Morningstar Document Research: FORM 10-K

Morningstar Document Research
FORM 10-K
Core-Mark Holding Company, Inc. - CORE
Filed: March 12, 2010 (period: December 31, 2009)
Annual report which provides a comprehensive overview of the company for the past year
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
Annual Report Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 2009
Transition Report Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of

1934
For the transition period from
to
Commission File Number:

000-51515
CORE-MARK HOLDING COMPANY, INC.

(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
20-1489747
(I.R.S. Employer Identification No.)
395 Oyster Point Boulevard, Suite 415

South San Francisco, California 94080
(Address of Principal Executive Offices, including Zip Code)
(650) 589-9445
(Registrants Telephone Number, including Area Code)
Securities Registered Pursuant to Section 12(b) of the Act:

Name of each exchange
on which registered:
NASDAQ Global Market
Title of each class

Common Stock, par value $0.01 per share
Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in
Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Source: Core-Mark Holding Company, Inc., 10-K, March 12, 2010
Non-accelerated filer
Smaller reporting company
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(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
No
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to
the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of June 30,
2009, the last business day of the registrants most recently completed second fiscal quarter: $269,030,306.
As of February 26, 2010, the Registrant had 10,612,543 shares of its common stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
See Parts III and IV. Registrants Proxy Statement for the 2010 Annual Meeting of Stockholders is incorporated by reference to
Part III in this Form 10-K.
TABLE OF CONTENTS
Page
PART I
ITEM 1. BUSINESS
ITEM 1.A. RISK FACTORS
ITEM 1.B. UNRESOLVED STAFF COMMENTS
16
ITEM 2. PROPERTIES
16
ITEM 3. LEGAL PROCEEDINGS
17
ITEM 4. (REMOVED AND RESERVED)
17
PART II
ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS

AND ISSUER PURCHASES OF EQUITY SECURITIES
17
ITEM 6. SELECTED FINANCIAL DATA
19
ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS
21
ITEM 7.A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
39
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
40
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURE
74
ITEM 9.A. CONTROLS AND PROCEDURES
74
ITEM 9.B. OTHER INFORMATION
74
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
75
ITEM 11. EXECUTIVE COMPENSATION
75
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
75
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

INDEPENDENCE
75
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
75
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
76
Exhibit 10.18
Exhibit 10.21
Exhibit 21.1
Exhibit 23.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
Table of Contents
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Except for historical information, the statements made in this Annual Report on Form 10-K are forward-looking statements
made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements
are based on certain assumptions or estimates, discuss future expectations, describe future plans and strategies, contain
projections of results of operations or of financial conditions or state other forward-looking information. Our ability to predict
results or the actual effect of future plans or strategies is inherently uncertain.
Although we believe that the expectations reflected in such forward-looking statements are based on reasonable
assumptions, actual results and performance could differ materially from those set forth in the forward-looking statements.
Forward-looking statements in some cases can be identified by the use of words such as may, will, should, potential,
intend, expect, seek, anticipate, estimate, believe, could, would, project, predict, continue, plan,
propose or other similar words or expressions. These forward-looking statements are based on the current plans and
expectations of our management and are subject to certain risks and uncertainties that could cause actual results to differ
materially from historical results or those discussed in such forward-looking statements.
Factors that might cause or contribute to such differences include, but are not limited to our dependence on the convenience
retail industry for our revenues; uncertain economic conditions; competition; price increases; our dependence on relatively few
suppliers; the low-margin nature of cigarette and consumable goods distribution; certain distribution centers dependence on a
few relatively large customers; competition in the labor market; product liability claims and manufacturer recalls of products;
fuel price increases; our dependence on our senior management; our ability to successfully integrate acquired businesses;
currency exchange rate fluctuations; our ability to borrow additional capital; governmental regulations and changes thereto
including the Family Smoking Prevention and Tobacco Control Act which was signed into law in June 2009 which granted the
U.S. federal Food & Drug Administration (FDA) the authority to regulate the production and marketing of tobacco products in
the U.S.; earthquake and natural disaster damage; failure or disruptions to our information systems; a greater decline than
anticipated in cigarette sales volume; our ability to implement marketing strategies; and competition from sales of deep-discount
cigarette brands and illicit and other low priced sales of cigarettes. Refer to Part I, Item 1A, Risk Factors of this Form 10-K.
Except as provided by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
ii
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ITEM 1. BUSINESS
Unless the context indicates otherwise, all references in this Annual Report on Form 10-K to Core-Mark, the Company, we,
us or our refer to Core-Mark Holding Company, Inc. and its subsidiaries.
Company Overview
Core-Mark is one of the largest marketers of fresh and broad-line supply solutions to the convenience retail industry in
North America in terms of annual sales, providing sales and marketing, distribution and logistics services to customer locations
across the U.S. and Canada. Our origins date back to 1888, when Glaser Bros., a family-owned-and-operated candy and tobacco
distribution business, was founded in San Francisco.
Core-Mark offers retailers the ability to participate in manufacturer and Company-sponsored marketing programs,
merchandising and product category management services, as well as the use of information systems that are focused on
minimizing retailers investment in inventory, while seeking to maximize their sales. In addition, our wholesale distributing
capabilities provide valuable services to both manufacturers of consumer products and convenience retailers. Manufacturers
benefit from our broad retail coverage, inventory management and efficient processing of small orders. Convenience retailers
benefit from our distribution capabilities by gaining access to a broad product line, optimizing inventory management and
accessing trade credit.
We operate in an industry where, in 2008, based on the NACS Association for Convenience and Petroleum Retailing 2009
State of the Industry (SOI) Report, total in-store sales at convenience retail locations increased 3.2% to approximately
$173.9 billion and were generated through an estimated 145,000 stores across the U.S. We estimate that 45% to 55% of the
products that these stores sell are supplied by wholesale distributors such as Core-Mark. The convenience retail industry gross
profit for in-store sales was approximately $56 billion in 2008 and $45 billion in 2007. Over the ten years from 1998 through
2008, convenience in-store sales increased by a compounded annual growth rate of 7.2%.
We distribute a diverse line of national and private label convenience store products to approximately 24,000 customer
locations in all 50 states of the Unites States and five Canadian provinces. The products we distribute include cigarettes, tobacco,
candy, snacks, fast food, groceries, fresh products, dairy, non-alcoholic beverages, general merchandise and health and beauty
care products. We service traditional convenience stores as well as alternative outlets selling convenience products. Our
traditional convenience store customers include many of the major national and super-regional convenience store operators as
well as thousands of multi- and single-store customers. Our alternative outlet customers comprise a variety of store formats,
including drug stores, grocery stores, liquor stores, cigarette and tobacco shops, hotel gift shops, military exchanges, college
bookstores, casinos, movie theaters, hardware stores and airport concessions.
We operate a network of 26 distribution centers across the U.S. and Canada, including two distribution centers that we
operate as a third party logistics provider. We distribute approximately 42,000 SKUs (Stock Keeping Units) of packaged
consumable goods to our customers and also provide an array of information and data services that enable our customers to
better manage retail product sales and marketing functions.
In 2009, our consolidated net sales increased 8.1% to $6,531.6 million from $6,044.9 million in 2008. Cigarettes comprised
approximately 70.3% of total net sales in 2009, while approximately 64.6% of our gross profit was generated from
food/non-food products.
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Table of Contents
Competitive Strengths
We believe we have the following fundamental competitive strengths which are the foundation of our business strategy:
Experience in the Industry. Our origins date back to 1888, when Glaser Bros., a family-owned-and-operated candy and
tobacco distribution business, was founded in San Francisco. The executive management team comprised of our CEO and 13
senior managers has largely overseen the operations of Core-Mark for more than a decade, bringing their expertise to critical
functional areas including logistics, sales and marketing, purchasing, information technology, finance, human resources and
retail store support.
Innovation & Flexibility. Wholesale distributors typically provide convenience retailers access to a broad product line, the
ability to place small quantity orders, inventory management and access to trade credit. As a large, full-service wholesale
distributor we offer retailers the ability to participate in manufacturer and Company sponsored sales and marketing programs,
merchandising and product category management services, as well as the use of information systems that are focused on
minimizing retailers investment in inventory, while seeking to maximize their sales.
Distribution Capabilities. The wholesale distribution industry is highly fragmented and historically has consisted of a large
number of small, privately-owned businesses and a small number of large, full-service wholesale distributors serving multiple
geographic regions. Relative to smaller competitors, large distributors such as Core-Mark benefit from several competitive
advantages including: increased purchasing power, the ability to service large national chain accounts, economies of scale in
sales and operations, the ability to spread fixed costs over a larger revenue base and the resources to invest in information
technology and other productivity enhancing technology.
Business Strategy
Our objective is to increase overall return to shareholders by growing market share, revenues, profitability and cash flow.
To achieve that objective, we have become one of the largest marketers of fresh and broad-line supply solutions to the
convenience retail industry in North America. In order to further enhance our value to the retailer, we plan to:
Drive our Vendor Consolidation Initiative (VCI). We expect our VCI program will allow us to grow by capitalizing on
the highly fragmented nature of the distribution channel that services the convenience retail industry. A convenience retailer
generally receives their store merchandise through a large number of unique deliveries. This represents a highly inefficient and
costly process for the individual stores. Our VCI program offers convenience retailers the ability to receive one delivery for the
bulk of their products, including dairy and other perishable items, thus simplifying the supply chain and eliminating operational
costs.
Deliver Fresh Products. We believe there is an increasing trend among consumers to purchase fresh food and dairy
products from convenience stores. To meet this expected demand, we have modified and upgraded our refrigerated capacity,
including investing in chill docks, state-of-the-art ordering devices and tri-temperature trailers, which enables us to deliver a
significant range of chilled items including milk, produce and other fresh foods to retail outlets. We have also established
partnerships with strategically located bakeries and commissaries to further enable us to deliver the freshest product possible. We
continue to expand the delivery of fresh products through the development of unique and comprehensive marketing programs,
and we have rebranded the Company to properly reflect the role this fresh product line will play in our and the industrys future.
We believe our investments in infrastructure and branding, combined with our strategically located suppliers and in-house
expertise, position us as the leader in providing fresh products and programs to convenience stores.
Expand our Presence Eastward. We believe there is significant opportunity for us to increase our market share by
expanding our presence east of the Mississippi. According to the Association for Convenience and Petroleum Retailing 2009 SOI
Report, during 2008, aggregate U.S. traditional convenience retail in-store sales were approximately $173.9 billion through
approximately 145,000 stores with most of those stores located east of the Mississippi. We believe our expansion eastward will
be accomplished by acquiring new customers, both national and regional, through a combination of exemplary service, VCI
programs, fresh product deliveries, innovative marketing strategies and competitive pricing. In addition, we intend to explore
select acquisitions of other wholesale distributors which complement our business. In January 2008, we opened a distribution
facility near Toronto, Ontario. This facility expanded our existing market geography in Canada. In June 2008, we acquired
Auburn Merchandise Distributors, Inc. (AMD or New England), to further expand our presence and infrastructure in the
Northeastern region of the U.S. (see Note 3Acquisitions).
Continue Building Sustainable Competitive Advantage. We believe our ability to increase sales and profitability with
existing and new customers is highly dependent upon our ability to deliver consistently high levels of service, innovative
marketing programs and information technology and logistics support. To that fundamental end, we are committed to further
improving our operational efficiencies in our distribution centers while containing our costs in order to enhance profitability. To
further enhance our competitive advantage, we have been the first to recognize emerging trends and to offer to the retailer our
unique marketing programs such as VCI and Fresh. We believe this innovation has established us as the market leader in
providing valuable marketing and supply chain solutions in the industry.
Table of Contents
Customers, Products and Suppliers

We service approximately 24,000 customer locations in all 50 states of the U.S. and 5 Canadian provinces. Our customers
represent many of the large national and regional convenience retailers in the U.S. and Canada and leading alternative outlet
customers. Our top ten customers accounted for approximately 30.6% of our sales in 2009, and no single customer accounted for
10% or more of our total sales in 2009.
Below is a comparison of our net sales mix by primary product category for the last three years (in millions):
2009
Cigarettes
Net Sales
$
4,589.1
% of Net
Sales
70.3%
738.0
405.0
434.0
209.5
151.7
4.3
11.3%
6.2%
6.6%
3.2%
2.3%
0.1%
710.1
401.3
402.7
220.1
180.9
5.0
1,942.5
29.7%
6,531.6
100.0%
Food
Candy
Other tobacco products
Health, beauty & general
Non-alcoholic beverages
Equipment/other
Total Food/Non-food
Products
Total net sales
Year Ended December 31,

2008
% of Net
Net Sales
Sales
$
4,124.8
68.2%
2007
Net Sales
$
3,863.1
% of Net
Sales
69.5%
11.7%
6.7%
6.7%
3.6%
3.0%
0.1%
596.7
349.8
353.4
206.2
186.4
5.3
10.7%
6.3%
6.4%
3.7%
3.4%
0.1%
1,920.1
31.8%
1,697.8
30.5%
6,044.9
100.0%
5,560.9
100.0%
Cigarette Products. We purchase cigarette products from major U.S. and Canadian manufacturers. With cigarettes
accounting for approximately $4,589.1 million or 70.3% of our total net sales and 35.4% of our total gross profit in 2009, we
control major purchases of cigarettes centrally in order to optimize inventory levels and purchasing opportunities. The daily
replenishment of inventory and brand selection is controlled by our distribution centers.
In the U.S., legislation was introduced in 2008 to fund the State Childrens Health Insurance Program (SCHIP) by raising
the federal cigarette excise tax from 39 to $1.01 per pack. Federal excise tax is included as a component of our product cost
charged by the manufacturer. The legislation, which was signed into law in February 2009, became effective April 1, 2009. As a
result, our net cigarette sales for 2009 were inflated by approximately $534.0 million, due primarily to the significant price
increases from manufacturers in response to the SCHIP legislation.
U.S. cigarette consumption has generally declined since 1980. Based on 2009 statistics provided by the Tobacco Merchants
Association (TMA) published in early 2010 and compiled from the U.S. Department of Agriculture-Economic Research
Service, total cigarette consumption in the U.S. declined from 467 billion cigarettes in 1999 to 336 billion cigarettes in 2009, or a
28% reduction in consumption. Prior to 2007, we had benefitted from a shift in cigarette and tobacco sales to the convenience
retail segment. According to the most recent statistics available on the growth of cigarette sales in the convenience retail segment
in the NACS 2007 SOI Report (which includes data through December 31, 2006), the convenience retail portion of aggregate
U.S. cigarette sales increased from approximately 54% in 1999 to 64% in 2006. In 2009, convenience retailers were the largest
trade class for cigarette sales accounting for approximately 70% of total industry volume according to the R.J. Reynolds 2009
Industry Report.
Total cigarette consumption also declined in Canada from 45.6 billion cigarettes in 1998 to 13.8 billion cigarettes in 2008,
or a 70% reduction in consumption, according to consumption statistics published in 2009 by Canadas central statistical agency,
Statistics Canada.
In 2009, our average daily carton sales in the U.S. declined 9.9%, excluding the New England division, which was acquired
in June 2008. We believe the decline in the U.S. is due largely to the significant price increases in 2009. Our average daily carton
sales in Canada increased 14.4% primarily through market share gains dominated by our expansion in the Toronto market. The
shift in cigarette carton sales from other channels to the convenience retail segment may no longer be adequate to compensate for
consumption declines.
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Table of Contents
We have no long-term cigarette purchase agreements and buy substantially all of our products on an as needed basis.
Cigarette manufacturers historically have offered structured incentive programs to wholesalers based on maintaining market
share and executing promotional programs. These programs are subject to change by the manufacturers without notice.
Excise taxes on cigarettes and other tobacco products are imposed by the various states, localities and provinces. We collect
these taxes from our customers and remit these amounts to the appropriate authorities. Excise taxes are a significant component
of our revenue and cost of sales. During 2009, we included in net sales approximately $1,516.0 million of state and provincial
excise taxes. As of December 31, 2009, state cigarette excise taxes in the U.S. jurisdictions we serve ranged from $0.07 per pack
of 20 cigarettes in South Carolina to $3.46 per pack of 20 cigarettes in the state of Rhode Island. In the Canadian jurisdictions we
serve, provincial excise taxes ranged from C$2.47 per pack of 20 cigarettes in Ontario to C$5.36 per pack of 20 cigarettes in the
Northwest Territories.
Food and Non-food Products. The food category includes fast food, snacks, groceries, non-alcoholic beverages, fresh
produce, dairy and bread. The non-food category includes cigars, chewable tobacco, loose tobacco, health and beauty products,
general merchandise and equipment. The combined food/non-food products categories totaled $1,942.5 million in net sales for
2009 or 29.7% of our total net sales and $259.2 million in gross profit or 64.6% of our total gross profit. Food/non-food
generated gross margins of 14.36% excluding excise taxes in 2009, while the cigarette categories generated 3.83%. Due to the
significantly higher margins earned, most of the companys marketing programs are designed to promote and grow sales in the
food and non-food categories.
Food/non-food sales grew 1.2% in 2009, while gross profits grew $4.2 million or 1.7%. These growth rates were negatively
impacted by an $8.1 million reduction in floor stock income resulting from a decline in manufacturers price increases.
Additionally, price deflation in 2009, primarily in certain dairy products, negatively impacted our net sales of food/non-food
products.
Two of our key business strategies focus primarily on the higher margin categories in the food group. These categories
include milk, fresh bread, fresh sandwiches, fresh fruit, fresh produce, fresh baked goods, healthy snacks and home replacement
meals. This drive toward more healthy and fresh foods being sold in the convenience markets is a significant trend in the
industry. We have invested a significant amount of capital to position our company to have the right infrastructure to deliver
these highly perishable items. Our objective is to take market share and to increase our customers profit, thereby increasing our
own.
Our Suppliers. We purchase products for resale from approximately 4,100 trade suppliers and manufacturers located across
the U.S. and Canada. In 2009, we purchased approximately 63% of our products from our top 20 suppliers, with our top two
suppliers, Philip Morris and R.J. Reynolds, representing approximately 28% and 14% of our purchases, respectively. We
coordinate our purchasing from suppliers by negotiating, on a corporate-wide basis, special arrangements to obtain volume
discounts and additional incentives, while also taking advantage of promotional and marketing incentives offered to us as a
wholesale distributor. In addition, buyers in each of our distribution facilities purchase products, particularly food, directly from
the manufacturers, improving product mix and availability for individual markets and reducing our inventory investment.
Seasonality
We typically generate slightly higher revenues and gross profits during the warm weather months (May through September)
than in other times throughout the year. We believe this occurs because the convenience store industry which we serve tends to
be busier during this period due to vacation and travel. During the second and third quarters of both 2009 and 2008, we generated
approximately 53% of our net sales for each fiscal year.
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Table of Contents
Operations
We operate a total of 26 distribution centers consisting of 22 in the U.S. and 4 in Canada as of December 31, 2009. The map
below describes the scope of our operations and distribution centers.
Map of Operations
Two of the facilities we operate in the U.S., Artic Cascade and Allied Merchandising Industry, are consolidating
warehouses which buy products from our suppliers in bulk quantities and then distribute the products to many of our other
distribution centers. By using Artic Cascade, located in Sacramento, California, to obtain products at lower cost from frozen
product vendors, we are able to offer a broader selection of quality products to retailers at more competitive prices. Allied
Merchandising Industry, located in Corona, California, purchases the majority of our non-food products, other than cigarettes
and tobacco products, for our distribution centers, enabling us to reduce our overall general merchandise and health and beauty
care product inventory. We operate two additional facilities as a third party logistics provider. One distribution facility located in
Phoenix, Arizona, referred to as the Arizona Distribution Center (ADC), is dedicated solely to supporting the logistics and
management requirements of one of our major customers, Alimentation Couche-Tard, Inc. The second distribution facility
located in San Antonio, Texas, referred to as the Retail Distribution Center (RDC), is dedicated solely to supporting another
major customer, Valero Energy Corporation.
We purchase a variety of brand name and private label products, totaling approximately 42,000 SKUs, including
approximately 4,200 SKUs of cigarette and other tobacco products, from our suppliers and manufacturers. We offer customers a
variety of food and non-food products, including candy, snacks, fast food, groceries, fresh products, dairy, non-alcoholic
beverages, general merchandise and health and beauty care products.
A typical convenience store order is comprised of a mix of dry, frozen and chilled products. Our receivers, stockers, order
selectors, stampers, forklift drivers and loaders received, stored and picked nearly 426 million, 435 million and 407 million items
(a carton of 10 packs of cigarettes is one item) or 65 million, 66 million and 64 million cubic feet of product, during the years
ended December 31, 2009, 2008 and 2007, respectively, while limiting the service error rate to approximately two errors per
thousand items shipped.
Our proprietary Distribution Center Management System, or DCMS, platform provides our distribution centers with the
flexibility to adapt to our customers information technology requirements in an industry that does not have a standard
information technology platform. Actively integrating our customers into our platform is a priority which enables fast, efficient
and reliable service.
Distribution
At December 31, 2009, we had approximately 940 transportation department personnel, including delivery drivers, shuttle
drivers, routers, training supervisors and managers who focus on achieving safe, on-time deliveries. Our daily orders are picked
and loaded nightly in reverse order of scheduled delivery. At December 31, 2009, our trucking fleet consisted of approximately
660 tractors, trucks and vans, of which nearly all were leased. We have made a significant investment over the past few years in
upgrading our trailer fleet to tri-temperature (tri-temp) which gives us the capability to deliver frozen, chilled and
non-refrigerated goods in one delivery. As of December 31, 2009, over 55% of our fleet consisted of tri-temp trailers with the
remainder capable of delivering refrigerated and non-refrigerated foods. This provides us the multiple temperature zone
capability needed to support our focus on delivering fresh products to our customers. Our fuel consumption costs for 2009
totaled approximately $4.9 million, net of fuel surcharges passed on to customers, which represented a decrease of approximately
$4.5 million, from $9.4 million in 2008 due to decreased fuel prices, partially offset by an increase in miles driven and the
addition of our New England division.
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Competition
We estimate that, as of December 31, 2009, there were over 300 wholesale distributors to traditional convenience retailers
in the U.S. We believe that McLane Company, Inc., a subsidiary of Berkshire Hathaway, Inc., and Core-Mark are the two largest
convenience wholesale distributors, measured by annual sales, in North America. There are also companies that provide products
to specific regions of the country, such as The H.T. Hackney Company in the Southeast, Eby-Brown Company in the Midwest,
Mid-Atlantic and Southeast and GSC Enterprises, Inc. in Texas and surrounding states, and several hundred local distributors
serving small regional chains and independent convenience retailers. In Canada, there are fewer wholesale distributors compared
to the U.S. In addition, certain manufacturers such as Coca-Cola bottlers, Frito Lay and Hostess Brands, Inc. deliver their
products directly to convenience retailers.
Competition within the industry is based primarily on the range and quality of the services provided, price, variety of
products offered and the reliability of deliveries. We operate from a perspective that focuses heavily on flexibility and providing
outstanding customer service through our distribution centers, order fulfillment rates, on-time delivery performance using
delivery equipment sized for the small format store, innovative marketing solutions and merchandising support, as well as
competitive pricing. We believe this represents a contrast to some large competitors who offer a standardized logistics approach,
with emphasis on uniformity of product lines, and company determined delivery schedules using large delivery equipment
designed for large format stores, while also providing competitive order fulfillment rates and pricing. The emphasis on the
logistics approach, while responsive to competitive pricing, is not in our opinion best suited for retailers looking for more
customized solutions and support from their supply partners in addition to competitive pricing. Some small competitors focus on
customer service and long standing customer relationships but oftentimes lack the range of offerings of the larger distributor. We
believe that our unique combination of service, marketing solutions and price is a compelling combination that is highly
attractive to customers and may enhance their growth and profitability.
We purchase cigarettes primarily from manufacturers covered by the tobacco industrys Master Settlement Agreement
(MSA), which was signed in November 1998. Since then, we have experienced increased wholesale competition for cigarette
sales. Competition amongst cigarette wholesalers is based primarily on service, price and variety, whereas competition amongst
manufacturers for cigarette sales is based primarily on brand positioning, price, product attributes, consumer loyalty, promotions,
marketing and retail presence. Cigarette brands produced by the major tobacco product manufacturers generally require
competitive pricing, substantial marketing support, retail programs and other financial incentives to maintain or improve a
brands market position. Historically, major tobacco product manufacturers have had a competitive advantage in the U.S.
because significant cigarette marketing restrictions and the scale of investment required to compete made gaining consumer
awareness and trial of new brands difficult.
We also face competition from the sale of cigarettes by third parties over the internet and by other means designed to avoid
collection of applicable taxes, including the sale of cigarettes in non-taxable jurisdictions, imports of foreign low-priced brands
and the diversion into the U.S. market of cigarettes intended for sale outside the U.S. The competitive environment has been
impacted by alternative smoking products, such as snus and snuff, and higher prices due to higher state excise taxes and list price
increases for cigarettes manufactured by parties to the MSA. As a result, the lowest priced products of manufacturers of
numerous small share brands manufactured by companies that are not parties to the MSA have held their market share, putting
pressure on the profitability of premium cigarettes.
Working Capital Practices
We sell products on credit terms to our customers that averaged, as measured by days sales outstanding, about 9 days for
2009 and 2008. Credit terms may impact pricing and are competitive within our industry. An increasing number of our customers
remit payment electronically, which facilitates efficient and timely monitoring of payment risk. Canadian days sales outstanding
in receivables tend to be lower as Canadian industry practice is for shorter credit terms than those in the U.S.
We maintain our inventory of products based on the level of sales of the particular product and manufacturer replenishment
cycles. The number of days a particular item of inventory remains in our distribution centers varies by product and is principally
driven by the turnover of that product and economic order quantities. We typically order and carry in inventory additional
amounts of certain critical products to assure high order fulfillment levels for these items. The number of days of cost of sales in
inventory averaged about 15 days during 2009 and 2008.
We obtain terms from our vendors based on industry practices and consistent with our credit standing. We take advantage
of the full complement of vendor offerings, including early payment terms. Our days payable outstanding during 2009 averaged
11 days, including cigarette and tobacco taxes payable, as compared to 12 days for 2008, with a range of three days prepaid to
30 days credit.
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Employees
The following chart provides a breakdown of our employees by function and geographic region as of December 31, 2009:
TOTAL EMPLOYEES BY BUSINESS FUNCTIONS
U.S.
Management, Administration, Finance and Purchasing
Sales and Marketing
Warehousing and Distribution
Total Categories
489
1,044
2,290
3,823
Canada
108
64
272
444
Total
597
1,108
2,562
4,267
Three of our distribution centers, Hayward, Las Vegas and Calgary, employ people who are covered by collective
bargaining agreements with local affiliates of The International Brotherhood of Teamsters (Hayward and Las Vegas) and United
Food and Commercial Workers (Calgary). Approximately 220 employees, or 5.2% of our workforce, are unionized. There have
been no disruptions in customer service, strikes, work stoppages or slowdowns as a result of union activities, and we believe we
have satisfactory relations with our employees.
Regulation
As a distributor of food products, we are subject to the Federal Food, Drug and Cosmetic Act and regulations promulgated
by the U.S. Food and Drug Administration (FDA). The FDA regulates the holding requirements for foods through its current
good manufacturing practice regulations, specifies the standards of identity for certain foods and prescribes the format and
content of certain information required to appear on food product labels. A limited number of the over-the-counter medications
that we distribute are subject to the regulations of the U.S. Drug Enforcement Administration. In Canada, similar standards
related to food and over-the-counter medications are governed by Health Canada. The products we distribute are also subject to
federal, state, provincial and local regulation through such measures as the licensing of our facilities, enforcement by state,
provincial and local health agencies of relevant standards for the products we distribute and regulation of our trade practices in
connection with the sale of our products. Our facilities are inspected periodically by federal, state, provincial and local authorities
including the Occupational Safety and Health Administration under the U.S. Department of Labor which require us to comply
with certain health and safety standards to protect our employees.
We are also subject to regulation by numerous other federal, state, provincial and local regulatory agencies, including but
not limited to the U.S. Department of Labor, which sets employment practice standards for workers, and the U.S. and Canadian
Departments of Transportation, which regulate transportation of perishable goods, and similar state, provincial and local
agencies. Compliance with these laws has not had and is not anticipated to have a material effect on our results of operations.
We voluntarily participate in random quality inspections of all of our distribution centers, conducted by the American
Institute of Baking (AIB). The AIB publishes standards as a tool to permit operators of distribution centers to evaluate the food
safety risks within their operations and determine the levels of compliance with the standards. AIB conducts an inspection which
is composed of food safety and quality criteria. AIB conducts its inspections based on five categories: adequacy of the
companys food safety program, pest control, operational methods and personnel practices, maintenance of food safety and
cleaning practices. Within these five categories, the AIB evaluates over 100 criteria items. AIBs independent evaluation is
summarized and posted on its website for our customers review. In 2009, nearly 89% of our distribution centers received the
highest rating from the AIB with 10% receiving the second highest rating.
Registered Trademarks
We have registered trademarks including the following: Arcadia Bay , Cable Car, Core-Mark, Core-Mark
International, EMERALD, Java Street, QUICKEATS , Richland Valley TM, SmartStock and Tastefully Yours .
Segment and Geographic Information
We operate in two reportable geographic segmentsthe U.S. and Canada. See Note 15Segment Information to our
consolidated financial statements.
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Corporate and Available Information

The office of our corporate headquarters is located at 395 Oyster Point Boulevard, Suite 415, South San Francisco,
California 94080 and the telephone number is (650) 589-9445.
Our internet website address is www.core-mark.com. We provide free access to various reports that we file with or furnish
to the U.S. Securities and Exchange Commission (SEC) through our website, as soon as reasonably practicable after they have
been filed or furnished. These reports include, but are not limited to, our annual reports on Form 10-K, quarterly reports on Form
10-Q and any amendments to those reports. Our SEC reports can be accessed through the Investor Relations section of our
website, or through www.sec.gov. Also available on our website are printable versions of Core-Marks Audit Committee
Charter, Compensation Committee Charter, Nominating and Corporate Governance Committee Charter and Code of Business
Conduct and Ethics. Copies of these documents may be requested from:
Core-Mark International
395 Oyster Point Blvd, Suite 415
South San Francisco, CA 94080
Attention: Investor Relations
Corporate GovernanceCode of Business Conduct and Ethics and Whistle Blower Policy:
Our Code of Business Conduct and Ethics is designed to promote honest, ethical and lawful conduct by all employees,
officers and directors and is posted on the Investor Relations section of our website at www.core-mark.com under Corporate
Governance.
Additionally, the Audit Committee (Audit Committee) of the Board of Directors of Core-Mark has established procedures
to receive, retain, investigate and act on complaints and concerns of employees, shareholders and others regarding accounting,
internal accounting controls and auditing matters, including complaints regarding attempted or actual circumvention of internal
accounting controls or complaints regarding violations of the Companys accounting policies. The procedures are also described
in our website address at www.core-mark.com under Corporate Governance in the Investor Relations section.
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ITEM 1.A. RISK FACTORS

You should carefully consider the following risks together with all of the other information contained in this Annual Report
on Form 10-K. Additional risks and uncertainties not currently known to us may also materially adversely affect our business,
financial condition or results of operations.
This Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties. Our actual
results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such
differences include, but are not limited to, the risk factors set forth below (seeSpecial Note Regarding Forward-Looking
Statements prior to Item 1. Business).
Risks Related to the Economy and Market Conditions
Current difficult economic conditions may reduce demand for our products and increase credit risks.
Current difficult economic conditions, including the rising unemployment and underemployment rates, significant declines
in real estate values, large losses to consumer retirement and investment accounts, increases in food prices and uncertainty
regarding federal tax and economic policies have resulted in reduced consumer confidence and curtailed consumer spending. If
these economic conditions persist or deteriorate further, we expect that convenience retail operators will experience continued
weakness and further reductions in same store sales, which will adversely affect demand for our products and lead to reduced
sales and pressures on margins. In addition, the uncertainty in the financial markets and the resulting pressures on liquidity may
place a number of our convenience retail customers under financial stress, which could increase our credit risk and potential bad
debt exposure. These economic and market conditions may have a material adverse effect on our business and operating results.
Our business is sensitive to gasoline prices, which could adversely affect business.
Our operating results are sensitive to, and may be adversely affected by, unexpected increases in fuel or other
transportation-related costs. Our retailers have reported to us that when gasoline prices increased they have experienced a
decrease in the proportion of their customers expenditures on food/non-food products compared to customers expenditures on
cigarettes. The shift in expenditures may place pressure on our sales and gross margins since sales of food/non-food products
result in higher margins than sales of cigarettes do.
Historically, we have been able to pass on a substantial portion of increases in our own fuel costs to our customers in the
form of fuel surcharges, but our ability to continue to pass through price increases, either from manufacturers or costs incurred in
the business, including fuel costs, is not assured. If we are unable to continue to pass on fuel cost increases to our customers, our
operating results could be materially and adversely affected.
As a result of recent recessionary economic conditions, our pension plan is currently underfunded and we will be
required to make cash payments to the plan, reducing the cash available for our business.
We record a liability associated with our pension plans equal to the excess of the benefit obligation over the fair value of
plan assets. The benefit liability recorded at December 31, 2009 was $35.2 million for the pension plan. Our pension plans
underfunded status decreased from approximately $12.8 million in 2008 to approximately $11.6 million in 2009. The decrease in
the underfunded status of the plan from 2008 to 2009 is due primarily to a higher return than expected on invested plan assets as
of December 31, 2009 compared to December 31, 2008. The amount of the estimated contributions is expected to increase in
2010 due, in part, to the underperformance of the plan assets relative to our expectations given the overall market downturn
during 2008. If the performance of the assets in the plan does not meet our expectations, or if other actuarial assumptions are
modified, our future cash payments to the plan could be substantially higher than we expect. The pension plan is subject to the
Employee Retirement Income Security Act of 1974, or ERISA. Under ERISA, the Pension Benefit Guaranty Corporation, or
PBGC, has the authority to terminate an underfunded pension plan under limited circumstances. In the event our pension plan is
terminated for any reason while it is underfunded, we will incur a liability to the PBGC that may be equal to the entire amount of
the underfunding in the pension plan.
Risks Related to Our Business and Industry
We are dependent on the convenience retail industry for our revenues, and our results of operations would suffer if there
is an overall decline or consolidation in the convenience retail industry.
The majority of our sales are made under purchase orders and short-term contracts with convenience retail stores which
inherently involve significant risks. These risks include declining sales in the convenience retail industry due to general
economic conditions, credit exposure from our customers, termination of customer relationships without notice, consolidation of
our customer base and consumer movement toward purchasing from club stores. Any of these factors could negatively affect our
results of operations.
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We face competition in our distribution markets and if we are unable to compete effectively in any distribution market,
we may lose market share and suffer a decline in sales.
Our distribution centers operate in highly competitive markets. We face competition from local, regional and national
tobacco and consumable products distributors on the basis of service, price and variety of products offered, schedules and
reliability of deliveries and the range and quality of services provided. Some of our competitors, including a subsidiary of
Berkshire Hathaway Inc., McLane Company, Inc., the largest convenience wholesale distributor in the U.S., have substantial
financial resources and long standing customer relationships. In addition, heightened competition among our existing
competitors, or by new entrants into the distribution market, could create additional competitive pressures that may reduce our
margins and adversely affect our business. If we fail to successfully respond to these competitive pressures or to implement our
strategies effectively, we may lose market share and our results of operations could suffer.
If we are not able to retain existing customers and attract new customers, our results of operations could suffer.
Increasing the growth and profitability of our distribution business is particularly dependent upon our ability to retain
existing customers and attract additional customers. The ability to attract additional customers through our existing network of
distribution centers is especially important because it enables us to leverage our distribution centers and other fixed assets. Our
ability to retain existing customers and attract new customers is dependent upon our ability to provide industry-leading customer
service, offer competitive products at low prices, maintain high levels of productivity and efficiency in distributing products to
our customers while integrating new customers into our distribution system, and offer marketing, merchandising and ancillary
services that provide value to our customers. If we are unable to execute these tasks effectively, we may not be able to attract a
significant number of new customers and our existing customer base could decrease, either or both of which could have an
adverse impact on our results of operations.
If the costs to us of the products we distribute increase and we cannot pass the increase on to our customers, our results
of operations could be adversely affected.
Our industry is characterized by a high volume of sales with relatively low profit margins. We experience increases in our
cost of goods sold when manufacturers increase prices or reduce or eliminate discounts and incentive programs. If we cannot
pass along such cost increases to our customers due to resistance to higher prices, our narrow profit margins and earnings could
be negatively affected.
We rely on funding from manufacturer discount and incentive programs and cigarette excise stamping allowances; any
material changes in these programs could adversely affect our results of operations.
We receive payments from the manufacturers of the products we distribute for allowances, discounts, volume rebates and
other merchandising and incentive programs. These payments are a substantial benefit to us. The amount and timing of these
payments are affected by changes in the programs by the manufacturers, our ability to sell specified volumes of a particular
product, attaining specified levels of purchases by our customers and the duration of carrying a specified product. In addition, we
receive discounts from states in connection with the purchase of excise stamps for cigarettes. If the manufacturers or states
change or discontinue these programs or change the timing of payments, or if we are unable to maintain the volume of our sales,
our results of operations could be negatively affected.
We depend on relatively few suppliers for a large portion of our products, and any interruptions in the supply of the
products that we distribute could adversely affect our results of operations.
We obtain the products we distribute from third party suppliers. At December 31, 2009, we had approximately 4,100
vendors, and during 2009 we purchased approximately 63% of our products from our top 20 suppliers, with our top two
suppliers, Philip Morris and R. J. Reynolds, representing approximately 28% and 14% of our purchases, respectively. We do not
have any long-term contracts with our suppliers committing them to provide products to us. Our suppliers may not provide the
products we distribute in the quantities we request on favorable terms, or at all. We are also subject to delays caused by
interruption in production due to conditions outside our control, such as job actions or strikes by employees of suppliers,
inclement weather, transportation interruptions, regulatory requirements and natural disasters or other catastrophic events. Our
inability to obtain adequate supplies of the products we distribute could cause us to fail to meet our obligations to our customers
and reduce the volume of our sales and profitability.
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We may lose business if cigarette or other manufacturers decide to engage in direct distribution of their products.
In the past, certain large manufacturers have elected to engage in direct distribution of their products and eliminate
distributors such as Core-Mark. If other manufacturers make similar decisions in the future, our revenues and profits would be
adversely affected and there can be no assurance that we will be able to take action to compensate for such losses.
Cigarette and consumable goods distribution is a low-margin business sensitive to economic conditions.
We derive most of our revenues from the distribution of cigarettes, other tobacco products, candy, snacks, fast food,
groceries, fresh products, dairy, non-alcoholic beverages, general merchandise and health and beauty care products. Our industry
is characterized by a high volume of sales with relatively low profit margins. Our food/non-food sales are at prices that are based
on the cost of the product plus a percentage markup. As a result, our profit levels may be negatively impacted during periods of
cost deflation for these products, even though our gross profit as a percentage of the price of goods sold may remain relatively
constant. Alternatively, periods of product cost inflation may also have a negative impact on our profit margins and earnings with
respect to sales of cigarettes. Gross profit on cigarette sales are generally fixed on a cents per carton basis. Therefore, as cigarette
prices increase, gross profit generally decreases as a percent of sales. In addition, if the cost of the cigarettes that we purchase
increases due to manufacturer price increases or increases in applicable excise tax rates, our inventory costs and accounts
receivable could rise. To the extent that we are unable to pass on product cost increases to our customers, our profit margins and
earnings could be negatively impacted.
Some of our distribution centers are dependent on a few relatively large customers, and our failure to maintain our
relationships with these customers could substantially harm our business and prospects.
Some of our distribution centers are dependent on relationships with a single customer or a few customers, and we expect
our reliance on these relationships to continue for the foreseeable future. Any termination or non-renewal of customer
relationships could severely and adversely affect the revenues generated by certain of our distribution centers. Any future
termination, non-renewal or reduction in services that we provide to these select customers would cause our revenues to decline
and our operating results to suffer.
We may be subject to product liability claims which could materially adversely affect our business, and our operations
could be subject to disruptions as a result of manufacturer recalls of products.
Core-Mark, as with other distributors of food and consumer products, faces the risk of exposure to product liability claims
in the event that the use of products sold by us causes injury or illness. With respect to product liability claims, we believe that
we have sufficient liability insurance coverage and indemnities from manufacturers. However, product liability insurance may
not continue to be available at a reasonable cost, or, if available, may not be adequate to cover all of our liabilities. We generally
seek contractual indemnification and insurance coverage from parties supplying the products we distribute, but this
indemnification or insurance coverage is limited, as a practical matter, to the creditworthiness of the indemnifying party and the
insured limits of any insurance provided by suppliers. If we do not have adequate insurance, if contractual indemnification is not
available or if a party cannot fulfill its indemnification obligation, product liability relating to defective products could materially
adversely impact our results of operations.
In addition, we may be required to manage a recall of products on behalf of a manufacturer. Managing a recall could disrupt
our operations as we might be required to devote substantial resources toward implementing the recall, which could materially
adversely affect our ability to provide quality service to our customers.
Adverse publicity or lack of confidence in our products could adversely affect reputation and reduce earnings.
Our business could be adversely affected if consumers lose confidence in the safety and quality of certain food products and
services we distribute. Adverse publicity may discourage consumers from buying our products or using our services. In addition,
such adverse publicity may result in product liability claims, a loss of reputation, and product recalls which would have a
material adverse effect on our sales and operations.
Unexpected outcome in legal proceedings may result in adverse effect on results of operations.
On occasion, we are a party to legal proceedings, including matters involving personnel and employment issues, personal
injury, antitrust claims and other proceedings arising in the ordinary course of business. Furthermore, there are an increasing
number of cases being filed against companies generally, which include class-action allegations under federal and state wage and
hour laws. We estimate our exposure to these legal proceedings and establish reserves for the estimated liabilities. Assessing and
predicting the outcome of these matters involve substantial uncertainties. Although not currently anticipated by management,
unexpected outcomes in these legal proceedings, or changes in our evaluation of the proceedings, could have a material adverse
impact on our finances and results of operations.
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Our ability to operate effectively could be impaired by the risks and costs associated with the efforts to grow our business
through acquisitions.
Efforts to grow our distribution business may include acquisitions. Acquisitions entail various risks such as identifying
suitable candidates, effecting acquisitions at acceptable rates of return, obtaining adequate financing and acceptable terms and
conditions. Successful integration of new operations will depend on our ability to manage those operations, fully assimilate the
operations into our distribution network, realize opportunities for revenue growth presented by strengthened product offerings
and expanded geographic market coverage, maintain the customer base and eliminate redundant and excess costs. We may not
realize the anticipated benefits or savings from an acquisition to the extent or in the time frame anticipated, if at all, or such
benefits and savings may include higher costs than anticipated.
We may not be able to achieve the expected benefits from the implementation of new marketing initiatives.
We are taking action to improve our competitive performance through a series of strategic marketing initiatives. The goal of
this effort is to develop and implement a comprehensive and competitive business strategy, addressing the special needs of the
convenience industry environment, increase our market position within the industry and ultimately create increased shareholder
value.
We may not be able to successfully execute our new marketing initiatives to realize the intended synergies, business
opportunities and growth prospects. Many of the risk factors previously mentioned, such as increased competition, may limit our
ability to capitalize on business opportunities and expand our business. Our efforts to capitalize on business opportunities may
not bring the intended result. Assumptions underlying estimates of expected revenue growth or overall cost savings may not be
met or economic conditions may deteriorate. Customer acceptance of new distribution formats developed may not be as
anticipated, hampering our ability to attract new customers or maintain our existing customer base. Additionally, our
management may have its attention diverted from other important activities while trying to execute new marketing initiatives. If
these or other factors limit our ability to execute our strategic initiatives, our expectations of future results of operations,
including expected revenue growth and cost savings, may not be met.
Our information technology systems may be subject to failure or disruptions, which could seriously harm our business.
Our business is highly dependent on our Distribution Center Management System, or DCMS. The convenience retail
industry does not have a standard information technology, or IT, platform. Therefore, actively integrating our customers into our
IT platform is a priority, and our DCMS platform provides our distribution centers with the flexibility to adapt to our customers
IT requirements. We also rely on DCMS and our internal information technology staff to maintain the information required to
operate our distribution centers and to provide our customers with fast, efficient and reliable deliveries. While we have taken
steps to increase redundancy in our IT systems, if our DCMS fails or is not reliable, we may suffer disruptions in service to our
customers and our results of operations could suffer.
We depend on our senior management.
We substantially depend on the continued services and performance of our senior executive officers as named in our Proxy
Statement. We do not maintain key person life insurance policies on these individuals, and we do not have employment
agreements with any of them. The loss of the services of any of our senior executive officers could harm our business.
We operate in a competitive labor market and a portion of our employees are covered by collective bargaining
agreements.
Our continued success will depend partly on our ability to attract and retain qualified personnel. We compete with other
businesses in each of our markets with respect to attracting and retaining qualified employees. While current market conditions
have provided us with a surplus of qualified employee candidates, in the future, a shortage of qualified employees could require
us to enhance our wage and benefit packages in order to compete effectively in the hiring and retention of qualified employees or
to hire more expensive temporary employees. In addition, at December 31, 2009, 220, or 5.2%, of our employees were covered
by collective bargaining agreements with labor organizations, which expire at various times.
We cannot assure you that we will be able to renew our respective collective bargaining agreements on favorable terms, that
employees at other facilities will not unionize, that our labor costs will not increase, that we will be able to recover any increases
in labor costs through increased prices charged to customers or that we will not suffer business interruptions as a result of strikes
or other work stoppages. If we fail to attract and retain qualified employees, to control our labor costs, or to recover any
increased labor costs through increased prices charged to our customers or offsets by productivity gains, our results of operations
could be materially adversely affected.
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Risks Related to the Distribution of Cigarettes

Our sales volume is largely dependent upon the distribution of cigarette products, sales of which are declining.
The distribution of cigarette and other tobacco products is currently a significant portion of our business. In 2009,
approximately 70.3% of our revenues came from the distribution of cigarettes and 35.4% of our gross profit was generated from
cigarettes. Due to increases in the prices of cigarettes and other tobacco products, restrictions on marketing and promotions by
cigarette manufacturers, increases in cigarette regulation and excise taxes, health concerns, increased pressure from anti-tobacco
groups and other factors, the U.S. and Canadian cigarette and tobacco market has generally been declining since 1980 and is
expected to continue to decline.
Prior to 2007 our cigarette sales had benefitted from a shift in sales to the convenience retail segment, and as a result of this
shift, convenience store cigarette sales had not declined in proportion to the decline in overall consumption. However, our
cigarette carton sales began to decline in 2007, and this decline continued in 2008 and 2009. We expect consumption trends of
legal cigarette and tobacco products will continue to be negatively impacted by rising prices, diminishing social acceptance and
legislative and regulatory actions that create limitations on where a consumer can smoke, and how products can be promoted and
produced. In addition, we expect rising prices will stimulate a higher percentage of consumers to purchase from illicit markets to
fulfill consumer demand. We believe this may adversely impact our cigarette carton volume, primarily in the U.S., in future
periods.
Legislation and other matters are negatively affecting the cigarette and tobacco industry.
The tobacco industry is subject to a wide range of laws and regulations regarding the marketing, sale, taxation and use of
tobacco products imposed by local, state, federal and foreign governments. Various state and provincial governments have
adopted or are considering legislation and regulations restricting displays and marketing of tobacco products, establishing fire
safety standards for cigarettes, raising the minimum age to possess or purchase tobacco products, requiring the disclosure of
ingredients used in the manufacture of tobacco products, imposing restrictions on public smoking, restricting the sale of tobacco
products directly to consumers or other recipients over the Internet and other tobacco product regulation. For example, the U.S.
Supreme Court has recently determined that lawsuits may proceed against tobacco manufacturers based on alleged deceptive
advertising in the marketing of so-called light cigarettes. In June 2009, the Family Smoking Prevention and Tobacco Control
Act was signed into law, which granted the U.S. federal Food & Drug Administration (FDA) the authority to regulate the
production and marketing of tobacco products in the U.S. The new legislation establishes a new FDA office that will regulate
changes to nicotine yields and the chemicals and flavors used in tobacco products, require ingredient listings be displayed on
tobacco products, prohibit the use of certain terms which may attract youth or mislead users as to the risks involved with using
tobacco products, as well as limit or otherwise impact the marketing and marketing of tobacco products by requiring additional
labels or warnings as well as pre-approval of the FDA. This new FDA office is to be financed through user fees paid by tobacco
companies prorated based on market share. This new legislation and related regulation could adversely impact the market for
tobacco products and, accordingly, our sales of such products. In British Columbia, Canada, legislation was adopted authorizing
the provincial government to seek recovery of tobacco-related health care costs from the tobacco industry and a lawsuit under
such legislation is underway. The Supreme Court of Canada unanimously upheld the Provinces right to sue the tobacco industry
and concluded the Tobacco Damages and Health Care Costs Recovery Act is constitutional. Quebec, New Brunswick and
Ontario have joined British Columbia in passing legislation that would allow them to file lawsuits against tobacco manufacturers.
Other states and provinces may adopt similar legislation and initiate similar lawsuits. Furthermore, in Alberta, Canada, the
Tobacco Reduction Act was passed in 2008 to prohibit the sale of all cigarette and tobacco products from all health-care
facilities, public post-secondary campuses, pharmacies and stores containing a pharmacy effective January 1, 2009.
Cigarettes and other tobacco products are subject to substantial excise taxes and, if these taxes are increased, our sales of
cigarettes and other tobacco products could decline.
Cigarettes and tobacco products are subject to substantial excise taxes in the U.S. and Canada. Significant increases in
cigarette-related taxes and/or fees have been proposed or enacted and are likely to continue to be proposed or enacted within the
U.S. and Canada. States continue to pass ballot measures that may result in increasing excise taxes on cigarettes and other
tobacco products. In February 2009, U.S. legislation was signed into law which funds the SCHIP program by raising the federal
cigarette excise tax from 39 to $1.01 per pack. This legislation was effective April 1, 2009.
These tax increases are expected to continue to have an adverse impact on sales of cigarettes due to lower consumption
levels and a shift in sales from the premium to the non-premium or discount cigarette segments or to sales outside of legitimate
channels. In addition, state and local governments may require us to prepay for excise tax stamps placed on packages of
cigarettes and other tobacco products that we sell. If these excise taxes are substantially increased, it could have a negative
impact on our liquidity. Accordingly, we may be required to obtain additional debt financing, which we may not be able to
obtain on satisfactory terms or at all. Our inability to prepay the excise taxes may prevent or delay our purchase of cigarettes and
other tobacco products, which could materially adversely affect our ability to supply our customers.
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In the U.S. we purchase cigarettes primarily from manufacturers covered by the tobacco industrys Master Settlement
Agreement (MSA), which results in our facing certain potential liabilities and financial risks including competition
from lower priced sales of cigarettes produced by manufacturers who do not participate in the MSA.
In June 1994, the Mississippi attorney general brought an action against various tobacco industry members on behalf of the
state to recover state funds paid for health-care costs related to tobacco use. Most other states sued the major U.S. cigarette
manufacturers based on similar theories. The cigarette manufacturer defendants settled the first four of these cases with
Mississippi, Florida, Texas and Minnesota by separate agreements. These states are referred to as non-MSA states. In
November 1998, the major U.S. tobacco product manufacturers entered into the MSA with 46 states, the District of Columbia
and certain U.S. territories. The MSA and the other state settlement agreements settled health-care cost recovery actions and
monetary claims relating to future conduct arising out of the use of, or exposure to, tobacco products, imposed a stream of future
payment obligations on major U.S. cigarette manufacturers and placed significant restrictions on the ability to market and sell
cigarettes. The payments required under the MSA result in the products sold by the participating manufacturers to be priced at
higher levels than non-MSA manufacturers.
In order to limit our potential tobacco related liabilities, we try to limit our purchases of cigarettes from non-MSA
manufacturers for sale in MSA states. The benefits of liability limitations and indemnities we are entitled to under the MSA do
not apply to sales of cigarettes manufactured by non-MSA manufacturers. From time to time, however, we find it necessary to
purchase a limited amount of cigarettes from non-MSA manufacturers. For example, during a transition period while integrating
distribution operations from an acquisition we may need to purchase and distribute cigarettes manufactured by non-MSA
manufacturers to satisfy the demands of customers of the acquired business. With respect to sales of such non-MSA cigarettes,
we could be subject to litigation that could expose us to liabilities for which we would not be indemnified.
If the tobacco industrys Master Settlement Agreement is invalidated, or tobacco manufacturers cannot meet their
obligations to indemnify us, we could be subject to substantial litigation liability.
In connection with the MSA, we are indemnified by most of the tobacco product manufacturers from which we purchase
cigarettes and other tobacco products for liabilities arising from our sale of the tobacco products that they supply to us. To date,
litigation challenging the validity of the MSA, including claims that the MSA violates antitrust laws, has not been successful.
However, if such litigation were to be successful and the MSA is invalidated, we could be subject to substantial litigation due to
our sales of cigarettes and other tobacco products, and we may not be indemnified for such costs by the tobacco product
manufacturers in the future. In addition, even if we continue to be indemnified by cigarette manufacturers that are parties to the
MSA, future litigation awards against such cigarette manufacturers and our company could be so large as to eliminate the ability
of the manufacturers to satisfy their indemnification obligations.
We face competition from sales of deep-discount brands and illicit and other low priced sales of cigarettes.
As a result of purchasing cigarettes for sale in MSA states primarily from manufacturers that are parties to the MSA, we are
adversely impacted by sales of brands from non-MSA manufacturers and deep-discount brands manufactured by small
manufacturers that are not original participants to the MSA. The cigarettes subject to the MSA that we sell have been burdened
by MSA related payments and are thus negatively impacted by widening price gaps between those brands and deep-discount
brands for the past several years. Growth in market share of deep-discount brands since the MSA was signed in 1998 has had an
adverse impact on the volume of the cigarettes that we sell.
We also face competition from the diversion into the U.S. market of cigarettes intended for sale outside the U.S., the sale of
counterfeit cigarettes by third parties, the sale of cigarettes in non-taxable jurisdictions, inter-state and international smuggling of
cigarettes, increased imports of foreign low priced brands, the sale of cigarettes by third parties over the internet and by other
means designed to avoid collection of applicable taxes. The competitive environment has been characterized by a continued
influx of cheap products that challenge sales of higher priced and taxed cigarettes manufactured by parties to the MSA. Increased
sales of counterfeit cigarettes, sales by third parties over the internet, or sales by means to avoid the collection of applicable
taxes, could have an adverse effect on our results of operations.
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Risks Related to Foreign Exchange and Financing

Currency exchange rate fluctuations could have an adverse effect on our revenues and financial results.
We generate a significant portion of our revenues in Canadian dollars, approximately 15% in both 2009 and 2008. We also
incur a significant portion of our expenses in Canadian dollars. To the extent that we are unable to match revenues received in
Canadian dollars with costs paid in the same currency, exchange rate fluctuations in Canadian dollars could have an adverse
effect on our revenues and financial results. During times of a strengthening U.S. dollar, our reported sales and earnings from our
Canadian operations will be reduced because the Canadian currency will be translated into fewer U.S. dollars. Conversely,
during times of a weakening U.S. dollar, our reported sales and earnings from our Canadian operations will be increased because
the Canadian currency will be translated into more U.S. dollars. Accounting principles generally accepted in the U.S. (U.S.
GAAP) require that foreign currency transaction gains or losses on short-term intercompany transactions be recorded currently
as gains or losses within the income statement. To the extent we incur losses on such transactions, our net income and earnings
per share will be reduced.
We may not be able to borrow additional capital to provide us with sufficient liquidity and capital resources necessary to
meet our future financial obligations.
During the current economic downturn, some companies had experienced difficulties in drawing on lines of credit, issuing
debt and raising capital generally, which had a material adverse effect on their liquidity. In addition, if banks from which
companies expect to receive financing fail or become insolvent, the borrowing capacity of those companies may be reduced. We
expect that our principal sources of funds will be cash generated from our operations and, if necessary, borrowings under our
$200 million credit facility. While we believe our sources of liquidity are adequate, we cannot assure you that these sources will
be available or continue to provide us with sufficient liquidity and capital resources required to meet our future financial
obligations, or to provide funds for our working capital, capital expenditures and other needs. As such, additional equity or debt
financing may be necessary, but we may not be able to obtain financing on terms satisfactory to us, or at all.
Our operating flexibility is limited in significant respects by the restrictive covenants in our Credit Facility.
Our credit facility imposes restrictions on us that could increase our vulnerability to general adverse economic and industry
conditions by limiting our flexibility in planning for and reacting to changes in our business and industry. Specifically, these
restrictions limit our ability, among other things, to: incur additional indebtedness, pay dividends and make distributions, issue
stock of subsidiaries, make investments, repurchase stock, create liens, enter into transactions with affiliates, merge or
consolidate, or transfer and sell our assets. In addition, under our credit facility, under certain circumstances we are required to
meet a fixed charge coverage ratio. Our ability to comply with this covenant may be affected by factors beyond our control and a
breach of the covenant could result in an event of default under our credit facility, which would permit the lenders to declare all
amounts incurred thereunder to be immediately due and payable and terminate their commitments to make further extensions of
credit.
Risks Related to Government Regulation and Environment
If we are unable to comply with governmental regulations that affect our business or if there are substantial changes in
these regulations, our business could be adversely affected.
As a distributor of food products, we are subject to regulation by the U.S. Food and Drug Administration, Health Canada
and similar regulatory authorities at the state, provincial and local levels. In addition, our employees operate tractor trailers,
trucks, forklifts and various other powered material handling equipment and we are therefore subject to regulation by the U.S.
and Canadian Departments of Transportation.
Our operations are also subject to regulation by the Occupational Safety and Health Administration, the Drug Enforcement
Agency and other federal, state, provincial and local agencies. Each of these regulatory authorities has broad administrative
powers with respect to our operations. If we fail to adequately comply with government regulations or regulations become more
stringent, we could experience increased inspections, regulatory authorities could take remedial action including imposing fines
or shutting down our operations or we could be subject to increased compliance costs. If any of these events were to occur, our
results of operations would be adversely affected.
Earthquake and natural disaster damage could have a material adverse affect on our business.
Our headquarters and operations in California, as well as one of our data centers located in Richmond, British Columbia,
Canada, are located in or near high hazard earthquake zones. In addition, one of our data centers is located in Plano, Texas,
which is susceptible to wind storms. We also have operations in areas that have been affected by natural disasters such as
hurricanes, tornados, flooding, ice and snow storms. While we maintain insurance to indemnify us for losses due to such
occurrences, our insurance may not be sufficient in the event of a significant natural disaster or payments under our policies may
not be received timely enough to prevent adverse impacts on our business. Our customers could also be affected by like events,
which could adversely impact our sales.
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Tax legislation could impact future cash flows.

The U.S. budget proposal currently being discussed includes potential changes to current tax law, including the repeal of the
LIFO (Last-In, First-Out) method of inventory accounting. As currently drafted, LIFO would be repealed for tax years beginning
after 2011 and LIFO reserves existing at that time would be taxed ratably over an eight year period. Should LIFO be repealed,
the payment of income taxes, and any future tax deferral prior to the date of repeal, over the eight year period, would reduce the
amount of money that we have for our operations, working capital, capital expenditures, expansions, acquisitions or general
corporate or other business activities, which could materially and adversely affect our business, financial condition and results of
operations.
New accounting standards could result in changes to our methods of quantifying and recording accounting transactions,
and could affect our financial results and financial position.
Changes to U.S. GAAP arise from new and revised standards, interpretations and other guidance issued by the Financial
Accounting Standards Board, the SEC and others. In addition, the SEC is considering a potential requirement for U.S. issuers to
report future financial results in accordance with International Financial Reporting Standards (IFRS) rather than U.S. GAAP.
The U.S. Government may also issue new or revised Cost Accounting Standards or Cost Principles. The effects of such changes
may include prescribing an accounting method where none had been previously specified, prescribing a single acceptable method
of accounting from among several acceptable methods that currently exist or revoking the acceptability of a current method and
replacing it with an entirely different method, among others. Such changes could result in unanticipated effects on our results of
operations, financial position and other financial measures.
ITEM 1.B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Our headquarters are located in South San Francisco, California, and consist of approximately 26,000 square feet of leased
office space. We also lease approximately 13,000 square feet for use by our information technology and tax personnel in
Richmond, British Columbia and approximately 6,000 square feet for use by our information technology personnel in Plano,
Texas. We lease approximately 2.7 million square feet and own approximately 0.4 million square feet of distribution space.
Distribution Center Facilities by City and State of Location(1)
Albuquerque, New Mexico
Atlanta, Georgia
Bakersfield, California
Corona, California(2)
Denver, Colorado
Fort Worth, Texas
Grants Pass, Oregon
Hayward, California
Las Vegas, Nevada

Los Angeles, California
Leitchfield, Kentucky
Minneapolis, Minnesota
Portland, Oregon
Sacramento, California(3)
Salt Lake City, Utah
Spokane, Washington
Whitinsville, Massachusetts
Wilkes-Barre, Pennsylvania
Calgary, Alberta
Toronto, Ontario
Vancouver, British Columbia
Winnipeg, Manitoba
(1) Excluding outside storage facilities or depots and two facilities that we operate as third party logistics provider. Depots are
defined as a secondary location for a division which may include any combination of sales offices, operational departments
and/or storage. We own distribution center facilities located in Leitchfield, Kentucky and Wilkes-Barre, Pennsylvania. All
other facilities listed are leased. The facilities we own are subject to encumbrances under our principal credit facility.
(2) This facility includes a distribution center and our Allied Merchandising Industry consolidating warehouse.
(3) This facility includes a distribution center and our Artic Cascade consolidating warehouse.
We also operate distribution centers on behalf of two of our major customers, one in Phoenix, Arizona for Alimentation
Couche-Tard Inc. and one in San Antonio, Texas for Valero Energy Corporation. Each facility is leased by the specific customer
solely for their use and operated by Core-Mark.
16
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ITEM 3. LEGAL PROCEEDINGS

As of December 31, 2009, we were not involved in any material legal proceedings.
ITEM 4. (REMOVED AND RESERVED)
ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock trades on the NASDAQ Global Market under the symbol CORE. According to the records of our
transfer agent, we had 3,174 stockholders of record as of February 26, 2010.
The following table provides the range of high and low sales prices of our common stock as reported by the NASDAQ
Global Market for the periods indicated:
Low
Price
Fiscal 2009
4th Quarter
3rd Quarter
2nd Quarter
1st Quarter
25.93
24.73
17.55
15.60
High
Price
$
Low
Price
Fiscal 2008
4th Quarter
3rd Quarter
2nd Quarter
1st Quarter
14.81
24.65
25.53
22.59
33.20
30.12
27.35
22.01
High
Price
24.94
30.74
30.03
29.95
We have not declared or paid any cash dividends on our common stock. The credit agreement for our Credit Facility places
limitations on our ability to pay cash dividends on our common stock. The payment of any future dividends will be determined
by our board of directors in light of then existing conditions, including our earnings, financial condition and capital requirements,
strategic alternatives, restrictions in financing agreements, business conditions and other factors.
17
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PERFORMANCE COMPARISON
The graph below presents a comparison of cumulative total return to stockholders for the period Core-Mark had securities
trading on the Pink Sheets or on the NASDAQ Global Market and the cumulative total return of the NASDAQ Non-Financial
Stock Index and a peer group of companies (the Performance Peer Group).
Cumulative total return to stockholders is measured by per share price change for the period by the share price at the
beginning of the measurement period. Core-Marks cumulative stockholder return is based on an investment of $100 on
November 7, 2005 and is compared to the total return of the NASDAQ Non-Financial Stock Index, the Russell 2000 Index, and
the weighted-average performance of the Performance Peer Group over the same period with a like amount invested, including
the assumption that any dividends have been reinvested. We regularly compare our performance to the Russell 2000 Index since
it includes primarily companies with relatively small market capitalization similar to us.
The companies composing the Performance Peer Group are Sysco Corp. (SYY), Nash Finch Company (NAFC), United
Natural Foods, Inc. (UNFI) and AMCON Distributing Co. (DIT).
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG CORE-MARK, NASDAQ NON-FINANCIAL STOCK AND RUSSELL 2000 INDEXES,
AND THE PERFORMANCE PEER GROUP
11/7/05
CORE
NASDAQ Index
Russell 2000 Index
Performance Peer Group
$
$
$
$
100.00
100.00
100.00
100.00
12/30/05
$
$
$
$
3/31/08
CORE
NASDAQ Index
Russell 2000 Index
Performance Peer Group
$
$
$
$
91.24
108.28
107.12
99.25
101.27
101.56
102.04
101.47
3/31/06
$
$
$
$
6/30/08
$
$
$
$
83.17
110.64
107.75
95.28
121.46
107.91
116.27
107.08
9/30/08
$
$
$
$
79.33
98.85
106.55
108.50
Investment Value at
9/29/06
12/29/06
6/30/06
$
$
$
$
113.65
99.68
110.42
102.10
$
$
$
$
12/31/08
$
$
$
$
68.32
57.94
78.72
82.18
99.49
103.71
110.91
111.38
$
$
$
$
3/31/09
$
$
$
$
57.84
57.39
66.95
81.58
106.19
111.38
120.78
123.46
3/30/07
$
$
$
$
6/30/09
$
$
$
$
82.73
69.63
80.80
82.77
113.27
112.39
123.13
114.34
9/30/09
$
$
$
$
90.89
81.04
96.38
91.20
6/29/07
$
$
$
$
114.22
121.93
128.57
112.48
9/28/07
$
$
$
$
111.84
127.83
124.59
120.86
12/31/07
$
$
$
$
91.17
126.36
118.89
108.20
12/31/09
$
$
$
$
104.63
87.34
100.11
103.81
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Sales of Unregistered Securities

Common Stock and Warrants Issued Pursuant to the Plan of Reorganization in 2004
Pursuant to the plan of reorganization (May 2004) described in Exhibit 2.1 and incorporated by reference (see Part IV,
Item 15, Exhibit Index of this Form 10-K), herein referred to as Flemings bankruptcy or plan of reorganization, on
August 23, 2004 we issued an aggregate of 9,800,000 shares of our common stock and warrants to purchase an aggregate of
990,616 shares of our common stock to the Class 6(B) creditors of Fleming. We refer to the warrants we issued to the Class 6(B)
creditors as the Class 6(B) Warrants. We received no cash consideration for the issuance of common stock and the Class 6(B)
Warrants. The Class 6(B) Warrants have an exercise price of $20.93 per share and may be exercised at the election of the holder
at any time prior to August 23, 2011, at which time any outstanding warrants will be net issued. The shares of common stock and
the Class 6(B) Warrants were issued pursuant to an exemption from registration under Section 1145(a) of the Bankruptcy Code.
We also issued warrants to purchase an aggregate of 247,654 shares of our common stock to the holders of our Tranche B Notes.
The Tranche B Warrants have an exercise price of $15.50 per share. Shares of our common stock issued upon exercise of the
Tranche B Warrants are issued pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933.
During 2009, 15,822 of the Class 6(B) warrants were exercised and issued in cash transactions, and a total of 37,810 shares
of common stock have been issued since inception pursuant to exercises of Class 6(B) warrants. The exercise of such warrants
was also done pursuant to an exemption from registration under Section 1145(a) of the Bankruptcy Code. During 2009, there
were no Tranche B warrants exercised and issued in cashless transactions, and the total number of shares of common stock
issued since inception pursuant to Tranche B warrants as of December 31, 2009 remained at 73,507 shares.
Issuer Purchases of Equity Securities
There were no repurchases of common stock shares during the three months ended December 31, 2009.
ITEM 6. SELECTED FINANCIAL DATA
Core-Mark Holding Company, Inc., or Core-Mark, is the ultimate parent holding company for Core-Mark International,
Inc. and our wholly-owned subsidiaries.
Basis of Presentation
The selected consolidated financial data for the years 2009, 2008, 2007, 2006 and 2005 are derived from Core-Marks
audited consolidated financial statements included in our Annual Reports on Form 10-K. The following financial data should be
read in conjunction with the consolidated financial statements and notes thereto and with Item 7, Managements Discussion and
Analysis of Financial Condition and Results of Operations.
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SELECTED CONSOLIDATED FINANCIAL DATA
(in millions except per share amounts)

Statement of Operations Data:
Net sales
Gross profit (d)
Warehousing and distribution expenses (d)
Selling, general and administrative expenses
Income from operations
Interest expense, net (e)
Net income
Per share data:
Basic income per common share
Diluted income per common share
Shares used to compute net income per share:
Basic
Diluted
Other Financial Data:
Excise taxes (f)
Cigarette inventory holding profits/FET (g)
OTP tax refunds (h)
LIFO expense
Depreciation and amortization (i)
Stock-based compensation
Capital expenditures
2009(a)
Core-Mark Holding Company, Inc. and Subsidiaries

2008(b)
2007
2006 (c)
6,531.6
401.6
197.3
137.3
65.0
1.4
47.3
6,044.9
359.1
197.6
129.4
30.1
1.2
17.9
5,560.9
332.6
174.1
119.0
37.7
1.0
24.1
5,314.4
297.7
151.1
106.6
38.5
4.2
20.6
4,891.1
271.0
135.7
90.0
44.0
11.0
14.3
$
$
4.53
4.35
$
$
1.71
1.64
$
$
2.30
2.15
$
$
2.05
1.87
$
$
1.46
1.37
10.5
10.9
$
10.5
10.9
1,516.0
25.2
0.6
6.7
18.7
5.1
21.1
2009
Balance Sheet Data:
Total assets
Total debt, including current maturities
2005
1,474.4
3.1
1.4
11.0
17.4
3.9
19.9
2008
677.9
20.0
612.6
30.8
10.5
11.2
$
1,349.4
7.3
13.3
13.1
14.9
5.3
20.8
10.0
11.0
$
December 31,
2007
$
577.1
29.7
1,313.3
4.1
2.9
13.2
4.4
12.8
9.8
10.5
$
2006
$
555.6
78.0
1,195.0
5.7
7.5
12.5
4.0
7.8
2005
$
510.4
59.6
(a) The selected consolidated financial data for 2009 includes approximately $534.0 million of incremental sales related to
increased cigarette prices by manufacturers in response to the increase in federal excise taxes mandated by the SCHIP
legislation and $36.7 million of related cigarette inventory holding profits, offset by $11.5 million of a net floor stock tax.
(b) The selected consolidated financial data for 2008 includes the results of operations of the Toronto division, which started
operations in late January 2008, and also the New England division following its acquisition in June 2008.
(c) The selected consolidated financial data for 2006 includes the results of operations of the Pennsylvania division following
its acquisition in June 2006.
(d) Gross margins may not be comparable to those of other entities because warehouse and distribution expenses are not
included as a component of our cost of goods sold.
(e) Interest expense, net, is reported net of interest income and includes amortization of debt issuance costs.
(f) State and provincial excise taxes (predominantly cigarettes and tobacco) paid by the Company are included in net sales and
cost of goods sold.
(g) Cigarette inventory holding profits represent income related to cigarette and excise tax stamp inventories on hand at the
time either cigarette manufacturers increase their prices or states increase their excise taxes, for which the Company is able
to pass such increases on to its customers. This income is recorded as an offset to cost of goods sold and recognized as the
inventory is sold. This income is not predictable and is dependent on inventory levels and the timing of manufacturer price
increases or state excise tax increases. In 2009, we realized significant cigarette inventory holding profits due to the price
increases in response to the federal excise taxes levied on manufacturers by the SCHIP legislation.
(h) We received OTP (Other Tobacco Products) tax refunds from the State of Florida of $0.6 million in 2009, from the State of
Texas of $1.4 million in 2008 and from the State of Washington of $13.3 million in 2007.
(i) Depreciation and amortization includes depreciation on property and equipment and amortization of purchased intangibles.
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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS
The following discussion and analysis of financial condition, results of operations, liquidity and capital resources should be
read in conjunction with the accompanying audited consolidated financial statements and notes thereto that are included under
Part II, Item 8, of this Form 10-K. Also refer to Special Note Regarding Forward-Looking Statements, which is included after
Table of Contents in this Form 10-K.
Our Business
Core-Mark is one of the largest marketers of fresh and broad-line supply solutions to the convenience retail industry in
North America. We offer a full range of products, marketing programs and technology solutions to approximately 24,000
customer locations in the U.S. and Canada. Our customers include traditional convenience stores, grocery stores, drug stores,
liquor stores and other specialty and small format stores that carry convenience products. Our product offering includes
cigarettes, tobacco, candy, snacks, fast food, groceries, fresh products, dairy, non-alcoholic beverages, general merchandise and
health and beauty care products. We operate a network of 26 distribution centers (including two distribution facilities we operate
as a third party logistics provider) in the U.S. and Canada.
We derive our net sales primarily from sales to convenience store customers. Our gross profit is derived primarily by
applying a markup to the cost of the product at the time of the sale and from cost reductions derived from vendor credit term
discounts received and other vendor incentive programs. Our operating expenses are comprised primarily of sales personnel
costs; warehouse personnel costs related to receiving, stocking and selecting product for delivery; delivery costs such as delivery
personnel, truck leases and fuel; costs relating to the rental and maintenance of our facilities; and other general and
administrative costs.
Overview of 2009 Results
Net sales for 2009 increased 8.1% to $6.53 billion compared to $6.04 billion in 2008. Sales of cigarettes and other tobacco
products increased in absolute dollars, primarily as a result of price increases by U.S. cigarette manufacturers in response to the
federal excise taxes levied on manufacturers by the SCHIP legislation that became effective April 1, 2009. We believe these
significant price increases contributed to the drop in our average daily U.S. cigarette carton sales which declined 9.9% during the
year, excluding our New England division which we acquired in June 2008. This decrease was partially offset by a 14.4%
increase in average daily Canadian carton sales, driven by market share gains in Toronto and other parts of Ontario. We expect
consumption trends of legal cigarette and tobacco products will continue to be negatively impacted by rising prices, diminishing
social acceptance and legislative and regulatory actions that create limitations on where a consumer can smoke and how products
can be promoted and produced. In addition, we expect rising prices will stimulate a higher percentage of consumers to purchase
from illicit markets to fulfill consumer demand. We believe this may adversely impact our cigarette carton volume, primarily in
the U.S., in future periods.
Sales of our food/non-food products for 2009 increased slightly to $1.94 billion compared with $1.92 billion for 2008. We
believe the ongoing general weakness in the economy negatively impacted our overall sales in this category as consumers
curtailed discretionary spending on certain products. Additionally, sales in our beverages category declined in 2009 due to
distribution and marketing changes by some of the retail beverage manufacturers and sales in our dairy category were negatively
impacted by significant price deflation during the year. Despite these challenging times, we did benefit from price increases
related to the SCHIP legislation in some of the other tobacco product lines and we experienced sales growth from our marketing
initiatives that focus on fresh foods and vendor consolidation.
We continue to monitor current macroeconomic conditions including consumer confidence, employment and
inflation/deflation. If consumer spending declines further and/or the current decline persists for a prolonged period of time, our
sales and associated gross profit could be negatively impacted in future quarters. Conversely, if consumer confidence and
employment conditions improve, our results could benefit.
Operating income for 2009 increased by $34.9 million to $65.0 million from $30.1 million in 2008. This increase included a
$33.6 million increase in cigarette holding profits, offset by $11.5 million of federal excise floor taxes, and a $4.3 million
reduction in LIFO expense resulting primarily from lack of inflation in our food/non-food categories. Excluding these items from
both periods, operating income for 2009 increased by $8.5 million, or 22.4%, to $46.5 million as compared to $38.0 million in
2008. This increase in operating income was due primarily to a $16.9 million increase in remaining gross profit offset by an
increase of $7.6 million in operating expenses. Higher cigarette gross profit was partially offset by a decrease in our
food/non-food remaining gross profit resulting primarily from a decline in floor stock income which we typically recognize as
our vendors increase their prices. Our gross profit can be positively or negatively impacted on a comparable basis depending on
the relative level of price inflation or deflation period over period.
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The increase in our operating expenses resulted primarily from incremental expenses from our New England and Toronto
divisions added during 2008, salary merit increases, higher incentive based compensation, increases in healthcare costs and a
decrease in cooperative marketing reimbursements from vendors. These were partially offset by lower net fuel costs, increased
operating efficiencies at certain divisions and cost saving in other areas. Inflation in future fuel costs or reductions in the fuel
surcharges we pass on to our customers may materially impact our financial results depending on the extent and timing of these
changes.
Business and Supply Expansion
We continue to expand our presence eastward, expand our fresh product delivery and drive our vendor consolidation
initiative. Some of our recent activities include:
In 2009, as part of our strategy of selling fresh product, we enrolled almost 2,000 new stores in our
program of delivering fresh sandwiches, bakery items, fruits and vegetables, dairy products and other
fresh items multiple times per week. This program was in addition to our other sales and marketing
initiatives focused on increasing sales of fresh products.
We entered into a five-year contract with BP Products North America in February 2010 to provide all of the
ampm proprietary products to its 1,200 stores nationwide. This agreement expands our existing relationship
with BP Products North America from a focus in western states to a national basis. In addition, Core-Mark is now
designated as the approved supplier for traditional nonproprietary products, in a move designed to further
advance ampms ongoing progress in supply chain efficiencies, marketing program effectiveness and
consistency of offerings.
We signed a non-binding memorandum of intent with Jamba, Inc. (Jamba) in February 2010 to establish a
relationship to offer and deliver health-oriented Jamba-branded food and beverage consumer products to
Core-Mark serviced convenience retail locations. The proposed three-year relationship would us the generally
exclusive distribution rights of the Jamba-branded products to the convenience store retail channel.
We acquired in June 2008 substantially all of the assets of Auburn Merchandise Distributors, Inc. (AMD),
located in Whitinsville, Massachusetts, a wholly-owed subsidiary of Warren Equities, Inc., for approximately
$28.7 million, including transaction costs. The assets purchased include primarily accounts receivable, inventory
and fixed assets. The AMD acquisition expanded our presence and infrastructure in the Northeastern region of the
U.S., as its facility and the majority of its customers are located there (see Note 3Acquisitions).
We opened a distribution facility near Toronto, Ontario, in January 2008, to expand our existing market
geography in Canada, and we signed a long-term supply agreement with Couche-Tard, a Canadian retailer that
operates over 600 stores in the province of Ontario.
Other Business Developments

Impact of the Passage of Family Smoking Prevention and Tobacco Control Act
In June 2009, the Family Smoking Prevention and Tobacco Control Act was signed into law, which granted the U.S. federal
Food & Drug Administration (FDA) the authority to regulate the production and marketing of tobacco products in the U.S. The
new legislation establishes a new FDA office that will regulate changes to nicotine yields and the chemicals and flavors used in
tobacco products, requires ingredient listings be displayed on tobacco products, prohibits the use of certain terms which may
attract youth or mislead users as to the risks involved with using tobacco products and limits the advertising and marketing of
tobacco products. This new FDA office is to be financed through user fees paid by tobacco companies prorated based on market
share. To date this legislation and its associated regulations have not had a material impact on our business.
Federal Excise Tax Liability Impact for the State Childrens Health Insurance Program
In February 2009, SCHIP was signed into law, which increased federal cigarette excise taxes levied on manufacturers of
cigarettes from 39 to $1.01 per pack effective April 1, 2009. In March 2009, most U.S. manufacturers increased their list prices
that resulted in an increase of approximately 28.0% on Core-Marks product purchases. We believe these price increases were in
response to the passage of the SCHIP legislation and increased sales by approximately $534.0 million in 2009. These price
increases resulted in cigarette inventory holding profits net of Federal Excise Taxes (FET) associated with the SCHIP
legislation of $25.2 million for 2009. We paid approximately $12.7 million of federal excise floor taxes and received
$1.2 million in reimbursements from cigarette and tobacco manufacturers for a net floor stock tax amount of $11.5 million,
which was reflected as an increase to our cost of goods sold for the second quarter of 2009. We earn a cash discount of
approximately 2% (or approximately 14 incremental gross profit per carton) on purchases from cigarette manufacturers.
Tobacco Tax Refunds Settlement Agreements
In November 2008, we entered into a settlement agreement with the State of Texas Comptroller of Public Accounts related
to a technical interpretation of the State of Texas Other Tobacco Products Tax Law, which resulted in a net refund of
$1.4 million. This refund, which was received in January 2009, was recorded in the fourth quarter of 2008 as a reduction to cost
of goods sold.
In April 2007, we entered into a settlement agreement with the State of Washington Department of Revenue related to a
refund of Other Tobacco Product (OTP) tax of approximately $13.3 million, representing 25% of the State of Washington OTP
tax we paid for the periods of December 1991 through December 1996 and May 1998 through June 2005. This refund, which
was received in July 2007, was recorded in the second quarter of 2007 as a reduction to cost of goods sold.
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Share Repurchase Program

In March 2008, our Board of Directors authorized a share repurchase program of up to $30 million to repurchase shares of
our common stock in the open market or in privately negotiated transactions subject to market conditions. The number of shares
to be repurchased and the timing of the purchases will be based on market conditions, our cash and liquidity requirements,
relevant securities laws and other factors. The share repurchase program may be discontinued or amended at any time. We
funded repurchases under the program, and plan to fund any future repurchases, from available cash. Our Credit Facility was
amended in 2008 to allow us to execute the share repurchase program. As of December 31, 2009 there was $16.8 million
available for future share repurchases under the program. Our available funds for future share repurchases were re-established at
$30 million under the February 2010 amendment to our Credit Facility (see Note 7Long-Term Debt).
During 2009, we repurchased 98,646 shares of common stock under the share repurchase program at an average price of
$22.77 per share for a total cost of $2.2 million. During the year ended December 31, 2008, we repurchased 396,716 shares of
common stock under the share repurchase program at an average price of $27.66 per share for a total cost of $11.0 million.
23
Table of Contents
Results of Operations
Comparison of 2009 and 2008(1)
Net sales
Net sales Cigarettes
Net sales Food/Non-food
Net sales, less excise taxes (2)
Gross profit (3)
Warehousing and distribution expenses
Selling, general and administrative
expenses
Interest expense
Interest income
Foreign currency transaction
(gains) losses, net
Income before taxes
Net income
2009
Increase
(Decrease)
Amounts
(in millions)
(in millions)
$
486.7 $
6,531.6
464.3
4,589.1
22.4
1,942.5
445.1
5,015.6
42.5
401.6
(0.3)
197.3
2009
2008
% of Net
sales
100.0
70.3
29.7
76.8
6.1
3.0
% of Net
sales, less
Amounts
excise taxes
(in millions)
$
6,044.9
64.0
4,124.8
36.0
1,920.1
100.0
4,570.5
8.0
359.1
3.9
197.6
% of Net
sales
100.0
68.2
31.8
75.6
5.9
3.3
% of Net
sales, less
excise taxes
60.7
39.3
100.0
7.9
4.3
7.9
34.9
(0.5)
(0.7)
137.3
65.0
1.7
(0.3)
2.1
1.0
2.7
1.3
129.4
30.1
2.2
(1.0)
2.1
0.5
2.8
0.7
0.1
(8.5)
43.2
29.4
(2.2)
65.8
47.3
1.0
0.7
1.3
0.9
6.3
22.6
17.9
0.1
0.4
0.3
0.1
0.5
0.4
(1) Amounts and percentages have been rounded for presentation purposes and might differ from unrounded results.
(2) Net sales, less excise taxes is a non-GAAP financial measure which we provide to separate the increase in sales due to
actual sales growth and increases in state and provincial excise taxes which we are responsible for collecting and remitting.
Federal excise taxes are levied on the manufacturers who pass the taxes on to us as part of the product cost and thus are not
a component of our excise taxes. Although increases in cigarette excise taxes result in higher net sales, our overall gross
profit percentage may decrease as a result of increases in excise taxes since gross profit dollars generally remain the same
(seeComparison of Sales and Gross Profit by Product Category, page 30).
(3) Gross margins may not be comparable to those of other entities because warehouse and distribution expenses are not
included as a component of our cost of goods sold.
Consolidated Net Sales. Net sales increased by $486.7 million, or 8.1%, to $6,531.6 million for 2009 from $6,044.9 million
in 2008. Excluding the effects of foreign currency fluctuations, net sales increased by 9.1% in 2009 compared to 2008. The
increase in net sales was attributable primarily to approximately $534.0 million from manufacturer price increases in response to
the SCHIP legislation and incremental sales of $136.9 million from our New England and Toronto divisions, which were
acquired or became operational in 2008, partially offset by a reduction in the volume of cigarette carton sales and one less selling
day in 2009 compared to 2008. The significant cigarette price increases and the resulting increase in our net sales impact certain
year over year comparisons on a percent of net sales basis.
Net Sales of Cigarettes. Net sales of cigarettes for 2009 increased by $464.3 million, or 11.3%, to $4,589.1 million from
$4,124.8 million in 2008. Net cigarette sales for 2009 increased 12.4%, excluding the effects of foreign currency fluctuations.
The increase in net cigarette sales in 2009 was driven by a 19.1% increase in the average sales price per carton due primarily to
manufacturer price increases and incremental sales of $115.5 million from our New England and Toronto divisions, partially
offset by a decline in average daily carton sales in the U.S. of 9.9%, excluding the New England division. We believe the decline
in average daily carton sales in the U.S. is due in part to the significant price increases during 2009 which led to reduced carton
sales. Average daily carton sales in Canada increased 14.4% primarily through market share gains. Total net cigarette sales as a
percentage of total net sales increased to 70.3% in 2009 compared to 68.2% in 2008. This increase was due primarily to the
significant price increases from the manufacturers in response to the SCHIP legislation.
24
Table of Contents
Net Sales of Food/Non-food Products. Net sales of food and non-food products for 2009 increased $22.4 million, or 1.2%,
to $1,942.5 million from $1,920.1 million in 2008. The following table provides the increases in net sales by product category for
our Food/Non-food Products (in millions):
2009
Net Sales
Product Category
Food
Candy
Equipment/other
Total Food/Non-food Products
2008
Net Sales
738.0
405.0
434.0
209.5
151.7
4.3
710.1
401.3
402.7
220.1
180.9
5.0
1,942.5
1,920.1
Increase / (Decrease)
Dollars
Percentage
27.9
3.7
31.3
(10.6)
(29.2)
(0.7)
3.9%
0.9%
7.8%
-4.8%
-16.1%
-14.0%
22.4
1.2%
Excluding the effects of foreign currency fluctuations, net sales of food and non-food products increased 2.2% in 2009
compared to 2008. The increase in net food/non-food sales was attributable to incremental sales of $21.4 million from our New
England and Toronto divisions, our sales and marketing initiatives, impacting primarily the food category, and price inflation in
the Other Tobacco Products category related primarily to SCHIP. The increase was offset partially by a reduction in
non-alcoholic beverages resulting from a change in the marketing and distribution methods of some beverage manufacturers.
Total net sales of food and non-food products as a percentage of total net sales were 29.7% for 2009 compared to 31.8% for
2008.
Gross Profit. Gross profit represents the portion of sales remaining after deducting the cost of goods sold during the period.
Vendor incentives, cigarette holding profits, the federal floor stock tax and changes in LIFO reserves are classified as elements of
cost of goods sold. Gross profit for 2009 increased by $42.5 million, or 11.8%, to $401.6 million from $359.1 million in 2008.
Gross profit for 2009 was significantly higher compared to 2008 as we realized $36.7 million of cigarette inventory holding
profits due primarily to increased cigarette prices by manufacturers in response to the increase in federal excise taxes mandated
by the SCHIP legislation, partially offset by $11.5 million of a FET tax related to SCHIP.
The following table provides the components comprising the change in gross profit as a percentage of net sales for 2009 and
2008(1):
2009
Net sales
Net sales, less excise
taxes (2)
Components of gross
profit:
Cigarette inventory
holding profits
Net federal floor stock
tax (3)
OTP tax refunds (4)
LIFO expense
Remaining gross profit
Amounts
(in millions)
$
6,531.6
% of Net
sales
100.0
5,015.6
76.8
100.0%
36.7
0.56
(11.5)
0.6
(6.7)
(0.18)
0.01
(0.10)
382.5
401.6
5.86
6.15
(5)
Gross profit
2008
% of Net
sales, less
excise taxes
% of Net
sales, less
excise taxes
Amounts
(in millions)
$
6,044.9
% of Net
sales
100.0
4,570.5
75.6
100.0%
0.73
3.1
0.05
0.07
(0.23)
0.01
(0.13)
1.4
(11.0)
0.02
(0.18)
0.03
(0.24)
365.6
359.1
6.05
5.94
7.63
8.01% $
8.00
7.86%
actual sales growth and increases in state and provincial excise taxes which we are responsible for collecting and remitting.
Federal excise taxes are levied on the manufacturers who pass the tax on to us as part of the product cost and thus are not a
component of our excise taxes. Although increases in cigarette excise taxes result in higher net sales, our overall gross
profit percentage may decrease since gross profit dollars generally remain the same (seeComparison of Sales and Gross
Profit by Product Category, page 30).
(3) In February 2009, SCHIP was signed into law and imposed a floor stock tax on tobacco products held for sale on April 1,
2009. The net floor stock tax was recorded as an increase to our cost of goods sold in the second quarter of 2009.
(4) We received OTP (Other Tobacco Products) tax refunds of $0.6 million from the State of Florida in 2009 and $1.4 million
from the State of Texas in 2008.
(5) Remaining gross profit is a non-GAAP financial measure which we provide to segregate the effects of LIFO expense,
cigarette inventory holding profits, FET associated with the SCHIP legislation and other major non-recurring items that
significantly affect the comparability of gross profit.
25
Table of Contents
Our remaining gross profit was 5.86% of total net sales for 2009 compared with 6.05% in 2008. The cigarette price
increases associated with SCHIP that increased our total net sales also reduced our remaining gross profit margins by
approximately 52 basis points in 2009.
Cigarette remaining gross profit increased approximately 24.5% on a cents per carton basis in 2009 compared with 2008
due primarily to increased margins as a result of the manufacturers price increases. We believe cigarette margins may revert
closer to normal historical margins over time. Remaining gross profit for our food/non-food categories decreased approximately
17 basis points in 2009 to 13.36% compared to 13.53% in 2008, due primarily to an $8.1 million reduction in floor stock income
earned from manufacturer price increases. In 2009, our remaining gross profit for food/non-food products declined to
approximately 67.9% of our total remaining gross profit compared to 71.1% in 2008. The decline was due primarily to the
impact of SCHIP which resulted in higher cigarette remaining gross profit in 2009.
Operating Expenses. Our operating expenses include costs related to warehousing, distribution, and selling, general and
administrative activities. In 2009, operating expenses increased $7.6 million, or 2.3%, to $336.6 million from $329.0 million in
2008. The increase in operating expenses was driven by a 6.1% increase in selling, general and administrative expenses. As a
percentage of net sales, total operating expenses were 5.2% in 2009 compared to 5.4% in 2008. Operating expenses, as a percent
to total net sales, were favorably impacted by approximately 46 basis points due to the SCHIP related cigarette price increases
which increased our total net sales.
Warehousing and Distribution Expenses. Warehousing and distribution expenses decreased by $0.3 million, or 0.2%, to
$197.3 million in 2009 from $197.6 million in 2008. The decrease in warehousing and distribution expenses was due primarily to
a decrease in net fuel costs of $4.5 million and increases in warehousing efficiencies at certain divisions offset by incremental
expenses of $3.4 million from our New England division, acquired in June 2008, and an increase in healthcare and workers
compensation costs of $3.6 million. The increase in healthcare and workers compensation costs for 2009 was due primarily to
higher overall medical costs and an increase in the severity of certain claims. As a percentage of net sales, warehousing and
distribution expenses were 3.0% for 2009 compared with 3.3% for 2008. The impact of SCHIP related cigarette price increases
on total net sales favorably impacted warehousing and distribution expenses as a percent of sales by approximately 27 basis
points.
Selling, General and Administrative (SG&A) Expenses. SG&A expenses increased $7.9 million, or 6.1%, in 2009 to
$137.3 million from $129.4 million in 2008. The increase in SG&A for 2009 was due primarily to $3.6 million of incremental
expenses from our New England and Toronto divisions, salary merit increases of $2.0 million and an increase in employee
incentives consisting of $1.3 million and $1.2 million of bonus and stock compensation respectively. As a percentage of net
sales, SG&A expenses were 2.1% for both 2009 and 2008. The impact of price increases associated with SCHIP favorably
impacted SG&A expenses as a percent to total net sales by approximately 19 basis points.
Interest Expense. Interest expense includes both debt interest and amortization of fees related to borrowings. Interest
expense was $1.7 million for 2009 compared to $2.2 million in 2008. Average borrowings for 2009 were $8.2 million compared
to $21.1 million for 2008. During 2009, the weighted-average interest rate on borrowings from our revolving credit facility was
2.0% compared to 3.8% in 2008. The decline in interest rates was the result of general decreases in both bank prime and LIBOR
borrowing rates. Interest expense declined period over period due to lower average interest rates and lower average borrowings.
Interest Income. In 2009, interest income was $0.3 million compared to $1.0 million for 2008. Our interest income was
derived primarily from earnings on cash balances kept in trust, checking accounts and overnight deposits. Interest income was
lower in 2009 due primarily to a reduction in prevailing interest rates.
Foreign Currency Transaction (Gains) Losses, Net. We incurred foreign currency transaction gains of $2.2 million for
2009 compared to losses of $6.3 million in 2008. The fluctuation was due primarily to the level of investment in our Canadian
operations and to changes in the Canadian/U.S. exchange rate.
Income Taxes. Our effective tax rate was 28.1% for 2009 compared to 20.8% for 2008 (see Note 9Income Taxes for a
reconciliation of the differences between the federal statutory tax rate and the effective tax rate). Included in the provision for
income taxes for 2009 was a $6.7 million net benefit, inclusive of a net interest recovery of $2.1 million related to unrecognized
tax benefits, compared to a net benefit of $3.2 million, inclusive of net interest expense of $0.1 million, for 2008. The net
benefits related primarily to the expiration of the statute of limitations for uncertain tax positions, changes to prior year estimates
based upon finalization of tax returns and state tax credits claimed for prior years.
26
Table of Contents
Comparison of 2008 and 2007(1)
Net sales
Net salesCigarettes
Net salesFood/Non-food
Net sales, less excise taxes(2)
Gross profit
Warehousing and distribution expenses (3)
Interest expense
Interest income
Foreign currency transaction losses (gains), net
Income before income taxes
Net income
2008
2008
2007
Increase
% of Net
% of Net
(Decrease)
Amounts
% of Net
sales, less
Amounts
% of Net
sales, less
(in millions) (in millions)
sales
excise taxes (in millions)
sales
excise taxes
$
484.0 $
6,044.9
100.0
$
5,560.9
100.0
261.7
4,124.8
68.2
60.7
3,863.1
69.5
62.4
222.3
1,920.1
31.8
39.3
1,697.8
30.5
37.6
359.0
4,570.5
75.6
100.0
4,211.5
75.7
100.0
26.5
359.1
5.9
7.9
332.6
6.0
7.9
23.5
197.6
3.3
4.3
174.1
3.1
4.1
10.4
129.4
2.1
2.8
119.0
2.1
2.8
(7.6)
30.1
0.5
0.7
37.7
0.7
0.9
(0.2)
2.2
0.1
2.4
0.1
(0.4)
(1.0)
(1.4)
7.2
6.3
0.1
0.1
(0.9)
(15.0)
22.6
0.4
0.5
37.6
0.7
0.9
(6.2)
17.9
0.3
0.4
24.1
0.4
0.6
actual sales growth and increases in excise taxes (seeComparison of Sales and Gross Profit by Product Line, page 30).
Increases in cigarette-related taxes and/or fees, excise taxes, drive prices higher on the cigarette products we sell which
result in higher net sales without increasing gross profit dollars. Increases in excise taxes result in a decline in overall gross
profit percentage since net sales increase and gross profit dollars remain the same.
(3) Gross margins may not be comparable to those of other entities because warehouse and distribution expenses are not
included as a component of cost of goods sold.
Consolidated Net Sales. Net sales increased by $484.0 million, or 8.7%, to $6,044.9 million for 2008 from $5,560.9 million
in 2007. The increase includes excise taxes of $124.9 million. Excluding our new distribution facility in Toronto and the recently
acquired New England division, net sales increased $227.6 million, or 4.1%, driven by net sales increases from existing and new
customers.
Net Sales of Cigarettes. Net sales of cigarettes for 2008 increased $261.7 million, or 6.8%, to $4,124.8 million from
$3,863.1 million in 2007. The increase in net cigarette sales was driven by a 4.5% increase in the average sales price per carton
due primarily to manufacturer price and state excise tax increases and sales from our new distribution facilities in Toronto and
New England, which also contributed to an approximate 2.2% increase in overall carton sales compared with 2007. Carton sales
declined approximately 1.7% in the U.S., excluding sales from our New England division, due primarily to overall lower
consumer demand. Carton sales in Canada increased 19.6%, or 8.3%, excluding sales from our new Toronto division. The
increase in carton sales in Canada was attributable primarily to market share gains and sales of additional product lines. Total net
cigarette sales as a percentage of total net sales was 68.2% for 2008 and 69.5% for 2007.
27
Table of Contents
Net Sales of Food/Non-food Products. Net sales of food and non-food products for 2008 increased $222.3 million, or
13.1%, to $1,920.1 million from $1,697.8 million for 2007. The increase was due primarily to increases in our food, candy and
other tobacco product categories driven by the Companys sales and marketing initiatives and the addition of our new Toronto
and New England divisions. Total net sales of food and non-food products as a percentage of total net sales was 31.8% for 2008
compared to 30.5% for 2007.
Gross Profit. Gross profit represents the portion of sales remaining after deducting the cost of goods sold during the period.
Vendor incentives, cigarette holding profits and changes in LIFO reserves are classified as elements of cost of goods sold. Gross
profit in 2008 increased by $26.5 million, or 8.0%, to $359.1 million from $332.6 million in 2007.
The following table provides the components comprising the change in gross profit as a percentage of net sales for 2008 and
2007(1):
2008
Net sales
Net sales, less excise
taxes(2)
Components of gross
profit:
OTP tax refunds (3)
LIFO expense
Cigarette inventory
holding profits
Remaining gross profit
Gross profit
Amounts
(in millions)
$
6,044.9
4,570.5
1.4
(11.0)
3.1
365.6
359.1
% of Net
sales
100.0%
2007
% of Net
sales, less
excise taxes
75.6
100.0%
0.02
(0.18)
0.03
(0.24)
0.05
6.05
5.94%
Amounts
(in millions)
$
5,560.9
0.07
8.00
7.86% $
4,211.5
13.3
(13.1)
7.3
325.1
332.6
% of Net
sales
100.0%
% of Net
sales, less
excise taxes
75.7
100.0%
0.24
(0.24)
0.32
(0.31)
0.13
5.85
5.98%
0.17
7.72
7.90%
actual sales growth and increases in excise taxes (seeComparison of Sales and Gross Profit by Product Line, page 30).
Increases in cigarette-related taxes and/or fees, excise taxes, drive prices higher on the cigarette products we sell which
result in higher net sales generally without increasing gross profit dollars. Increases in excise taxes result in a decline in
overall gross profit percentage since net sales increase and gross profit dollars remain the same.
(3) We received OTP (Other Tobacco Products) tax refunds from the State of Texas of $1.4 million in 2008 and from the State
of Washington of $13.3 million in 2007.
As a percentage of net sales, our remaining gross profit improved to 6.05% for 2008 compared to 5.85% for 2007. Our
remaining gross profit percentage for cigarettes declined approximately 5 basis points for 2008 to 2.56% compared with 2.61%
in 2007. This decline was due primarily to inflation in product cost from increases in excise taxes. Our remaining cigarette gross
profit increased 2.4% on a cents per carton basis. Remaining gross profit related to our food/non-food category increased
approximately 32 basis points for 2008 to 13.53% compared with 13.21% in 2007. Excluding our new divisions, Toronto and
New England, remaining gross profit for food/non-food category increased 47 basis points to 13.68% in 2008 compared with
2007. The increase in remaining gross profit percentage was due primarily to a higher percentage of sales from higher margin
food/non-food products combined with an increase in inventory holding gains related to candy, somewhat offset by an increase
in inventory shrinkage and the addition of national chain store customers.
In 2008, approximately 71.0% of gross profit was derived from food/non-food products compared to 69.5% in 2007,
including the impact of the OTP tax refunds.
Operating Expenses. Our operating expenses include costs related to warehousing, distribution, and selling, general and
administrative activities. In 2008, operating expenses increased $34.1 million, or 11.6%, to $329.0 million from $294.9 million
in 2007. Included in operating expenses for 2007 was a bad debt charge of $5.9 million related to two customers and a workers
compensation benefit of $3.1 million related to favorable claims experience prior to 2007. Excluding these two items, operating
expenses increased $36.9 million, or 12.6%, for 2008. This increase in operating expenses was driven primarily by a 13.5%
increase in warehouse and distribution expenses and an 8.7% increase in selling, general and administrative expenses. As a
percentage of sales, total operating expenses were 5.4% in 2008 compared with 5.3% in 2007.
28
Table of Contents
Warehousing and Distribution Expenses. Warehousing and distribution expenses increased $23.5 million, or 13.5%, to
$197.6 million in 2008 from $174.1 million in 2007. The increase in warehousing and distribution expenses was due primarily to
increases in sales volume, the addition of our Toronto and New England divisions which represented 48.9% of the increase, sales
growth and related operational inefficiencies at two of our divisions which accounted for 24.8% of the increase, higher fuel costs,
net of surcharges, which represented 7.0% of the increase, and an increase in facility and truck rental expense due primarily to
investment in additional capacity in certain locations to support our growth in key markets. As a percentage of sales,
warehousing and distribution expenses were 3.3% for 2008 as compared to 3.1% for 2007.
Selling, General and Administrative (SG&A) Expenses. SG&A expenses increased $10.4 million, or 8.7%, to
$129.4 million in 2008 from $119.0 million in 2007. SG&A expenses were impacted in 2007 by a $5.9 million bad debt charge
related to two customers that filed for bankruptcy protection and a workers compensation benefit of $3.1 million related to
favorable claims experience prior to 2007. Excluding these two items, SG&A expenses increased by $13.2 million, or 11.4%, in
2008. The increase for 2008 is due primarily to higher employee benefit costs driven by increases in healthcare and workers
compensation costs due to a higher wage base, increased medical costs, as well as an increase in the severity of certain claims,
the addition of the Toronto and New England divisions, and lower bonus last year as a result of fewer employees qualifying. As a
percentage of net sales, SG&A expenses were 2.1% for both 2008 and 2007.
Interest Expense. Interest expense includes both debt interest and amortization of fees related to borrowings. For 2008,
interest expense decreased by $0.2 million, or 8.3%, to $2.2 million from $2.4 million in 2007. The decrease in interest expense
was due primarily to lower interest rates during 2008 compared to 2007. Average borrowings for 2008 were $21.1 million
compared to $19.8 million for 2007. During 2008, the weighted-average interest rate on the revolving credit facility was 3.8%
compared to 6.7% in 2007. The decline in interest rates is the result of general decreases in rates charged to us on both prime and
LIBOR borrowings.
Interest Income. In 2008 interest income was $1.0 million compared to $1.4 million for 2007. Interest income is derived
from our earnings on cash balances kept in trust, checking accounts and overnight deposits. The interest income was lower for
2008 due primarily to a reduction in prevailing interest rates.
Foreign Currency Transaction (Gains) Losses, Net. We incurred foreign currency transaction losses of $6.3 million in
2008 compared to $0.9 million in gains in 2007. The fluctuation was due primarily to the depreciation of the Canadian foreign
exchange rate against the US dollar over the last six months of 2008 on transactions between our Canadian and U.S. operations.
For 2008 the average Canadian/U.S. exchange rate was $1.0676 compared to $1.0735 for 2007.
Income Taxes. Our effective tax rate was 20.8% for 2008 compared to 35.9% for 2007 (see Note 9Income Taxes for a
reconciliation of the differences between the federal statutory tax rate and the effective tax rate). Included in the provision for
income taxes for 2008 was a $3.2 million net benefit related primarily to the expiration of the statute of limitations for uncertain
tax positions and changes to prior years estimates, and $0.1 million of penalties net of after-tax interest credit related to
unrecognized tax benefits recorded under generally accepted accounting principles.
29
Table of Contents
Comparison of Sales and Gross Profit by Product Category

The following table summarizes our cigarette and other product sales, LIFO expense, gross profit and other relevant
financial data for 2009, 2008 and 2007 (dollars in millions)(1):
2009
Cigarettes
Net sales (2)
Excise taxes in sales (3)
LIFO expense
Gross profit (6)
Gross profit %
Gross profit % less excise taxes
Remaining gross profit (5)
Remaining gross profit %
Remaining gross profit % less excise taxes
Food/Non-food Products
Net sales
LIFO expense
Gross profit (7)
Gross profit %
Totals
Net sales (2)
LIFO expense
Gross profit (6),(7)
Gross profit %
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
4,589.1
1,381.0
3,208.1
6.6
142.4
3.10%
4.44%
122.9
2.68%
3.83%
1,942.5
135.0
1,807.5
0.1
259.2
13.34%
14.34%
259.6
13.36%
14.36%
6,531.6
1,516.0
5,015.6
6.7
401.6
6.15%
8.01%
382.5
5.86%
7.63%
2008
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
4,124.8
1,350.9
2,773.9
4.7
104.1
2.52%
3.75%
105.7
2.56%
3.81%
1,920.1
123.5
1,796.6
6.3
255.0
13.28%
14.19%
259.9
13.53%
14.46%
6,044.9
1,474.4
4,570.5
11.0
359.1
5.94%
7.86%
365.6
6.05%
8.00%
2007
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
3,863.1
1,237.2
2,625.9
6.7
101.5
2.63%
3.87%
100.9
2.61%
3.85%
1,697.8
112.2
1,585.6
6.4
231.1
13.61%
14.57%
224.2
13.21%
14.14%
5,560.9
1,349.4
4,211.5
13.1
332.6
5.98%
7.90%
325.1
5.85%
7.72%
(2) Cigarette net sales for the year ended December 31, 2009 includes $534.0 million of price increases primarily associated
with the implementation of SCHIP, which did not impact cigarette net sales for the years ended December 31, 2008 and
2007, as SCHIP was not signed into law until February 2009. Our gross profit percentage for the year ended December 31,
2009 was negatively impacted by SCHIP price increases.
(3) Excise taxes included in our net sales consist of state and provincial excise taxes which we are responsible for collecting
and remitting. Federal excise taxes are levied on the manufacturers who pass the tax on to us as part of the product cost and
thus are not a component of our excise taxes. Although increases in cigarette excise taxes result in higher net sales, our
overall gross profit percentage will decrease since gross profit dollars generally remain the same.
actual sales growth and increases in excise taxes.
(5) Remaining gross profit is a non-GAAP financial measure which we provide to segregate the effects of LIFO expense,
cigarette inventory holding profits and other major non-recurring items, such as FET associated with the SCHIP legislation
and OTP tax refunds, that significantly affect the comparability of gross profit.
(6) Cigarette gross profit includes (i) cigarette holding profits related to manufacturer price increases and increases in state and
provincial excise taxes, (ii) federal excise floor taxes and (iii) LIFO effects. Cigarette holding profits for the years 2009,
2008 and 2007 were $36.7 million, $3.1 million and $7.3 million, respectively. The increase in cigarette inventory holding
profits for the year ended December 31, 2009 was due primarily to increases in cigarette prices by manufacturers in
response to the increases in federal excise taxes mandated by the SCHIP legislation. Cigarette gross profit for the year
ended December 31, 2009 was negatively impacted by the $11.5 million of federal excise floor tax net of manufacturer
reimbursements related to SCHIP.
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(7) Food/Non-food gross profit includes (i) holding profits related to manufacturer price increases, (ii) increases in state and
provincial excise taxes, (iii) federal excise floor taxes and (iv) LIFO effects. Included in food/non-food gross profit for the
year ended December 31, 2009 is $0.9 million of federal excise floor taxes related to SCHIP. In addition, included in
food/non-food gross profit for 2009, 2008 and 2007 is the State of Florida OTP tax refund of $0.6 million, the State of
Texas OTP net tax refund of $1.4 million, and the State of Washington OTP tax refund of $13.3 million, respectively, all of
which were recorded as a reduction to our costs of goods sold in the applicable year.
Liquidity and Capital Resources
Our cash and cash equivalents as of December 31, 2009 were $17.7 million compared to $15.7 million as of December 31,
2008. Our restricted cash as of December 31, 2009 was $12.4 million compared to $11.4 million as of December 31, 2008.
Restricted cash primarily represents funds that have been set aside in trust as required by one of the Canadian provincial taxing
authorities to secure amounts payable for cigarette and tobacco excise taxes.
Our liquidity requirements arise primarily from the funding of our working capital, capital expenditures and debt service
requirements of our credit facilities. We have historically funded our liquidity requirements through our current operations and
external borrowings. For the year ended December 31, 2009, our cash flows from operating activities provided $33.1 million and
we had $196.9 million of borrowing capacity available in our revolving credit facility as of December 31, 2009. In
February 2010, we entered into a third amendment to our Credit Facility (the Third Amendment), which extended our credit
facility for four years, to February 2014, and decreased the lenders revolving loan commitments by $50 million to $200 million,
at our request.
Based on our anticipated cash needs, availability under our revolving credit facility and the scheduled maturity of our debt,
we expect that our current liquidity will be sufficient to meet all of our anticipated needs during the next twelve months.
Cash flows from operating activities
Year ended December 31, 2009
Net cash provided by operating activities decreased by $22.5 million to $33.1 million for the year ended December 31, 2009
compared with $55.6 million for the same period in 2008. The decrease in cash provided by operating activities was due
primarily to a $61.6 million net decrease in working capital, driven by the timing of vendor prepayments and increased cigarette
prices resulting from the SCHIP legislation, which resulted in higher accounts receivable and inventory balances. This decrease
in working capital was partially offset by a $39.1 million increase in net income plus adjustments for non-cash items such as
depreciation, amortization and LIFO expense, which was driven primarily by income from cigarette price increases related to the
SCHIP legislation.
Net cash provided by operating activities decreased by $11.0 million to $55.6 million for 2008 compared with $66.6 million
for 2007. The decrease in net cash flows provided by operations was due primarily to a $7.0 million decrease in net income
adjusted for non-cash activity such as depreciation, amortization, LIFO expense and foreign currency transaction losses, coupled
with a $4.0 million decrease in working capital due primarily to the addition of our Toronto and New England divisions and
higher cigarette inventories to capitalize on buying opportunities.
Cash flows from investing activities
Net cash used in investing activities decreased by $28.5 million to $20.6 million for the year ended December 31, 2009
compared with $49.1 million for the same period 2008. In June 2008, we acquired AMD and paid approximately $28.0 million
which consisted primarily of purchased accounts receivable, inventory and fixed assets, offset by approximately $1.6 million of
cash received in the acquisition. Capital expenditures increased by $1.2 million to $21.1 million in 2009 compared with
$19.9 million for 2008. We estimate that fiscal 2010 capital expenditures will not exceed $20 million.
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Net cash used in investing activities increased by $25.8 million to $49.1 million for 2008 from $23.3 million in 2007. This
increase was due primarily to the acquisition of AMD. We paid approximately $28.0 million which consisted primarily of
purchased accounts receivable, inventory and fixed assets, offset by approximately $1.6 million of cash received in the
acquisition. Capital expenditures were $19.9 million in 2008 compared with $20.8 million for 2007. Capital expenditures for
2008 related primarily to the completion of our new Toronto distribution facility and expenditures for refrigerated delivery and
warehouse equipment.
Cash flows from financing activities
Net cash used in financing activities decreased by $1.8 million to $9.2 million for 2009 compared with $11.0 million for
2008. We had net repayments on our revolving line of credit of $10.7 million during 2009 compared to $0.1 million of
borrowings during 2008. Additionally, cash payments to repurchase our common stock pursuant to our share repurchase program
decreased from $11.0 million in 2008 to $2.2 million in 2009. The decrease in net cash used in financing activities was also
offset by an increase in book overdrafts due to the timing of excise tax payments.
Net cash used in financing activities decreased by $28.5 million to $11.0 million in 2008 compared with $39.5 million in
2007. The decrease was due primarily to higher repayments on our revolving line of credit made in 2007 as compared to 2008,
offset by approximately $11.0 million of cash payments to repurchase our common stock and a decrease in book overdrafts.
Our Credit Facility
In October 2005, we entered into a five-year revolving credit facility (Credit Facility) with a capacity of $250 million and
an expiration date of October 2010.
In February 2010, we entered into a third amendment to our Credit Facility (the Third Amendment), which extended our
credit facility for four years, to February 2014, and decreased the lenders revolving loan commitments by $50 million to
$200 million, at our request. Pricing under the new facility increased as a result of generally higher prices in the bank loan
market. The basis points added to LIBOR increased to a range of 275 to 350 basis points, up from a range of 100 to 175 basis
points, tied to achieving certain operating results as defined in the Credit Facility. Additionally, unused facility fees and letter of
credit fees increased. The Third Amendment also increased our basket for permitted acquisitions following the date of the Third
Amendment to $125 million and re-established our basket for permitted stock repurchases at $30 million. At the date of signing
the Amendment, we incurred fees of approximately $2.0 million, which will be amortized over the term of the amendment.
All obligations under the Credit Facility are secured by first priority liens upon substantially all of our present and future
assets. The terms of the Credit Facility permit prepayment without penalty at any time (subject to customary breakage costs with
respect to LIBOR- or CDOR-based loans prepaid prior to the end of an interest period).
Amounts borrowed, outstanding letters of credit and amounts available to borrow under the Credit Facility were as follows
(in millions):
Amounts borrowed
December 31,
2009
$
19.2
December 31,
2008
$
30.0
Outstanding letters of credit
26.1
24.4
Amounts available to borrow (prior to Third Amendment)
196.9
186.0
Since the total amount of the Credit Facility was reduced by $50 million in February 2010, the maximum amount available
to borrow is subject to the lower ceiling of $200 million permitted by the Third Amendment.
The Credit Facility contains restrictive covenants, including among others, limitations on dividends and other restricted
payments, other indebtedness, liens, investments and acquisitions and certain asset sales. We were in compliance with all of the
covenants under the Credit Facility as of December 31, 2009.
Our weighted-average interest rate was calculated based on our daily cost of borrowing which was computed on a blend of
prime and LIBOR rates. The weighted-average interest rate on our revolving credit facility for the years ended December 31,
2009 and 2008 was 2.0% and 3.8%, respectively. We paid total unused facility fees of $0.5 million for both 2009 and 2008.
Unamortized debt issuance costs were $0.4 million as of December 31, 2009 and $1.0 million at December 31, 2008.
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Contractual Obligations and Commitments

Contractual Obligations. The following table presents information regarding our contractual obligations that existed as of
December 31, 2009:
(in millions)
Long-term debt(1)
Purchase obligations(2)
Letters of credit
Operating leases
Capitalized leases(3)
Total contractual obligations (4)(5)(6)
2015 and
Total
2010
2011
2012
2013
2014
Thereafter
$
19.2 $
$
$
$
$
19.2 $
0.2
0.2
26.1
26.1
176.0
28.5
26.1
21.9
16.7
12.7
70.1
0.8
0.1
0.1
0.1
0.1
0.4
$ 222.3 $
54.8 $
26.2 $
22.0 $
16.8 $
32.0 $
70.5
(1) Does not include interest costs associated with the Revolving Credit Facility which had a weighted-average interest rate of
2.0% for the year ended December 31, 2009.
(2) Purchase orders for the purchase of inventory and other services are not included in the table above because purchase orders
represent authorizations to purchase rather than binding agreements. For the purposes of this table, contractual obligations
for purchase of goods or services are defined as agreements that are enforceable and legally binding and that specify all
significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions, and
the approximate timing of the transaction. Our purchase orders are based on our current inventory needs and are fulfilled by
our suppliers within short time periods. We also enter into contracts for outsourced services; however, the obligations under
these contracts are not significant and the contracts generally contain clauses allowing for cancellation without significant
penalty. As of December 31, 2009, $0.2 million represents estimated transportation equipment purchase commitments.
(3) Represents refrigeration equipment.
(4) We have not included in the table above Claims Liabilities of $32.6 million, net of current portion, which includes health
and welfare, workers compensation and general and auto liabilities because it does not have a definite payout by year.
They are included in a separate line in the Consolidated Balance Sheet and discussed in Note 2 to our Consolidated
Financial Statements in Item 8.
(5) As discussed in Note 12 to our Consolidated Financial Statements included in Item 8, we have an $11.6 million long-term
obligation arising from an underfunded pension plan. Future minimum pension funding requirements are not included in the
schedule above as they are not available for all periods presented.
(6) The table excludes unrecognized tax liabilities of $1.5 million because a reasonable and reliable estimate of the timing of
future tax payments or settlements, if any, cannot be determined (see Note 9Income Taxes).
Off-Balance Sheet Arrangements
Letter of Credit Commitments. As of December 31, 2009, our standby letters of credit issued under our Credit Facility were
$26.1 million related primarily to casualty insurance and tax obligations. The standby letters of credit expire in 2010. However,
in the ordinary course of our business, we will continue to renew or modify the terms of the letters of credit to support business
requirements. The liabilities underlying the letters of credit are reflected on our consolidated balance sheets.
Operating Leases. The majority of our sales offices, warehouse facilities and trucks are subject to lease agreements which
expire at various dates through 2022 (excluding renewal options). These leases generally require us to maintain, insure and pay
any related taxes. In most instances, we expect the leases that expire will be renewed or replaced in the normal course of our
business.
Third Party Distribution Centers. We currently manage two regional distribution centers for third party convenience store
operators who engage in self-distribution. Under the agreement relating to one of these facilities, the third party has a put right
under which it may require us to acquire the facility. If the put right is exercised, we will be required to (1) purchase the
inventory in the facilities at cost, (2) purchase the physical assets of the facilities at fully depreciated cost and (3) assume the
obligations of the third party as lessees under the leases related to those facilities. While we believe the likelihood that this put
option will be exercised is remote, if it were exercised, we would be required to make aggregate capital expenditures of
approximately $4.9 million based on current estimates. The amount of capital expenditures would vary depending on the timing
of any exercise of such put right and does not include an estimate of the cost to purchase inventory because such purchases
would simply replace other planned inventory purchases and would not represent an incremental cost.
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Critical Accounting Policies and Estimates

Managements Discussion and Analysis of our Financial Condition and Results of Operations is based on our consolidated
financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The
preparation of our consolidated financial statements requires estimates and assumptions that affect the reported amounts of assets
and liabilities as of the date of the financial statements and the reported amounts of net sales and expenses during the reporting
period. The critical accounting polices used in the preparation of the consolidated financial statements are those that are
important both to the presentation of financial condition and results of operations and require significant judgments with regards
to estimates. We base our estimates on historical experience and on various assumptions we believe are reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are
not readily apparent from other sources. We believe the current assumptions and other considerations used to estimate amounts
reflected in our financial statements are appropriate; however, actual results could differ from these estimates.
We believe that the following represent the more critical accounting policies, which are subject to estimates and
assumptions used in the preparation of our financial statements.
Allowance for Doubtful Accounts
We maintain an allowance for doubtful accounts for losses we estimate will arise from our trade customers inability to
make required payments. We evaluate the collectability of accounts receivable and determine the appropriate allowance for
doubtful accounts based on historical experience and a review of specific customer accounts. In determining the adequacy of
allowances for customer receivables, we analyze factors such as the value of any collateral, customer financial statements,
historical collection experience, aging of receivables, general economic conditions and other factors. It is possible that the
accuracy of the estimation process could be materially affected by different judgments as to the collectability based on
information considered and further deterioration of accounts. If circumstances change (i.e., further evidence of material adverse
creditworthiness, additional accounts become credit risks, store closures or deterioration in general economic conditions), our
estimates of the recoverability of amounts due us could be reduced by a material amount, including to zero.
The allowance for doubtful accounts at December 31, 2009, 2008 and 2007 amounted to 5.6%, 6.0% and 6.9%,
respectively, of net trade accounts receivable.
Bad debt expense associated with our trade customer receivables was $1.8 million for 2009, $1.6 million for 2008 and
$6.9 million for 2007. Bad debt expense for 2007 included a charge of $5.9 million related to two customers who declared
bankruptcy in the fourth quarter of 2007. As a percentage of sales, our bad debt expense was less than 0.1% for both 2009 and
2008, and 0.1% for 2007.
Inventories
Our U.S. inventories are valued at the lower of cost or market. Cost of goods sold is determined on a last-in, first-out
(LIFO) basis using producer price indices (PPIs) as published by the U.S. Department of Labor. PPIs are updated by the
Department of Labor on a lag basis for manufacturer price increases or decreases implemented after the initial PPI has been
published for a given month. When we are aware of material price increases or decreases from manufacturers, we will estimate
the PPI for the respective period in order to more accurately reflect inflation rates. The PPIs are applied to inventory which is
grouped by merchandise having similar characteristics. Under the LIFO method, current costs of goods sold are matched against
current sales. During periods of rising prices, the LIFO method of costing inventories generally results in higher costs being
charged against income (LIFO expense), while lower costs are retained in inventories. To the extent inventories or prices decline
significantly at the end of any period where there have been increasing prices in prior periods, under LIFO some older and
potentially lower priced inventory is considered as having been sold, resulting in a lower cost of goods sold compared to current
prices, and increased current gross profit (LIFO income).
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Table of Contents
Vendor and Sales Incentives

Vendors Discounts, Rebates and Allowances Periodic payments from vendors in various forms including volume or
other purchase discounts are reflected in the carrying value of the related inventory when earned and as cost of goods sold as the
related merchandise is sold. Up-front consideration received from vendors linked to purchase or other commitments is initially
deferred and amortized ratably to cost of goods sold or as the performance of the activities specified by the vendor to earn the fee
is completed. Cooperative marketing incentives from suppliers are recorded as reductions to cost of goods sold to the extent the
vendor considerations exceed the costs relating to the programs. These amounts are recorded in the period the related
promotional or merchandising programs were provided. Some of the vendor incentive promotions require that we make
assumptions and judgments regarding, for example, the likelihood of achieving market share levels or attaining specified levels
of purchases. Vendor incentives are at the discretion of our vendors and can fluctuate due to changes in vendor strategies and
market requirements.
Customers Sales IncentivesWe also provide sales rebates or discounts to our customers on a regular basis. The
customers sales incentives are recorded as a reduction to sales revenue as the sales incentive is earned by the customer.
Additionally, we may provide racking and slotting allowances for the customers commitments to continue using us as the
supplier of their products. These allowances may be paid at the inception of the contract or on a periodic basis. Allowances paid
at the inception of the contract are capitalized and amortized over the period of the distribution agreement as a reduction to sales.
Income Taxes
Income taxes are accounted for under U.S. GAAP using the liability method. Deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts
of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry-forwards. Deferred tax assets
and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when management does not consider
it more likely than not that some portion or all of the deferred tax assets will be realized. In assessing the need for a valuation
allowance, our management evaluates all significant available positive and negative evidence, including historical operating
results, estimates of future taxable income and the existence of prudent and feasible tax planning strategies. As of December 31,
2009, we had a valuation allowance of $0.1 million with respect to 100% of the deferred tax asset related to foreign tax credits.
We believe that it is more likely than not we will be unable to utilize the foreign tax credits, which will expire at various times
from 2014 to 2016, due primarily to the relatively lower taxable income generated in Canada compared with the U.S. Changes in
the expectations regarding the realization of deferred tax assets could materially impact income tax expense in future periods.
According to U.S. GAAP, a tax benefit from an uncertain tax position may be recognized when it is more likely than not
that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on
the technical merits. We have established an estimated liability for income tax exposures that arise and meet the criteria for
accrual under U.S. GAAP. We prepare and file tax returns based on our interpretation of tax laws and regulations and record
estimates based on these judgments and interpretations. In the normal course of business, our tax returns are subject to
examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing
authorities. Inherent uncertainties exist in estimates of tax contingencies due to changes in tax law resulting from legislation,
regulation and/or as concluded through the various jurisdictions tax court systems. We classify interest and penalties related to
income taxes as income tax expense.
Claims Liabilities and Insurance Recoverables
We maintain reserves related to workers compensation, general and auto liability and health and welfare programs that are
principally self-insured. Our workers compensation, general and auto liability insurance policies include a deductible of
$500,000 per occurrence and we maintain excess loss insurance that covers any health and welfare costs in excess of $200,000
per person per year.
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Table of Contents
Our reserves for workers compensation, general and auto insurance liabilities are estimated based on applying an
actuarially derived loss development factor to our incurred losses, including losses for claims incurred but not yet reported.
Actuarial projections of losses concerning workers compensation, general and auto insurance liabilities are subject to a high
degree of variability. Among the causes of this variability are unpredictable external factors affecting future inflation rates, health
care costs, litigation trends, legal interpretations, legislative reforms, benefit level changes and claim settlement patterns. Our
reserve for health and welfare claims includes an estimate of claims incurred but not yet reported which is derived primarily from
historical experience.
Our claim liabilities and the related recoverables from insurance carriers for estimated claims in excess of deductible
amounts and other insured events are presented in their gross amounts because there is no right of offset. The following is a
summary of our net reserves as of December 31, 2009 and December 31, 2008:
2009
LongTerm
Current
Gross claims liabilities:
Workers compensation
liability
Auto & general liability
Health & welfare liability
5.8
0.9
1.7
31.3
1.0
0.3
Total
$
37.1
1.9
2.0
2008
LongTerm
Current
$
5.7
1.3
2.3
29.2
1.8
0.3
Total
$
34.9
3.1
2.6
Total gross claims liabilities
8.4
32.6
41.0
9.3
31.3
40.6
Insurance recoverables
(2.7)
(21.0)
(23.7)
(2.9)
(19.8)
(22.7)
Reserves (net):
Workers compensation
liability
Auto & general liability
Health & welfare liability
3.5
0.5
1.7
10.8
0.5
0.3
14.3
1.0
2.0
3.2
0.9
2.3
10.3
0.9
0.3
13.5
1.8
2.6
Reserves (net):
5.7
11.6
17.3
6.4
11.5
17.9
The decrease in these reserves for 2009 is due primarily to a decrease in our auto and general liability due to favorable
claims experience and a decrease in our health and welfare liability due to an increase in the contribution percentage of the
employee portion of health premiums during 2009, offset by an increase in workers compensation liability due to the severity of
certain claims.
A 10% change in our incurred but not reported estimates would increase or decrease the estimated reserves for our workers
compensation liability, general and auto insurance liability and health and welfare liability as of December 31, 2009 by
$0.8 million, $0.1 million and $0.2 million, respectively.
Pension Liabilities
We sponsored a qualified defined-benefit pension plan and a post-retirement benefit plan for employees hired before
September 1986. There have been no new entrants to the pension or non-pension post-retirement benefit plans after those benefit
plans were frozen on September 30, 1989. Pursuant to the plan of reorganization (May 2004) described in Exhibit 2.1 and
incorporated by reference (see Part IV, Item 15, Exhibit Index of this Form 10-K), we were assigned the obligations for three
former Fleming defined-benefit pension plans. All of the pension and post-retirement benefit plans are collectively referred to as
the Pension Plans.
The determination of the obligation and expense associated with our Pension Plans are dependent, in part, on our selection
of certain assumptions used by our independent actuaries in calculating these amounts. These assumptions are disclosed in Note
12 to the consolidated financial statements and include, among other things, the weighted-average discount rate, the expected
weighted-average long-term rate of return on plan assets and the rate of compensation increases. Actual results in any given year
will often differ from actuarial assumptions because of economic and other factors. In accordance with U.S. GAAP, actual
results that differ from the actuarial assumptions are accumulated and amortized over future periods and, therefore, affect
recognized expense and recorded obligation in such future periods. While we believe our assumptions are appropriate, significant
differences in actual results or changes in our assumptions may materially affect our pension and other post-retirement
obligations and the future expense.
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We select the weighted-average discount rates for each benefit plan as the rate at which the benefits could be effectively
settled as of the measurement date. In selecting an appropriate weighted-average discount rate we use a yield curve methodology,
matching the expected benefits at each duration to the available high quality yields at that duration and calculating an equivalent
yield, which is the ultimate discount rate used. The weighted-average discount rate used to determine 2009 pension expense was
6.26%. A lower weighted-average discount rate increases the present value of benefit obligations and increases pension expense.
Expected return on pension plan assets is based on historical experience of our portfolio and the review of projected returns by
asset class on broad, publicly traded equity and fixed-income indices, as well as target asset allocation. Our target asset allocation
mix is designed to meet our long-term pension and post-retirement benefit plan requirements. For 2009 our assumed
weighted-average rate of return was 7.35% on our assets.
Sensitivity to changes in the major assumptions for our pension plans as of December 31, 2009 is as follows (dollars in
millions):
Percentage
Point
Change
+/- .25 pt
+/- .25 pt
+/- .25 pt
Expected return on plan assets

Discount ratePension
Discount ratePost-retirement
Projected
Benefit
Obligation
Decrease
(Increase)
$
0.0 /(0.0)
$
0.8 /(0.8)
$
0.1 /(0.1)
Expense
Decrease
(Increase)
$
0.1 / (0.1)
$
0.0 / (0.0)
$
0.0 / (0.0)
Stock-Based Compensation
We account for stock-based compensation expense by estimating the fair values of awards at their grant dates and
expensing the fair values using the straight-line amortization method for awards with vesting based on service and ratably for
awards based on performance conditions. Determining the appropriate fair value model and calculating the fair value of
stock-based awards at the grant date requires considerable judgment, including estimating stock price volatility, expected life of
share awards and forfeiture rates. We develop our estimates based on historical data and market information which can change
significantly over time. Currently we use the Black-Scholes option valuation model to value stock option awards. If we were to
use alternative valuation methodologies, the amount we expense for stock-based payments could be significantly different (see
Note 11Stock-Based Compensation Plans).
Recent Accounting Pronouncements
Employers Disclosures about Post-retirement Benefit Plan Assets
In December 2008, the Financial Accounting Standards Board issued Accounting Standards Codification (ASC) 715
(formerly FSP SFAS No. 132(R)-1, Employers Disclosures about Post-retirement Benefit Plan Assets), Compensation
Retirement Benefits, which amended Statement of Financial Accounting Standards No. 132(R). ASC 715 enhances required
disclosures about employers plan assets, including employers investment strategies, major categories of plan assets,
concentrations of risk within plan assets and valuation techniques used to measure the fair value of plan assets. The ASC is
effective for our fiscal year beginning January 1, 2010. We do not expect the adoption of ASC 715 to have a material impact on
the disclosures that accompany our consolidated financial statements.
Forward-Looking Trend and Other Information
Cigarette Industry Trends
Cigarette Consumption
Aggregate cigarette consumption in North America has declined steadily since 1980. Prior to 2007, our cigarette sales had
benefitted from a shift in sales to the convenience retail segment, and as a result of this shift, carton sales had not declined in
proportion to the decline in overall consumption. However, our cigarette carton sales started declining in 2007 and have
experienced further declines in 2008 and 2009. We believe this trend is driven principally by an increasing decline in overall
cigarette consumption due to factors such as increasing legislative controls which regulate cigarette sales and where consumers
may or may not smoke, the acceleration in the frequency and amount of excise tax increases which reduces demand,
manufacturer price increases and health concerns on the part of consumers. The shift in cigarette carton sales from other channels
to the convenience retail segment may no longer be adequate to compensate for consumption declines.
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Cigarette Regulation
In June 2009, the Family Smoking Prevention and Tobacco Control Act was signed into law, which granted the FDA the
authority to regulate the production and marketing of tobacco products in the U.S. The new legislation establishes a new FDA
office that will regulate changes to nicotine yields and the chemicals and flavors used in tobacco products, require ingredient
listings be displayed on tobacco products, prohibit the use of certain terms which may attract youth or mislead users as to the
risks involved with using tobacco products, as well as limit or otherwise impact the advertising and marketing of tobacco
products by requiring additional labels or warnings as well as pre-approval by the FDA. This new FDA office is to be financed
through user fees paid by tobacco companies prorated based on market share. To date this legislation and its associated
regulations have not had a material impact on our business.
Excise Taxes
Cigarette and tobacco products are subject to substantial excise taxes in the U.S. and Canada. Significant increases in
cigarette-related taxes and/or fees have been levied by the taxing authorities in the past and are likely to continue to be levied in
the future. Federal excise taxes are levied on the cigarette manufacturer, whereas state, provincial and local excise taxes are
levied on the wholesaler. We increase cigarette prices as state, provincial and local excise tax increases are assessed on cigarette
products that we sell. As a result, generally, increases in excise taxes do not increase overall gross profit dollars in the same
proportion, but increases will result in a decline in overall gross profit percentage. In February 2009, SCHIP was signed into law
and increased federal cigarette excise taxes levied on manufacturers from 39 to $1.01 per pack of cigarettes effective and after
April 1, 2009. This substantial increase in excise taxes we believe caused the manufacturers to increase their prices to us, which
in turn increased our working capital requirements. We also believe it has contributed to a further decline in consumer cigarette
consumption which has adversely impacted our cigarette carton sales and could result in a decrease of our gross profit as a
percentage of sales.
Cigarette Inventory Holding Profits
Distributors such as Core-Mark, from time to time, may earn higher gross profits on cigarette inventory and excise tax
stamp quantities on hand either at the time cigarette manufacturers increase their prices or when states, localities or provinces
increase their excise taxes and allow us to recognize inventory holding profits. These profits are recorded as an offset to cost of
goods sold as the inventory is sold. Our cigarette holding profits prior to 2009 averaged approximately $5.1 million per year
from 2005 to 2008 and represent a normal historical trend. For the year ended December 31, 2009 our cigarette inventory
holding profits, net of FET taxes associated with the SCHIP legislation, were $25.2 million, or 6.3%, of our gross profit, as
compared to $3.1 million, or 0.9%, of our gross profit for the same period in 2008. The significant holding profits in 2009 were
attributable to an average increase of approximately 28% of our cigarette manufacturer list prices, one of the largest increases we
have seen in recent history. We believe these price increases were in response to the passage of the SCHIP legislation, and we
have not included them in our average trends since they distort an average that we believe is more indicative of future trends.
Food and Non-food Product Trends
We focus our marketing efforts primarily on growing our food/non-food product sales. These products typically earn higher
profit margins than cigarettes and our goal is to continue to increase food/non-food product sales in the future to offset the
potential decline in cigarette carton sales and the associated gross profits.
General Economic Trends
Uncertain Economic Conditions
Uncertain economic conditions, including changes in the credit and housing markets leading to the 2008 financial and credit
crisis, rising unemployment and underemployment rates, significant declines in the personal net worth of many individuals and
uncertainty regarding future federal tax and economic policies have resulted in reduced consumer confidence and curtailed retail
spending. As a result, convenience store operators may continue to experience a reduction in same store sales in subsequent
quarters, which will adversely affect demand for our products and may result in reduced sales unless offset by other factors (such
as an increase in the number or size of our customers stores, penetration of product offerings into existing stores serviced, or
increases in our market share). These economic and market conditions, combined with continuing difficulties in the credit
markets and the resulting pressures on liquidity may also place a number of our convenience store owners under financial stress,
which will increase our credit risk and potential bad debt exposure. If the economic conditions in our key markets further
deteriorate or do not show improvement, we may experience material adverse impacts to our business, financial condition and
operating results.
38
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Inflation
Historically, we have not experienced a significant adverse impact as a result of price increases from our suppliers as we
have been able to adjust our selling prices in order to maintain our overall gross profit dollars. However, significant increases in
cigarette product costs and cigarette excise taxes adversely impact our gross profit as a percentage of net sales because we are
paid on a per carton basis. While we have historically been able to maintain or slightly increase gross profit dollars related to
such increases, gross profit percentages typically decline as a result of the impact of significant price or tax increases on net
cigarette sales. Inversely, we have generally benefitted from price increases on the net sales of food/non-food categories because
we generally mark up product costs using a percentage of cost of goods sold.
Inflation can also result in increases in LIFO expense, adversely impacting our gross profit percentage (see Note
2Summary of Significant Accounting Policies).
ITEM 7.A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our major exposure to market risk comes from changes in short-term interest rates on our variable rate debt. At
December 31, 2009, all amounts borrowed under our Credit Facility represented variable rate debt. Depending upon the
borrowing option chosen, the interest charged is generally based upon the prime rate or LIBOR plus an applicable margin. If
interest rates increased 32.5 basis points (which approximates 10% of the weighted-average interest rate on our year end
outstanding balance), our results from operations and cash flows would not be materially affected.
We conduct business in Canada primarily in Canadian dollars. To the extent that funds are moved to or from Canada, we
would be exposed to fluctuations in the Canadian/U.S. exchange rate. The Canadian/U.S. exchange rate based on the noon rate
used for balance sheet translation was $1.0466, $1.2246 and $0.9881 as of December 31, 2009, 2008 and 2007, respectively. We
did not engage in hedging transactions during 2007, 2008 or 2009.
39
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Page
(a) Financial Statements filed as part of this Annual Report on Form 10-K
1. Financial Statements
A. Audited Financial Statements
Report of Independent Registered Public Accounting Firm
41
Consolidated Balance Sheetsat December 31, 2009 and 2008
42
Consolidated Statements of Operationsfor the Years ended December 31, 2009, 2008 and 2007
43
Consolidated Statements of Stockholders Equity and Comprehensive Incomefor the Years ended
December 31, 2009, 2008 and 2007
44
Consolidated Statements of Cash Flowsfor the Years ended December 31, 2009, 2008 and 2007
45
Notes to Consolidated Financial Statements
46
2. Financial Statement Schedule
Schedule II Valuation and Qualifying Accounts
80
40
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Core-Mark Holding Company, Inc.:
We have audited the accompanying consolidated balance sheets of Core-Mark Holding Company, Inc. and subsidiaries (the
Company) as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholders equity and
comprehensive income, and cash flows for each of the three years in the period ended December 31, 2009. Our audits also
included the financial statement schedule listed in the Index at Item 8(a)(2). We also have audited the Companys internal control
over financial reporting as of December 31, 2009, based on criteria established in Internal ControlIntegrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Companys management is responsible
for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting,
and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Managements Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these financial
statements and financial statement schedule and an opinion on the Companys internal control over financial reporting based on
our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement and whether effective internal control over financial reporting was maintained in all material
respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included
obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing
and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a
reasonable basis for our opinions.
A companys internal control over financial reporting is a process designed by, or under the supervision of, the companys
principal executive and principal financial officers, or persons performing similar functions, and effected by the companys
board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A companys internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that
could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper
management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely
basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are
subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company and subsidiaries as of December 31, 2009 and 2008, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 2009, in conformity with accounting principles generally
accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to
the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth
therein. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting
as of December 31, 2009, based on the criteria established in Internal Control Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission.
/s/ Deloitte & Touche LLP
San Francisco, California
March 12, 2010
41
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CORE-MARK HOLDING COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
December 31,
2009
Assets
Current assets:
Cash and cash equivalents
Restricted cash
Accounts receivable, net of allowance for doubtful accounts of $9.1 and $8.8,
respectively (Note 4)
Other receivables, net (Note 4)
Inventories, net (Note 5)
Deposits and prepayments (Note 4)
Deferred income taxes (Note 9)
Total current assets

Property and equipment, net (Note 6)
Goodwill
Other non-current assets, net (Note 4)
Total assets
Liabilities and Stockholders Equity
Current liabilities:
Accounts payable
Book overdrafts
Cigarette and tobacco taxes payable
Accrued liabilities (Note 4)
Total current liabilities
15.7
11.4
161.1
39.6
275.5
42.2
3.6
146.9
34.1
238.4
26.5
12.2
552.1
485.2
83.8
5.3
3.7
33.0
74.2
12.1
3.7
37.4
677.9
612.6
63.2
19.4
132.3
59.6
0.6
275.1
66.0
17.8
103.2
58.1
1.6
246.7
Long-term debt, net (Note 7)

Other long-term liabilities
Claims liabilities, net of current portion
Pension liabilities
Total liabilities
Commitments and Contingencies (Note 8)
Stockholders equity:
Common stock; $0.01 par value (50,000,000 shares authorized, 11,001,632 and
10,746,416 shares issued; 10,506,270 and 10,349,700 shares outstanding at
December 31, 2009 and 2008, respectively)
Additional paid-in capital
Treasury stock at cost (495,362 and 396,716 shares of common stock at
December 31, 2009 and 2008, respectively)
Retained earnings
Accumulated other comprehensive loss
Total stockholders equity
Total liabilities and stockholders equity
17.7
12.4
December 31,
2008
20.0
4.3
32.6
15.7
347.7
30.8
11.1
31.3
19.1
339.0
0.1
216.2
0.1
209.3
(13.2)
129.6
(2.5)
330.2
677.9
(11.0)
82.3
(7.1)
273.6
612.6
The accompanying notes are an integral part of these consolidated financial statements.
42
Table of Contents

CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
Net sales
Cost of goods sold
Gross profit
Amortization of intangible assets
Total operating expenses
Interest expense
Interest income
Foreign currency transaction (gains) losses, net
Income before income taxes
Provision for income taxes (Note 9)
Net income
Basic income per common share (Note 10)

Diluted income per common share (Note 10)
$
$
Basic weighted-average shares (Note 10)

Diluted weighted-average shares (Note 10)

2009
2008
6,531.6
$
6,044.9
$
6,130.0
5,685.8
401.6
359.1
197.3
197.6
137.3
129.4
2.0
2.0
336.6
329.0
65.0
30.1
1.7
2.2
(0.3)
(1.0)
(2.2)
6.3
65.8
22.6
18.5
4.7
47.3
$
17.9
$
4.53
4.35
10.5
10.9
$
$
1.71
1.64
10.5
10.9
$
$
2007
5,560.9
5,228.3
332.6
174.1
119.0
1.8
294.9
37.7
2.4
(1.4)
(0.9)
37.6
13.5
24.1
2.30
2.15
10.5
11.2
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
AND COMPREHENSIVE INCOME
(In millions)
Balance, December 31, 2006

Net income
Amortization of stock-based
compensation
Cash proceeds from exercise of
common stock options
Adoption of new income tax
accounting guidance
Minimum pension liability
adjustment, net of taxes of $0.7
Excess tax deductions associated
with stock-based compensation
Issuance of stock based
instruments
Foreign currency translation
adjustment
Accumulated
Additional
Other
Total
Total
Common Stock
Paid-In
Treasury
Retained Comprehensive Stockholders Comprehensive
Shares
Amount
Capital
Stock
Earnings
Income (Loss)
Equity
Income (Loss)
10.2
$
0.1 $
175.5 $
$
40.2 $
(0.1) $
215.7
24.1
24.1 $
24.1
5.3
5.3
2.2
2.2
18.5
0.1
18.6
(1.0)
(1.0)
(1.0)
1.1
1.1
0.2
0.5
0.5
0.5
$
23.6
(0.6)
266.5
17.9 $
17.9
Total comprehensive income

Net income
compensation
common stock options
adjustment, net of taxes of $3.8
instruments
Repurchases of common stock
adjustment
10.4
0.1
202.6
64.4
17.9
3.9
3.9
2.5
2.5
(5.9)
(5.9)
(5.9)
0.3
0.3
0.7
(0.4)
(11.0)
(11.0)
(0.6)
(0.6)
(0.6)
$
11.4
(7.1)
273.6
47.3 $
47.3

Net income
compensation
common stock options and
warrants
adjustment, net of taxes of
$(1.5)
instruments, net of shares
withheld for employee taxes
Repurchases of common stock
adjustment
10.7
0.1
209.3
(11.0)
82.3
47.3
5.1
5.1
2.2
2.2
2.4
2.4
2.4
0.1
0.1
0.4
(0.1)
(0.5)
(2.2)
(0.5)
(2.2)
2.2
2.2
2.2
$

11.0
0.1 $
216.2 $
(13.2) $
129.6 $
(2.5) $
51.9
330.2
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
2009
Cash flows from operating activities:
Net income
$
Adjustments to reconcile net income to net cash provided by operating
activities:
LIFO and inventory provisions
Amortization of debt issuance costs
Amortization of deferred stock-based compensation
Bad debt expense, net
Depreciation and amortization
Foreign currency transaction (gains) losses, net
Deferred income taxes
Changes in operating assets and liabilities:
Accounts receivable
Other receivables
Inventories
Deposits, prepayments and other non-current assets
Accounts payable
Cigarette and tobacco taxes payable
Pension, claims and other accrued liabilities
Income taxes payable
Net cash provided by operating activities
Cash flows from investing activities:
Restricted cash
Acquisition of business, net of cash acquired
Additions to property and equipment, net
Capitalization of software
Proceeds from sale of fixed assets
Net cash used in investing activities
Cash flows from financing activities:
(Repayments) borrowings under revolving credit facility, net
Repurchases of common stock (treasury stock)
Proceeds from exercise of common stock options and warrants
Tax withholdings related to net share settlements of restricted stock
units
Excess tax deductions associated with stock-based compensation
Increase (decrease) in book overdrafts
Net cash used in financing activities
Effects of changes in foreign exchange rates
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
$
Supplemental disclosures:
Cash paid during the period for:
Income taxes, net of refunds
Interest
$
$

2008
47.3
17.9
2007
24.1
7.1
0.5
5.1
1.8
18.7
(2.2)
14.5
11.0
0.5
3.9
1.6
17.4
6.3
(4.9)
14.5
0.4
5.3
6.9
14.9
(0.9)
(4.5)
(13.8)
(4.3)
(36.7)
(16.7)
(4.4)
22.8
(6.6)
33.1
(2.9)
(4.2)
(31.9)
4.4
13.8
16.2
6.2
0.3
55.6
9.2
6.0
(7.1)
(8.5)
2.3
22.7
(15.3)
(3.4)
66.6
0.7
(21.1)
(0.3)
0.1
(20.6)
(2.2)
(26.4)
(19.9)
(0.7)
0.1
(49.1)
(0.6)
(20.8)
(2.0)
0.1
(23.3)
(10.7)
(2.2)
2.2
0.1
(11.0)
2.5
(48.4)
2.2
(0.5)
0.4
1.6
(9.2)
(1.3)
2.0
15.7
17.7
0.6
(3.2)
(11.0)
(1.1)
(5.6)
21.3
15.7
1.1
5.6
(39.5)
(2.4)
1.4
19.9
21.3
11.7
1.0
$
$
7.5
1.7
$
$
28.1
2.5
45
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Company Information
Business
Core-Mark Holding Company, Inc. and subsidiaries (referred herein as we, us our, the Company or Core-Mark)
is one of the largest marketers of fresh and broad-line supply solutions to the convenience retail industry in North America. We
offer a full range of products, marketing programs and technology solutions to approximately 24,000 customer locations in the
U.S. and Canada. Our customers include traditional convenience stores, grocery stores, drug stores, liquor stores and other
specialty and small format stores that carry convenience products. Our product offering includes cigarettes, tobacco, candy,
snacks, fast food, groceries, fresh products, dairy, non-alcoholic beverages, general merchandise and health and beauty care
products. We operate a network of 26 distribution centers (including two distribution facilities we operate as a third party
logistics provider) in the U.S. and Canada.
2. Summary of Significant Accounting Policies
Basis of Consolidation and Presentation
The consolidated financial statements include Core-Mark and its wholly-owned subsidiaries. All intercompany balances and
transactions have been eliminated in the consolidated financial statements.
Use of Estimates
These financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles
generally accepted in the U.S. This requires management to make certain estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. We consider the allowance for doubtful accounts,
inventory reserves, LIFO valuation, recoverability of goodwill and other long-lived assets, stock-based compensation expense,
the realizability of deferred income taxes, uncertain tax positions, pension benefits and self-insurance reserves to be those
estimates which involve a higher degree of judgment and complexity. Actual results could differ from those estimates.
Revenue Recognition
We recognize revenue at the point at which the product is delivered and title passes to the customer. Revenues are reported
net of customer incentives, discounts and returns, including an allowance for estimated returns. The allowance for sales returns is
calculated based on our returns experience which has historically not been significant. We also earn management service fee
revenue from operating third party distribution centers belonging to certain customers. The service fee revenue was
approximately $2.9 million in 2009, $3.0 million in 2008 and $2.8 million in 2007. These revenues represented less than 1% of
our total revenues for each of those years. The service fee revenue is recognized as earned on a monthly basis in accordance with
the terms of the management service fee contracts and is included in net sales on the accompanying consolidated statements of
operations.
Vendor and Sales Incentives
Vendors Discounts, Rebates and Allowances Periodic payments from vendors in various forms including volume or
other purchase discounts are reflected in the carrying value of the related inventory when earned and as cost of goods sold as the
related merchandise is sold. Up-front consideration received from vendors linked to purchase or other commitments is initially
deferred and amortized ratably to cost of goods sold or as the performance of the activities specified by the vendor to earn the fee
is completed. Cooperative marketing incentives from suppliers are recorded as reductions to cost of goods sold to the extent the
vendor considerations exceeds the costs relating to the programs. These amounts are recorded in the period the related
promotional or merchandising programs were provided. Some of the vendor incentive promotions require that we make
assumptions and judgments regarding, for example, the likelihood of achieving market share levels or attaining specified levels
of purchases. Vendor incentives are at the discretion of our vendors and can fluctuate due to changes in vendor strategies and
market requirements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
Customers Sales IncentivesWe also provide sales rebates or discounts to our customers on a regular basis. These
customers sales incentives are recorded as a reduction to sales revenue as the sales incentive is earned by the customer.
Additionally, we may provide racking and slotting allowances for the customers commitment to continue using us as the
supplier of their products. These allowances may be paid at the inception of the contract or on a periodic basis. Allowances paid
at the inception of the contract are capitalized and amortized over the period of the distribution agreement as a reduction to sales.
Excise Taxes
Excise taxes on cigarettes and other tobacco products are a significant component of our net sales and our cost of sales. In
2009, 2008 and 2007, approximately 23%, 24% and 24% of our net sales, and approximately 25%, 26% and 26% of our cost of
goods sold, respectively, represented excise taxes. Excise taxes are included in our net sales and cost of sales as we are
responsible for collecting and remitting such state and provincial taxes on the applicable sales.
Foreign Currency Translation
The operating assets and liabilities of our Canadian operations, whose functional currency is the Canadian dollar, are
translated to U.S. dollars at exchange rates in effect at period-end. Adjustments resulting from such translation are presented as
foreign currency translation adjustments, net of applicable income taxes, and are included in other comprehensive income. The
statements of operations, including income and expenses, of our Canadian operations are translated to U.S. dollars at average
exchange rates for the period for financial reporting purposes. We also recognize the gain or loss on foreign currency exchange
transactions between our Canadian and U.S. operations, net of applicable income taxes, in the consolidated statements of
operations.
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents include cash, money market funds and all highly liquid investments with original maturities of
three months or less. Restricted cash represents funds collected and set aside in trust as required by Canadian provincial taxing
authorities. As of December 31, 2009, we had cash book overdrafts of $19.4 million compared to $17.8 million as of
December 31, 2008, reflecting issued checks that have not cleared through our banking system in the ordinary course of business
for accounts payable. Our policy has been to fund these outstanding checks as they clear with cash held on deposit with other
financial institutions or with borrowings under our line of credit.
Fair Value Measurements
The carrying amount for our cash, cash equivalents, restricted cash, trade accounts receivable, other receivables, trade
accounts payable, cigarette and tobacco taxes payable and other accrued liabilities approximates fair value because of the short
maturity of these financial instruments. The carrying amount of our variable rate debt approximates fair value.
We calculate the fair value of our pension plan assets based on assumptions that market participants would use in pricing
the assets or liabilities. We use a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value
and give precedence to observable inputs in determining fair value. An instruments level within the hierarchy is based on the
lowest level of any significant input to the fair value measurement. The following levels were established for each input:
Level 1 Quoted prices in active markets for identical assets or liabilities.
Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly.
Level 3 Unobservable inputs for the asset or liability, which reflect the Companys own assumptions about what market
participants would assume when pricing the asset or liability.
(See Note 12Employee Benefit Plans.)
Risks and Concentrations
Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash investments,
accounts receivable and other receivables. We place our cash and cash equivalents in short-term instruments with high quality
financial institutions and limit the amount of credit exposure in any one financial instrument. We pursue amounts and incentives
due from vendors in the normal course of business and are often allowed to deduct these amounts and incentives from payments
made to our vendors.
47
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A credit review is completed for new customers and ongoing credit evaluations of each customers financial condition are
performed and prepayment or other guarantees are required whenever deemed necessary. Credit limits given to customers are
based on a risk assessment of their ability to pay and other factors. We do not have individual customers that account for more
than 10% of our total sales or for more than 10% of total accounts receivable. However, some of our distribution centers are
dependent on relationships with a single customer or a few large customers.
We have two significant suppliers: Philip Morris USA, Inc. and R.J. Reynolds Tobacco Company. Product purchases from
Philip Morris USA, Inc. represented approximately 28% of our total product purchases for 2009, 27% for 2008 and 25% for
2007. Product purchases from R.J. Reynolds Tobacco Company were approximately 14% for each of the years 2009, 2008 and
2007.
Cigarette sales represented approximately 70.3%, 68.2% and 69.5% of our revenues and contributed approximately 35.4%,
29.0% and 30.5% of our gross profit in 2009, 2008 and 2007, respectively. The increase in the percentage of our revenues and
gross profit attributable to cigarettes in 2009 was due primarily to manufacturer price increases in response to the enactment of
the State Childrens Health Insurance Program (SCHIP), which increased the federal cigarette excise tax from 39 to $1.01 per
pack. U.S. cigarette consumption has declined since 1980. If cigarette consumption continues to decline and we do not make up
for lost cigarette carton sales through cigarette price increases or by increasing our food/non-food sales, our results of operations
could be materially and adversely affected.
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable consists of trade receivables from customers. We evaluate the collectability of accounts receivable and
determine the appropriate allowance for doubtful accounts based on historical experience and a review of specific customer
accounts. Account balances are charged off against the allowance when collection efforts have been exhausted and the receivable
is deemed worthless (see Note 4Other Consolidated Balance Sheet Accounts Detail).
Other Receivables
Other receivables consist primarily of amounts due from vendors for promotional and other incentives, which are accrued as
earned. We evaluate the collectability of amounts due from vendors and determine the appropriate allowance for doubtful
accounts due from vendors based on historical experience and on a review of specific amounts outstanding. While we believe
that such allowances are adequate, these estimates could change in the future depending upon our ability to collect these vendor
receivables.
Inventories
Inventories consist of finished goods, including cigarettes and other tobacco products, food and other products and related
consumable products held for re-sale, and are valued at the lower of cost or market. In the U.S., cost is primarily determined on a
last-in, first-out (LIFO) basis using producer price indices as determined by the Department of Labor, adjusted based on more
current information if necessary. Under the LIFO method, current costs of goods sold are matched against current sales.
Inventories in Canada are valued on a first-in, first-out (FIFO) basis, as LIFO is not a permitted inventory valuation method in
Canada. Approximately 82% and 85% of our FIFO inventory was valued on a LIFO basis at December 31, 2009 and 2008,
respectively.
During periods of rising prices, the LIFO method of costing inventories generally results in higher current costs being
charged against income while lower costs are retained in inventories. Conversely, during periods of decreasing prices, the LIFO
method of costing inventories generally results in lower current costs being charged against income and higher stated inventories.
Liquidations of inventory may also result in the sale of low-cost inventory and a decrease of cost of goods sold. We reduce
inventory value for spoiled, aged and unrecoverable inventory based on amounts on hand and historical experience. We had a
decrement in our LIFO layer of $5.1 million in 2009 and an insignificant LIFO layer decrement in 2008.
Property and Equipment
Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Depreciation and
amortization on new purchases are computed using the straight-line method over their estimated useful lives. Leasehold
improvements are amortized using the straight-line method over the shorter of the estimated useful life of the property or the
term of the lease including available renewal option terms if it is reasonably assured that those terms will be exercised. Upon
retirement or sale, the cost and related accumulated depreciation are removed from the accounts and any related gain or loss is
reflected in operations. Maintenance and repairs are charged to operations as incurred.
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We have determined the following useful lives for our fixed assets:
Useful life in
years
3 to 10
4 to 10
3 to 15
3 to 25
25
Office furniture and equipment

Delivery equipment
Warehouse equipment
Leasehold improvements
Buildings
Impairment of Long-lived Assets
We review our intangible and long-lived assets for potential impairment at least annually, based on projected undiscounted
cash flows associated with these assets. Long-lived and intangible assets may also be included in impairment testing when events
and circumstances exist that indicate the carrying amounts of those assets may not be recoverable. Measurement of impairment
losses for long-lived assets that we expect to hold and use is based on the estimated fair value of those assets.
Long-lived assets consist primarily of land, buildings, furniture, fixtures and equipment, leasehold improvements and
intangible assets. An impairment of long-lived assets exists when future undiscounted cash flows are less than an asset groups
carrying value over the estimated remaining useful life of the primary assets. Impairment is measured as the difference between
carrying value and fair value. Fair value is based on appraised value or estimated sales value, similar assets in recent transactions
or discounted cash flows. Assets to be disposed of are reported at the lower of carrying amount or fair value less the cost to sell
such assets. During 2009, 2008 and 2007, we did not have impairment costs related to long-lived assets or assets identified for
abandonment as a result of facility closures or facility relocation.
Goodwill and Intangible Assets
We review goodwill for impairment on an annual basis or whenever significant events or changes occur in our business.
The reviews are performed at the operating division level, which comprise our reporting units. The implied fair value of the
reporting units goodwill must be determined and compared to the carrying value of the goodwill. If the carrying value of a
reporting units goodwill exceeds its implied fair value, an impairment loss equal to the difference will be recorded. Based on the
impairment tests performed as of December 31, 2009 and November 30, 2008, there was no impairment of goodwill in 2009 or
2008. There can be no assurance that future goodwill tests will not result in a charge to earnings. We do not amortize those
intangible assets that have been determined to have indefinite useful lives (see Note 4Other Consolidated Balance Sheet
Accounts Detail).
Computer Software Developed or Obtained for Internal Use
We account for proprietary computer software systems, namely our Distribution Center Management System (DCMS),
using certain criteria under which costs associated with this software are either expensed or capitalized and amortized over
periods from one to eight years. During 2009, 2008 and 2007, we capitalized approximately $0.3 million, $0.7 million and
$2.0 million, respectively, primarily for DCMS enhancements, as well as other non-proprietary systems.
Debt Issuance Costs
Debt issuance costs have been deferred and are being amortized as interest expense over the term of the related debt
agreement using the effective interest method. Debt issuance costs are included in other non-current assets, net, on the
accompanying consolidated balance sheets.
Claims Liabilities and Insurance Recoverables
Claims liabilities and the related recoverables from insurance carriers for estimated claims in excess of deductible amounts
and other insured events are presented in their gross amounts on the accompanying consolidated balance sheets because there is
no right of offset. The carrying values of claims liabilities and insurance recoverables are not discounted. Insurance recoverables
are included in other receivables, net and other non-current assets, net. We had liabilities for workers compensation, auto and
general liability related to both Core-Mark and Fleming (former owner of Core-Mark, related to emergence from bankruptcy in
2004) self-insurance obligations at December 31, 2009 and 2008 in the amounts of $32.6 million long-term and $8.4 million
short-term, and $31.3 million long-term and $9.3 million short-term, respectively.
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We maintain reserves related to health and welfare, workers compensation, auto and general liability programs that are
principally self-insured. We have a per-claim ceiling of $500,000 for our workers compensation, auto and general liability
self-insurance programs and a per-claim limit of $200,000 for our health and welfare program. We purchase insurance to cover
the claims that exceed the ceiling up to policy limits. Self-insured reserves are for pending or future claims that fall outside the
policy and reserves include an estimate of expected settlements on pending claims and a provision for claims incurred but not
reported. Estimates for workers compensation, auto and general liability insurance are based on our assessment of potential
liability using an annual actuarial analysis of available information with respect to pending claims, historical experience and
current cost trends. Reserves for claims under these programs are included in accrued liabilities (current portion) and claims
liabilities, net of current portion.
Pension Costs and Other Post-retirement Benefit Costs
Pension costs and other post-retirement benefit costs charged to operations are estimated on the basis of annual valuations
by an independent actuary. Adjustments arising from plan amendments, changes in assumptions and experience gains and losses
are amortized over the expected average remaining service life of the employee group. We recognize in the consolidated balance
sheets an asset for a plans overfunded status or a liability for a plans underfunded status as of the end of each fiscal year. We
determine the plans funded status by measuring its assets and its obligations, and we recognize changes in the funded status of
our defined benefit post-retirement plan in the year in which the change occurred (see Note 12Employee Benefit Plans).
Income Taxes
Income taxes are accounted for using the liability method. Deferred tax assets and liabilities are recognized for the
estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. The effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets
are reduced by a valuation allowance when we do not consider it more likely than not that some portion or all of the deferred tax
assets will be realized.
A tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be
sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits.
We have established an estimated liability for income tax exposures that arise and meet the criteria for accrual. We prepare and
file tax returns based on our interpretation of tax laws and regulations and record estimates based on these judgments and
interpretations. In the normal course of business, our tax returns are subject to examination by various taxing authorities. Such
examinations may result in future tax and interest assessments by these taxing authorities. Inherent uncertainties exist in
estimates of tax contingencies due to changes in tax law resulting from legislation, regulation and/or as concluded through the
various jurisdictions tax court systems. We classify interest and penalties related to income taxes as income tax expense.
Stock-Based Compensation
We account for stock-based compensation expense by estimating the fair values of awards at their grant dates and
amortizing these amounts as expense using a straight-line method for awards with vesting based on service and ratably for
awards based on performance conditions. Currently, we use the Black-Scholes option valuation model to value the stock awards
(see Note 11Stock-Based Compensation Plans).
Determining the appropriate fair value model and calculating the fair value of stock-based awards at the grant date requires
considerable judgment, including estimating stock price volatility, expected life of share awards and forfeiture rates. We develop
our estimates based on historical data and market information which can change significantly over time.
Total Comprehensive Income
Total comprehensive income consists of two components: net income and other comprehensive income. Other
comprehensive income refers to revenues, expenses, gains and losses that under generally accepted accounting principles are
recorded directly as an element of stockholders equity, but are excluded from net income. Other comprehensive income is
comprised of adjustments to minimum pension liability and currency translation adjustments relating to our foreign operations in
Canada whose functional currency is not the U.S. dollar (see consolidated statements of stockholders equity and
comprehensive income).
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Segment Information
We report our segment information using established standards for reporting by public enterprises on information about
product lines, geographical areas and major customers. The method of determining what information to report is based on the
way we are organized for operational decisions and assessment of financial performance. From the perspective of our chief
operating decision makers, we are engaged in the business of distributing packaged consumer products to convenience retail
stores in the U.S. and Canada. Therefore, we have determined that we have two reportable segments based on geographical area
U.S. and Canada. We present our segment reporting information based on business operations and by major product category
for each of the two geographic segments (see Note 15Segment Information).
Earnings Per Share
Basic earnings per share is calculated by dividing net income by the weighted-average number of common shares
outstanding during each period, excluding unvested restricted stock. Diluted earnings per share assumes the exercise of stock
options and common stock warrants and the impact of restricted stock, when dilutive, using the treasury stock method (see Note
10Earnings Per Share).
Recent Accounting Pronouncements
In December 2008, the Financial Accounting Standards Board issued Accounting Standards Codification (ASC) 715
(formerly FSP SFAS No. 132(R)-1, Employers Disclosures about Post-retirement Benefit Plan Assets), Compensation
Retirement Benefits, which amended Statement of Financial Accounting Standards No. 132(R). ASC 715 enhances required
disclosures about employers plan assets, including employers investment strategies, major categories of plan assets,
concentrations of risk within plan assets and valuation techniques used to measure the fair value of plan assets. The ASC is
effective for our fiscal year beginning January 1, 2010. We do not expect the adoption of ASC 715 to have a material impact on
the disclosures that accompany our consolidated financial statements.
3. Acquisitions
On June 23, 2008, we acquired substantially all of the assets of Auburn Merchandise Distributors, Inc. (AMD), located in
Whitinsville, Massachusetts, a wholly-owned subsidiary of Warren Equities, Inc., for approximately $28.7 million, including
transaction costs. The assets purchased include primarily accounts receivable, inventory, fixed assets and other intangibles, with
no significant liabilities. AMD conducts business primarily in the Northeastern region of the U.S. The purchase price exceeded
the estimated fair value of net assets acquired by approximately $0.9 million, which has been recorded as goodwill. AMD
conducts operations as the New England division of Core-Mark. Results of operations of AMD are included in Core-Marks
consolidated statements of operations since the date of acquisition to December 31, 2009.
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4. Other Consolidated Balance Sheet Accounts Detail
Allowance for Doubtful Accounts, Accounts Receivable
The changes in the allowance for doubtful accounts due from customers consist of the following (in millions):
2009
Balance, beginning of period
Net additions charged to operations
Less: Write-offs and adjustments
Balance, end of period
2008
8.8
1.8
(1.5)
9.1
9.3
1.6
(2.1)
8.8
The increase in the allowance for doubtful accounts was recognized in our selling, general and administrative expenses
which is included in our operating expenses. We continually assess our collection risks and make appropriate adjustments, as
deemed necessary, to the allowance for doubtful accounts to ensure that reserves for accounts receivable are adequate.
Other Receivables, Net
Other receivables, net consist of the following (in millions):
December 31,
2009
$
30.4
2.7
6.5
$
39.6
Vendor receivables, net

Insurance recoverables, current
Other
Total
December 31,
2008
$
25.9
2.9
5.3
$
34.1
The allowance for doubtful accounts due from vendors was $0.1 million and $0.2 million as of December 31, 2009 and
2008, respectively.
Deposits and Prepayments
Deposits and prepayments consist of the following (in millions):
December 31,
2009
$
3.3
38.9
$
42.2
Deposits
Prepayments
Total
December 31,
2008
$
3.6
22.9
$
26.5
Our deposits and prepayments include deposits related to workers compensation claims, prepayments relating to insurance
policies, income taxes, product purchases, prepaid rent and rental deposits and up-front consideration to customers.
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Other Non-Current Assets, Net
Other non-current assets, net consist of the following (in millions):
December 31,
2009
$
3.3
21.0
0.3
4.5
2.2
1.7
$
33.0
Internally developed and other purchased software, net

Insurance recoverables, net of current portion
Debt issuance costs, net of current portion
Insurance deposits, net of current portion
Other amortizable intangibles
Other customer receivables
Other assets
Total
December 31,
2008
$
4.7
19.8
1.0
5.1
3.8
1.9
1.1
$
37.4
The amortization of intangible assets, inclusive of non-compete agreements and customers lists, recorded in the
consolidated statement of operations was $2.0 million for both 2009 and 2008 and $1.8 million for 2007.
Accrued Liabilities
Accrued liabilities consist of the following (in millions):
December 31,
2009
$
21.1
8.4
20.4
9.7
$
59.6
Accrued payroll, retirement and other benefits

Claims liabilities, current
Other accrued expenses
Accrued customer incentives payable
Total
December 31,
2008
$
17.5
9.3
20.9
10.4
$
58.1
Our accrued payroll, retirement and other benefits include accruals for vacation, bonus, wages, 401(k) benefit matching and
the current portion of pension and post-retirement benefit obligations. Our other accrued expenses include Canadian goods and
services taxes, legal expenses, interest and other miscellaneous accruals.
5. Inventories
Inventories consist of the following (in millions):
December 31,
2009
$
318.5
(43.0)
$
275.5
Inventories at FIFO, net of reserves

Less: LIFO reserve
Inventories at LIFO
December 31,
2008
$
274.7
(36.3)
$
238.4
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6. Property and Equipment
Property and equipment consist of the following (in millions):
December 31,
2009
$
109.0
1.0
17.4
12.7
140.1
(56.3)
$
83.8
Delivery, warehouse and office equipment

Equipment under capital leases
Leasehold improvements
Land and buildings
Accumulated depreciation and amortization
Total
December 31,
2008
$
94.0
1.0
9.1
12.5
116.6
(42.4)
$
74.2
For 2009, 2008 and 2007, depreciation and amortization expenses related to property and equipment were $14.2 million,
$12.8 million and $10.8 million, respectively. Property and equipment includes accruals for construction in progress of
$0.7 million in 2009 and 2008 and $3.3 million in 2007.
7. Long-Term Debt
Total long-term debt as presented in the consolidated balance sheets consists of the following (in millions):
December 31,
2009
$
19.2
0.8
$
20.0
Amounts borrowed (Credit Facility)

Obligations under capital leases
Total long-term debt, net
December 31,
2008
$
30.0
0.8
$
30.8
In October 2005, we entered into a five-year revolving credit facility (Credit Facility) with a capacity of $250 million and
an expiration date of October 2010. In February 2010, we entered into a third amendment to our Credit Facility (the Third
Amendment), which extended our credit facility for four years, to February 2014, and decreased the lenders revolving loan
commitments by $50 million to $200 million, at our request. Pricing under the new facility increased as a result of generally
higher prices in the bank loan market. The basis points added to LIBOR increased to a range of 275 to 350 basis points, up from
a range of 100 to 175 basis points, tied to achieving certain operating results as defined in the Credit Facility. Additionally,
unused facility fees and letter of credit fees increased. The Third Amendment also increased our basket for permitted acquisitions
following the date of the Third Amendment to $125 million and re-established our basket for permitted stock repurchases at
$30 million. At the date of signing the Amendment, we incurred fees of approximately $2.0 million, which will be amortized
over the term of the agreement. All obligations under the Credit Facility are secured by first priority liens upon substantially all
of our present and future assets. The terms of the Credit Facility permit prepayment without penalty at any time (subject to
customary breakage costs with respect to LIBOR- or CDOR-based loans prepaid prior to the end of an interest period).
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Amounts borrowed, outstanding letters of credit and amounts available to borrow under the Credit Facility were as follows
(in millions):
Amounts borrowed
December 31,
2009
$
19.2
December 31,
2008
$
30.0
Outstanding letters of credit
26.1
24.4
Amounts available to borrow (prior to Third Amendment)
196.9
186.0
Since the total amount of the Credit Facility was reduced by $50 million in February 2010, the maximum amount available
to borrow is subject to the lower ceiling of $200 million permitted by the Third Amendment.
The Credit Facility contains restrictive covenants, including among others, limitations on dividends and other restricted
payments, other indebtedness, liens, investments and acquisitions and certain asset sales. We were in compliance with all of the
covenants under the Credit Facility as of December 31, 2009.
Our weighted-average interest rate was calculated based on our daily cost of borrowing which was computed on a blend of
prime and LIBOR rates. The weighted-average interest rate on our revolving credit facility for the years ended December 31,
2009 and 2008 was 2.0% and 3.8%, respectively. We paid total unused facility fees of $0.5 million for both 2009 and 2008.
Unamortized debt issuance costs were $0.4 million as of December 31, 2009 and $1.0 million at December 31, 2008.
8. Commitments and Contingencies
Purchase Commitments
We enter into purchase commitments in the ordinary course of business related to transportation equipment.
Operating Leases
We lease nearly all of our sales and warehouse facilities as well as tractors, trucks, vans and certain equipment under
operating lease agreements expiring at various dates through 2022, excluding renewal options. Rent expense is recorded on a
straight-line basis over the term of the lease, including available renewal option terms, if it is reasonably assured that the renewal
options will be exercised. The operating leases generally require us to pay taxes, maintenance and insurance. In most instances,
we expect the operating leases that expire will be renewed or replaced in the normal course of business.
Future minimum rental payments under non-cancelable operating leases (with initial or remaining lease terms in excess of
one year and excluding contracted vehicle maintenance costs) were as follows as of December 31, 2009:
Year Ending December 31,
2010
2011
2012
2013
2014
Thereafter
(in millions)
28.5
26.1
21.9
16.7
12.7
70.1
$
176.0
For 2009, 2008 and 2007, rental expenses for operating and month-to-month leases, including contracted vehicle
maintenance costs, were $34.7 million, $33.8 million and $29.1 million, respectively.
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Capital Leases
As of December 31, 2009 and 2008, we had approximately $0.8 million of refrigeration equipment leased under a capital
lease.
Contingencies
Litigation
We are subject to certain legal proceedings, claims, investigations and administrative proceedings in the ordinary course of
our business. We make a provision for a liability when it is both probable that the liability has been incurred and the amount of
the liability can be reasonably estimated. These provisions, if any, are reviewed at least quarterly and adjusted to reflect the
impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular
case. At December 31, 2009, we were not involved in any material litigation.
9. Income Taxes
Our income tax provision consists of the following (in millions):
2009
Current:
Federal
State
Foreign
Total current tax provision

2008
7.6
(1.9)
5.7
Deferred:
Federal
State
Foreign
Total deferred tax (benefit) provision
Total income tax provision
6.8
0.6
(0.1)
7.3
11.6
2.3
(1.1)
12.8
18.5
2007
13.5
3.4
0.4
17.3
(1.6)
(1.0)
(2.6)
(2.3)
(0.4)
(1.1)
(3.8)
4.7
13.5
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A reconciliation of the statutory federal income tax rate to our effective income tax rate and income tax provision follows
(in millions):
2008
2009
Federal income tax provision at the
statutory rate
Increase (decrease) resulting from:
State income taxes, net of
federal benefit
Decrease in unrecognized tax
benefits (inclusive of related
interest and penalty)
Effect of foreign operations
Change in valuation allowances
Other, net
Income tax provision
23.0
35.0%
2.9
(6.0)
(1.1)
(0.3)
18.5
7.9
35.0%
4.4
1.0
(9.1)
(1.7)
(0.5)
28.1%
(2.5)
(0.1)
(1.6)
4.7
2007
$
13.2
35.0%
4.4
1.9
5.1
(11.1)
(0.4)
(7.1)
20.8%
(0.8)
(0.8)
13.5
(2.1)
(2.1)
35.9%
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The tax effects of significant temporary differences
which comprise deferred tax assets and liabilities are as follows (in millions):
December 31,
2009
Deferred tax assets:
Employee benefits, including post-retirement benefits
Trade and other receivables
Inventories
Goodwill and intangibles
Self-insurance reserves
State taxes
Other
Subtotal
Less: valuation allowance
Net deferred tax assets
Deferred tax liabilities:

Inventories
Property and equipment
Prepaid and deposits
Deferred income
Other
Total deferred tax liabilities
Total net deferred tax assets

Net current deferred tax assets
Net non-current deferred tax assets
$
$
16.8
3.6
1.3
0.6
2.2
24.5
(0.1)
24.4
5.1
10.0
0.5
0.6
1.7
17.9
6.5
3.0
3.5
December 31,
2008
$
$
$
$
$
$
22.3
3.4
2.5
1.1
1.7
0.8
2.0
33.8
(0.1)
33.7
9.3
1.5
1.7
12.5
21.2
10.7
10.5
At each balance sheet date, a valuation allowance was established against the deferred tax assets based on managements
assessment of whether it is more likely than not that these deferred tax assets would not be realized. We had a valuation
allowance of $0.1 million at December 31, 2009 and 2008 related to foreign tax credits, which will expire at various times
between 2014 and 2016.
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At December 31, 2009, the total gross amount of unrecognized tax benefits, which was included in other tax liabilities
related to federal, state and foreign taxes, was approximately $1.5 million. The total amount of net unrecognized tax benefits that
would impact the effective tax rate, if recognized, would be $1.5 million as of December 31, 2009. The expiration of the statute
of limitations for certain tax positions in future years could impact the total gross amount of unrecognized tax benefits by
$0.4 million through December 31, 2010. A reconciliation of the beginning and ending amounts of unrecognized tax benefits for
2009, 2008 and 2007 follows (in millions):
2009
Balance at beginning of year
Lapse of statute of limitations
Other
Balance at end of year
2008
6.1
(4.7)
0.1
1.5
2007
10.2
(3.4)
(0.7)
6.1
10.5
(0.9)
0.6
10.2
We file U.S. federal, state and foreign income tax returns in jurisdictions with varying statutes of limitations. The 2006 to
2009 tax years remain subject to examination by federal and state tax authorities. The 2005 tax year is still open for certain tax
authorities. The 2002 to 2009 tax years remain subject to examination by the tax authorities in certain foreign jurisdictions. In
2007, the Canada Revenue Agency initiated an examination of our Canadian tax returns for 2003 and 2004. The examination was
finalized in 2009 and resulted in no significant adjustments.
We recognize interest and penalties on income taxes in income tax expense. As of December 31, 2009, we recorded a
liability of $0.8 million for estimated interest and penalties related to unrecognized tax benefits, consisting of $0.5 million for
interest and $0.3 million of penalties.
10. Earnings Per Share
The following table sets forth the computation of basic and diluted net earnings per share (in millions, except per share
amounts):
2008
2007
Net
Net
Net
WeightedIncome
WeightedIncome
WeightedIncome
Average
Per
Average
Per
Average
Per
Shares
Common
Net
Shares
Common
Net
Shares
Common
Net Income Outstanding
Share
Income Outstanding
Share
Income Outstanding
Share
$
47.3
10.5 $
4.53 $ 17.9
10.5 $
1.71 $ 24.1
10.5 $
2.30
2009
Basic EPS
Effect of dilutive
common share
equivalents:
Unvested restricted
stock units
Stock options
Warrants
Performance shares
Diluted EPS
47.3
0.2
0.2
10.9 $
(0.02)
(0.07)
(0.08)
(0.01)
4.35 $
17.9
0.2
0.2
10.9 $
(0.03)
(0.04)
1.64 $
24.1
0.3
0.4
11.2 $
(0.06)
(0.09)
2.15
Note: Basic and diluted earnings per share are calculated based on unrounded actual amounts.
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Certain options and warrants to purchase common stock were outstanding but were not included in the computation of
diluted earnings per share because the effect would be anti-dilutive. For 2009, 2008 and 2007 there were 259,777, 249,453 and
121,475 anti-dilutive options, respectively. There were no anti-dilutive warrants in 2009, 2008 or 2007.
In May 2004, we issued an aggregate of 9,800,000 shares of our common stock and warrants to purchase an aggregate of
990,616 shares of our common stock to the Class 6(B) creditors of Fleming Inc. (our former parent company) pursuant to its plan
of reorganization. We refer to the warrants we issued to the Class 6(B) creditors as the Class 6(B) warrants. We received no cash
consideration for the issuance of common stock and the Class 6(B) warrants. The Class 6(B) warrants have an exercise price of
$20.93 per share and may be exercised at the election of the holder at any time prior to August 23, 2011, at which time any
outstanding warrants will be net issued. The shares of common stock and the Class 6(B) warrants were issued pursuant to an
exemption from registration under Section 1145(a) of the Bankruptcy Code. We also issued warrants to purchase an aggregate of
247,654 shares of our common stock to the holders of our Tranche B Notes, which we refer to as Tranche B warrants. The
Tranche B warrants have an exercise price of $15.50 per share.
The number of Class 6(B) warrants outstanding was 952,806 at the end of 2009 and 968,628 at the end of both 2008 and
2007. The number of Tranche B warrants outstanding was 126,716 at the end of 2009, 2008 and 2007. The Class 6(B) warrants
and the Tranche B warrants have been classified as permanent equity. We use the treasury stock method to determine the shares
of common stock due to conversion of outstanding warrants as of December 31, 2009.
11. Stock-Based Compensation Plans
Total stock-based compensation cost recognized in the consolidated statements of operations for 2009, 2008 and 2007 was
$5.1 million, $3.9 million and $5.3 million, respectively. Total unrecognized compensation cost related to non-vested
share-based compensation arrangements was $4.5 million at December 31, 2009. This balance is expected to be recognized over
a weighted-average period of 1.5 years.
Employee stock-based compensation expense recognized in 2009 was calculated based on awards ultimately expected to
vest and has been reduced for estimated forfeitures. Our forfeiture experience since inception of our plans has been
approximately 4% of the total grants. The historical rate of forfeiture is a component of the basis for predicting the future rate of
forfeitures, which are also dependent on the remaining service period related to grants and on the limited number of
approximately 79 plan participants that have been awarded grants since the inception of our plans. We issue new shares to satisfy
stock option exercises.
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We maintain five stock-based compensation plans: the 2004 Long-Term Incentive Plan, the 2004 Directors Equity
Incentive Plan, the 2005 Long-Term Incentive Plan, the 2005 Directors Equity Incentive Plan and the 2007 Long-Term
Incentive Plan.
Number of securities to
be issued upon exercise of
outstanding options,
warrants and
rights
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column 1)
492,196
22,111
30,000
15,000
605,734
1,000
336,933
2004 Long-Term Incentive PlanRestricted stock units and

options
2005 Long-Term Incentive PlanRestricted stock units
2004 Directors Equity Incentive Plan
2007 Long-Term Incentive Plan (1)
(1) Includes non-qualified stock options, restricted stock units and performance shares.
2004 Long-Term Incentive Plan
The 2004 Long-Term Incentive Plan (2004 LTIP) provides for issuance of up to 1,314,444 shares of non-qualified stock
options and restricted stock units. For option grants, the exercise price equals the fair value of the Companys common stock on
the date of grant. For restricted stock grants, the exercise price is fixed at $0.01. Options and restricted stock units vest over a
three-year period; one-third of the options and restricted stock units cliff-vest on the first anniversary of the vesting
commencement date and the remaining options and restricted stock units vest in equal monthly and quarterly installments,
respectively, over the two-year period following the first anniversary of the vesting commencement date. Stock options expire
seven years after the date of grant. Restricted stock units do not have an expiration date. Restricted stock units are available for
grant to officers and key employees. Stock-based compensation is being recognized ratably over the three-year vesting period of
the stock options or restricted stock units using the straight-line method.
The 2004 Directors Equity Incentive Plan (2004 Directors Plan) consists of 30,000 non-qualified stock options that have
been granted to non-employee Directors of the Company. This plan has terms and vesting requirements similar to those of the
2004 LTIP, except options vest quarterly after the first anniversary of the vesting commencement date. No stock options are
available for future issuance.
The 2005 Long-Term Incentive Plan (2005 LTIP) provides for the granting of restricted stock units to officers and key
employees. The majority of restricted stock units issued under the 2005 LTIP generally vest over three years: one-third of the
restricted stock units cliff vest on the first anniversary of the vesting commencement date and the remaining restricted stock units
vest in equal quarterly installments over the two-year period following the first anniversary of the vesting commencement date.
Restricted stock units do not have an expiration date. No restricted stock units are available for future issuance.
The 2005 Directors Equity Incentive Plan (2005 Directors Plan) consists of 15,000 non-qualified stock options that have
been granted to non-employee Directors of the Company. The terms of the 2005 Directors Plan are similar to the 2004
Directors Plan. No stock options are available for future issuance.
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The 2007 Long-Term Incentive Plan (2007 LTIP) provides for the granting of awards of up to 1,202,350 shares of our
common stock (including treasury shares) to officers, employees and non-employee directors. The 2007 LTIP became effective
on July 1, 2007. Awards may be made under the 2007 LTIP through June 30, 2017, which is 10 years from the effective date of
the 2007 LTIP.
The available awards under the 2007 LTIP include: stock options, restricted stock units and performance shares. The annual
award limits of the 2007 LTIP provide for options which are limited in any one plan year to 100,000 shares to any one
participant, and performance shares which are also limited to 100,000 to any one participant in any one plan year. Restricted
stock units, or RSUs, are awards that will be subject to certain restrictions and subject to a risk of forfeiture upon certain kinds of
employment terminations. A RSU represents a right to receive a share of our common stock at the end of a specified period.
Unless a grant agreement provides otherwise, a holder of a RSU has the right to receive accumulated dividends or distributions
on the corresponding shares underlying the RSU on the date the RSU vests and thereafter until the underlying shares are issued.
Performance shares may include (i) specific dollar-value target awards, (ii) performance units, the value of each unit being
determined by the Compensation Committee at the time of issuance and/or (iii) performance shares, the value of each such share
being equal to the fair market value of a share of our common stock.
If any grant of shares under the 2007 LTIP expires or is forfeited by the grantee (whether due to failure to satisfy vesting
requirement or otherwise), then such forfeited shares will be withdrawn from the pool of shares available for grant under the
2007 LTIP.
Assumptions Used for Fair Value
We use the Black-Scholes option-pricing model to determine the grant date fair value for each stock option. Option-pricing
models require the input of assumptions that are estimated at the date of grant.
The following table presents the assumptions used in the Black-Scholes option-pricing model to value the stock options
granted during the period 2007 through 2009. Restricted stock units and performance shares were valued at the fair market value
of our stock at date of grant.
2009
Expected life (years)
Risk-free interest rate
Volatility
Dividend yield
Weighted-average fair value per share of grants:
Stock options
Restricted stock units
Performance shares
$
$
$

2008
4.0
4.0
1.12%
2.55%
44%
35%
7.14
19.18
19.18
$
$
$
8.45
25.80
25.80
$
$
$
2007
4.0
4.50%-5.00%
30%
11.39
35.41
36.95
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The expected volatility of our stock is based on the implied volatilities of publicly traded options to buy our stock. Through
2007, our expected volatility was based on a variety of factors including the volatility measures of other companies in relatively
similar industries and the measures of companies which have also emerged from bankruptcy. The risk-free rate for periods within the
contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected term of options
granted represents the period of time we estimate that options granted are expected to be outstanding.
The following table summarizes the activity for all stock options, restricted stock units and performance shares under all of the
plans for the year ended December 31, 2009:
Plans
2004 LTIP
2004 Directors Plan
2005 LTIP
2005 Directors Plan
2007 LTIP (1)
Total
Securities
RSUs
Options
Options
RSUs
Options
RSUs
Options
Performance shares
December 31, 2007

Outstanding
Number
Price
74,627
$
0.01
753,546
16.99
30,000
15.50
90,976
0.01
15,000
27.03
59,871
0.01
66,838
36.96
19,979
0.01
1,110,837
December 31, 2008

Outstanding
Number
Price
41,978
$
0.01
593,291
17.39
30,000
15.50
38,472
0.01
15,000
27.03
146,994
0.01
199,145
29.39
27,500
0.01
1,092,380
Granted
Number
Price
$
2,543
19.19
134
0.01
126,465
0.01
143,634
19.19
83,025
0.01
355,801
Activity during 2009

Exercised
Number
Price
(30,049) $ 0.01
(114,567)
15.50
(16,495)
0.01
(81,295)
0.01
(2,709)
25.81
(18,735)
0.01
(263,850)
Canceled/Reclass
Number
Price
(1,000)
36.03
(7,165)
29.48
(11,125)
0.01
(19,290)
December 31, 2009

Outstanding
Exercisable
Number
Price
Number
Price
11,929
$ 0.01
10,671
$ 0.01
480,267
17.81
472,097
17.61
30,000
15.50
30,000
15.50
22,111
0.01
20,438
0.01
15,000
27.03
15,000
27.03
192,164
0.01
20,949
0.01
332,905
25.01
141,177
29.95
80,665
0.01
1,165,041
710,332
Note: Price is weighted-average price per share.

(1)
The 2007 LTIP is for officers, employees and non-employee directors.
The aggregate intrinsic value of stock options exercised in 2009 was $1.4 million, $2.1 million in 2008 and $2.5 million in 2007.
The aggregate intrinsic value of restricted stock units exercised in 2009 was $2.9 million, $3.1 million in 2008 and $3.2 million in
2007. The aggregate intrinsic value of performance shares exercised in 2009 was $0.4 million, less than $0.1 million in 2008 and
$0.5 million in 2007.
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The following tables summarize stock options, restricted stock units and performance shares that have vested and are
expected to vest as of December 31, 2009:
Plans
2004 LTIP
2004 Directors Plan
2005 LTIP
2005 Directors Plan
2007 LTIP
Securities
RSUs
Options
Options
RSUs
Options
RSUs
Options
Performance shares
Total
Vested
10,671
472,097
30,000
20,438
15,000
20,949
141,177
710,332
December 31, 2009

Weighted-Average Remaining
Aggregate Intrinsic Value (1)
Contractual Term (years)
(in thousands)
Vested
Expected to vest(2)
Vested
Expected to vest(2)
$
352
$
40
1.9
4.9
7,390
43
1.6
524
673
53
2.6
89
690
5,425
4.9
5.8
635
2,170
2,556
10,353
10,287
Outstanding
Expected to vest(2)
1,210
7,856
1,609
164,640
184,366
77,567
437,248
(1) Aggregate intrinsic value is calculated based upon the difference between the exercise prices of options or restricted stock
units and our closing common stock price on December 31, 2009 of $32.96, multiplied by the number of instruments that
are vested or expected to vest. Options and restricted stock units having exercise prices greater than the closing stock price
noted above are excluded from this calculation.
(2) Options and restricted stock units that are expected to vest are net of estimated future forfeitures.
The aggregate fair values of options vested in 2009, 2008 and 2007 were approximately $4.3 million, $1.6 million and
$6.7 million, respectively. The aggregate fair value of restricted stock units vested in 2009, 2008 and 2007 was approximately
$3.6 million, $1.4 million and $2.7 million, respectively. The aggregate fair value of performance shares vested in 2009, 2008
and 2007 was approximately $0.6 million, $0.1 million and $0.6 million, respectively.
12. Employee Benefit Plans
Pension Plans
We sponsored a qualified defined-benefit pension plan and a post-retirement benefit plan for employees hired before
September 1986. There have been no new entrants to the pension or non-pension post-retirement benefit plans after those benefit
plans were frozen on September 30, 1989.
Our defined-benefit pension plan is subject to the Employee Retirement Income Security Act of 1974 (ERISA). Under
ERISA, the Pension Benefit Guaranty Corporation (PBGC) has the authority to terminate an underfunded pension plan under
limited circumstances. In the event our pension plan is terminated for any reason while it is underfunded, we will incur a liability
to the PBGC that may be equal to the entire amount of the underfunding. Our post-retirement benefit plan is not subject to
ERISA. As a result, the post-retirement benefit plan is not required to be pre-funded, and, accordingly, has no plan assets.
Pension costs and other post-retirement benefit costs charged to operations are estimated on the basis of annual valuations
with the assistance of an independent actuary. Adjustments arising from plan amendments, changes in assumptions and
experience gains and losses, are amortized over the average future life expectancy of inactive participants for the defined benefit
plan, and expected average remaining service life of active participants for the post-retirement benefit plan.
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The following tables provide a reconciliation of the changes in the Pension Plans benefit obligation and fair value of assets
over the two-year period ending December 31, 2009 and a statement of the funded status for the year ended December 31, 2009
and 2008 (in millions):
Other Post-retirement
Benefits
December 31,
December 31,
2009
2008
Pension Benefits
December 31,
December 31,
2009
2008
Change in Benefit Obligation:
Obligation at beginning of period
Interest cost
Actuarial loss
Benefit payments
Change in plan provision
Curtailment gain
Benefit obligation at end of period
Change in Pension Plan Assets:
Fair value of pension plan assets at
beginning of period
Actual return on plan assets
Employer contributions
Benefit payments
Fair value of pension plan assets at end
of period
Funded Status:
Funded status
34.9
2.0
1.5
(3.2)
35.2
22.1
4.5
0.2
(3.2)
$
$
35.3 $
2.2
0.1
(2.7)
34.9 $
6.6
0.5
1.2
(0.1)
(0.4)
(3.4)
4.4
31.3 $
(6.9)
0.4
(2.7)
0.1
(0.1)
0.3
(0.3)
23.6
22.1
(11.6)
(4.4)
(6.6)
(12.8) $
6.0
0.4
0.5
(0.3)
6.6
During 2009, the actual return on investments was above expectations, which was the primary reason for the decrease in the
underfunded status of the defined-benefit pension plan from 2008 to 2009. The expected return on pension plan assets for 2009
was a gain of $1.5 million compared with a realized gain of $4.5 million in 2009. In 2008, the expected return on pension plan
assets was a gain of $2.3 million compared to a realized loss of $6.9 million due to the economic recession which led to a
significant decline in the market value of invested plan assets.
In addition, during 2009 the Company implemented changes to medical benefits in the post-retirement benefit plan. The
most significant change to the plan was the removal of the Companys subsidy of medical premiums for future retirees which
curtailed future benefits for those participants. As a result of this change, the future obligations related to the plan were reduced
by $3.4 million and we recorded a net curtailment gain of $0.8 million in 2009.
The following table provides information for Pension Plans with an accumulated benefit obligation in excess of plan assets
(in millions):
December 31,
2009
$
35.2
35.2
23.6
Projected benefit obligation

Accumulated benefit obligation
Fair value of pension plan assets
December 31,
2008
$
34.9
34.9
22.1
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The following table provides components of the net periodic pension cost (in millions):
2009
Interest cost
Expected return on plan assets
Amortization of net actuarial loss
Net periodic benefit cost
2008
2.0
(1.5)
0.3
0.8
2007
2.2
(2.3)
(0.1)
2.1
(2.3)
(0.2)
The following table provides components of the net periodic other benefit cost (in millions):
2009
Interest cost
Amortization of net actuarial loss
Curtailment gain, net
Net periodic other benefit cost
2008
0.5
0.3
(0.8)
2007
0.4
0.1
0.5
0.4
0.2
0.6
The prior-service costs, which include interest, are amortized on a straight-line basis over the average future life expectancy
of inactive participants. Gains and losses in excess of 10% of the greater of the benefit obligation and market-related value of
assets are amortized over the average future life expectancy of inactive participants. Our measurement date was on December 31,
2009. We estimated that average future life expectancy is 24.6 years for the pension benefit plan and remaining service life of
active participants is 7.5 years for the post-retirement benefit plan.
Assumptions Used:
The following tables show weighted-average assumptions used in the measurement of:
Benefit Obligations:
Discount rate
Pension Benefits
December 31,
December 31,
2009
2008
5.58%
6.26%
Other Post-retirement Benefits

December 31,
December 31,
2009
2008
5.88%
6.07%
Pension Benefits
December 31,
December 31,
2009
2008
6.26%
6.35%
7.35%
7.50%
Other Post-retirement Benefits

December 31,
December 31,
2009
2008
6.07%
6.43%
Net Periodic Benefit Costs:
Discount rate
Expected return on assets
Assumed health care trend rates for the post-retirement benefit plans are as follows:
December 31,
2009
7.00%
5.00%
2011
Assumed current trend rate for next year

Ultimate year trend rate
Year that ultimate trend rate is reached
December 31,
2008
8.00%
5.00%
2011
The weighted-average discount rates used to determine pension and post-retirement benefit plan obligations and expense
are based on a yield curve methodology which matches the expected benefits at each duration to the available high quality yields
at that duration and calculating an equivalent yield. At December 31, 2009, our discount rates were 5.58% and 5.88% related to
our pension and post-retirement plan benefit obligations, respectively, compared with 6.26% and 6.07%, respectively, at
December 31, 2008. The decrease in the discount rate for 2009 was due primarily to lower bond yields.
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Assumed health care cost trend rates have an effect on the amounts reported for the post-retirement health care plans. A 1%
change in assumed health care cost trend rates would have the following effects (in millions):
1% Increase
Effect on total of service and interest cost components of net periodic
post-retirement health care benefit cost
Effect on the health care component of the accumulated post-retirement benefit
obligation
1% Decrease
0.5
(0.4)
We use a building block approach in determining the overall expected long-term return on assets. Under this approach, a
weighted-average expected rate of return is developed based on historical returns for each major asset class and the proportion of
assets of the class held by the Pension Plans. We then review the results and may make adjustments in subsequent years to reflect
expectations of future rates of return that may differ from those experienced in the past.
Plan Assets:
The companys overall investment strategy is to produce a total investment return which will satisfy future annual cash
benefit payments to participants, while minimizing future contributions from the Company. Additionally, our asset allocation
strategy is intended to diversify plan assets to minimize nonsystematic risk and provide reasonable assurance that no single
security or class of security will have a disproportionate impact on the Plans.
Our investment guidelines allocation ranges are: 0-20% cash, 50-70% equity and 30-50% fixed income. Our investment
guidelines also set forth the requirement for diversification within asset class, types and classes for investment prohibited and
permitted, specific indices to be used for benchmark in investment decisions and criteria for individual security.
The fair value measurements of the Pension Plans assets by asset category at December 31, 2009 are as follows (in
millions):
Asset Category
Cash
Equity securities
Government securities
Corporate bonds
Group annuity contract
Total
Total
$
1.3
13.8
2.5
2.6
3.4
23.6
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
$
1.3
13.8
2.5
2.6
$
20.2
Significant
Observable Inputs
(Level 2)
$
3.4
$
3.4
Significant
Unobservable Inputs
(Level 3)
$
Debt and equity securities are recorded at their fair market value each year-end as determined by quoted closing market
prices on national securities exchanges or other markets, as applicable. The group annuity consists primarily of fixed income
securities. The participating annuity contract is valued based on discounted cash flows of current yields of similar securities with
comparable duration based on the underlying fixed income investments.
We expect to contribute at least $1.4 million and $0.3 million to our pension plan and post-retirements benefits plan,
respectively, in 2010.
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Estimated future benefit payments reflecting future service are as follows (in millions):
Year ended December 31,
2010
2011
2012
2013
2014
2015 through 2019
Pension
$
2.5
2.5
2.8
2.5
2.9
13.9
Other
Post-retirement
$
0.3
0.3
0.3
0.3
0.4
1.8
Amounts recognized in the consolidated statements of stockholders equity and comprehensive income (in millions):
0.7
5.6
1.1
Other
Post-retirement
Benefits
After Tax
$
0.3
0.2
1.3
(12.8)
(12.8)
Other
Post-retirement
(0.3)
(6.3)
$
(6.6)
Pension
After Tax
Net loss during 2007
Amounts recognized in the consolidated balance sheets (in millions):

Current liabilities
Non-current liabilities
Pension

Current liabilities
Non-current liabilities
Pension
(11.6)
(11.6)
Other
Post-retirement
(0.3)
(4.1)
$
(4.4)
Expected amortizations for the year ending December 31, 2010 (in millions):
Pension
Expected amortization of net loss
0.2
Other
Post-retirement
$
Savings Plans
We maintain defined contribution plans in the U.S., subject to Section 401(k) of the Internal Revenue Code, and in Canada,
subject to the Department of National Revenue Taxation Income Tax Act. For the fiscal year ended December 31, 2009, eligible
U.S. employees could elect to contribute on a tax-deferred basis from 1% to 75%, of their compensation to a maximum of
$16,500. Eligible U.S. employees over 50 years of age could also contribute an additional $5,500 on a tax-deferred basis. In
Canada, employees could elect to contribute up to a maximum of $21,000 Canadian dollars. Under the 401(k) plan, we match
100% of U.S. employee contributions up to 2% of base salary and match 25% of employee contributions from 2% to 6% of base
salary. For Canadian employees, we match 50% of employee contributions up to 6% of base salary. For the year ended
December 31, 2009, we made matching payments of approximately $2.2 million.
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13. Repurchase of Common Stock
In March 2008, our Board of Directors authorized a share repurchase program of up to $30 million to repurchase shares of
our common stock in the open market or in privately negotiated transactions subject to market conditions. The number of shares
to be repurchased and the timing of the purchases will be based on market conditions, our cash and liquidity requirements,
relevant securities laws and other factors. The share repurchase program may be discontinued or amended at any time. We
funded repurchases under the program and plan to fund any future repurchases, from available cash. Our Credit Facility was
amended in March 2008 to increase our basket for permitted stock repurchases to $30 million to allow us to execute the share
repurchase program. As of December 31, 2009 there was $16.8 million available for future share repurchases under the program.
Upon execution of the Third Amendment to our Credit Facility in February 2010, our available funds for future share
repurchases were re-established at $30 million.
During 2009, we repurchased 98,646 shares of common stock under the share repurchase program at an average price of
$22.77 per share for a total cost of $2.2 million. During the year ended December 31, 2008, we repurchased 396,716 shares of
common stock under the share repurchase program at an average price of $27.66 per share for a total cost of $11.0 million.
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14. Quarterly Financial Data (Unaudited)
The tables below provide our unaudited consolidated results of operations for each of the four quarters in 2009 and 2008:
Net sales (8)

Net sales Cigarettes (8)
Net sales Food/Non-food (8)
Cigarette inventory holding profits
(losses) (1)
Gross profit
Warehousing and distribution
expenses (7)
expenses
Interest expense (5)
Interest income
Foreign currency (gains) losses, net
Net income
Basic net income per share (6)
Diluted net income per share (6)
Shares used in computing basic net
income per share
Shares used in computing diluted net
income per share
Excise taxes (8)
LIFO expense
December 31,
2009
$
1,651.9
1,173.7
478.2
$
$
Three Months Ended

(unaudited)
(in millions, except per share data)
September 30,
June 30,
2009
2009
$
1,776.1
$
1,711.8
1,250.1
1,209.1
526.0
502.7
34.9(2)
118.1
1.5
94.1
(0.1)
101.9(4)
51.0
51.1
50.2
45.0
34.0
8.7
0.4
(0.1)
(0.2)
8.5
0.82
0.76
34.2
16.1
0.4
(0.4)
11.3
1.08
1.02
32.1
4.7
0.4
(0.1)
(2.4)
4.2(3)
0.40(3)
0.39(3)
37.0
35.5
0.5
(0.1)
0.8
23.3(2)
2.22(2)
2.20(2)
$
$
10.5
$
$
$
$
$
March 31,
2009
$
1,391.8
956.2
435.6
11.1
5.1
390.2
1.4
1.2
7.6
0.4
87.5(3)
$
$
10.5
$
$
$
$
$
11.0
4.5
412.1
0.2
1.4
5.2
$
$
10.5
$
$
$
$
$
10.8
4.6
385.8
2.1
1.3
3.5
10.5
$
$
$
$
$
10.6
4.5
327.9
3.0
1.2
4.8
(1) Cigarette inventory holding profits relate to increases in manufacturer prices and excise taxes.
(2) We realized significant cigarette holding profits in the first quarter ended March 31, 2009, due primarily to increases in
cigarette prices by manufacturers in response to the anticipated increase in federal tax mandated by the SCHIP legislation.
(3) Gross profit for the second quarter ended June 30, 2009 was negatively impacted by $11.5 million of federal excise floor
tax net of manufacturer reimbursements related to SCHIP.
(4) Includes a $0.6 million State of Florida OTP net tax refund which was recorded as a reduction of cost of goods sold during
the third quarter of 2009.
(5) Includes amortization of debt issuance cost, of approximately $0.1 million for each quarter in 2009.
(6) Totals may not agree with full year amounts due to rounding and separate calculations for each quarter.
(7) Warehousing and distribution expenses are not included as a component of the Companys cost of goods sold which
presentation may differ from that of other registrants.
(8) Excise taxes are included as a component of net sales.
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Net sales (8)

Net sales Cigarettes (8)
Net sales Food/Non-food (8)
Cigarette inventory holding profits (1)
Gross profit
December 31,
2008
$
1,492.2
1,028.5
463.7
1.5
92.9(2)
(7)

expenses
Interest expense (5)
Interest income
Foreign currency losses, net
Net income (loss)
Basic net income (loss) per share (6)
Diluted net income (loss) per share (6)
Shares used in computing basic net
income per share
Shares used in computing diluted net
income per share
Excise taxes (8)
LIFO expense
Three Months Ended

(unaudited)
(in millions, except per share data)
September 30,
June 30,
2008
2008
$
1,672.7
$
1,534.6
1,144.9
1,032.4
527.8
502.2
0.2
1.3
93.9
91.1
$
$
46.4
54.3
51.0(3)
45.9
33.9(4)
12.1
0.6
(0.1)
3.7
7.4
0.71
0.70
30.5
8.6
0.7
(0.2)
1.5
5.3
0.51
0.49
30.9(4)
8.7
0.4
(0.4)
0.1
5.7
0.54
0.51
34.1
0.7
0.5
(0.3)
1.0
(0.5)
(0.05)
(0.05)
$
$
10.4
$
$
$
$
$
March 31,
2008
$
1,345.4
919.0
426.4
0.1
81.2
$
$
10.4
10.5
4.5
370.6
0.3
1.1
6.0
$
$
$
$
$
10.9
4.5
414.9
6.0
0.9
6.0
$
$
10.5
$
$
$
$
$
11.0
4.0
364.0
3.0
0.9
1.9
10.6
$
$
$
$
$
10.6
4.4
324.9
1.7
1.0
6.0
(1) Cigarette inventory holding profits relate to increases in manufacturer prices and excise taxes.
(2) Includes a $1.4 million State of Texas OTP net tax refund which was recorded as a reduction to cost of goods sold during
the fourth quarter of 2008.
(3) Includes start up costs of $0.3 million for first quarter of 2008 and $0.1 million for the second quarter of 2008 related to the
Toronto division.
(4) Includes start up costs of $0.4 million for first quarter of 2008, $0.1 million for the second quarter of 2008 and $0.1 million
in the third and fourth quarters combined related to the Toronto division.
(5) Includes amortization of debt issuance costs, of approximately $0.1 million for each quarter in 2008.
(6) Totals may not agree with full year amounts due to rounding and separate calculations for each quarter.
(7) Warehousing and distribution expenses are not included as a component of the Companys cost of goods sold which
presentation may differ from that of other registrants.
(8) Excise taxes are a component of net sales.
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15. Segment Information
We are one of the largest marketers of fresh and broad-line supply solutions to the convenience retail industry in North
America. We offer a full range of products, marketing programs and technology solutions to approximately 24,000 customer
locations in the U.S. and Canada. Our customers include traditional convenience stores, grocery stores, drug stores, liquor stores
and other specialty and small format stores that carry convenience products. Our product offering includes cigarettes, tobacco,
candy, snacks, fast food, groceries, fresh products, dairy, non-alcoholic beverages, general merchandise and health and beauty
care products.
As of December 31, 2009, we operated 24 distribution centers (excluding two distribution facilities we operated as third
party logistics provider) which support our wholesale distribution business. Twenty-two of our distribution centers are located in
the U.S. and four in Canada. Two of the facilities we operate in the U.S. are consolidating warehouses which buy products from
our suppliers in bulk quantities and then distribute the products to our other distribution centers.
All of our distribution centers (operating divisions) have similar historical economic characteristics and are expected to
have similar economic characteristics in the future. The principal measures and factors we considered in determining whether the
economic characteristics are similar are sales, net sales income (which is comparable to our reported gross profit adjusted for
LIFO expense), operating expenses and pre-tax net profit. In addition, each operating division carries similar products, which
they sell to similar customers by using similar operating procedures. Therefore, in our judgment, our 24 operating divisions
aggregate into one reportable segment.
Corporate adjustments and eliminations include the net results after intercompany eliminations for our consolidating
warehouses, service fee revenue, LIFO and reclassifying adjustments, corporate allocations and elimination of intercompany
interest charges. Accounting policies for measuring segment assets and earnings before income taxes are substantially consistent
with those described in Note 2Summary of Significant Accounting Policies. Inter-segment revenues are not significant and no
single customer accounted for 10% or more of our total revenues.
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Information about our business operations based on the two geographic reporting segments follows (in millions):
2009
Net sales:
United States(1)
Canada
Corporate adjustments and eliminations
Total
Income (loss) before income taxes:

United States(2)
Canada
Total
Interest expense:
United States
Canada
Total
Interest income:
United States
Canada
Total
Depreciation and amortization:

United States
Canada
Total

2008
5,519.2
992.9
19.5
6,531.6
70.0
(3.2)
(1.0)
65.8
20.9
0.8
(20.0)
1.7
0.1
0.1
0.1
0.3
13.3
2.4
3.0
18.7
5,082.3
935.8
26.8
6,044.9
2007
$
34.9
(5.6)
(6.7)
22.6
20.6
0.9
(19.3)
2.2
0.1
0.1
0.8
1.0
12.4
2.0
3.0
17.4
4,771.3
768.2
21.4
5,560.9
18.1
(1.0)
20.5
37.6
20.6
(18.2)
2.4
0.2
0.1
1.1
1.4
11.2
1.0
2.7
14.9
(1) Net cigarette sales for 2009 include approximately $534.0 million of increased sales resulting from manufacturers cigarette
price increases in response to SCHIP legislation.
(2) Includes $25.2 million of income for 2009, consisting of $36.7 million of cigarette holding profits due primarily to
manufacturers price increases in response to the SCHIP legislation less $11.5 million of federal excise floor taxes.
72
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Identifiable assets by geographic reporting segments (in millions):
December 31,
2009
Identifiable assets:
U.S.
Canada
Total
575.8
102.1
677.9
December 31,
2008
$
530.7
81.9
612.6
The net sales mix for our primary product categories is as follows (in millions):
2009
Net Sales
Cigarettes(1)
Food
Candy
Equipment/other
Total Food/Non-food Products
Total net sales
4,589.1

2008
Net Sales
$
4,124.8
2007
Net Sales
$
3,863.1
738.0
405.0
434.0
209.5
151.7
4.3
710.1
401.3
402.7
220.1
180.9
5.0
596.7
349.8
353.4
206.2
186.4
5.3
1,942.5
1,920.1
1,697.8
6,531.6
6,044.9
5,560.9
(1) Net cigarette sales for 2009 include approximately $534.0 million of increased sales resulting from manufacturers cigarette
price increases in response to SCHIP legislation.
73
Table of Contents
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL

DISCLOSURE.
None.
ITEM 9.A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We conducted, under the supervision and with the participation of our management, including the chief executive officer
and chief financial officer, an evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based on our
evaluation, the chief executive officer and chief financial officer concluded that, as of December 31, 2009, our disclosure
controls and procedures were effective.
Managements Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as
defined in Rule 13a-15(f) of the Securities Exchange Act of 1934. We assessed the effectiveness of our internal control over
financial reporting as of December 31, 2009. In making this assessment, we used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal ControlIntegrated Framework, issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
Based on this assessment, we concluded that our internal control over financial reporting was effective as of December 31,
2009.
Our internal control over financial reporting as of December 31, 2009 has been audited by Deloitte & Touche LLP, our
independent registered public accounting firm, as stated in their report which appears herein.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the fourth quarter of the year
ended December 31, 2009 that have materially affected, or are reasonably likely to materially affect, the internal control over
financial reporting.
ITEM 9.B. OTHER INFORMATION
None.
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Table of Contents
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this item is included in our Proxy Statement for the 2010 Annual Meeting of Stockholders
under the following captions and is incorporated herein by reference thereto: Nominees for Director, Board of Directors,
Our Executive Officers, and Ownership of Core-Mark Common StockSection 16(a) Beneficial Ownership Reporting
Compliance.
ITEM 11. EXECUTIVE COMPENSATION
under the following captions and is incorporated herein by reference thereto: Board of DirectorsDirector Compensation,
Board of DirectorsCompensation Committee Interlocks and Insider Participation, Compensation Discussion and Analysis,
Compensation Committee Report, and Compensation of Named Executives.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by this item is included (i) in our Proxy Statement for the 2010 Annual Meeting of Stockholders
under the caption Ownership of Core-Mark Common Stock and is incorporated herein by reference thereto and (ii) in Item 5 of
this Annual Report on Form 10-K and is incorporated herein by reference thereto.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
under the following caption and is incorporated by reference herein by reference thereto: Board of DirectorsCertain
Relationships and Related Transactions, Board of DirectorsCommittees of the Board of Directors and Board of
DirectorsCorporate Governance.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
under the caption Independent Public Accountants and is incorporated herein by reference thereto.
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Table of Contents
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
The following exhibits are filed as part of this Annual Report on Form 10-K:
EXHIBIT INDEX
Exhibit
No.
2.1
Description
Third Amended and Revised Joint Plan of Reorganization of Fleming Companies, Inc. and its Subsidiaries
Under Chapter 11 of the Bankruptcy Code, dated May 25, 2004 (incorporated by reference to Exhibit 2.1
of the Companys Registration Statement on Form 10 filed on September 6, 2005).
3.1
Certificate of Incorporation of Core-Mark Holding Company, Inc. (incorporated by reference to Exhibit 3.1
3.2
Second Amended and Restated Bylaws of Core-Mark Holding Company, Inc. (incorporated by reference
to Exhibit 3.2 of the Companys Current Report on Form 8-K filed on August 18, 2008).
4.1
Form of Class 6(B) Warrant (incorporated by reference to Exhibit 4.1 of the Companys Registration
Statement on Form 10 filed on September 6, 2005).
10.1
2004 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 of the Companys Registration
10.2
2004 Directors Equity Incentive Plan (incorporated by reference to Exhibit 10.2 of the Companys
Registration Statement on Form 10 filed on September 6, 2005).
10.3
2005 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.3 of the Companys Registration
10.4
2005 Directors Equity Incentive Plan (incorporated by reference to Exhibit 10.4 of the Companys
10.5
2007 Long-Term Incentive Plan (incorporated by reference to Annex A of the Companys Proxy Statement
on Schedule 14A filed on April 23, 2007).
10.6
Statement of Policy Regarding 2007 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.1
of the Companys Current Report on Form 8-K filed on May 9, 2007).
10.7
Form of Management Option Award Agreement for Awards under the Core-Mark Holding Company, Inc.
2004 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.7 of the Companys Annual
Report on Form 10-K filed on March 12, 2009).
10.8
Form of Management Restricted Stock Unit Award Agreement for Awards under the Core-Mark Holding
Company, Inc. 2004 Long-Term Incentive Plan and 2005 Long-Term Incentive Plan (incorporated by
reference to Exhibit 10.8 of the Companys Annual Report on Form 10-K filed on March 12, 2009).
10.9
Form of Management Option Award Agreement for Awards under the Core-Mark Holding Company, Inc.
2007 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.3 of the Companys Current
Report on Form 8-K filed on July 6, 2007).
10.10
Form of Management Restricted Stock Unit Award Agreement for July 2007 Awards under the Core-Mark
Holding Company, Inc. 2007 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 of the
Companys Current Report on Form 8-K filed on July 6, 2007).
10.11
Form of Management Performance Share Award Agreement for July 2007 Awards under the Core-Mark
Holding Company, Inc. 2007 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.4 of the
Companys Current Report on Form 8-K filed on July 6, 2007).
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Exhibit
No.
10.12
Description
Form of Management Restricted Stock Unit Award Agreement for January 2008 Awards under the
Core-Mark Holding Company, Inc. 2007 Long-Term Incentive Plan (incorporated by reference to
Exhibit 10.12 of the Companys Annual Report on Form 10-K filed on March 12, 2009).
10.13
Form of Management Performance Share Award Agreement for January 2008 Awards under the
Core-Mark Holding Company, Inc. 2007 Long-Term Incentive Plan (incorporated by reference to
Exhibit 10.4 of the Companys Current Report on Form 8-K filed on February 14, 2008).
10.14
Form of First Amendment to Management Performance Share Award Agreement for January 2008 Awards
under the Core-Mark Holding Company, Inc. 2007 Long-Term Incentive Plan (incorporated by reference
to Exhibit 10.14 of the Companys Annual Report on Form 10-K filed on March 12, 2009).
10.15
Form of Indemnification Agreement for Officers and Directors (incorporated by reference to Exhibit 10.5
10.16
Form of Common Stock Purchase Warrant (incorporated by reference to Exhibit 10.12 of the Companys
10.17
Registration Rights Agreement, dated August 20, 2004, among Core-Mark Holding Company, Inc. and the
parties listed on Schedule I attached thereto (incorporated by reference to Exhibit 10.10 of the Companys
10.18
Credit Agreement, dated October 12, 2005, among Core-Mark Holding Company, Inc., Core-Mark
International, Inc., Core-Mark Holdings I, Inc., Core-Mark Holdings II, Inc., Core-Mark Holdings III, Inc.,
Core-Mark Midcontinent, Inc., Core-Mark Interrelated Companies, Inc., Head Distributing Company and
Minter-Weisman Co., as Borrowers, the Lenders Signatory Thereto as Lenders, JPMorgan Chase Bank,
N.A., as Administrative Agent, General Electric Capital Corporation and Wachovia Capital Finance
Corporation (Western), as Co-Syndication Agents and Bank of America, N.A. and Wells Fargo Foothill,
LLC, as Co-Documentation Agents.
10.19
First Amendment to Credit Agreement, dated December 4, 2007, among Core-Mark Holding Company,
Inc., Core-Mark International, Inc., Core-Mark Holdings I, Inc., Core-Mark Holdings II, Inc., Core-Mark
Holdings III, Inc., Core-Mark Midcontinent, Inc., Core-Mark Interrelated Companies, Inc., Head
Distributing Company and Minter-Weisman Co., as Borrowers, the Lenders Signatory Thereto as Lenders
and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.19 of
the Companys Annual Report on Form 10-K filed on March 12, 2009).
10.20
Second Amendment to Credit Agreement, dated March 12, 2008, among Core-Mark Holding Company,
the Companys Current Report on Form 8-K filed on March 18, 2008).
10.21
Pledge and Security Agreement, dated October 12, 2005, among Core-Mark Holding Company, Inc.,
Core-Mark Holdings I, Inc., Core-Mark Holdings II, Inc., Core-Mark Holdings III, Inc., Core-Mark
International, Inc., Core-Mark Midcontinent, Inc., Core-Mark Interrelated Companies, Inc., Head
Distributing Company, Inc. and Minter-Weisman Co., Inc., as Grantors and JPMorgan Chase Bank, N.A.,
as Administrative Agent.
10.22
Waiver Letter, dated March 29, 2006 (incorporated by reference to Exhibit 10.1 of the Companys Current
Report on Form 8-K filed on April 3, 2006).
10.23
Third Amendment to Credit Agreement, dated February 2, 2010, among Core-Mark Holding Company,
the Companys Current Report on Form 8-K filed on February 5, 2010).
11.1
Statement of Computation of Earnings Per Share (required information contained within this Annual
Report on Form 10-K).
77
Table of Contents
Exhibit
No.
14.1
Description
Core-Mark Code of Ethics (incorporated by reference to Exhibit 14.1 of the Companys Annual Report on
Form 10-K filed on April 14, 2006).
21.1
List of Subsidiaries of Core-Mark Holding Company, Inc.
23.1
Consent of Deloitte & Touche LLP.
31.1
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.
32.2
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.

78
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 12, 2010
By: /s/ J. MICHAEL WALSH

J. Michael Walsh
President, Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
SIGNATURE
TITLE
DATE
/s/ J. MICHAEL WALSH

J. Michael Walsh
President, Chief Executive Officer and Director

(Principal Executive Officer)
March 12, 2010
/s/ STACY LORETZ-CONGDON

Stacy Loretz-Congdon
Chief Financial Officer (Principal Financial

Officer)
March 12, 2010
/s/ CHRISTOPHER MILLER

Christopher Miller
Vice President, Chief Accounting Officer

(Principal Accounting Officer)
March 12, 2010
/s/ RANDOLPH I. THORNTON

Randolph I. Thornton
Chairman of the Board of Directors
March 12, 2010
/s/ ROBERT A. ALLEN

Robert A. Allen
Director
March 12, 2010
/s/ STUART W. BOOTH

Stuart W. Booth
Director
March 12, 2010
/s/ GARY F. COLTER

Gary F. Colter
Director
March 12, 2010
/s/ L. WILLIAM KRAUSE

L. William Krause
Director
March 12, 2010
/s/ HARVEY L. TEPNER

Harvey L. Tepner
Director
March 12, 2010
79
Table of Contents

SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS
(in thousands)
Charged
(Credited) to
Costs and
Expenses
Balance at
Beginning
of Period
Year Ended December 31, 2007
Allowances for:
Trade receivables
Vendor allowances
Inventory reserves
Valuation allowance on deferred tax assets

Allowances for:
Trade receivables
Vendor allowances
Inventory reserves

Allowances for:
Trade receivables
Vendor allowances
Inventory reserves
Deductions
Charged to
Other
Accounts
Balance
at End
of Period
3,984 $
1,049
1,182
2,260
6,885 $
(587)
7,143
(1,936) $
(230)
(7,568)
359 $
(595)
9,292
232
757
1,665
8,475 $
13,441 $
(9,734) $
(236) $
11,946
9,292 $
232
757
1,665
1,641 $
(79)
9,731
(2,313) $
(27)
(9,859)
197 $
(1,589)
8,817
126
629
76
11,946 $
11,293 $
(12,199) $
(1,392) $
9,648
8,817 $
126
629
76
1,751 $
222
10,158
(1,508) $
(180)
(9,628)
34 $
9,094
168
1,159
76
9,648 $
12,131 $
(11,316) $
34 $
10,497
80
Exhibit 10.18
CREDIT AGREEMENT
dated as of
October 12, 2005
among
CORE-MARK INTERNATIONAL, INC.
CORE-MARK HOLDINGS I, INC.
CORE-MARK HOLDINGS II, INC.
CORE-MARK HOLDINGS III, INC.
CORE-MARK MIDCONTINENT, INC.
CORE-MARK INTERRELATED COMPANIES, INC.
HEAD DISTRIBUTING COMPANY
MINTER-WEISMAN CO.
The Lenders Party Hereto,
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent,
GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Syndication Agent,
WACHOVIA CAPITAL FINANCE CORPORATION (WESTERN),
as Co-Syndication Agent,
BANK OF AMERICA, N.A.,
as Co-Documentation Agent,
and
WELLS FARGO FOOTHILL, LLC,
as Co-Documentation Agent,
J.P. MORGAN SECURITIES INC.,
as Sole Bookrunner and Sole Lead Arranger
CHASE BUSINESS CREDIT
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
SECTION 1.01. Defined Terms
SECTION 1.02. Classification of Loans and Borrowings
SECTION 1.03. Terms Generally
SECTION 1.04. Accounting Terms; GAAP
2
2
30
31
31
ARTICLE II THE CREDITS

SECTION 2.01. Commitments
SECTION 2.02. Loans and Borrowings
SECTION 2.03. Requests for Revolving Borrowings
SECTION 2.04. Protective Advances
SECTION 2.05. Swingline Loans, Canadian Swingline Loans and Overadvances
SECTION 2.06. Letters of Credit
SECTION 2.07. Funding of Borrowings
SECTION 2.08. Interest Elections
SECTION 2.09. Termination of Commitments
SECTION 2.10. Repayment and Amortization of Loans; Evidence of Debt
SECTION 2.11. Repayment of Loans
SECTION 2.12. Fees
SECTION 2.13. Interest
SECTION 2.14. Alternate Rates of Interest
SECTION 2.15. Increased Costs
SECTION 2.16. Break Funding Payments
SECTION 2.17. Taxes
SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs
SECTION 2.19. Mitigation Obligations; Replacement of Lenders
SECTION 2.20. Returned Payments
SECTION 2.21. Increase In Commitments
SECTION 2.22. Adjustments of Advance Rates and Reserves; Permitted Acquisition Eligibility and Reporting
31
31
31
32
33
34
37
41
41
42
43
44
45
45
46
47
48
48
49
52
52
53
53
ARTICLE III REPRESENTATIONS AND WARRANTIES

SECTION 3.01. Organization; Powers
SECTION 3.02. Authorization; Enforceability
SECTION 3.03. Governmental Approvals; No Conflicts
54
54
54
54
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TABLE OF CONTENTS
(continued)
Page
SECTION 3.04. Financial Condition; No Material Adverse Change
SECTION 3.05. Properties
SECTION 3.06. Litigation and Environmental Matters
SECTION 3.07. Compliance with Laws and Agreements
SECTION 3.08. Investment and Holding Company Status
SECTION 3.09. Taxes
SECTION 3.10. ERISA
SECTION 3.11. Disclosure
SECTION 3.12. Material Agreements
SECTION 3.13. Solvency
SECTION 3.14. Insurance
SECTION 3.15. Capitalization and Subsidiaries
SECTION 3.16. Security Interest in Collateral
SECTION 3.17. Labor Disputes
SECTION 3.18. Affiliate Transactions
SECTION 3.19. Common Enterprise
54
55
55
55
55
56
56
56
56
56
57
57
57
57
57
58
ARTICLE IV CONDITIONS
SECTION 4.01. Effective Date
SECTION 4.02. Each Credit Event
58
58
60
ARTICLE V AFFIRMATIVE COVENANTS

SECTION 5.01. Financial Statements; Borrowing Base and Other Information
SECTION 5.02. Notices of Material Events
SECTION 5.03. Existence; Conduct of Business
SECTION 5.04. Payment of Obligations
SECTION 5.05. Maintenance of Properties
SECTION 5.06. Books and Records; Inspection Rights
SECTION 5.07. Compliance with Laws
SECTION 5.08. Use of Proceeds
SECTION 5.09. Insurance
SECTION 5.10. Casualty and Condemnation
SECTION 5.11. Appraisals and Field Examinations
SECTION 5.12. Depository Banks
SECTION 5.13. Additional Collateral; Further Assurances
61
61
64
65
65
65
65
65
66
66
66
66
66
67
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TABLE OF CONTENTS
(continued)
Page
ARTICLE VI NEGATIVE COVENANTS
SECTION 6.01. Indebtedness
SECTION 6.02. Liens
SECTION 6.03. Fundamental Changes
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions
SECTION 6.05. Asset Sales
SECTION 6.06. Sale and Leaseback Transactions
SECTION 6.07. Swap Agreements
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness
SECTION 6.09. Transactions with Affiliates
SECTION 6.10. Restrictive Agreements
SECTION 6.11. Amendment of Material Documents
SECTION 6.12. Interest Deduction
SECTION 6.13. Fixed Charge Coverage Ratio
68
68
69
70
70
72
73
73
73
74
75
75
75
75
ARTICLE VII EVENTS OF DEFAULT
76
ARTICLE VIII THE ADMINISTRATIVE AGENT
78
ARTICLE IX MISCELLANEOUS
SECTION 9.01. Notices
SECTION 9.02. Waivers; Amendments
SECTION 9.03. Expenses; Indemnity; Damage Waiver
SECTION 9.04. Successors and Assigns
SECTION 9.05. Survival
SECTION 9.06. Counterparts; Integration; Effectiveness
SECTION 9.07. Severability
SECTION 9.08. Right of Setoff
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process; Judicial Reference
SECTION 9.10. WAIVER OF JURY TRIAL
SECTION 9.11. Headings
SECTION 9.12. Confidentiality
SECTION 9.13. Several Obligations; Nonreliance; Violation of Law
SECTION 9.14. USA PATRIOT Act
82
82
83
85
87
90
90
91
91
91
92
92
92
93
93
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TABLE OF CONTENTS
(continued)
Page
SECTION 9.15. Disclosure
SECTION 9.16. Appointment for Perfection
SECTION 9.17. Interest Rate Limitation
SECTION 9.18. Judgment Currency
93
93
93
93
ARTICLE X LOAN GUARANTY

SECTION 10.01. Guaranty
SECTION 10.02. Guaranty of Payment
SECTION 10.03. No Discharge or Diminishment of Loan Guaranty
SECTION 10.04. Defenses Waived
SECTION 10.05. Rights of Subrogation
SECTION 10.06. Reinstatement; Stay of Acceleration
SECTION 10.07. Information
SECTION 10.08. Termination
SECTION 10.09. [Intentionally omitted.]
SECTION 10.10. Maximum Liability
SECTION 10.11. Contribution
SECTION 10.12. Liability Joint and Several
94
94
94
94
95
95
95
96
96
96
96
96
97
ARTICLE XI MULTIPLE BORROWER PROVISIONS

SECTION 11.01. Independent Obligations; Subrogation
SECTION 11.02. Authority to Modify Obligations and Security
SECTION 11.03. Waiver of Defenses
SECTION 11.04. Right to Dispose of Security; Impairment of Rights
SECTION 11.05. Additional Waivers
SECTION 11.06. No Right To Information
SECTION 11.07. Notices, Demands, Etc.
SECTION 11.08. Subordination
SECTION 11.09. Revival
SECTION 11.10. Understanding of Waivers
SECTION 11.11. Unlimited Liability
SECTION 11.12. Holdings as Agent for Borrowers
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SCHEDULES:
Commitment Schedule
Schedule 2.06 Existing Letters of Credit
Schedule 3.05 Properties
Schedule 3.06 Disclosed Matters
Schedule 3.10 ERISA Matters
Schedule 3.12 Material Agreements
Schedule 3.14 Insurance
Schedule 3.15 Capitalization and Subsidiaries
Schedule 3.18 Affiliate Transactions
Schedule 6.01 Existing Indebtedness
Schedule 6.02 Existing Liens
Schedule 6.04 Existing Investments
Schedule 6.10 Existing Restrictions
EXHIBITS:
Exhibit A Form of Assignment and Assumption
Exhibit B Form of Opinion of Borrowers Counsel
Exhibit C Form of Borrowing Base Certificate
Exhibit D Form of Compliance Certificate
Exhibit E-1 Loan Party Joinder Agreement
Exhibit E-2 Borrower Joinder Agreement
Exhibit F Form of Borrowing Request
Exhibit G Form of Revolving Note
Exhibit H Form of Interest Election Request
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CREDIT AGREEMENT dated as of October 12, 2005 (as it may be amended or modified from time to time, this
Agreement), among Core-Mark Holding Company, Inc. (Holdings), Core-Mark International, Inc. (International),
Core-Mark Holdings I, Inc. (Holdings I), Core-Mark Holdings II, Inc. (Holdings II), Core- Mark Holdings III, Inc.
(Holdings III), Core-Mark Midcontinent, Inc. (Midcontinent), Core-Mark Interrelated Companies, Inc. (Interrelated),
Head Distributing Company (Head), Minter-Weisman Co. (Minter-Weisman; each of Holdings, International, Holdings I,
Holdings II, Holdings III, Midcontinent, Interrelated, Head and Minter-Weisman shall be a Borrower, International shall be the
Canadian Borrower and collectively such entities shall be the Borrowers), the Lenders party hereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, General Electric Capital Corporation and Wachovia Capital Finance Corporation (Western), as
Co-Syndication Agents, and Bank of America, N.A. and Wells Fargo Foothill, LLC, as Co-Documentation Agents.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:
ABR, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.
Account has the meaning assigned to such term in the Security Agreement.
Account Debtor means any Person obligated on an Account.
Acquisition means any transaction, or any series of related transactions, consummated on or after the Closing Date,
by which any Loan Party (a) acquires any going business or all or substantially all of the assets of any Person, whether
through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most
recent transaction in a series of transactions) at least a majority (in number of votes) of the Equity Interests of a Person
which has ordinary voting power for the election of directors or other similar management personnel of a Person (other than
Equity Interests having such power only by reason of the happening of a contingency) or a majority of the outstanding
Equity Interests of a Person.
Adjusted LIBO Rate means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per
annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
Administrative Agent means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders
hereunder.
Administrative Borrower has the meaning assigned to such term in Section 11.12.
Administrative Questionnaire means an Administrative Questionnaire in a form supplied by the Administrative
Agent.
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Affiliate means, with respect to a specified Person, another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
Aggregate Canadian Credit Exposure means, at any time, the aggregate Canadian Credit Exposure of all Canadian
Lenders.
Aggregate Credit Exposure means, at any time, the aggregate Credit Exposure of all the Lenders.
Alternate Base Rate means, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such
day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.
Applicable Percentage means, with respect to any Lender (that is not a Canadian Lender), (a) with respect to
Revolving Loans (that are not Canadian Revolving Loans), LC Exposure, Swingline Loans or Overadvances, a percentage
equal to a fraction the numerator of which is such Lenders Revolving Commitment and the denominator of which is the
aggregate Revolving Commitment of all Revolving Lenders (if the Revolving Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon such Lenders share of the aggregate Revolving Exposures at that
time), and (b) with respect to Protective Advances or with respect to the Aggregate Credit Exposure, a percentage based
upon its share of the Aggregate Credit Exposure and the unused Commitments.
Applicable Rate means, for any day, with respect to any Eurodollar Revolving Loan or CDOR Revolving Loan, or
with respect to the unused commitment fees payable under Section 2.12(a) hereof or the participation fees payable under
Section 2.12(b) hereof, as the case may be, the applicable rate per annum set forth below under the caption Eurodollar
Spread, CDOR Spread or Unused Commitment Fee Rate, as the case may be, based upon Holdings consolidated
EBITDA for the trailing 12 month period as of the most recent determination date:
Eurodollar Spread
and CDOR Spread
EBITDA
Category 1 >$60,000,000
Category 2 $60,000,000 >$53,000,000
Category 3 $53,000,000 >$48,000,000
Category 4 $48,000,000
Unused Commitment Fee

Rate
1.00%
1.25%
1.50%
1.75%
0.25%
0.25%
0.25%
0.30%
For purposes of the foregoing, (a) the initial Applicable Rate shall be the applicable rate per annum set forth above in Category 3,
(b) thereafter, the Applicable Rate shall be determined as of the end of each fiscal quarter of Holdings based upon Holdings
annual or quarterly consolidated financial statements delivered pursuant to Section 5.01, commencing with the later of
(i) delivery of the quarterly consolidated financial statements for the fiscal quarter ending September 30, 2005, or (ii) 90 days
after the Effective Date, and (c) each change in the Applicable Rate resulting from a change in EBITDA shall be effective during
the period commencing on and including the date of delivery to the Administrative Agent of such consolidated financial
statements indicating such change and ending on the date immediately preceding the effective date of the next such change,
provided that if the Borrowers fail to deliver the annual or quarterly consolidated financial statements required to be delivered by
them pursuant to Section 5.01 (and if no waiver or consent with respect thereto has been delivered) EBITDA shall be deemed to
be in the Category that is one Category higher than the Category corresponding to EBITDA reported by Holdings in its most
recently delivered required financial statements at the option of the Administrative Agent or at the request of the Required
Lenders, during the period from the expiration of the time for delivery thereof until such consolidated financial statements are
delivered.
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Approved Fund has the meaning assigned to such term in Section 9.04.
Assignment and Assumption means an assignment and assumption entered into by a Lender and an assignee (with
the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
Availability means, at any time, an amount equal to (a) the lesser of the Revolving Commitment and the Borrowing
Base minus (b) the Revolving Exposure of all Revolving Lenders minus (c) fees and expenses payable hereunder that have
not been paid when due minus (d) all Exposure Reserves that have been established in compliance with Section 2.22(a) and
that have not been deducted or taken into account in the calculation of the Borrowing Base or any element or component
thereof.
Available Revolving Commitment means, at any time, the Revolving Commitment then in effect minus the
Revolving Exposure of all Revolving Lenders at such time.
Availability Period means the period from and including the Effective Date to but excluding the earlier of the
Maturity Date and the date of termination of the Commitments.
Backstop Letter of Credit has the meaning assigned to such term in Section 2.06(j).
Banking Services means each and any of the following bank services provided to any Loan Party by any Lender or
any of its Affiliates: (a) commercial credit cards, stored value cards, and treasury management services (including, without
limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository
network services), and (b) interest rate, commodities or foreign exchange derivative and hedging products, including Swap
Agreements; provided that in order for any of the foregoing provided by any Lender or its Affiliates to be included within
the Banking Services by the Administrative Agent: (i) such Lender shall provide to the Administrative Agent written notice
of (A) the existence of such Banking Services, (B) such Lenders (or its Affiliates) and the Administrative Borrowers
agreement as to the maximum dollar amount of the applicable Borrowers obligations arising under such Banking Services
that will be included in an Exposure Reserve under Availability (the Banking Services Amount) and (C) the methodology
agreed upon by such Lender (or its Affiliate) and the Administrative Borrower to determine the Banking Services Amount,
and (ii) the applicable Borrower must be permitted to enter into such arrangement under this Agreement or must not be
restricted from entering into such arrangement under this Agreement. The Administrative Agent shall send notice to the
Lenders of the establishment of any Banking Services. After any of the foregoing have been established as Banking
Services hereunder and as long as no Event of Default exists, the Banking Services Amount may thereafter be changed by
written notice to the Administrative Agent pursuant to an agreement between the applicable Lender (or its Affiliate) and the
Administrative Borrower, provided that no change in a Banking Services Amount may cause Availability to be less than
zero.
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Banking Services Obligations of the Loan Parties means any and all obligations of the Loan Parties, whether
absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor) in connection with Banking Services.
Banking Services Reserves means all Exposure Reserves which the Administrative Agent from time to time
establishes in its Permitted Discretion for Banking Services then provided or outstanding.
BIA means the Bankruptcy and Insolvency Act (Canada).
Board means the Board of Governors of the Federal Reserve System of the United States of America.
Borrower and Borrowers have the meanings set forth in the introductory paragraph of this Agreement.
Borrowing means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the
case of Eurodollar Loans or CDOR Loans, as to which a single Interest Period is in effect, (b) a Swingline Loan, (c) a
Canadian Swingline Loan, (d) a Protective Advance and (e) an Overadvance.
Borrowing Base means, at any time, the sum of (a) the product of (i) 85% multiplied by (ii) the Borrowers Eligible
Accounts at such time minus the Dilution Reserve, plus (b) the lesser of (i) the product of (x) 65% multiplied by (y) the
Borrowers Eligible Inventory (excluding Eligible Inventory consisting of unaffixed tax stamps), valued at the lower of cost
or market value, determined on a first-in-first-out basis, at such time, and (ii) the product of (x) 85% multiplied by (y) the
Net Orderly Liquidation Value of the Borrowers Inventory identified as eligible in the most recent inventory appraisal
ordered by the Administrative Agent (excluding Eligible Inventory consisting of unaffixed tax stamps), plus (c) 90% of
Eligible Unaffixed Tax Stamps on hand, plus (d) 100% of unrestricted cash and cash equivalents held at, and subject to a
first-priority lien in favor of, the Administrative Agent, plus (e) the PP&E Component, minus (f) Collateral Reserves;
provided that up to two times per calendar year (but never more than once in any six-month period or more than a total of
60 days during any calendar year), the Borrowers may include in the Borrowing Base an Inventory overadvance in an
amount not to exceed either (i) $5,000,000 more than the Inventory component of the Borrowing Base from time to time
under clause (b) above or (ii) an additional 5% of the Net Orderly Liquidation Value of the Borrowers Inventory identified
as eligible in the most recent inventory appraisal ordered by the Administrative Agent above the Inventory component of
the Borrowing Base from time to time under clause (b) above. The Borrowing Base at any time shall be determined by
reference to the most recent Borrowing Base Certificate delivered to the Administrative Agent pursuant to Section 5.01(g)
of this Agreement.
Borrowing Base Certificate means a certificate, signed and certified as accurate and complete by a Financial Officer
of the Administrative Borrower, in substantially the form of Exhibit C or another form which is acceptable to the
Administrative Agent in its sole discretion.
Borrowing Request means a request by the Administrative Borrower for a Revolving Borrowing in accordance with
Section 2.02.
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British Columbia Tax Lien means the Lien evidenced by PPSA registration number 975855A filed on April 4, 2003
in the Province of British Columbia and naming International, as debtor, and Her Majesty the Queen in the Right of the
Province of British Columbia, as secured party.
Business Day means any day that is not a Saturday, Sunday or other day on which commercial banks in New York
City are authorized or required by law to remain closed and, if such day relates to any Loan (including CDOR Loans) made
or Letter of Credit issued as part of the Canadian Subfacility, means any such day other than a day on which commercial
banks are authorized to close under the Laws of, or are in fact closed in, New York City or Toronto, Ontario; provided that,
when used in connection with a Eurodollar Loan, the term Business Day shall also exclude any day on which banks are
not open for dealings in dollar deposits in the London interbank market.
Canadian Applicable Percentage shall mean as to any Canadian Lender, the percentage of the aggregate Canadian
Revolving Commitments constituted by its Canadian Revolving Commitment (or, if the Canadian Revolving Commitments
have terminated or expired, the percentage which such Canadian Lenders Canadian Credit Exposure at such time
constitutes of the Aggregate Canadian Credit Exposure at such time).
Canadian Borrower has the meaning set forth in the introduction paragraph of this Agreement.
Canadian Credit Exposure shall mean, at any time and as to each Canadian Lender, the Dollar Equivalent of the
aggregate principal amount of the Canadian Revolving Loans made by such Canadian Lender outstanding as of such date.
Canadian Dollar and Cdn.$ mean the lawful money of Canada.
Canadian Funding Bank shall mean Chase Canada, and any successor to Chase Canada, acting in such capacity.
Canadian Lenders means a Lender with a Canadian Revolving Commitment or is the holder of a Canadian
Revolving Loan.
Canadian Loans means the Canadian Revolving Loans and the Canadian Swingline Loans.
Canadian Prime Rate shall mean on any day, the annual rate of interest (rounded upwards, if necessary, to the
nearest 1/100 of 1%) equal to the greater of: (a) the annual rate of interest announced from time to time by JPMorgan
Canada as its prime rate in effect at its principal office in Toronto, Ontario Canada on such day being the reference rate
used by JPMorgan Canada for determining interest rates on Cdn.$ denominated commercial loans to its customers in
Canada; and (b) the annual rate of interest equal to the sum of (i) the one-month CDOR Rate in effect on such day, and
(ii) 1%.
Canadian Prime Rate Loans shall mean Canadian Revolving Loans which, for greater certainty, will be Cdn.$
denominated and will bear interest at a rate based upon the Canadian Prime Rate.
Canadian Priority Payables Reserve shall mean Reserves established in the Permitted Discretion of the
Administrative Agent for amounts secured by any Liens, choate or inchoate, which rank or are capable of ranking in
priority to the Administrative Agents and/or Lenders Liens, including, without limitation, in the Permitted Discretion of
the Administrative Agent, (i) Exposure Reserves for any such amounts due and not paid for vacation pay, amounts due and
not paid under any legislation relating to workers compensation or to employment insurance, all amounts deducted or
withheld and not paid and remitted when due under the Income Tax Act (Canada) and all amounts currently or past due and
not contributed, remitted or paid to any Plan or under the Canada Pension Plan, the Pension Benefits Act (Ontario) or any
similar legislation, and (ii) a Collateral Reserve for amounts currently or past due and not paid for realty, municipal or
similar taxes (to the extent impacting personal or moveable property).
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Canadian Revolving Commitment shall have the meaning assigned to the definition of Revolving Commitment.
Canadian Revolving Loan means a Canadian Revolving Loan made pursuant to Section 2.01.
Canadian Subfacility has the meaning set forth in Section 2.01 of this Agreement.
Canadian Swingline Lender means the Canadian Funding Bank, in its capacity as lender of Canadian Swingline
Loans hereunder.
Canadian Swingline Loan means a Loan made pursuant to Section 2.05.
Canadian Tobacco Tax Reserve means a Reserve for Canadian tobacco tax liabilities net of or less restricted cash
specifically reserved for such purpose, which Reserve will constitute a Collateral Reserve on the Effective Date, provided
that in the event that either (a) a Default or Event of Default has occurred and is continuing or (b) Availability is less than
$60,000,000, such Reserve shall constitute an Exposure Reserve.
Capital Expenditures means, without duplication, any expenditure for any purchase or other acquisition of any asset
which would be classified as a fixed or capital asset on a consolidated balance sheet of Holdings and its Subsidiaries
prepared in accordance with GAAP.
Capital Lease Obligations of any Person means the obligations of such Person to pay rent or other amounts under
any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
CDOR when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising
such Borrowing, are bearing interest at a rate determined by reference to the CDOR Rate.
CDOR Rate means, with respect to a CDOR Loan for the relevant Interest Period, the Canadian deposit offered rate
which, in turn means on any day the annual rate of interest which is the rate determined as being the arithmetic average of
the quotations of all institutions listed in respect of the relevant Interest Period for Canadian dollar denominated bankers
acceptances displayed and identified as such on the Reuters Screen CDOR Page as defined in the International Swap
Dealer Association, Inc. definitions, as modified and amended from time to time, as of 10:00 a.m. Toronto, Ontario local
time on such day and, if such day is not a Business Day, then on the immediately preceding Business Day (as adjusted by
the Canadian Funding Bank after 10:00 a.m. Toronto, Ontario local time to reflect any error in the posted rate of interest or
in the posted average annual rate of interest) plus 10bps; provided that if such rates are not available on the Reuters Screen
CDOR Page on any particular day, then the CDOR rate calculated on that day shall be calculated as the cost of funds quoted
by the Canadian Funding Bank to raise Canadian dollars for the applicable Interest Period as of 10:00 a.m. Toronto, Ontario
local time on such day for commercial loans or other extensions of credit to businesses of comparable credit risk; or if such
day is not a Business Day, then as quoted by the Canadian Funding Bank on the immediately preceding Business Day.
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Change in Control means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any
Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof), of Equity Interests representing more than 50% of the aggregate
ordinary voting power represented by the issued and outstanding Equity Interests of Holdings; (b) occupation of a majority
of the seats (other than vacant seats) on the board of directors of Holdings by Persons who were neither (i) nominated by the
board of directors of Holdings nor (ii) appointed by directors so nominated; or (c) the acquisition of direct or indirect
Control of Holdings by any Person or group; or (d) Holdings shall cease to own and control all of the economic and voting
rights associated with all of the outstanding Equity Interests of any of its Subsidiaries (except in connection with any
transaction expressly permitted by this Agreement).
Change in Law means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change
in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of
this Agreement or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending
office of such Lender or by such Lenders or the Issuing Banks holding company, if any) with any request, guideline or
directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this
Agreement.
Chase means JPMorgan Chase Bank, N.A., a national banking association, in its individual capacity, and its
successors.
Chase Canada means JPMorgan Chase Bank, N.A. acting through its Canadian branch.
Class, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, are Revolving Loans, Canadian Revolving Loans, Swingline Loans or Protective Advances or Overadvances.
Code means the Internal Revenue Code of 1986, as amended from time to time.
Collateral means any and all property owned, leased or operated by a Person covered by the Collateral Documents
and any and all other property of any Loan Party, now existing or hereafter acquired, that is subject to a security interest or
Lien in favor of Administrative Agent, on behalf of itself and the Lenders, to secure the Secured Obligations.
Collateral Access Agreement has the meaning assigned to such term in the Security Agreement.
Collateral Documents means, collectively, the Security Agreement and any other documents granting a Lien upon
the Collateral as security for payment of the Secured Obligations.
Collateral Reserves means any and all reserves established in accordance with Section 2.22(a) that are deducted from
the Borrowing Base and which the Administrative Agent deems reasonably necessary, in its Permitted Discretion, to
maintain (including, without limitation, the Canadian Priority Payables Reserve (only to the extent of amounts currently or
past due and not paid for realty, municipal or similar taxes (to the extent impacting personal or moveable property)), the
Canadian Tobacco Tax Reserve (to the extent included as a Collateral Reserve under the definition of Canadian Tobacco
Tax Reserve), Dilution Reserves, reserves for contra Accounts, reserves for Inventory shrinkage, reserves for customs
charges and shipping charges related to any Inventory in transit) with respect to the Collateral or any Loan Party; provided
that the Administrative Agent will not establish any Collateral Reserves under this Agreement to the extent that the basis for
such Collateral Reserve has already been addressed in the existing Reserves, determination of eligibility standards or
advance rates hereunder.
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Collection Account has the meaning assigned to such term in the Security Agreement.
Commitment means, with respect to each Lender, such Lenders Revolving Commitment or Canadian Revolving
Commitment, as applicable, together with the commitment of such Lender to acquire participations in Protective Advances
hereunder. The initial amount of each Lenders Commitment or Canadian Revolving Commitment, as applicable is set forth
on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its
Commitment, as applicable.
Commitment Schedule means the Schedule attached hereto identified as such.
Control means the possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. Controlling and
Controlled have meanings correlative thereto.
Credit Exposure means, as to (i) any Canadian Lender at any time, the Canadian Credit Exposure, and (ii) any
Lender at any time, the sum of (a) such Lenders Revolving Exposure at such time, plus (b) an amount equal to its
Applicable Percentage, if any, of the aggregate principal amount of Protective Advances outstanding at such time.
Default means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or
both would, unless cured or waived, become an Event of Default.
Dilution Factors shall mean, without duplication, with respect to any period, the aggregate amount of all cash
discounts, returns and allowances, shortages, credit memos, damages, corrections, bad debt write-offs and other non-cash
credits which are recorded to reduce accounts receivable in a manner consistent with current and historical accounting
practices of the Borrower.
Dilution Ratio shall mean, at any date, the excess (if any) of (a) the amount (expressed as a percentage) equal to
(i) the aggregate amount of the applicable Dilution Factors for the twelve (12) most recently ended fiscal months divided by
(ii) total gross sales for the twelve (12) most recently ended fiscal months, over (b) 5.0%.
Dilution Reserve shall mean a Collateral Reserve in an amount equal to, at any date, the applicable Dilution Ratio (if
greater than zero) multiplied by the Eligible Accounts on such date.
Disclosed Matters means the actions, suits and proceedings and the environmental matters disclosed in
Schedule 3.06.
Document has the meaning assigned to such term in the Security Agreement.
Dollar Equivalents means, with respect to any amounts of Canadian Dollars, an equivalent amount of dollars
determined at a rate of exchange quoted by Chase Canada on the date of determination for the spot purchase in the foreign
exchange market of Canadian Dollars with dollars.
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dollars or $ refers to lawful money of the United States of America.

EBITDA means, for any period, Net Income for such period plus (a) without duplication and to the extent deducted
in determining Net Income for such period, the sum of (i) Interest Expense for such period, (ii) income tax expense for such
period, (iii) all amounts attributable to depreciation and amortization expense for such period, (iv) any extraordinary
non-cash charges for such period and (v) any other non-cash charges for such period (but excluding any non-cash charge in
respect of an item that was included in Net Income in a prior period), minus (b) without duplication and to the extent
included in Net Income, (i) any cash payments made during such period in respect of non-cash charges described in clause
(a)(v) taken in a prior period and (ii) any extraordinary non-cash gains and any non-cash items of income for such period,
all calculated for Holdings and its Subsidiaries on a consolidated basis in accordance with GAAP.
Effective Date means the date on which the conditions specified in Section 4.01 are satisfied (or waived in
accordance with Section 9.02).
Eligible Accounts means, at any time, the Accounts of the Borrowers which the Administrative Agent determines in
accordance with Section 2.22(a) in its Permitted Discretion are eligible as the basis for the extension of Revolving Loans,
Swingline Loans, Canadian Swingline Loans and the issuance of Letters of Credit hereunder. Without limiting the
Administrative Agents discretion provided herein, Eligible Accounts shall not include any Account:
(a) which is not subject to a first priority perfected security interest in favor of the Administrative Agent;
(b) which is subject to any Lien other than (i) a Lien in favor of the Administrative Agent and (ii) a Permitted
Encumbrance or other Lien permitted by this Agreement which does not have priority over the Lien in favor of the
Administrative Agent;
(c) which is unpaid more than 90 days after the date of the original invoice therefor or more than 60 days after the
original due date, or which has been written off the books of any Borrower or otherwise designated as uncollectible;
(d) which is owing by an Account Debtor for which more than 50% of the Accounts owing from such Account Debtor
and its Affiliates are ineligible under the criteria set forth in clause (c) above;
(e) which is owing by an Account Debtor to the extent of the amount by which the aggregate amount of Accounts
owing from such Account Debtor and its Affiliates to the Borrowers exceeds (i) in the case of investment grade (defined as
rated at least BBB- (or its equivalent) by S&P or Ba2 (or its equivalent) by Moodys) Account Debtors, 20% of the
aggregate Eligible Accounts, and (ii) in the case of all other Account Debtors, 10% of the aggregate Eligible Accounts;
(f) with respect to which any covenant, representation, or warranty contained in this Agreement or in the Security
Agreement has been breached or is not true;
(g) which (i) does not arise from the sale of goods or performance of services in the ordinary course of business, (ii) is
not evidenced by an invoice or other documentation reasonably satisfactory to the Administrative Agent which has been
sent to the Account Debtor, (iii) represents a progress billing, (iv) is contingent upon any Borrowers completion of any
further performance, or (v) represents a guaranteed sale, sale-and-return, sale on approval, consignment or any other
repurchase or return basis;
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(h) that constitutes a customer deposit, an unaccounted for customer credit, clean invoice, credit reclass or for which
the goods giving rise to such Account have not been shipped to the Account Debtor or for which the services giving rise to
such Account have not been performed by the Borrowers or if such Account was invoiced more than once, in each case to
the extent of such deposit, credit or other basis for ineligibility under this clause;
(i) with respect to which any check or other instrument of payment has been returned uncollected for 30 days or more;
(j) which is owed by an Account Debtor which has (i) applied for, suffered, or consented to the appointment of any
receiver, monitor, custodian, trustee, or liquidator of its assets, (ii) has had possession of all or a material part of its property
taken by any receiver, monitor, custodian, trustee or liquidator, (iii) filed, or had filed against it, any request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or voluntary or
involuntary case under any state, provincial or federal bankruptcy laws, (iv) has admitted in writing its inability, or is
generally unable to, pay its debts as they become due, (v) become insolvent, or (vi) ceased operations; provided that
Accounts owed by any Account Debtor that has successfully exited bankruptcy pursuant to a confirmed reorganization plan
shall not be ineligible under this clause if the Administrative Agent has determined in its Permitted Discretion that such
Account Debtor has adequate ability to pay amounts owing to the Borrowers;
(k) which is owed by any Account Debtor which has sold all or a substantially all of its assets if the Administrative
Agent determines in its Permitted Discretion that such Account constitutes a collection risk;
(l) which is owed (i) by an Account Debtor that (A) does not maintain its chief executive office in the U.S. or Canada
or (B) is not organized under applicable law of the U.S., any state of the U.S., Canada, or any province of Canada unless, in
either case, such Account is backed by a Letter of Credit reasonably acceptable to the Administrative Agent which is in the
possession of, has been assigned to and is directly drawable by the Administrative Agent, or (ii) in any currency other than
U.S. or Canadian dollars;
(m) which is owed by (i) the government (or any department, agency, public corporation, Crown corporation or
instrumentality thereof) of any country other than the U.S. or Canada unless such Account is backed by a Letter of Credit
acceptable to the Administrative Agent which is in the possession of the Administrative Agent, (ii) the federal government
of the U.S., or any department, agency, public corporation, or instrumentality thereof, unless the Federal Assignment of
Claims Act of 1940, as amended (31 U.S.C. 3727 et seq. and 41 U.S.C. 15 et seq.), and any other steps necessary to
perfect the Lien of the Administrative Agent in such Account have been complied with to the Administrative Agents
satisfaction, (iii) any state government in the United States unless any steps necessary (if any) to perfect the Lien of the
Administrative Agent in such Account have been complied with to the Administrative Agents satisfaction, or (iv) the
Canadian federal government, a Canadian provincial, territorial or municipal government, or any department, agency,
public corporation, or instrumentality thereof, unless the Financial Administration Act (Canada) and any other steps
necessary to perfect the Lien of the Administrative Agent in such Account have been complied with to the Administrative
Agents satisfaction;
11
(n) which is owed by any Affiliate, employee, officer, director, agent or stockholder (holding 10% or more of the stock
of any Loan Party) of any Loan Party unless approved in writing by the Administrative Agent in its Permitted Discretion;
(o) which is owed by an Account Debtor or any Affiliate of such Account Debtor to which any Loan Party is indebted,
but only to the extent of such indebtedness or is subject to any security, deposit, progress payment, retainage or other
similar advance made by or for the benefit of an Account Debtor, in each case to the extent thereof;
(p) which (i) is subject to any counterclaim, deduction, defense, setoff or dispute or with respect to which any
Borrower or any Subsidiary thereof is liable for any goods sold or services rendered by the applicable Account Debtor to
such Borrower or Subsidiary, in each case only to the extent of the potential offset, or (ii) constitutes a manufacturers
representative Account to the extent subject to offset for any amount payable to the manufacturer in connection therewith;
(q) which is evidenced by any promissory note, chattel paper, or instrument;
(r) which is owed by an Account Debtor located in any jurisdiction which requires filing of a Notice of Business
Activities Report or other similar report in order to permit any Borrower to seek judicial enforcement in such jurisdiction
of payment of such Account, unless such Borrower has filed such report or qualified to do business in such jurisdiction;
(s) with respect to which any Borrower has made any agreement with the Account Debtor for any reduction thereof
(only to the extent of such reduction), other than discounts and adjustments given in the ordinary course of business, or any
Account which was partially paid and any Borrower created a new receivable for the unpaid portion of such Account;
(t) which does not comply in all material respects with the requirements of all applicable laws and regulations, whether
federal, state, provincial or local, including without limitation the Federal Consumer Credit Protection Act, the Federal
Truth in Lending Act and Regulation Z of the Board;
(u) which is for goods that have been sold under a purchase order or pursuant to the terms of a contract or other
agreement or understanding (written or oral) that indicates or purports that any Person other than the Borrowers has or has
had an ownership interest in such goods, or which indicates any party other than the Borrowers as payee or remittance
party;
(v) which was created on cash-on-delivery or cash-and-carry terms;
(w) in the case of any Account acquired pursuant to a Permitted Acquisition, which has not been the subject of an audit
and field examination reasonably satisfactory to the Administrative Agent or as permitted by the Administrative Agent in
accordance with Section 2.22(b);
(x) to the extent that such Account is pre-billed by any Borrower in excess of one (1) day or otherwise constitutes a
sale on bill and hold;
(y) any Account of a Borrower that is subject to an unreconciled variance between such Borrowers general ledger and
accounts receivable aging;
(z) that constituted unapplied cash;
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(aa) to the extent such Account constitutes a charge back, re-bill or similar adjustment for unauthorized deductions
made by the Account Debtor;
(bb) to the extent that such Account is subject to customer rebates in the ordinary course of business consistent with
past practices, but only to the extent of the amount of such customer rebates; or
(cc) which the Administrative Agent determines, in its Permitted Discretion, is unlikely to be paid by reason of the
Account Debtors inability to pay or which the Administrative Agent otherwise determines, in its Permitted Discretion, is
unacceptable for any legal, credit or likelihood of collectability reason.
In the event that a material Account which was previously an Eligible Account ceases to be an Eligible Account
hereunder (for any reason other than repayment of the Account), the Borrowers shall notify the Administrative Agent
thereof on and at the time of submission to the Administrative Agent of the next Borrowing Base Certificate. In determining
the amount of an Eligible Account, the face amount of an Account shall be reduced by, without duplication, to the extent
not reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits pending,
promotional program allowances, price adjustments, finance charges or other allowances (including any amount that any
Borrower may be obligated to rebate to an Account Debtor pursuant to the terms of any agreement or understanding
(written or oral)) and (ii) the aggregate amount of all cash received in respect of such Account but not yet applied by the
Borrowers to reduce the amount of such Account.
Eligible Equipment means the equipment owned by the Borrowers, which equipment is described on Exhibit E to the
Security Agreement as of the Effective Date and equipment hereafter approved by the Administrative Agent as part of the
PP&E Component, and which equipment meets each of the following requirements:
(a) the Borrowers have good title to such equipment;
(b) the Borrowers have the right to subject such equipment to a Lien in favor of the Administrative Agent; such
equipment is subject to a first priority perfected Lien in favor of the Administrative Agent and is free and clear of all other
Liens of any nature whatsoever (except for Permitted Encumbrances or other Liens permitted by this Agreement, in each
case which do not have priority over the Lien in favor of the Administrative Agent);
(c) the full purchase price for such equipment has been paid by the Borrowers;
(d) such equipment is located on premises (i) owned by a Borrower, or (ii) leased by a Borrower where (x) the lessor
has delivered to the Administrative Agent a Collateral Access Agreement or (y) a Reserve for rent, charges, and other
amounts due or to become due with respect to such facility has been established by the Administrative Agent in its
Permitted Discretion;
(e) such equipment is in good working order and condition (ordinary wear and tear excepted) and is used or held for
use by the Borrowers in the ordinary course of business of the Borrowers;
(f) such equipment is not subject to any agreement which restricts the ability of the Borrowers to use, sell, transport or
dispose of such equipment or which restricts the Administrative Agents ability to take possession of, sell or otherwise
dispose of such equipment; and
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(g) such equipment does not constitute fixtures under the applicable statutory laws or common law of the jurisdiction
in which such equipment is located.
Eligible Inventory means, at any time, the Inventory of the Borrowers which the Administrative Agent determines in
accordance with Section 2.22(a) in its Permitted Discretion is eligible as the basis for the extension of Revolving Loans,
Swingline Loans and the issuance of Letters of Credit hereunder. Without limiting the Administrative Agents discretion
provided herein, Eligible Inventory shall not include:
(a) any Inventory which is not subject to a first priority perfected Lien in favor of the Administrative Agent;
(b) any Inventory which is subject to any Lien other than (i) a Lien in favor of the Administrative Agent and (ii) a
Permitted Encumbrance or other Lien permitted by this Agreement which does not have priority over the Lien in favor of
the Administrative Agent;
(c) any Inventory with respect to which any covenant, representation, or warranty contained in this Agreement or the
Security Agreement as to such Inventory has been breached or is not true and which does not conform to all standards
imposed by any applicable Governmental Authority;
(d) any Inventory in which any Person other than the Borrowers shall (i) have any direct or indirect ownership, interest
or title to such Inventory or (ii) be indicated on any purchase order or invoice with respect to such Inventory as having or
purporting to have an interest therein, including, without limitation, goods held on consignment;
(e) any Inventory which is not finished goods or which constitutes work-in-process, raw materials, spare or
replacement parts, subassemblies, packaging and shipping material, manufacturing supplies, samples, prototypes,
equipment displays or display items, bill-and-hold goods, repossessed goods, or goods which are not of a type held for sale
in the ordinary course of business;
(f) any Inventory which is not located in the U.S. or Canada or is in transit with a common carrier from vendors,
suppliers or outside processors, provided that, up to $500,000 of Inventory in transit from vendors and suppliers may be
included as eligible pursuant to this clause (f) so long as (i) the Administrative Agent shall have received (1) a true and
correct copy of the bill of lading and other shipping documents for such Inventory, (2) evidence of satisfactory casualty
insurance naming the Administrative Agent as loss payee and otherwise covering such risks as the Administrative Agent
may reasonably request, and (3) if the bill of lading is (A) non-negotiable, a duly executed Collateral Access Agreement
from the applicable customs broker (if any) for such Inventory or (B) negotiable, confirmation that the bill is issued in the
name of a Borrower and consigned to the order of the Administrative Agent, and an acceptable agreement has been
executed with the Borrowers customs broker, in which the customs broker agrees that it holds the negotiable bill as agent
for the Administrative Agent and has granted the Administrative Agent access to the Inventory and (ii) the common carrier
is not an Affiliate of the applicable vendor, supplier or outside processor;
(g) any Inventory which (i) is located in any location leased by any Borrower unless (A) the lessor has delivered to the
Administrative Agent a Collateral Access Agreement or (B) a Reserve for rent, charges, and other amounts due or to
become due with respect to such facility has been established by the Administrative Agent in its Permitted Discretion, or (ii)
is being processed offsite at a third party location or outside processor unless such third party or processor has delivered to
the Administrative Agent a Collateral Access Agreement and evidence reasonably satisfactory to the Administrative Agent
that such Inventory is segregated from the Inventory of such third party or outside processor and all other Inventory being
processed by such third party or outside processor;
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(h) any Inventory which is located in any third party warehouse or is in the possession of a bailee (other than a third
party processor) and is not evidenced by a Document (other than bills of lading to the extent permitted pursuant to clause
(f) above), unless (i) such warehouseman or bailee has delivered to the Administrative Agent a Collateral Access
Agreement and such other documentation as the Administrative Agent may require or (ii) an appropriate Reserve has been
established by the Administrative Agent in its Permitted Discretion;
(i) any Inventory which is the subject of a consignment by a Borrower as consignor;
(j) any Inventory which is perishable (with a shelf life less than 21 days);
(k) any Inventory which contains or bears any intellectual property rights licensed to a Borrower unless it may sell or
otherwise dispose of such Inventory without (i) infringing the rights of such licensor, (ii) violating any contract with such
licensor, or (iii) incurring any liability with respect to payment of royalties other than royalties incurred pursuant to sale of
such Inventory under the current licensing agreement;
(l) any Inventory which is not reflected in a current perpetual inventory report (or other accounting system acceptable
to the Administrative Agent in its Permitted Discretion) of the Borrowers (unless such Inventory is reflected in a report to
the Administrative Agent as in transit Inventory), except for dry room and excise tax Inventory to the extent that such
Inventory is otherwise eligible hereunder;
(m) in the case of any Inventory acquired pursuant to a Permitted Acquisition, which has not been the subject of an
audit and field examination reasonably satisfactory to the Administrative Agent or as permitted by the Administrative Agent
in accordance with Section 2.22(b);
(n) 35% of Inventory that consists of goods which have been returned by the applicable buyer which constitutes dry
room inventory;
(o) the amount of Inventory equal to the monthly shrink which the Borrowers accrue for;
(p) (i) 50% of non-cigarette Inventory on hand over 180 days but less than 360 days, (ii) 100% of non-cigarette
Inventory on hand over 360 days, and (iii) 25% of cigarette Inventory on hand over 180 days;
(q) any Inventory which is, in the Administrative Agents reasonable opinion, slow moving, obsolete, unmerchantable,
defective, unfit for sale, or not saleable at prices approximating at least the cost of such Inventory in the ordinary course of
business;
(r) any Inventory the value of which is attributable to intercompany profits among the Borrowers and their
Subsidiaries;
(s) 25% of the portion of Inventory of any Borrower that represents the difference between the standard cost and
discounted purchase price of such Inventory due to discounts, rebates, allowances and manufacturer incentives;
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(t) Inventory of any Borrower which constitutes United States cigarette tax stamps of a jurisdiction in which such
Borrower has a cigarette tax liability greater than the amount of a surety bond or other similar arrangement backing such
liability, provided that such Inventory shall be ineligible under this clause (t) only to the extent of any such shortfall;
(u) the amount of Inventory of any Borrower which represents an unreconciled variance between the book accounts
and the physical Inventory counts conducted by the Administrative Agent or its representatives in accordance with this
Agreement; or
(v) any Inventory which the Administrative Agent otherwise determines, in its Permitted Discretion, is unacceptable
for any legal reason or for any reason related to saleability, value or merchantability of such Inventory.
In the event that a material portion of the Inventory which was previously Eligible Inventory ceases to be Eligible
Inventory hereunder, the Borrowers shall notify the Administrative Agent thereof on and at the time of submission to the
Administrative Agent of the next Borrowing Base Certificate.
Eligible Unaffixed Tax Stamps shall mean State unaffixed tax stamps which (a) have been fully paid for by the
Borrowers or otherwise reserved by the Administrative Agent, (b) are subject to a first priority Lien in favor of the
Administrative Agent, and (c) are (i) freely saleable by the Borrowers (or by the Administrative Agent in the event of
foreclosure pursuant to the terms of the Loan Documents) to a third party without restrictions or (ii) returnable to the issuing
State for full payment thereon without offset or reduction.
Environmental Laws means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions,
notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to
the environment, preservation or reclamation of natural resources, the management, release or threatened release of any
Hazardous Material or to health and safety matters.
Environmental Liability means any liability, contingent or otherwise (including any liability for damages, costs of
environmental remediation, fines, penalties or indemnities), of any Borrower or any Subsidiary directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
Equity Interests means shares of capital stock, partnership interests, membership interests in a limited liability
company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other
rights entitling the holder thereof to purchase or acquire any such equity interest.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.
ERISA Affiliate means any trade or business (whether or not incorporated) that, together with any Borrower, is
treated as a single employer under 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.
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ERISA Event means (a) any reportable event, as defined in Section 4043 of ERISA or the regulations issued
thereunder, or a Termination Event with respect to a Plan (other than an event for which the 30-day notice period is
waived); (b) the existence with respect to any Plan of an accumulated funding deficiency (as defined in Section 412 of the
Code or Section 302 of ERISA), whether or not waived; (c) the filing, pursuant to Section 412(d) of the Code or Section
303(d) of ERISA or pursuant to any other applicable legislation (including the PBA), of an application for a waiver of the
minimum funding standard with respect to any Plan; (d) the incurrence by any Borrower or any of their respective ERISA
Affiliates of any liability under Title IV of ERISA, the PBA or other applicable law of any jurisdiction with respect to the
termination of any Plan; (e) the receipt by any Borrower or any ERISA Affiliate from the PBGC or other applicable
Governmental Authority or from a plan administrator of any notice relating to an intention to terminate any Plan or Plans or
to appoint a trustee to administer any Plan; (f) the incurrence by any Borrower or any of their respective ERISA Affiliates
of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt
by any Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in reorganization, including, without limitation, within the meaning of Title IV of
ERISA.
Eurodollar, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising
such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
Event of Default has the meaning assigned to such term in Article VII.
Excluded Taxes means, with respect to the Administrative Agent, any Lender, the Issuing Bank or any other
recipient of any payment to be made by or on account of any obligation of the Borrowers hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of America, Canada, or by the jurisdiction under the
laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which
its applicable lending office is located or in which it is doing business, (b) any branch profits taxes imposed by the United
States of America, Canada, or by the jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its applicable lending office is located or in which it is
doing business, or any similar tax imposed by any other jurisdiction in which any Borrower is located and (c) in the case of
a Foreign Lender (other than an assignee pursuant to a request by the Borrowers under Section 2.19(b)), any withholding
tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such Foreign Lenders failure to comply with
Section 2.17(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation
of a new lending office (or assignment), to receive additional amounts from the Borrowers with respect to such withholding
tax pursuant to Section 2.17(a).
Existing Letters of Credit means the letters of credit or guarantees of letters of credit issued for the account of a
Borrower by a Lender (or an Affiliate of a Lender) and listed on Schedule 2.06 attached hereto, which letters of credit will,
as of the Effective Date, be deemed outstanding as Letters of Credit issued pursuant to Section 2.06.
17
Exposure Reserves means any and all reserves established in accordance with Section 2.22(a) that are deducted from
Availability and which the Administrative Agent deems reasonably necessary, in its Permitted Discretion, to maintain
(including, without limitation, reserves for interest on the Secured Obligations that has not been paid when due, Banking
Services Reserves, Canadian Priority Payables Reserves (to the extent not taken as a Collateral Reserve), the Canadian
Tobacco Tax Reserve (to the extent included as an Exposure Reserve under the definition of Canadian Tobacco Tax
Reserve), Withholding Reserves, reserves for rent at locations leased by any Loan Party and for consignees,
warehousemens and bailees charges unless waived (in each case, to the extent not adequately addressed by an executed
Collateral Access Agreement), reserves for Swap Obligations, reserves for unpaid or unsaleable stamp taxes (including,
without limitation, United States tobacco stamp liabilities to the extent greater than stamps on hand) and reserves for taxes,
fees, assessments, and other governmental charges) with respect to the Collateral or any Loan Party; provided that the
Administrative Agent will not establish any Exposure Reserves under this Agreement to the extent that the basis for such
Exposure Reserve has already been addressed in the existing Reserves, determination of eligibility standards or advance
rates hereunder.
Federal Funds Effective Rate means, for any day, the weighted average (rounded upwards, if necessary, to the next
1/100 of 1%) of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next
1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it.
Financial Officer means the chief financial officer, principal accounting officer, treasurer or controller of any
Borrower.
Fixed Charges means, with reference to any period, without duplication, cash Interest Expense, plus prepayments
(other than prepayments in connection with refinancings of Indebtedness permitted by this Agreement) and scheduled
principal payments on Indebtedness (other than any such payments on intercompany Indebtedness permitted by this
Agreement) made during such period (including payments made under the RCT Guarantee and the PCT Guarantee, but
excluding all prepayments of the Tranche B Notes), plus dividends or distributions paid in cash, plus Capital Lease
Obligation payments, plus cash contributions to any Plan to the extent not expensed, all calculated for Holdings and its
Subsidiaries on a consolidated basis.
Fixed Charge Coverage Ratio means, the ratio, determined as of the end of each of fiscal quarter of Holdings for the
most-recently ended four fiscal quarters, of (a) EBITDA minus the unfinanced portion of Capital Expenditures minus
expense for income taxes paid in cash, to (b) Fixed Charges, all calculated for Holdings and its Subsidiaries on a
consolidated basis in accordance with GAAP.
Foreign Lender means any Lender that is organized under the laws of a jurisdiction other than that in which any
Borrower is organized or has a permanent establishment. For purposes of this definition, the United States of America, each
State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
Funding Account has the meaning assigned to such term in Section 4.01(h).
GAAP means generally accepted accounting principles in the United States of America.
18
Governmental Authority means the government of the United States of America, Canada, any other nation or any
political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
Guarantee of or by any Person (the guarantor) means any obligation, contingent or otherwise that is required to be
recorded on such Persons books under GAAP, of the guarantor guaranteeing or having the economic effect of guaranteeing
any Indebtedness or other obligation of any other Person (the primary obligor) in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, or (c) as an account party in
respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term
Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.
Guaranteed Obligations has the meaning assigned to such term in Section 10.01.
Hazardous Materials means all explosive or radioactive substances or wastes and all hazardous or toxic substances,
wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature
regulated pursuant to any Environmental Law.
Holdings has the meaning set forth in the introductory paragraph of this Agreement.
Indebtedness of any Person means, without duplication, (a) all obligations of such Person for borrowed money,
(b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such
Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other
title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital
Lease Obligations of such Person (but excluding obligations under operating leases to the extent charged on the income
statement of such Person), (i) all obligations, contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers
acceptances, and (k) any other Off-Balance Sheet Liability. The Indebtedness of any Person shall include the Indebtedness
of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Persons ownership interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
Indemnified Taxes means Taxes other than Excluded Taxes.
Information Memorandum means the Confidential Information Memorandum dated August 2005 relating to the
Borrowers and the Transactions.
Interest Election Request means a request by the Borrowers to convert or continue a Revolving Borrowing in
accordance with Section 2.07.
19
Interest Expense means, with reference to any period, total interest expense (including that attributable to Capital
Lease Obligations) of Holdings and its Subsidiaries for such period with respect to all outstanding Indebtedness of Holdings
and its 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 Swap Agreements in respect of interest rates to the extent such net
costs are allocable to such period in accordance with GAAP), calculated on a consolidated basis for Holdings and its
Subsidiaries for such period in accordance with GAAP.
Interest Payment Date means (a) with respect to any ABR Loan or Canadian Prime Rate Loan (other than a
Swingline Loan or Canadian Swingline Loan), the first day of each calendar month and the Maturity Date, (b) with respect
to any Eurodollar Loan or CDOR Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan
is a part and, in the case of a Eurodollar Borrowing or a CDOR Borrowing with an Interest Period of more than three
months duration, each day prior to the last day of such Interest Period that occurs at intervals of three months duration
after the first day of such Interest Period and the Maturity Date, and (c) with respect to any Swingline Loan, the day that
such Loan is required to be repaid and the Maturity Date.
Interest Period means, with respect to any Eurodollar Borrowing or CDOR Borrowing, the period commencing on
the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three
or six months thereafter, as the Borrowers may elect; provided, that (i) if any Interest Period would end on a day other than
a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a
Eurodollar Borrowing or CDOR Borrowing only, such next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period
pertaining to a Eurodollar Borrowing or CDOR Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall
end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Revolving Borrowing,
thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.
Inventory has the meaning assigned to such term in the Security Agreement.
Issuing Bank means (a) Chase, in its capacity as the issuer of Letters of Credit hereunder, (b) with respect to the
Existing Letters of Credit, the Lenders set forth in Schedule 2.06, (c) any other Lender approved by the Administrative
Borrower and the Administrative Agent, and (d) their successors in such capacity as provided in Section 2.06(i). The
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank,
in which case the term Issuing Bank shall include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.
Joinder Agreement has the meaning assigned to such term in Section 5.13.
LC Disbursement means a payment made by the Issuing Bank pursuant to a Letter of Credit.
LC Exposure means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at
such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed (from the proceeds of
Revolving Loans or otherwise) by or on behalf of the Borrowers at such time. The LC Exposure of any Revolving Lender at
any time shall be its Applicable Percentage of the total LC Exposure at such time.
20
LC Collateral Account has the meaning assigned to such term in Section 2.06(j).
Lenders means the Persons (including the Canadian Lenders) listed on the Commitment Schedule and any other
Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that
ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term
Lenders includes the Swingline Lenders and the Canadian Swingline Lender.
Letter of Credit means any letter of credit or guarantee of a letter of credit issued pursuant to this Agreement and
shall include the Existing Letters of Credit.
LIBO Rate means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Page
3750 of the Dow Jones Market Service (or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service,
as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for any reason, then the LIBO Rate with respect to
such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a
maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period.
Lien means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance,
charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset (but not including the interest of a lessor under any operating lease), (c) in the
case of securities, any purchase option, call or similar right of a third party with respect to such securities, and (d) any other
lien, charge, privilege, secured claim, title retention, garnishment right, deemed trust, encumbrance or other right affecting
property, choate or inchoate, arising by any statute, act of law of any jurisdiction at common law or in equity or by
agreement.
Loan Documents means (a) this Agreement, any promissory notes issued pursuant to the Agreement, any Letter of
Credit applications, the Collateral Documents, the Loan Guaranty and all other agreements, instruments, documents and
certificates identified in Section 4.01 executed and delivered to, or in favor of, the Administrative Agent or any Lender and
including all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements, (b) all
certificates and other materials required to be delivered to the Administrative Agent or any Lender under this Agreement or
any of the Collateral Documents, and (c) all other material information contained in any other written communication
delivered to the Administrative Agent or any Lender in connection with this Agreement or any of the Collateral Documents,
but excluding any forecasts or projections. Any reference in the Agreement or any other Loan Document to a Loan
Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or
other modifications thereto, and shall refer to the Agreement or such Loan Document as the same may be in effect at any
and all times such reference becomes operative.
Loan Guarantor each Loan Party (other than the Borrowers foreign Subsidiaries).
21
Loan Guaranty means Article X of this Agreement.

Loan Parties means the Borrowers, the Borrowers material domestic Subsidiaries that are parties to this Agreement
and any other Person who becomes a party to this Agreement pursuant to a Joinder Agreement and their successors and
assigns.
Loans means the loans and advances made by the Lenders pursuant to this Agreement, including Swingline Loans,
Canadian Swingline Loans, Overadvances and Protective Advances.
Material Adverse Effect means a material adverse effect on (a) the business, assets, property or condition, financial
or otherwise, of the Borrowers and the Subsidiaries taken as a whole, (b) the ability of the Loan Parties taken as a whole to
pay any of the Obligations when due or to perform any of their other material obligations under the Loan Documents,
(c) the Collateral, or the Administrative Agents Liens (on behalf of itself and the Lenders) on the Collateral or the priority
of such Liens, or (d) the rights of or benefits available to the Administrative Agent, the Issuing Bank or the Lenders
thereunder.
Material Indebtedness means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of
one or more Swap Agreements, of any one or more of the Borrowers and their Subsidiaries in an aggregate principal
amount exceeding $5,000,000. For purposes of determining Material Indebtedness, the obligations of any Borrower or
any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any
netting agreements) that such Borrower or such Subsidiary would be required to pay if such Swap Agreement were
terminated at such time.
Maturity Date means October 12, 2010 or any earlier date on which the Commitments are reduced to zero or
otherwise terminated pursuant to the terms hereof.
Maximum Liability has the meaning assigned to such term in Section 10.10.
Moodys means Moodys Investors Service, Inc. and its successors and assigns.
Multiemployer Plan means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
Net Income means, for any period, the consolidated net income (or loss) of Holdings and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary of any Borrower or is merged into or consolidated
with any Borrower or any of the Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary of any
Borrower) in which any Borrower or any of the Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by such Borrower or such Subsidiary in the form of dividends or similar distributions and
(c) the undistributed earnings of any Subsidiary of any Borrower to the extent that the declaration or payment of dividends
or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than
under any Loan Document) or Requirement of Law applicable to such Subsidiary.
Net Orderly Liquidation Value means, with respect to Inventory, Equipment or intangibles of any Person, the orderly
liquidation value thereof as determined in a manner reasonably acceptable to the Administrative Agent by an appraiser
reasonably acceptable to the Administrative Agent, net of all costs of liquidation thereof.
22
Non-Consenting Lender has the meaning assigned to such term in Section 9.02(d).
Non-Paying Guarantor has the meaning assigned to such term in Section 10.11.
Obligated Party has the meaning assigned to such term in Section 10.02.
Obligations means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued
and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Loan Parties to the Lenders or to
any Lender, the Administrative Agent, the Canadian Funding Bank, the Issuing Bank or any indemnified party arising under
the Loan Documents.
Off-Balance Sheet Liability of a Person means in accordance with GAAP (a) any repurchase obligation or liability of
such Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or obligation
under any so-called synthetic lease transaction entered into by such Person, or (c) any indebtedness, liability or obligation
arising with respect to any other transaction which is the functional equivalent of borrowing but which does not constitute a
liability on the balance sheets of such Person. For the avoidance of doubt, operating leases are not Off-Balance Sheet
Liabilities.
Other Taxes means any and all present or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.
Overadvance has the meaning assigned to such term in Section 2.05(c).
Participant has the meaning set forth in Section 9.04.
Paying Guarantor has the meaning assigned to such term in Section 10.11.
PBA means the Pensions Benefit Act (Ontario) and all regulations thereunder as amended from time to time, and any
successor legislation.
PBGC means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity
performing similar functions.
PCT Guarantee means that certain Amended and Restated Administrative Claims Guaranty Agreement dated as of
August 31, 2004, made by and between Core-Mark Holding Company, Inc. (a Delaware corporation), and the
Post-Confirmation Trust (a trust established under a Post-Confirmation Trust Agreement dated as of August 19, 2004), as
the same may be amended or supplemented from time to time.
Permitted Acquisition means any Acquisition by any Loan Party in a transaction that satisfies each of the following
requirements:
(a) such Acquisition is not a hostile acquisition or contested by the company to be acquired;
(b) the business acquired in connection with such Acquisition is (i) located in the U.S. or Canada, (ii) organized under
U.S., Canadian or applicable state or provincial laws, and (iii) not primarily engaged, directly or indirectly, in any line of
business other than the businesses in which the Loan Parties are engaged on the Closing Date and any business activities
that are substantially similar, related, or incidental thereto;
23
(c) both before and after giving effect to such Acquisition and the Loans (if any) requested to be made in connection
therewith, each of the representations and warranties in the Loan Documents is true and correct (except (i) any such
representation or warranty which relates to a specified prior date and (ii) to the extent the Agent and the Lenders have been
notified in writing by the Loan Parties that any representation or warranty is not correct and the Required Lenders have
explicitly waived in writing compliance with such representation or warranty) and no Default or Event of Default exists,
will exist, or would result therefrom;
(d) as soon as available, but not less than fifteen days prior to such Acquisition, the Borrowers have provided the
Lenders (i) notice of such Acquisition and (ii) a copy of all available business and financial information reasonably
requested by the Agent including pro forma financial statements, statements of cash flow, and Availability projections;
(e) the aggregate purchase price (whether in cash, notes or any other form of non-equity consideration) of all
Acquisitions made during the term of this Agreement shall not exceed $75,000,000; provided, however, that if at the
effective date of any proposed Acquisition that otherwise meets the requirements of this definition of Permitted
Acquisitions, the Borrowers have pro forma Availability (on both a 60-day look-back and a 60-day look-forward basis and
including all non-equity consideration given in connection with such Acquisition as having been paid in cash at the time of
making such Acquisition) not less than $125,000,000, such Acquisition shall not be counted against this $75,000,000 total
basket;
(f) if such Acquisition is an acquisition of the Equity Interests of a Person, the Acquisition is structured so that the
acquired Person shall become a wholly-owned Subsidiary of a Borrower and, in accordance with Section 5.13, a Loan Party
pursuant to the terms of this Agreement;
(g) if such Acquisition is an acquisition of assets, the Acquisition is structured so that a Loan Party (or a newly
organized Subsidiary that becomes a Loan Party) shall acquire such assets;
(h) if such Acquisition is an acquisition of Equity Interests, such Acquisition will not result in any violation of
Regulation U;
(i) no Loan Party shall, as a result of or in connection with any such Acquisition, assume or incur any direct or
contingent liabilities (whether relating to environmental, tax, litigation, or other matters) that would reasonably be expected
to have a Material Adverse Effect;
(j) in connection with an Acquisition of the Equity Interests of any Person, all Liens (other than Permitted
Encumbrances and other Liens permitted by Section 6.02 which were not created in contemplation of such Acquisition) on
property of such Person shall be terminated unless the Administrative Agent in its sole discretion consents otherwise, and in
connection with an Acquisition of the assets of any Person, all Liens (other than Permitted Encumbrances and other Liens
permitted by Section 6.02 which were not created in contemplation of such Acquisition) on such assets shall be terminated;
and
(k) no Default or Event of Default exists or would result therefrom.
Permitted Discretion means a determination made in the Administrative Agents reasonable good faith judgment in
consideration of any factor which (a) would reasonably be expected to adversely affect (i) the value of any Collateral,
(ii) the ability to realize upon any Collateral, (iii) the enforceability or priority of the Administrative Agents Liens on the
Collateral or (iv) the amount that the Administrative Agent and the Lenders would be likely to receive from the liquidation
of the Collateral, or (b) materially increases the likelihood that the Administrative Agent and the Lenders would not receive
payment for all of the Obligations.
24
Permitted Encumbrances means:

(a) Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.04;
(b) carriers, warehousemens, mechanics, materialmens, repairmens and other like Liens imposed by law, arising in
the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in
compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business in compliance with workers compensation,
unemployment insurance and other social security or public liability laws or regulations;
(d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety, customs and appeal
bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;
(f) non-consensual statutory Liens (other than Liens securing the payment of taxes) arising in the ordinary course of
the Loan Parties business to the extent: (i) such liens secure Indebtedness which is not overdue or (ii) such liens secure
Indebtedness relating to claims or liabilities which are fully insured and being defended at the sole cost and expense and at
the sole risk of the insurer or being contested in good faith by appropriate proceedings diligently pursued and available to
the Loan Parties, in each case prior to the commencement of foreclosure or other similar proceedings and with respect to
which adequate reserves have been set aside on their books; and
(g) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising
in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value
of the affected property or interfere with the ordinary conduct of business of any Borrower or any Subsidiary.
Permitted Investments means:
(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the
United States of America or Canada (or by any agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America or Canada, as applicable), in each case maturing within one year from the date of
acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such
date of acquisition, an investment grade credit rating obtainable from S&P or from Moodys;
25
(c) investments in certificates of deposit, guaranteed investment certificates, bankers acceptances and time deposits
maturing within 270 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of Canada or
the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not
less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause
(a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and
(e) money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7
under the Investment Company Act of 1940, (ii) are rated investment grade by S&P or Moodys and (iii) have portfolio
assets of at least $5,000,000,000.
Person means any natural person, corporation, limited liability company, trust, joint venture, association, company,
partnership, Governmental Authority or other entity.
Petition Date means April 1, 2003, the date of the filing of Chapter 11 petitions for Core-Mark International, Inc.;
Fleming Companies, Inc.; ABCO Food Group, Inc.; ABCO Markets, Inc.; ABCO Realty Corp.; ASI Office Automation,
Inc.; C/M Products, Inc.; Core-Mark Interrelated Companies, Inc.; Core-Mark Mid-Continent, Inc.; Dunigan Fuels, Inc.;
Favar Concepts, Ltd.; Fleming Foods Management Co., L.L.C.; Fleming Foods of Texas, L.P.; Fleming International, Ltd.;
Fleming Supermarkets of Florida, Inc.; Fleming Transportation Service, Inc.; Food 4 Less Beverage Company, Inc.;
Fuelserv, Inc.; General Acceptance Corporation; Head Distributing Company; Marquise Ventures Company, Inc.;
Minter-Weisman Co.; Piggly Wiggly Company; Progressive Realty, Inc.; Rainbow Food Group, Inc.; Retail Investments,
Inc.; Retail Supermarkets, Inc.; RFS Marketing Services, Inc.; and Richmar Foods, Inc.
Plan means any employee pension benefit plan, pension plan or plan (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA or the applicable laws of any other
jurisdiction including the PBA, and in respect of which any Borrower or any ERISA Affiliate (i) sponsors, maintains, or to
which it makes, is making, or is obligated to make contributions, or has made contributions at any time during the
immediately preceding five (5) plan years, and/or (ii) is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an employer as defined in Section 3(5) of ERISA.
PP&E Component shall mean, at the time of any determination, an amount equal to 75% of the Net Orderly
Liquidation Value of the Borrowers Eligible Equipment less Reserves related to the Eligible Equipment established by the
Administrative Agent in its Permitted Discretion; provided that the PP&E Component shall be subject to straight-line
annual amortization from the date of any Loan on the PP&E Component through the date which is the fifth anniversary of
the Effective Date. As of the Effective Date, the Net Orderly Liquidation Value of the Borrowers Eligible Equipment is
$3,629,266. Upon request by the Borrowers, the Administrative Agent may agree in its Permitted Discretion to the addition
of new Eligible Equipment to the PP&E Component; provided that (A) the PP&E Component shall never exceed
$20,000,000 at any time prior to the first anniversary of the Effective Date, (B) the PP&E Component shall not exceed $0 at
any time after the fifth anniversary of the Effective Date, and (C) prior to inclusion in the PP&E Component, all Equipment
must be appraised in a manner reasonably acceptable to the Administrative Agent by an appraiser reasonably acceptable to
the Administrative Agent.
26
PPSA means the Personal Property Security Act (Ontario) (or any successor statute) or similar legislation
(including, without limitation, the Civil Code) of any other jurisdiction the laws of which are required by such legislation to
be applied in connection with the issue, perfection, enforcement, validity or effect of security interests.
Prime Rate means the rate of interest per annum publicly announced from time to time by Chase as its prime rate at
its offices at 270 Park Avenue in New York City; each change in the Prime Rate shall be effective from and including the
date such change is publicly announced as being effective.
Projections has the meaning assigned to such term in Section 5.01(f).
Protective Advance has the meaning assigned to such term in Section 2.04.
RCT Guarantee means, collectively, (i) that certain Subordinated Secured Guaranty Agreement dated as of
August 20, 2004 by and between Core-Mark Holding Company, Inc. and the Reclamation Creditors Trust for the benefit of
the holders of Allowed Class 3(B) TLV Reclamation Claims as the same may be amended or supplemented from time to
time, and (ii) that certain Junior Subordinated Secured Guaranty Agreement dated as of August 20, 2004 by and between
Core-Mark Holding Company, Inc. and the Reclamation Creditors Trust for the benefit of the holders of Allowed Net
Non-TLV Reclamation Claims, as the same may be amended or supplemented from time to time.
Register has the meaning set forth in Section 9.04.
Related Parties means, with respect to any specified Person, such Persons Affiliates and the respective directors,
officers, employees, agents and advisors of such Person and such Persons Affiliates.
Report means reports prepared by the Administrative Agent or another Person showing the results of appraisals, field
examinations or audits pertaining to the Borrowers assets from information furnished by or on behalf of any Borrower,
after the Administrative Agent has exercised its rights of inspection pursuant to this Agreement, which Reports may be
distributed to the Lenders by the Administrative Agent.
Required Lenders means, at any time, Lenders having Credit Exposure and unused Commitments representing more
than 50% of the sum of the total Credit Exposure and unused Commitments at such time.
Requirement of Law means, as to any Person, the Certificate of Incorporation and By-Laws or other organizational
or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
Reserves means the Collateral Reserves and the Exposure Reserves, as applicable.
Restricted Payment means any dividend or other distribution (whether in cash, securities or other property, other
than common stock of Holdings) with respect to any Equity Interests in any Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property, other than common stock of Holdings), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity
Interests in any Borrower or any option, warrant or other right to acquire any such Equity Interests in any Borrower.
27
Revolving Commitment means, with respect to each Lender, the commitment of such Lender to make Revolving
Loans and to acquire participations in Letters of Credit, Overadvances and Swingline Loans hereunder, expressed as an
amount representing the maximum possible aggregate amount of such Lenders Revolving Exposure hereunder, as such
commitment may be (a) increased from time to time pursuant to Section 2.21 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04; provided that the aggregate Revolving
Commitments shall not at any time exceed $325,000,000. The initial amount of each Lenders Revolving Commitment is
set forth on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such Lender shall have
assumed its Revolving Commitment, as applicable. The initial aggregate amount of the Lenders Revolving Commitments
is $250,000,000. The Revolving Commitments include the Canadian Revolving Commitments available pursuant to the
Canadian Subfacility in an aggregate amount not to exceed Cdn.$110,000,000.
Revolving Exposure means, with respect to any Lender at any time, the sum of the outstanding principal amount of
such Lenders Revolving Loans and Canadian Revolving Loans, as applicable and its LC Exposure and an amount equal to
its Applicable Percentage of the aggregate principal amount of Swingline Loans or Canadian Applicable Percentage of the
aggregate principal amount of the Canadian Swingline Loans, as applicable, at such time, plus an amount equal to its
Applicable Percentage of the aggregate principal amount of Overadvances outstanding at such time.
Revolving Lender means, as of any date of determination, a Lender with a Revolving Commitment or, if the
Revolving Commitments have terminated or expired, a Lender with Revolving Exposure.
Revolving Loan means a Loan (including Canadian Revolving Loans) made pursuant to Section 2.01(a).
S&P means Standard & Poors Ratings Services, a division of The McGraw Hill Companies, Inc., and its successors
and assigns.
Secured Obligations means all Obligations, together with all (i) Banking Services Obligations and (ii) Swap
Obligations owing to one or more Lenders or their respective Affiliates; provided that at or prior to the time that any
transaction relating to such Swap Obligation is executed (or, in the case of foreign exchange swaps, promptly thereafter),
the Lender party thereto (other than Chase or Chase Canada) shall have delivered written notice to the Administrative Agent
that such a transaction has been entered into and that it constitutes a Secured Obligation entitled to the benefits of the
Collateral Documents.
Security Agreement means (i) that certain Pledge and Security Agreement, dated as of the date hereof, between the
Loan Parties and the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, and (ii) any other
pledge or security agreement entered into, after the date of this Agreement by any other Loan Party (as required by this
Agreement or any other Loan Document), or any other Person, as the same may be amended, restated or otherwise modified
from time to time.
Statutory Reserve Rate means 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 (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative
Agent is subject with respect to the Adjusted LIBO Rate, 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.
28
Subordinated Indebtedness of a Person means any Indebtedness of such Person the payment of which is
subordinated to payment of the Secured Obligations to the written satisfaction of the Administrative Agent.
subsidiary means, with respect to any Person (the parent) at any date, any corporation, limited liability company,
partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parents
consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or
other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in
the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held,
or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent
and one or more subsidiaries of the parent.
Subsidiary means any subsidiary of Holdings or a Loan Party, as applicable.
Supermajority Revolving Lenders means, at any time, Lenders having Credit Exposure and unused Commitments
representing more than 66 2/3% of the sum of the total Credit Exposure and unused Commitments at such time.
Swap Agreement means any agreement with respect to any swap, forward, future or derivative transaction or option
or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or
value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan
providing for payments only on account of services provided by current or former directors, officers, employees or
consultants of the Borrowers or the Subsidiaries shall be a Swap Agreement.
Swap Obligations of a Person means any and all obligations of such Person, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (a) any and all Swap Agreements, and (b) any and all cancellations, buy backs,
reversals, terminations or assignments of any Swap Agreement transaction.
Swingline Lender means JPMorgan Chase Bank, N.A., in its capacity as lender of Swingline Loans hereunder.
Swingline Loan means a Loan made pursuant to Section 2.05.
Taxes means any and all present or future taxes, excise taxes, goods and services taxes, provincial sales taxes, levies,
imposts, duties, deductions, fees, charges or withholdings imposed by any Governmental Authority.
Termination Event means (a) the whole or partial withdrawal of the Borrower(s) or any Subsidiary from a Plan
during a plan year; or (b) the filing of a notice of interest to terminate in whole or in part a Plan or the treatment of a Plan
amendment as a termination of partial termination; or (c) the institution of proceedings by any Governmental Authority to
terminate in whole or in part or have a trustee appointed to administer a Plan; or (d) any other event or condition which
might constitute grounds for the termination of, winding up or partial termination of winding up or the appointment of
trustee to administer, any Plan.
29
Tranche B Facility means that certain Note and Warrant Purchase Agreement dated as of August 20, 2004 among
Core-Mark Holding Company, Inc. and the other Issuers identified therein, Wells Fargo Bank, N.A. as Administrative
Agent, Wells Fargo Bank, as the LC Issuer, and the Purchasers listed therein, as the same may be amended or supplemented
from time to time.
Tranche B Notes means the notes issued under the Tranche B Facility.
Transactions means the execution, delivery and performance by the Borrowers of this Agreement, the borrowing of
Loans and other credit extensions, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.
Type, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on
the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate, the CDOR Rate, the
Alternate Base Rate or the Canadian Prime Rate.
UCC means the Uniform Commercial Code as in effect from time to time in the State of New York or any other
state the laws of which are required to be applied in connection with the issue of perfection of security interests.
Unliquidated Obligations means, at any time, any Secured Obligations (or portion thereof) that are contingent in
nature or unliquidated at such time, including any Secured Obligation that is: (i) an obligation to reimburse a bank for
drawings not yet made under a letter of credit issued by it; (ii) any other obligation (including any guarantee) that is
contingent in nature at such time; or (iii) an obligation to provide collateral to secure any of the foregoing types of
obligations.
Withdrawal Liability means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from
such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
Withholding Reserves shall mean an Exposure Reserve established by the Administrative Agent in its Permitted
Discretion in the event that either (a) Availability at any time is less than $35,000,000 or (b) an Event of Default has
occurred, which reserve shall be in an amount reasonably deemed adequate by the Administrative Agent to cover any
potential withholding tax liabilities accruing from the Effective Date in the United States or Canada in connection with the
Canadian Borrowers status as a Canadian taxpayer or permanent establishment under Canadian law or in connection
with the Canadian Subfacility; provided that the Administrative Agent may in its Permitted Discretion thereafter decrease or
eliminate any Withholding Reserves.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and
referred to by Class (e.g., a Revolving Loan) or by Type (e.g., a Eurodollar Loan) or by Class and Type (e.g., a Eurodollar
Revolving Loan). Borrowings also may be classified and referred to by Class (e.g., a Revolving Borrowing) or by Type (e.g.,
a Eurodollar Borrowing) or by Class and Type (e.g., a Eurodollar Revolving Borrowing).
30
SECTION 1.03. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter
forms. The words include, includes and including shall be deemed to be followed by the phrase without limitation. The
word will shall be construed to have the same meaning and effect as the word shall. Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be
construed to include such Persons successors and assigns, (c) the words herein, hereof and hereunder, and words of
similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Agreement and (e) the words asset and property shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrowers
notify the Administrative Agent that the Borrowers request an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrowers that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have
become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving
Loans to the Borrowers from time to time in dollars (or, specifically with respect to Canadian Revolving Loans made under the
Canadian Subfacility, Canadian Dollars) during the Availability Period in an aggregate principal amount that will not result in
either (i) such Lenders Revolving Exposure exceeding such Lenders Revolving Commitment or (ii) the total Revolving
Exposures exceeding the lesser of (x) the sum of the total Revolving Commitments or (y) the Borrowing Base, subject to the
Administrative Agents authority, in its sole discretion, to make Protective Advances and Overadvances pursuant to the terms of
Sections 2.04 and 2.05; provided that with respect to Canadian Revolving Loans, the sum of the aggregate principal amount of
Canadian Revolving Loans and the LC Exposure for Canadian Dollar Letters of Credit issued (under the Letter of Credit facility
available pursuant to Section 2.06 hereof) shall not exceed Cdn.$110,000,000 (the Canadian Subfacility). Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, repay and reborrow Revolving Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a Swingline Loan or Canadian Swingline Loan) shall be
made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with
their respective Commitments of the applicable Class. Any Protective Advance, any Overadvance and any Swingline Loan or
Canadian Swingline Loan shall be made in accordance with the procedures set forth in Sections 2.04 and 2.05. Notwithstanding
anything to the contrary herein, (i) all Canadian Loans shall be made available to the Canadian Borrower only and shall be made
by Canadian Lenders under the Canadian Subfacility, and by the Canadian Funding Bank, by way of Canadian Swingline Loans,
and (ii) the only financial accommodations available to the Canadian Borrower (in its capacity as Canadian Borrower) under the
Canadian Subfacility shall be Canadian Revolving Loans, Canadian Swingline Loans and Letters of Credit; for greater certainty,
no other bank products or accommodations, such as, without limitation, Swaps and Swingline Loans (that are not Canadian
Swingline Loans), shall be made available under the Canadian Subfacility.
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(b) Subject to Section 2.14, each Revolving Borrowing shall be comprised entirely of ABR Loans, Canadian Prime
Rate Loans, Eurodollar Loans or CDOR Loans as the Administrative Borrower may request in accordance herewith,
provided that all Borrowings (that are not Canadian Prime Rate Borrowings) made on the Effective Date must be made as
ABR Borrowings but may be converted into Eurodollar Borrowings in accordance with Section 2.08. Each Swingline Loan
shall be an ABR Loan and each Canadian Swingline Loan shall be a Canadian Prime Rate Loan. Each Lender at its option
may make any Eurodollar Loan or CDOR Loan by causing any domestic or foreign branch or Affiliate of such Lender to
make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrowers to repay such
Loan in accordance with the terms of this Agreement and shall not increase the cost of such Loan to the Borrowers.
(c) At the commencement of each Interest Period for any Eurodollar Revolving Borrowing or CDOR Revolving
Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of (i) $100,000 and not less than
$500,000, in respect of Eurodollar Revolving Borrowings, and (ii) Cdn.$100,000 and not less than Cdn.$500,000, in respect
of CDOR Revolving Borrowings. At the time that each ABR Revolving Borrowing or Canadian Prime Rate Revolving
Borrowing is made, such Borrowing shall be in an aggregate amount that is not less than $500,000 or Cdn.$500,000, as
applicable; provided that an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Revolving Commitments or that is required to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.06(e). Each Swingline Loan or Canadian Swingline Loan shall be in an amount that is not less
than $500,000. Borrowings of more than one Type and Class may be outstanding at the same time and may be made on the
same date; provided that there shall not at any time be more than a total of seven (7) Eurodollar Borrowings and CDOR
Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the Borrowers shall not be entitled to request, or to elect to
convert or continue, any Borrowing as a Eurodollar Loan or CDOR Loan if the Interest Period requested with respect
thereto would end after the Maturity Date.
SECTION 2.03. Requests for Revolving Borrowings. To request a Revolving Borrowing, the Administrative Borrower shall
notify the Administrative Agent and (in the case of a Borrowing under the Canadian Subfacility) the Canadian Funding Bank of
such request either in writing (delivered by hand or facsimile) substantially in the form attached hereto as Exhibit F and signed
by the Administrative Borrower or by telephone (a) in the case of a Eurodollar Borrowing or CDOR Borrowing, not later than
12:00 p.m. (noon), Chicago time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR
Borrowing or Canadian Prime Rate Borrowing, not later than 12:00 p.m. (noon), Chicago time, on the date of the proposed
Borrowing; provided that any such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement
as contemplated by Section 2.06(e) may be given not later than 11:00 a.m., Chicago time, on the date of the proposed Borrowing.
Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to
the Administrative Agent and (in the case of a Borrowing under the Canadian Subfacility) the Canadian Funding Bank of a
written Borrowing Request in a form approved by the Administrative Agent and the (in the case of a Borrowing under the
Canadian Subfacility) Canadian Funding Bank and signed by the Administrative Borrower. Each such telephonic and written
Borrowing Request shall specify the following information in compliance with Section 2.01:
(i) the aggregate amount of the requested Borrowing and a breakdown of the separate wires comprising such
Borrowing;
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(ii) the date of such Borrowing, which shall be a Business Day;

(iii) whether such Borrowing is to be made in dollars (or, in the case of Borrowings under the Canadian
Subfacility, Canadian Dollars);
(iv) whether such Borrowing is to be an ABR Borrowing, a Canadian Prime Rate Borrowing, a Eurodollar
Borrowing or a CDOR Borrowing; and
(v) in the case of a Eurodollar Borrowing or a CDOR Borrowing, the initial Interest Period to be applicable
thereto, which shall be a period contemplated by the definition of the term Interest Period.
If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving Borrowing shall be an ABR
Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Revolving Borrowing or a CDOR
Revolving Borrowing, then the Borrowers shall be deemed to have selected an Interest Period of one months duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent and the Canadian Funding
Bank, as applicable shall advise each Lender of the details thereof and of the amount of such Lenders Loan to be made as part of
the requested Borrowing.
SECTION 2.04. Protective Advances. (a) Subject to the limitations set forth below, the Administrative Agent is authorized
by the Borrowers and the Lenders, from time to time in the Administrative Agents sole discretion (but shall have absolutely no
obligation to), to make Loans to the Borrowers, on behalf of all Lenders, which the Administrative Agent, in its Permitted
Discretion, deems necessary or desirable at any time after the occurrence and during the continuance of any Default (i) to
preserve or protect the Collateral, or any portion thereof, (ii) to pay any other amount chargeable to or required to be paid by any
Borrower pursuant to the terms of this Agreement, including payments of reimbursable expenses (including costs, fees, and
expenses as described in Section 9.03) and other sums payable under the Loan Documents which the Borrowers have not paid
out at the times required by this Agreement, or (iii) after the occurrence and during the continuation of an Event of Default, to
enhance the likelihood of, or maximize the amount of, repayment of the Loans and other Obligations (any of such Loans are
herein referred to as Protective Advances); provided that, the aggregate amount of Protective Advances outstanding at any
time shall not exceed $10,000,000; provided further that, the aggregate amount of outstanding Protective Advances plus the
aggregate Revolving Exposure shall not exceed the aggregate Commitments. Protective Advances may be made even if the
conditions precedent set forth in Section 4.02 have not been satisfied. The Protective Advances shall be secured by the Liens in
favor of the Administrative Agent in and to the Collateral and shall constitute Obligations hereunder. All Protective Advances
shall be ABR Borrowings or Canadian Prime Rate Borrowings, as applicable, and shall be payable within one (1) Business Day
after demand by the Administrative Agent. The Administrative Agents authorization to make Protective Advances may be
revoked at any time by the Supermajority Revolving Lenders. Any such revocation must be in writing and shall become effective
prospectively upon the Administrative Agents receipt thereof. At any time that there is sufficient Availability and the conditions
precedent set forth in Section 4.02 have been satisfied, the Administrative Agent may request the Revolving Lenders to make a
Revolving Loan to repay a Protective Advance. At any other time the Administrative Agent may require the Lenders to fund
their risk participations described in Section 2.04(b).
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(b) Upon the making of a Protective Advance by the Administrative Agent (whether before or after the occurrence of a
Default), each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably
purchased from the Administrative Agent without recourse or warranty, an undivided interest and participation in such
Protective Advance in proportion to its Applicable Percentage or Canadian Applicable Percentage, as applicable. From and
after the date, if any, on which any Lender is required to fund its participation in any Protective Advance purchased
hereunder, the Administrative Agent shall promptly distribute to such Lender, such Lenders Applicable Percentage of all
payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such
Protective Advance.
SECTION 2.05. Swingline Loans, Canadian Swingline Loans and Overadvances. (a) (i) Subject to the terms and conditions
set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrowers (excluding the Canadian Borrower in its
capacity as Canadian Borrower) from time to time during the Availability Period, in an aggregate principal amount at any time
outstanding that will not result in (A) the aggregate principal amount of outstanding Swingline Loans exceeding $20,000,000 or
(B) the sum of the total Revolving Exposures exceeding the lesser of the total Revolving Commitments and the Borrowing Base;
provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan.
Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, repay and
reborrow Swingline Loans. To request a Swingline Loan, the Administrative Borrower shall notify the Administrative Agent of
such request by telephone (confirmed by facsimile), not later than 1:00 p.m., Chicago time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of
the requested Swingline Loan. The Administrative Agent will promptly advise the Swingline Lender of any such notice received
from the Administrative Borrower. The Swingline Lender shall make each Swingline Loan available to the Borrowers by means
of a credit to the Funding Account (or, in the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.06(e), by remittance to the Issuing Bank, and in the case of repayment of another Loan or
fees or expenses as provided by Section 2.18(c), by remittance to the Administrative Agent to be distributed to the Lenders) by
3:00 p.m., Chicago time, on the requested date of such Swingline Loan.
(ii) Subject to the terms and conditions set forth herein, the Canadian Swingline Lender agrees to make Canadian
Swingline Loans to the Canadian Borrower from time to time during the Availability Period, in an aggregate principal
amount at any time outstanding that will not result in (A) the aggregate principal amount of outstanding Canadian
Swingline Loans (other than Single-Day Canadian Swingline Loans) exceeding $5,000,000 or (B) the sum of the total
Canadian Credit Exposure exceeding the lesser of the total Canadian Credit Commitments and the Borrowing Base;
provided that the Canadian Swingline Lender shall not be required to make a Canadian Swingline Loan to refinance an
outstanding Canadian Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth
herein, the Canadian Borrower may borrow, repay and reborrow Canadian Swingline Loans. To request a Canadian
Swingline Loan, the Administrative Borrower shall notify the Administrative Agent and the Canadian Funding Bank
of such request by telephone (confirmed by facsimile), not later than 1:00 p.m., Chicago time, on the day of a proposed
Canadian Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a
Business Day) and amount of the requested Canadian Swingline Loan. The Canadian Funding Bank will
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promptly advise the Canadian Swingline Lender of any such notice received from the Administrative Borrower. The
Canadian Swingline Lender shall make each Canadian Swingline Loan available to the Canadian Borrower by means
of a credit to the Funding Account (or, in the case of a repayment of another Canadian Loan or fees or expenses as
provided by Section 2.18(c), by remittance to the Canadian Funding Bank to be distributed to the Canadian Lenders)
by 3:00 p.m., Chicago time, on the requested date of such Canadian Swingline Loan. For purposes of this
Section 2.05(a)(ii), Single-Day Canadian Swingline Loans shall mean Canadian Swingline Loans that are made by
the Canadian Swingline Lender as an accommodation to Canadian Lenders that are unable to fund on the same day as
a requested Canadian Prime Rate Borrowing, which Single-Day Canadian Swingline Loans shall be funded by the
applicable Canadian Lenders on the first Business Day following the date of such Canadian Prime Rate Borrowing.
The Canadian Swingline Lender is not required to make any Single-Day Canadian Swingline Loan hereunder and will
not make any Single-Day Swingline Loan that would cause its outstanding Canadian Revolving Loans to exceed its
Canadian Revolving Commitment.
(b) (i) The Swingline Lender may by written notice given to the Administrative Agent not later than 9:00 a.m.,
Chicago time, on any Business Day require the Revolving Lenders (who are not Canadian Lenders) to acquire participations
on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate
amount of Swingline Loans in which such Revolving Lenders will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each such Revolving Lender, specifying in such notice such Lenders
Applicable Percentage of such Swingline Loan or Loans. Each such Revolving Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the
Swingline Lender, such Lenders Applicable Percentage of such Swingline Loan or Loans. Each such Revolving Lender
acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is
absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever. Each Revolving Lender shall comply with its
obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in
Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from such Revolving Lenders. The Administrative Agent shall notify the Borrowers of any participations in
any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be
made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from
any Borrower (or other party on behalf of any Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such
amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to such Revolving
Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may
appear; provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent,
as applicable, if and to the extent such payment is required to be refunded to any Borrower for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrowers of any default in the payment
thereof.
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(ii) The Canadian Swingline Lender may by written notice given to the Administrative Agent and Canadian
Funding Bank not later than 9:00 a.m., Chicago time, on any Business Day require the Canadian Lenders to acquire
participations on such Business Day in all or a portion of the Canadian Swingline Loans outstanding. Such notice shall
specify the aggregate amount of Canadian Swingline Loans in which Canadian Lenders will participate. Promptly
upon receipt of such notice, the Canadian Funding Bank will give notice thereof to each Canadian Lender, specifying
in such notice such Lenders Canadian Applicable Percentage of such Canadian Swingline Loan or Loans. Each
Canadian Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the
Canadian Funding Bank, for the account of the Canadian Swingline Lender, such Lenders Canadian Applicable
Percentage of such Canadian Swingline Loan or Loans. Each Canadian Lender acknowledges and agrees that its
obligation to acquire participations in Canadian Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of
a Default or reduction or termination of the Commitments, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever. Each Canadian Lender shall comply with its obligation under
this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.07 with
respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of
the Lenders), and the Canadian Funding Bank shall promptly pay to the Canadian Swingline Lender the amounts so
received by it from the Canadian Lenders. The Canadian Funding Bank shall notify the Canadian Borrower of any
participations in any Canadian Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect
of such Canadian Swingline Loan shall be made to the Canadian Funding Bank and not to the Canadian Swingline
Lender. Any amounts received by the Canadian Swingline Lender from the Canadian Borrower (or other party on
behalf of the Canadian Borrower) in respect of a Canadian Swingline Loan after receipt by the Canadian Swingline
Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Canadian Funding Bank;
any such amounts received by the Canadian Funding Bank shall be promptly remitted by the Canadian Funding Bank
to the Canadian Lenders that shall have made their payments pursuant to this paragraph and to the Canadian Swingline
Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the Canadian
Swingline Lender or to the Canadian Funding Bank, as applicable, if and to the extent such payment is required to be
refunded to the Canadian Borrower for any reason. The purchase of participations in a Canadian Swingline Loan
pursuant to this paragraph shall not relieve the Canadian Borrower of any default in the payment thereof.
(c) Any provision of this Agreement to the contrary notwithstanding, at the request of the Administrative Borrower, the
Administrative Agent may in its reasonable discretion (but with absolutely no obligation), make Revolving Loans to the
Borrowers, on behalf of the Revolving Lenders, in amounts that exceed Availability (any such excess Revolving Loans are
herein referred to collectively as Overadvances); provided that, no Overadvance shall result in a Default due to
Borrowers failure to comply with Section 2.01 for so long as such Overadvance remains outstanding in accordance with
the terms of this paragraph, but solely with respect to the amount of such Overadvance. In addition, Overadvances may be
made even if the condition precedent set forth in Section 4.02(c) has not been satisfied. All Overadvances shall constitute
ABR Borrowings or Canadian Prime Rate Borrowings. The authority of the Administrative Agent to make Overadvances is
limited to an aggregate amount not to exceed $10,000,000 at any time, no Overadvance may remain outstanding for more
than thirty days, all Overadvances shall be payable within one (1) Business Day after demand by the Administrative Agent
and no Overadvance shall cause any Revolving Lenders Revolving Exposure to exceed its Revolving Commitment;
provided that, the Supermajority Revolving Lenders may at any time revoke the Administrative Agents authorization to
make Overadvances. Any such revocation must be in writing and shall become effective prospectively upon the
Administrative Agents receipt thereof.
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(d) Upon the making of an Overadvance by the Administrative Agent, each Revolving Lender shall be deemed,
without further action by any party hereto, to have unconditionally and irrevocably purchased from the Administrative
Agent without recourse or warranty, an undivided interest and participation in such Overadvance in proportion to its
Applicable Percentage or Canadian Applicable Percentage, as applicable, of the Revolving Commitment. The
Administrative Agent may, at any time, require the Revolving Lenders to fund their participations. From and after the date,
if any, on which any Revolving Lender is required to fund its participation in any Overadvance purchased hereunder, the
Administrative Agent shall promptly distribute to such Lender, such Lenders Applicable Percentage of all payments of
principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Loan.
SECTION 2.06. Letters of Credit. (a) General. Subject to the terms and conditions set forth herein, the Administrative
Borrower may request the issuance of Letters of Credit for the account of any Borrower, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Administrative Borrower to, or entered into by the Administrative Borrower
with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control. Except as set
forth in Section 2.06(k), all Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after
the Effective Date shall be subject to and governed by the terms and conditions hereof.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of
Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Administrative Borrower shall hand
deliver or facsimile (or transmit by electronic communication, if arrangements for doing so have been approved by the
Issuing Bank) to the Issuing Bank and the Administrative Agent (prior to 12:00 noon, Chicago time, at least three Business
Days prior to the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter
of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name of the Borrower for
whose account such Letter of Credit is to be issued, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing
Bank, the Administrative Borrower also shall submit a letter of credit application on the Issuing Banks standard form in
connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrowers shall be deemed to represent
and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not
exceed $160,000,000 and (ii) the total Revolving Exposures shall not exceed the lesser of the total Revolving Commitments
and the Borrowing Base.
(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date
one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year
after such renewal or extension) and (ii) the date that is five Business Days prior to the Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount
thereof) and without any further action on the part of the Issuing Bank or the Revolving Lenders, the Issuing Bank hereby
grants to each Revolving Lender, and each Revolving Lender hereby acquires from the Issuing Bank, a participation in such
Letter of Credit equal to such Lenders Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lenders Applicable
Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrowers on the date due as
provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to any Borrower for
any reason. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a
Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
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(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the
Borrowers shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 1:00 p.m., Chicago time, on the date that such LC Disbursement is made, if the Borrowers shall
have received notice of such LC Disbursement prior to 11:00 a.m., Chicago time, on such date, or, if such notice has not
been received by the Borrowers prior to such time on such date, then not later than 1:00 p.m., Chicago time, on (i) the
Business Day that the Borrowers receive such notice, if such notice is received prior to 11:00 a.m., Chicago time, on the day
of receipt, or (ii) the Business Day immediately following the day that the Borrowers receive such notice, if such notice is
not received prior to such time on the day of receipt; provided that the Borrowers hereby request in accordance with
Section 2.03 or 2.05, unless the Administrative Borrower specifically gives notice to the Administrative Agent to the
contrary, that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount
and, to the extent so financed, the Borrowers obligation to make such payment shall be discharged and replaced by the
resulting ABR Revolving Borrowing or Swingline Loan. If the Borrowers fail to make such payment when due, the
Administrative Agent shall notify each Revolving Lender of the applicable LC Disbursement, the payment then due from
the Borrowers in respect thereof and such Lenders Applicable Percentage thereof. Promptly following receipt of such
notice, each Revolving Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due
from the Borrowers, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and
Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Revolving Lenders), and the Administrative
Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Revolving Lenders. Promptly
following receipt by the Administrative Agent of any payment from any Borrower pursuant to this paragraph, the
Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Revolving Lenders have made
payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their
interests may appear. Any payment made by a Revolving Lender pursuant to this paragraph to reimburse the Issuing Bank
for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above)
shall not constitute a Loan and shall not relieve the Borrowers of their obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrowers obligation to reimburse LC Disbursements as provided in paragraph (e) of
this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of
any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other
document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or
equitable discharge of, or provide a right of setoff against, the Borrowers obligations hereunder. Neither the Administrative
Agent, the Revolving Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation
of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the
foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrowers to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrowers to the
extent permitted by applicable law) suffered by any Borrower that are caused by the Issuing Banks failure to exercise care
when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof or
by its gross negligence or willful misconduct.
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(g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof, examine all documents
purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Administrative Borrower by telephone (confirmed by facsimile) of such demand for payment
and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrowers of their obligation to reimburse the Issuing Bank and the
Revolving Lenders with respect to any such LC Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then, unless the Borrowers shall reimburse
such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for
each day from and including the date such LC Disbursement is made to but excluding the date that any Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that, if the
Borrowers fail to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.13(d)
shall apply. Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest
accrued on and after the date of payment by any Revolving Lender pursuant to paragraph (e) of this Section to reimburse
the Issuing Bank shall be for the account of such Lender to the extent of such payment by such Revolving Lender.
(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any time by written agreement among the
Administrative Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Revolving Lenders of any such replacement of the Issuing Bank. At the time any such
replacement shall become effective, the Borrowers shall pay all unpaid fees accrued for the account of the replaced Issuing
Bank pursuant to Section 2.12(b). From and after the effective date of any such replacement, (i) the successor Issuing Bank
shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be
issued thereafter and (ii) references herein to the term Issuing Bank shall be deemed to refer to such successor or to any
previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to
such replacement, but shall not be required to issue additional Letters of Credit.
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(j) Cash Collateralization and Backstop Letter of Credit. If any Event of Default shall occur and be continuing, on the
Business Day that the Borrowers receive notice from the Administrative Agent or the Required Lenders demanding the
deposit of cash collateral or the delivery of a Backstop Letter of Credit pursuant to this paragraph, the Borrowers shall
either (a) deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit
of the Revolving Lenders (the LC Collateral Account), an amount in cash equal to 103% of the LC Exposure as of such
date plus accrued and unpaid interest thereon (if any); provided that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due and payable, without demand or other
notice of any kind, upon the occurrence of any Event of Default with respect to any Borrower described in clause (g) or
(h) of Article VII, or (b) provide to the Administrative Agent, for the benefit of the Administrative Agent and the Lenders, a
letter of credit in form and substance, on terms and from a lending institution reasonably satisfactory to the Administrative
Agent, which letter of credit shall be in a face amount equal to 103% of the L/C Exposure as of such date plus accrued and
unpaid interest thereon (if any) (the Backstop Letter of Credit). With respect to any LC Collateral Account: (i) such
deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Secured Obligations;
(ii) the Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over
such account and each of the Borrowers hereby grants the Administrative Agent a security interest in the LC Collateral
Account; (iii) other than any interest earned on the investment of such deposits, which investments shall be made at the
option and reasonable discretion of the Administrative Agent and at the Borrowers risk and expense, such deposits shall
not bear interest; (iv) interest or profits, if any, on such investments shall accumulate in such account; (v) moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has
not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrowers for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the
consent of Revolving Lenders with LC Exposure representing greater than 50% of the total LC Exposure), be applied to
satisfy other Secured Obligations in accordance with Section 2.18(b); and (vi) any remaining amount shall be promptly
returned to the Borrowers. If the Borrowers are required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrowers
within three Business Days after all such Events of Default have been cured to the satisfaction of the Administrative Agent
or waived in writing. With respect to any Backstop Letter of Credit: (A) the Administrative Agent shall be the named
beneficiary of such letter of credit; (B) drawings upon such letter of credit shall be made in the Administrative Agents
reasonable discretion to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrowers for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Lenders
with LC Exposure representing greater than 50% of the total LC Exposure), be applied to satisfy other Secured Obligations
in accordance with Section 2.18(b); and (C) if the Borrowers are required to provide a letter of credit hereunder as a result
of the occurrence of an Event of Default, such letter of credit (to the extent not drawn as aforesaid) shall be cancelled and
returned to the issuing bank within five Business Days after all such Events of Default have been cured or waived.
(k) Existing Letters of Credit. Notwithstanding anything to the contrary in this Agreement, the terms of payment of the
Existing Letters of Credit (and any issuance fees paid in connection therewith) shall be governed by the terms relating
thereto set forth in the loan documents under which such Existing Letters of Credit were issued.
Any reference to (i) Borrowers in this Section 2.06 shall not include the Canadian Borrower (in its capacity as Canadian
Borrower), and (ii) any reference to Revolving Lenders in this Section 2.06 shall not include the Canadian Lenders. For the
avoidance of doubt, Letters of Credit issued under this Section 2.06 may be denominated in either United States or Canadian
dollars, provided that any Letters of Credit issued in Canadian dollars are subject to both the Letter of Credit sublimit contained
in this Section 2.06 and the Canadian Subfacility sublimit contained in Section 2.01.
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SECTION 2.07. Funding of Borrowings. (a) Each Lender shall make each Loan to be made by it hereunder on the proposed
date thereof by wire transfer of immediately available funds by 1:00 p.m., Chicago time, to the account of the Administrative
Agent or the Canadian Funding Bank, as applicable, most recently designated by it for such purpose by notice to the Lenders in
an amount equal to such Lenders Applicable Percentage or Canadian Applicable Percentage, as applicable; provided that,
Swingline Loans and Canadian Swingline Loans shall be made as provided in Section 2.05. The Administrative Agent or the
Canadian Funding Bank, as applicable, will make such Loans available to the Borrowers by promptly crediting the amounts so
received, in like funds, to the respective Funding Account; provided that ABR Revolving Loans and/or Canadian Prime Rate
Loans, as applicable, made to finance the reimbursement of (i) an LC Disbursement as provided in Section 2.06(e) shall be
remitted by the Administrative Agent to the Issuing Bank and (ii) a Protective Advance or an Overadvance shall be retained by
the Administrative Agent.
(b) Unless the Administrative Agent or the Canadian Funding Bank, as applicable, shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent or
the Canadian Funding Bank, as applicable, such Lenders share of such Borrowing, the Administrative Agent or the
Canadian Funding Bank, as applicable, may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrowers
or the Canadian Borrower, as applicable, a corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent or the Canadian Funding Bank, as applicable, then the
applicable Lender agrees to pay to the Administrative Agent or the Canadian Funding Bank, as applicable, forthwith on
demand such corresponding amount with interest thereon, for each day from and including the date such amount is made
available to the Borrowers to but excluding the date of payment to the Administrative Agent or the Canadian Funding Bank,
as applicable, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation; provided that nothing herein shall discharge the
Borrowers of any obligation to pay interest on the Loans in the manner and amounts set forth in this Agreement. If such
Lender pays such amount to the Administrative Agent or the Canadian Funding Bank, as applicable, then such amount shall
constitute such Lenders Loan included in such Borrowing.
SECTION 2.08. Interest Elections. (a) Each Revolving Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Revolving Borrowing or CDOR Revolving Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, the Borrowers may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar Revolving Borrowing or CDOR Revolving
Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrowers may elect different options with
respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing. This Section shall not apply to Canadian Swingline Borrowings, Swingline Borrowings, Overadvances or
Protective Advances, which may not be converted or continued.
(b) To make an election pursuant to this Section, the Administrative Borrower shall notify the Administrative Agent of
such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Administrative
Borrower was requesting a Revolving Borrowing of the Type resulting from such election to be made on the effective date
of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by
hand delivery or facsimile to the Administrative Agent and (in the case of a Borrowing under the Canadian Subfacility) the
Canadian Funding Bank of a written Interest Election Request in the form attached hereto as Exhibit H signed by the
Administrative Borrower.
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(c) Each telephonic and written Interest Election Request shall specify the following information in compliance with
Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with
respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business
Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing, a Canadian Prime Rate Borrowing, a Eurodollar
Borrowing or a CDOR Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing or a CDOR Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the
term Interest Period.
If any such Interest Election Request requests a Eurodollar Borrowing or a CDOR Borrowing but does not specify an Interest
Period, then the Borrowers shall be deemed to have selected an Interest Period of one months duration.
(d) Promptly following receipt of an Interest Election Request, the Administrative Agent or the Canadian Funding
Bank, as applicable, shall advise each Lender of the details thereof and of such Lenders portion of each resulting
Borrowing.
(e) If the Administrative Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar
Revolving Borrowing or a CDOR Revolving Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing or a Canadian Prime Rate Borrowing, as applicable. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so
notifies the Borrowers, then, so long as an Event of Default is continuing (i) no outstanding Revolving Borrowing may be
converted to or continued as a Eurodollar Borrowing or a CDOR Borrowing and (ii) unless repaid, each Eurodollar
Revolving Borrowing or CDOR Revolving Borrowing shall be converted to an ABR Borrowing or a Canadian Prime Rate
Borrowing, as applicable, at the end of the Interest Period applicable thereto.
SECTION 2.09. Termination of Commitments. (a) Unless previously terminated, all Commitments shall terminate on the
Maturity Date.
(b) The Borrowers may at any time terminate the Commitments upon (i) the payment in full of all outstanding Loans,
together with accrued and unpaid interest thereon and on any Letters of Credit, (ii) the cancellation and return of all
outstanding Letters of Credit (or alternatively, with respect to each such Letter of Credit, the furnishing to the
Administrative Agent of a cash deposit or a Backstop Letter of Credit equal to 103% of the LC Exposure as of such date),
(iii) the payment in full of the accrued and unpaid fees (including, without limitation all the Issuing Banks fees), and
(iv) the payment in full of all reimbursable expenses and other Obligations together with accrued and unpaid interest
thereon.
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(c) The Administrative Borrower shall notify the Administrative Agent of any election to terminate the Commitments
under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination, specifying
such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise
the Lenders of the contents thereof. Each notice delivered by the Administrative Borrower pursuant to this Section shall be
irrevocable; provided that a notice of termination of the Commitments delivered by the Administrative Borrower may state
that such notice is conditioned upon the effectiveness of other credit facilities or other transactions, in which case such
notice may be revoked by the Administrative Borrower (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied. Any termination of the Commitments shall be permanent.
(d) Upon termination of this Agreement, the Administrative Agent may, if either (i) a claim is asserted or threatened or
a notice of assessment has been received or is threatened for withholding liabilities by any Governmental Authority in either
the United States or Canada arising in connection with this Agreement or the transactions contemplated hereby or (ii) all or
substantially all of the assets of the Borrowers are (or are contemplated to be) liquidated or otherwise disposed of or the
Borrowers have otherwise substantially ceased (or are contemplating ceasing) business operations, the Administrative
Agent may require the Borrowers to obtain a letter of credit for the benefit of the Lenders or pledge cash collateral in an
amount that the Administrative Agent reasonably determines will be sufficient to protect the Administrative Agent and the
Lenders from any liability accrued and unpaid for withholding tax liabilities (actual or contingent) accrued under United
States or Canadian laws during the term of this Agreement.
SECTION 2.10. Repayment and Amortization of Loans; Evidence of Debt. (a) The Borrowers hereby unconditionally,
jointly and severally, promise to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Loan on the Maturity Date, (ii) to the Administrative Agent the then unpaid amount of each Protective
Advance on the earlier of the Maturity Date and demand by the Administrative Agent, (iii) to the Swingline Lender and the
Canadian Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the Maturity Date and the
first date after such Swingline Loan and Canadian Swingline Loan is made that is the 15th or last day of a calendar month and is
at least two Business Days after such Swingline Loan and Canadian Swingline Loan is made; provided that on each date that a
Revolving Loan is made, the Borrowers shall repay all Swingline Loans and Canadian Swingline Loans then outstanding from
the proceeds of Revolving Loans or otherwise, and (iv) to the Administrative Agent the then unpaid principal amount of each
Overadvance on the earlier of the Maturity Date and the 30th day after such Overadvance is made.
(b) At all times that full cash dominion is in effect pursuant to Section 7.3 of the Security Agreement, on each Business
Day, at or before 1:00 p.m., Chicago time, the Administrative Agent shall apply all immediately available funds credited to
the Collection Account first to apply to any Protective Advances and Overadvances that may be outstanding, pro rata, and
second to apply to the Revolving Loans (including Swingline Loans and Canadian Swingline Loans) and to cash
collateralize outstanding LC Exposure (if and to the extent that such cash collateral is required under Section 2.06(j)).
(c) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrowers to such Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time hereunder.
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(d) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan and the date
such Loan is made hereunder, the Class and Type thereof 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 Borrowers to each Lender hereunder and
(iii) the amount of any sum received by the Administrative Agent and the Canadian Funding Bank hereunder for the
account of the Lenders and each Lenders share thereof.
(e) The entries made in the accounts maintained pursuant to paragraph (c) or (d) of this Section shall be prima facie
evidence of the existence and amounts of the obligations recorded therein (absent manifest error); provided that the failure
of any Lender, the Administrative Agent or the Canadian Funding Bank to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrowers to repay the Loans in accordance with the terms of this Agreement.
(f) Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrowers
shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by
such Lender, to such Lender and its successors and assigns) and substantially in the form attached hereto as Exhibit G.
Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment
pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee
named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.11. Repayment of Loans. (a) The Borrowers shall have the right at any time and from time to time to repay any
Borrowing in whole or in part, subject to prior notice in accordance with paragraph (c) of this Section.
(b) Except for Overadvances permitted under Section 2.05, in the event and on such occasion that the total Revolving
Exposure exceeds the lesser of (A) the aggregate Revolving Commitments or (B) the Borrowing Base, the Borrowers shall
repay the Revolving Loans, LC Exposure and/or Swingline Loans in an aggregate amount equal to such excess.
(c) The Borrowers shall notify the Administrative Agent (and, in the case of repayment of a Swingline Loan or
Canadian Swingline Loan, the Swingline Lender or the Canadian Funding Bank, as applicable) by telephone (confirmed by
facsimile) of any repayment hereunder (i) in the case of repayment of a Eurodollar Revolving Borrowing or a CDOR
Revolving Borrowing, not later than 12:00 p.m. (noon), Chicago time, three Business Days before the date of repayment,
(ii) in the case of repayment of an ABR Revolving Borrowing or Canadian Prime Rate Revolving Borrowing, not later than
12:00 p.m. (noon), Chicago time, on the date of repayment or (iii) in the case of repayment of a Swingline Loan or
Canadian Swingline Loan, not later than 1:00 p.m., Chicago time, on the date of repayment. Each such notice shall be
irrevocable and shall specify the repayment date and the principal amount of each Borrowing or portion thereof to be
prepaid; provided that, if a notice of repayment is given in connection with a conditional notice of termination of the
Commitments as contemplated by Section 2.09, then such notice of repayment may be revoked if such notice of termination
is revoked in accordance with Section 2.09. Promptly following receipt of any such notice relating to a Revolving
Borrowing, the Administrative Agent and the Canadian Funding Bank, if applicable, shall advise the Lenders of the
contents thereof. Each repayment of a Revolving Borrowing shall be applied ratably to the Revolving Loans included in the
prepaid Borrowing. Repayments shall be accompanied by accrued interest to the extent required by Section 2.13.
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SECTION 2.12. Fees. (a) The Borrowers agree to pay to the Administrative Agent for the account of each Lender an
unused commitment fee, which shall accrue at the Applicable Rate on the average daily amount of the Available Revolving
Commitment of such Lender during the period from and including the Effective Date to but excluding the date on which the
Lenders Revolving Commitments terminate. Accrued unused commitment fees shall be payable in arrears on the last day of
each March, June, September and December and on the date on which the Revolving Commitments terminate, commencing on
the first such date to occur after the date hereof. All unused commitment fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(b) The Borrowers agree to pay (i) to the Administrative Agent for the account of each Revolving Lender (who is not a
Canadian Lender) a participation fee with respect to its participations in Letters of Credit, which shall accrue (A) with
respect to standby Letters of Credit, at the same Applicable Rate used to determine the interest rate applicable to Eurodollar
Revolving Loans on the average daily amount of such Lenders LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements), and (B) with respect to documentary Letters of Credit, at a rate equal to the Applicable
Rate used to determine the interest rate applicable to Eurodollar Revolving Loans minus 0.25% on the average daily amount
of such Lenders LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements), in each case
during the period from and including the Effective Date to but excluding the later of the date on which such Lenders
Revolving Commitment terminates and the date on which such Revolving Lender ceases to have any LC Exposure, and
(ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum on the average daily amount of
the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the later of the date of termination of the Revolving Commitments and the
date on which there ceases to be any LC Exposure, as well as the Issuing Banks standard fees (including standard fees with
respect to the Existing Letters of Credit) with respect to the issuance, amendment, renewal or extension of any Letter of
Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day
of each March, June, September and December shall be payable on the third Business Day following such last day,
commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date
on which the Revolving Commitments terminate and any such fees accruing after the date on which the Commitments
terminate shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph shall be
payable within 10 days after demand. All participation fees and fronting fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(c) The Borrowers agree to pay to the Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Borrowers and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative
Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of unused commitment fees and
participation fees, to the Lenders. Fees paid shall not be refundable under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear
interest at the Alternate Base Rate and the Loans comprising each Canadian Prime Rate Borrowing (including each Canadian
Swingline Loan) shall bear interest at the Canadian Prime Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest
Period in effect for such Borrowing plus the Applicable Rate.
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(c) The Loans comprising each CDOR Borrowing shall bear interest at the CDOR Rate for the Interest Period in effect
for such Borrowing plus the Applicable Rate.
(d) Each Protective Advance and each Overadvance shall bear interest at the Alternate Base Rate for Revolving Loans
plus 2%.
(e) Notwithstanding the foregoing, during the occurrence and continuance of an Event of Default, the Administrative
Agent or the Required Lenders may, at their option, by notice to the Borrowers (which notice may be revoked at the option
of the Required Lenders notwithstanding any provision of Section 9.02 requiring the consent of each Lender affected
thereby for reductions in interest rates), declare that (i) all Loans shall bear interest at 2% plus the rate otherwise applicable
to such Loans as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount outstanding
hereunder, such amount shall accrue at 2% plus the rate applicable to such fee or other obligation as provided hereunder.
(f) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon
termination of the Commitments; provided that (i) interest accrued pursuant to paragraph (e) of this Section shall be payable
on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving
Loan or Canadian Prime Rate Loan prior to the end of the Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of
any Eurodollar Loan or CDOR Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan
shall be payable on the effective date of such conversion. The Canadian Borrower shall pay to the Canadian Funding Bank,
for the ratable benefit of the Canadian Lenders, in accordance with this Subsection 2.13(f), interest accrued on all Canadian
Prime Rate Loans and CDOR Loans (which shall be payable by the Canadian Funding Bank to the Canadian Lenders on the
next Business Day after payment by the Canadian Borrower).
(g) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by
reference to the Canadian Prime Rate and to the Alternate Base Rate, at times when the Alternate Base Rate is based on the
Prime Rate, shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be
payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate
Base Rate, Adjusted LIBO Rate, LIBO Rate, the CDOR Rate or the Canadian Prime Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest error.
(h) For the purposes of the Interest Act (Canada), the yearly rate of interest to which any rate calculated on the basis of
a period of time different from the actual number of days in the year (360 days, for example) is equivalent to the stated rate
multiplied by the actual number of days in the year (365 or 366, as applicable) and divided by the number of days in the
shorter period (360 days, in the example).
SECTION 2.14. Alternate Rates of Interest. If prior to the commencement of any Interest Period for a Eurodollar
Borrowing or CDOR Borrowing:
(a) the Administrative Agent or the Canadian Funding Bank, as applicable, determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate,
the LIBO Rate or the CDOR Rate, as applicable, for such Interest Period; or
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(b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate, the LIBO Rate or the
CDOR Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or
Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrowers and the Lenders by telephone or facsimile as promptly
as practicable thereafter and, until the Administrative Agent notifies the Borrowers and the Lenders that the circumstances giving
rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Revolving Borrowing to,
or continuation of any Revolving Borrowing as, a Eurodollar Borrowing or CDOR Borrowing, as applicable, shall be ineffective,
and (ii) if any Borrowing Request requests (x) a Eurodollar Revolving Borrowing, such Borrowing shall be made as an ABR
Borrowing, or (y) a CDOR Revolving Borrowing, such Borrowing shall be made as a Canadian Prime Rate Borrowing.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London interbank market any other condition affecting this
Agreement or Eurodollar Loans or CDOR Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan
or CDOR Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or the Issuing
Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable
by such Lender or the Issuing Bank hereunder (whether of principal, interest or otherwise), then the Borrowers will pay to such
Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered. Notwithstanding the foregoing, this
Section 2.15(a) shall not apply to any matter governed by Section 2.17.
(b) If any Change in Law regarding capital requirements has the effect of reducing the rate of return on such Lenders
or the Issuing Banks capital or on the capital of such Lenders or the Issuing Banks holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the
Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lenders
or the Issuing Banks holding company would have achieved but for such Change in Law (taking into consideration such
Lenders or the Issuing Banks policies and the policies of such Lenders or the Issuing Banks holding company with
respect to capital adequacy), then from time to time the Borrowers will pay to such Lender or the Issuing Bank, as the case
may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lenders or the
Issuing Banks holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such
Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section
shall be delivered to the Borrowers. The Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the
amount shown as due on any such certificate within 10 days after receipt thereof.
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(d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section
shall not constitute a waiver of such Lenders or the Issuing Banks right to demand such compensation; provided that the
Borrowers shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs
or reductions incurred more than 180 days prior to the date that such Lender or the Issuing Bank, as the case may be,
notifies the Borrowers of the Change in Law giving rise to such increased costs or reductions and of such Lenders or the
Issuing Banks intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period
of retroactive effect thereof.
SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any principal of any Eurodollar Loan or
CDOR Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Loan or CDOR Loan other than on the last day of the Interest Period applicable thereto,
(c) the failure to borrow, convert, continue or prepay any Eurodollar Loan or CDOR Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.09(c) and is revoked in accordance
therewith), or (d) the assignment of any Eurodollar Loan or CDOR Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrowers pursuant to Section 2.19, then, in any such event, the Borrowers shall
compensate each Lender for the loss, cost and expense attributable to such event, to the extent actually incurred by such Lender.
In the case of a Eurodollar Loan or CDOR Loan, such loss, cost or expense to any Lender shall include the excess, if any, of
(i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate or CDOR Rate, as applicable, that would have been applicable to such Loan, for the period from the date of
such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue,
for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of
any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrowers and shall be conclusive absent manifest error. The Borrowers shall pay such Lender the amount shown as due
on any such certificate within 10 days after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or on account of or in lieu of any obligation of the Loan Parties
hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrowers shall be required to deduct or withhold any Indemnified Taxes or Other Taxes from such payments, then (i) the sum
payable shall be increased as necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made, (ii) the Borrowers shall make such
deductions or withholdings and (iii) the Loan Parties shall pay the full amount deducted or withheld to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Loan Parties shall pay any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.
(c) The Loan Parties shall indemnify the Administrative Agent, each Lender and the Issuing Bank, within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation
of the Loan Parties hereunder (including Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, but only to the extent
that such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Loan Parties by a Lender or the Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest
error.
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(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Loan Parties to a
Governmental Authority, the Loan Parties shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or
other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the
jurisdiction in which any Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments
under this Agreement shall deliver to the Borrowers (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law
(including, without limitation, as set out in Article VIII) or reasonably requested by the Borrowers as will permit such
payments to be made without withholding or at a reduced rate.
(f) If the Administrative Agent or a Lender receives a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Loan Parties or with respect to which the Loan Parties have paid additional amounts pursuant to this
Section 2.17, it shall pay over such refund to the Loan Parties (but only to the extent of indemnity payments made, or
additional amounts paid, by the Loan Parties under this Section 2.17 with respect to the Taxes or Other Taxes giving rise to
such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Loan Parties, upon
the request of the Administrative Agent or such Lender, agree to repay the amount paid over to the Loan Parties (plus any
penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such
Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental
Authority. This Section shall not be construed to require the Administrative Agent or any Lender to make available its Tax
returns (or any other information relating to its taxes which it deems confidential) to the Loan Parties or any other Person.
(g) Notwithstanding anything to the contrary contained in this Section 2.17, the Loan Parties shall not be liable to any
Lender under this Section 2.17 for any payments required to be made as a result of willful acts made by such Lender,
including, without limitation, any breach or inaccuracy of such Lenders representation contained in the last paragraph of
Article VIII hereof.
SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs. (a) The Borrowers shall make each
payment required to be made by them hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 1:00 p.m., Chicago time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent or the Canadian Funding Bank, as applicable, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices at 120 South LaSalle Street, Chicago, Illinois, except payments to be made directly to the
Issuing Bank (including payments under any Existing Letters of Credit), Swingline Lender, Canadian Swingline Lender or the
Canadian Funding Bank as expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03
shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it
for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder
shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day,
and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars (except that payments made under the Canadian Subfacility shall be made in Canadian
dollars). At all times that full cash dominion is in effect pursuant to Section 7.3 of the Security Agreement, solely for purposes of
determining the amount of Loans available for borrowing purposes, checks and cash or other immediately available funds from
collections of items of payment and proceeds of any Collateral shall be applied in whole or in part against the Obligations, on the
day of receipt, subject to actual collection.
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(b) Any proceeds of Collateral received by the Administrative Agent or the Canadian Funding Bank, as applicable,
(i) not constituting either (A) a specific payment of principal, interest, fees or other sum payable under the Loan Documents
(which shall be applied as specified by the Borrowers) or (B) amounts to be applied from the Collection Account when full
cash dominion is in effect (which shall be applied in accordance with Section 2.10(b)) or (ii) after an Event of Default has
occurred and is continuing and the Administrative Agent so elects or the Required Lenders so direct, such funds shall be
applied ratably first, to pay any fees, indemnities, or expense reimbursements including amounts then due to the
Administrative Agent and the Issuing Bank (including with respect to the Existing Letters of Credit) from the Borrowers
(other than in connection with Banking Services), second, to pay any fees or expense reimbursements then due to the
Lenders from the Borrowers (other than in connection with Banking Services), third, to pay interest due in respect of the
Overadvances and Protective Advances, fourth, to pay the principal of the Overadvances and Protective Advances, fifth, to
pay interest then due and payable on the Loans (other than the Overadvances and Protective Advances) ratably, sixth, to
repay principal on the Loans (other than the Overadvances and Protective Advances) and unreimbursed LC Disbursements
ratably, seventh, to pay an amount to the Administrative Agent equal to one hundred three percent (103%) of the aggregate
undrawn face amount of all outstanding Letters of Credit, to be held as cash collateral for such Obligations, eighth, to
payment of any amounts owing with respect to Banking Services, ninth, to the payment of any other Secured Obligation
due to the Administrative Agent or any Lender by the Borrowers, and tenth, payment to Issuing Bank for issuance of
standby L/C in favor of the Administrative Agent in an amount to be determined by the Administrative Agent with respect
to Section 212(13.2) of the Income Tax Act (Canada). Notwithstanding anything to the contrary contained in this
Agreement, unless so directed by the Borrowers, or unless a Default is in existence, neither the Administrative Agent nor
any Lender shall apply any payment which it receives to any Eurodollar Loan or CDOR Loan of a Class, except (a) on the
expiration date of the Interest Period applicable to any such Eurodollar Loan or CDOR Loan or (b) in the event, and only to
the extent, that there are no outstanding ABR Loans or Canadian Prime Rate Loans, as applicable, of the same Class and, in
any event, the Borrowers shall pay the break funding payment required in accordance with Section 2.16. The
Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any
and all such proceeds and payments to any portion of the Secured Obligations.
(c) All payments of principal, interest, LC Disbursements, fees, premiums, reimbursable expenses (including, without
limitation, all reimbursement for fees and expenses pursuant to Section 9.03), and other sums payable under the Loan
Documents, may be paid from the proceeds of Borrowings made hereunder whether made following a request by the
Borrowers pursuant to Section 2.03 or a deemed request as provided in this Section or, if there is not sufficient Availability
to make such payment or if all conditions to Borrowing have not been satisfied, may be deducted from any deposit account
of any Borrower maintained with the Administrative Agent or the Canadian Funding Bank, as applicable. The Borrowers
hereby irrevocably authorize (i) the Administrative Agent or the Canadian Funding Bank, as applicable, to make a
Borrowing for the purpose of paying each payment of principal, interest and fees as it becomes due hereunder or any other
amount due under the Loan Documents and agrees that all such amounts charged shall constitute Loans (including
Swingline Loans, Canadian Swingline Loans and Overadvances, but such a Borrowing may only constitute a Protective
Advance if it is to reimburse costs, fees and expenses as described in Section 9.03) and that all such Borrowings shall be
deemed to have been requested pursuant to Sections 2.03, 2.04 or 2.05, as applicable and (ii) if there is not sufficient
Availability to make such payment or if all conditions to Borrowing have not been satisfied, the Administrative Agent to
charge any deposit account of any Borrower maintained with the Administrative Agent or the Canadian Funding Bank, as
applicable, for each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the
Loan Documents.
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(d) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of
any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and accrued
interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Loans and participations in LC Disbursements of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements;
provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by any Borrower
pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to
any assignee or participant, other than to any Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of
this paragraph shall apply). The Borrowers consent to the foregoing and agree, to the extent they may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against
any Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct
creditor of such Borrower in the amount of such participation.
(e) Unless the Administrative Agent and the Canadian Funding Bank shall have received notice from the Borrowers
prior to the close of business on the date on which any payment is due to the Administrative Agent or the Canadian Funding
Bank for the account of the Lenders or the Issuing Bank hereunder that the Borrowers will not make such payment, the
Administrative Agent and the Canadian Funding Bank may assume that the Borrowers have made such payment on such
date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as
the case may be, the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the
Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent and the Canadian
Funding Bank, as applicable, forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the
Administrative Agent and the Canadian Funding Bank, at the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
(f) If any Lender shall fail to make any payment required to be made by it hereunder, then the Administrative Agent or
the Canadian Funding Bank, as applicable, may, in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent or the Canadian Funding Bank, as applicable, for the account of
such Lender to satisfy such Lenders obligations hereunder until all such unsatisfied obligations are fully paid.
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SECTION 2.19. Mitigation Obligations; Replacement of Lenders. If any Lender requests compensation under Section 2.15
or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any
Lender pursuant Section 2.17, then:
(a) such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if such designation
or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the
future, and (ii) in the sole good faith judgment of such Lender, would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender (and the Borrowers hereby agree to pay all reasonable
costs and expenses incurred by any Lender in connection with any such designation or assignment);
(b) the Borrowers may, at their sole expense and effort, require such Lender (but, in the case of a Lender requesting
compensation under Section 2.15, only if the majority of the other Lenders are not similarly affected) or any Lender that
defaults in its obligation to fund Loans hereunder (herein, a Departing Lender), upon notice to the Departing Lender and
the Administrative Agent within thirty (30) days after such default by the Departing Lender, to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations
under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrowers shall have received the prior written consent of the
Administrative Agent (and if a Revolving Commitment is being assigned, the Issuing Bank), which consent shall not
unreasonably be withheld, (ii) the Departing Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in LC Disbursements, Swingline Loans or Canadian Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section 2.15 or 2.17, such assignment will result in a
reduction in such compensation or payments. A Departing Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to
require such assignment and delegation cease to apply.
SECTION 2.20. Returned Payments. If after receipt of any payment which is applied to the payment of all or any part of the
Obligations, the Administrative Agent, the Canadian Funding Bank or any Lender is for any reason compelled to surrender such
payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set
aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other
reason, then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall
continue in full force as if such payment or proceeds had not been received by the Administrative Agent, the Canadian Funding
Bank or such Lender. The provisions of this Section 2.20 shall be and remain effective notwithstanding any contrary action
which may have been taken by the Administrative Agent, the Canadian Funding Bank or any Lender in reliance upon such
payment or application of proceeds. The provisions of this Section 2.20 shall survive the termination of this Agreement.
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SECTION 2.21. Increase In Commitments. Notwithstanding anything to the contrary contained in this Agreement:
(a) Provided there exists no Default or Event of Default, upon notice to the Administrative Agent (which shall
promptly notify the Lenders), the Borrowers may from time to time request an increase in the aggregate Revolving
Commitments by an amount not less than $10,000,000 for any such increase and not exceeding $75,000,000 for all such
increases; provided that any increase in the aggregate Revolving Commitments pursuant to this Section 2.21 shall not result
in an increase in the amount of any of the subfacilities contained in this Agreement. At the time of sending such notice, the
Borrowers (in consultation with the Administrative Agent) shall specify the time period within which each Lender is
requested to respond (which shall in no event be less than ten (10) Business Days from the date of delivery of such notice to
the Lenders). Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase
its Commitment with respect to Loans and Letters of Credit and, if so, whether by an amount equal to, greater than, or less
than its Pro Rata Share of such requested increase. Any Lender not responding within such time period shall be deemed to
have declined to increase such Commitment. The Administrative Agent shall notify the Borrowers and each Lender of the
Lenders responses to each request made hereunder. To achieve the full amount of a requested increase, the Borrower may,
with the prior consent of the Administrative Agent (which consent shall not be unreasonably withheld), invite additional
lending institutions to become Lenders pursuant to a joinder agreement in form and substance reasonably satisfactory to the
Administrative Agent and its counsel.
(b) If the Revolving Commitments are increased in accordance with this Section, the Administrative Agent and the
Borrowers shall determine the effective date (the Increase Effective Date) and the final allocation of such increase. The
Administrative Agent shall promptly notify the Borrowers and the Lenders of the final allocation of such increase and the
Increase Effective Date. As a condition precedent to such increase, the Borrowers shall deliver to the Administrative Agent
a certificate of each Loan Party dated as of the Increase Effective Date signed by a Financial Officer or otherwise
acceptable officer of such Loan Party (i) certifying and attaching the resolutions adopted by such Loan Party approving or
consenting to such increase, and (ii) in the case of the Borrowers, certifying that, before and after giving effect to such
increase, (A) the representations and warranties contained in Article III and the other Loan Documents are true and correct
in all material respects on and as of the Increase Effective Date, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date, and
(B) no Default or Event of Default exists.
SECTION 2.22. Adjustments of Advance Rates and Reserves; Permitted Acquisition Eligibility and Reporting. (a) The
Administrative Agent may from time to time, in its Permitted Discretion, reduce the advance rates used in the calculation of the
Borrowing Base or adjust or establish one or more Collateral Reserves against the Borrowing Base or Exposure Reserves against
Availability, with such changes to be effective (A) if no Default or Event of Default has occurred and is continuing, three
(3) days after delivery of notice thereof to the Borrowers and the Lenders, and (B) after the occurrence and during the
continuation of a Default or an Event of Default, immediately. Notwithstanding the foregoing, (i) the Administrative Agent will
not use a single basis for adjustment to both establish new Reserves and to reduce advance rates, (ii) the size of any required
Reserves and/or advance rate reductions will be reasonably related to the Administrative Agents and the Lenders increased risk
with respect to the basis for adjustment, and (iii) no single Reserve will count against both the Borrowing Base and Availability.
The Administrative Agent may use its Permitted Discretion to determine whether future Reserves should constitute Collateral
Reserves or Exposure Reserves and may from time to time in its Permitted Discretion determine that a Reserve should be
recategorized from a Collateral Reserve or Exposure Reserve to the other type of Reserve hereunder.
(b) Notwithstanding anything to the contrary contained in this Agreement, Accounts and Inventory acquired in
connection with a Permitted Acquisition that is permitted pursuant to the terms of this Agreement may be included as
Eligible Accounts and Eligible Inventory without the requirement of a field audit or other appraisal thereof by the
Administrative Agent to the extent that (x) such Accounts and Inventory meet the requirements of the definitions of Eligible
Accounts and Eligible Inventory, respectively, and (y) in the case of Accounts, the Accounts are owed by Account Debtors
that already have Accounts included in the calculation of Eligible Accounts, and, in the case of Inventory, the type of
Inventory acquired is already a type of Inventory sold by the Borrowers and entered as an SKU in the Borrowers inventory
system. Notwithstanding anything to the contrary contained in the definition of Permitted Acquisition or in Section 6.04,
the Borrowers shall not be required to make any prior reports to the Administrative Agent or the Lenders in connection with
Permitted Acquisitions made by the Borrowers in an aggregate amount during the term of this Agreement not to exceed
$5,000,000.
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ARTICLE III
Representations and Warranties
Each Loan Party represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Loan Parties and each of its Subsidiaries is duly organized, validly
existing and subsisting and in good standing under the laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, would
not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
SECTION 3.02. Authorization; Enforceability. The Transactions are within each Loan Partys corporate powers and have
been duly authorized by all necessary corporate and, if required, stockholder action. The Loan Documents to which each Loan
Party is a party have been duly executed and delivered by such Loan Party and constitute a legal, valid and binding obligation of
such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors rights generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and
are in full force and effect and except for filings necessary to perfect Liens created pursuant to the Loan Documents, (b) will not
violate any Requirement of Law applicable to any Loan Party or any of its Subsidiaries, (c) will not violate or result in a default
under any indenture, agreement or other instrument binding upon any Loan Party or any of its Subsidiaries, or give rise to a right
thereunder to require any payment to be made by any Loan Party or any of its Subsidiaries, except for such violations or defaults
which would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, and (d) will not
result in the creation or imposition of any Lien on any asset of any Loan Party or any of its Subsidiaries, except Liens created
pursuant to the Loan Documents.
SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The Borrowers have heretofore furnished to the
Lenders Holdings consolidated balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the
fiscal year ended December 31, 2004, reported by PricewaterhouseCoopers, independent public accountants, and (ii) as of and
for the fiscal quarter and the portion of the fiscal year ended June 30, 2005, certified by its chief financial officer. Such financial
statements present fairly, in all material respects, the financial position and results of operations and cash flows of Holdings and
its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above.
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(b) No event, change or condition has occurred that has had, or would reasonably be expected to have, a Material
Adverse Effect, since December 31, 2004.
SECTION 3.05. Properties. (a) As of the date of this Agreement, Schedule 3.05(a) sets forth the address of each parcel of
real property that is owned or leased by each Loan Party. Each of such leases and subleases is valid and enforceable in
accordance with its terms and is in full force and effect, and no default by any Loan Party under any such lease or sublease
exists. Each of the Loan Parties and its Subsidiaries has good and indefeasible title to, or valid leasehold interests in, all its real
and personal property, free of all Liens other than those permitted by Section 6.02.
(b) Each Loan Party and its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents
and other intellectual property necessary to its business as currently conducted the absence of which would reasonably be
expected to have a Material Adverse Effect, a correct and complete list of which, as of the date of this Agreement, is set
forth on Schedule 3.05(b), and the use thereof by the Loan Parties and its Subsidiaries does not infringe in any material
respect upon the rights of any other Person, and except as set forth on Schedule 3.05, the Loan Parties rights thereto are
not, as of the date of this Agreement, subject to any licensing agreement or similar arrangement.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of any Loan Party, threatened against or affecting the
Loan Parties or any of their Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect
(other than the Disclosed Matters) or (ii) that involve this Agreement or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any other matters that, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse Effect, (i) no Loan Party nor any of its Subsidiaries has
received notice of any claim with respect to any Environmental Liability or knows of any basis for any Environmental
Liability and (ii) no Loan Party nor any of its Subsidiaries (1) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required under any Environmental Law or (2) has
become subject to any Environmental Liability (including any property now or previously in its charge, management or
control).
(c) Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually
or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.
SECTION 3.07. Compliance with Laws and Agreements. Except with respect to matters governed by Section 3.09, each
Loan Party and its Subsidiaries is in compliance with all Requirements of Law applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except in each case where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 3.08. Investment and Holding Company Status. No Loan Party nor any of its Subsidiaries is (a) an investment
company as defined in, or subject to regulation under, the Investment Company Act of 1940 or (b) a holding company as
defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935.
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SECTION 3.09. Taxes. Each Loan Party and its Subsidiaries has timely filed or caused to be filed all material federal
income tax returns and reports (including the Canadian Borrowers Canadian Tax returns) required to have been filed after the
Petition Date and has paid or caused to be paid all material Taxes required to have been paid by it after the Petition Date, except
(a) Taxes that are being contested in good faith by appropriate proceedings and for which such Loan Party or such Subsidiary, as
applicable, has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to do so
could not be expected to result in a Material Adverse Effect. To the knowledge of the Loan Parties, no tax liens, other than the
British Columbia Tax Lien, have been filed after the Petition Date and no material claims have been asserted with respect to any
such taxes after the Petition Date. The Borrowers have provided the Administrative Agent with true and complete copies of the
Canadian federal income tax returns of the Canadian Borrower for the years 2003 and 2004. The British Columbia Tax Lien
relates to tobacco tax liabilities that are accounted for in the monthly computation of the Canadian Tobacco Tax Reserve.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with
all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect. No Lien has arisen, choate or inchoate, in respect of any Loan Party or its property in connection with
any Plan. Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and its terms,
including timely filing of all reports and funding as required under the Code or ERISA. Except as set forth on Schedule 3.10 no
Plan has any material unfunded pension liability.
SECTION 3.11. Disclosure. The Borrowers have disclosed to the Lenders all agreements, instruments and corporate or
other restrictions to which any Borrower or any Subsidiary is subject, and all other matters known to it, that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.12. Material Agreements. All material agreements and contracts to which any Loan Party is a party or is bound
as of the date of this Agreement are listed on Schedule 3.12. Except for such defaults which would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect, no Loan Party is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any material agreement to which it is
a party or (ii) any agreement or instrument evidencing or governing Indebtedness.
SECTION 3.13. Solvency. (a) Immediately after the consummation of the Transactions to occur on the Effective Date,
(i) the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent
or otherwise; (ii) the present fair saleable value of the assets of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (iii) each Loan Party will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is
proposed to be conducted after the Effective Date. In computing the amount of contingent or unliquidated liabilities at any time,
such liabilities shall be computed at the amount that, in the light of all facts and circumstances then existing, represents the
amount that can reasonably be expected to become actual or matured liabilities.
(b) No Loan Party believes that it or any of its Subsidiaries will, incur debts beyond its ability to pay such debts as they
mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of
the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.
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SECTION 3.14. Insurance. Schedule 3.14 sets forth a description of all insurance maintained by or on behalf of the Loan
Parties and the Subsidiaries as of the Effective Date. As of the Effective Date, all premiums in respect of such insurance have
been paid. The Borrowers believe that the insurance maintained by or on behalf of the Borrowers and the Subsidiaries is
adequate.
SECTION 3.15. Capitalization and Subsidiaries. Schedule 3.15 sets forth, as of the Effective Date, (a) a correct and
complete list of the name and relationship to each Borrower of each and all of such Borrowers active Subsidiaries, (b) a true and
complete listing of each class of each Borrowers authorized Equity Interests, of which all of such issued and outstanding shares
are validly issued and outstanding, fully paid and non-assessable, and, in the case of each Borrower other than Holdings, owned
beneficially and of record by the Persons identified on Schedule 3.15, and (c) the type of entity of each Borrower and each of its
Subsidiaries. All of the issued and outstanding Equity Interests owned by any Loan Party have been (to the extent such concepts
are relevant with respect to such ownership interests) duly authorized and issued and are fully paid and non-assessable.
SECTION 3.16. Security Interest in Collateral. The provisions of this Agreement and the other Loan Documents create
legal and valid Liens on all the Collateral in favor of the Administrative Agent, for the benefit of the Administrative Agent and
the Lenders. For Liens in Collateral for which perfection is governed by the UCC or filing with the United States Copyright
Office, such Liens shall constitute continuing perfected Liens on the Collateral, securing the Secured Obligations, upon (a) filing
of a financing statement under the UCC and the completion of the filings and other necessary actions, (b) the delivery to the
Administrative Agent of all Collateral consisting of instruments and certificated securities, (c) the execution of control
agreements with respect to investment property not in certificated form and deposit accounts and (d) appropriate filings with the
United States Copyright Office. Such security interest shall be prior to all other Liens on the Collateral except for (a) Permitted
Encumbrances or Liens otherwise permitted under this Agreement, to the extent any such Permitted Encumbrances or other
Liens would have priority over the Liens in favor of the Administrative Agent pursuant to any applicable law, and (b) Liens
perfected only by possession (including possession of any certificate of title) to the extent the Administrative Agent has not
obtained or does not maintain possession of such Collateral.
SECTION 3.17. Labor Disputes. Except for matters that, individually or in the aggregate would not reasonably be expected
to have a Material Adverse Effect, (a) as of the Effective Date, there are no strikes, lockouts or slowdowns against any Loan
Party or any Subsidiary pending or, to the knowledge of the Borrowers, threatened, (b) the hours worked by and payments made
to employees of the Loan Parties and the Subsidiaries have not been in violation of the Fair Labor Standards Act or any other
applicable federal, state, provincial, local or foreign law dealing with such matters, and (c) all payments due from any Loan Party
or any Subsidiary, or for which any claim may be made against any Loan Party or any Subsidiary, on account of wages and
employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of the Loan Party
or such Subsidiary.
SECTION 3.18. Affiliate Transactions. Except as set forth on Schedule 3.18, as of the date of this Agreement, there are no
existing or proposed agreements, arrangements, understandings, or transactions involving more than $250,000 individually or
$1,000,000 in the aggregate between any Loan Party and any of the officers, members, managers, directors, stockholders
(holding 20% or more of equity interests in the case of Holdings), parents, other interest holders (holding 20% or more of equity
interests in the case of Holdings), employees, or Affiliates (other than Subsidiaries) of any Loan Party or any members of their
respective immediate families, and none of the foregoing Persons are directly or indirectly indebted to or have any direct or
indirect ownership, partnership, or voting interest in any Affiliate of any Loan Party or any Person with which any Loan Party
has a business relationship or which competes with any Loan Party.
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SECTION 3.19. Common Enterprise. The successful operation and condition of each of the Loan Parties is dependent on
the continued successful performance of the functions of the group of the Loan Parties as a whole and the successful operation of
each of the Loan Parties is dependent on the successful performance and operation of each other Loan Party. Each Loan Party
expects to derive benefit (and its board of directors or other governing body has determined that it may reasonably be expected to
derive benefit), directly and indirectly, from (i) successful operations of each of the other Loan Parties and (ii) the credit
extended by the Lenders to the Borrowers hereunder, both in their separate capacities and as members of the group of companies.
Each Loan Party has determined that execution, delivery, and performance of this Agreement and any other Loan Documents to
be executed by such Loan Party is within its purpose, will be of direct and indirect benefit to such Loan Party, and is in its best
interest.
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of
Credit hereunder shall not become effective until the first date on which each of the following conditions is satisfied (or waived
in accordance with Section 9.02):
(a) Credit Agreement and Loan Documents. The Administrative Agent (or its counsel) shall have received (i) from
each party hereto either (A) a counterpart of this Agreement signed on behalf of such party or (B) written evidence
satisfactory to the Administrative Agent (which may include facsimile transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement and (ii) duly executed copies of the other Loan
Documents and such other certificates, documents, instruments and agreements as the Administrative Agent shall
reasonably request in connection with the transactions contemplated by this Agreement and the other Loan Documents,
including any promissory notes requested by a Lender pursuant to Section 2.10 payable to the order of each such requesting
Lender and a written opinion of the Loan Parties counsel, addressed to the Administrative Agent, the Issuing Bank and the
Lenders in substantially the form of Exhibit B.
(b) Financial Statements, Projections and Canadian Tax Returns. The Administrative Agent shall have received
(i) audited consolidated financial statements of Holdings for the December 31, 2003 and 2004 fiscal years, (ii) unaudited
interim consolidated financial statements of Holdings for each fiscal quarter ended after the date of the latest applicable
financial statements delivered pursuant to clause (i) of this paragraph as to which such financial statements are available
including the period ended June 30, 2005, (iii) satisfactory projections for the period commencing with the beginning of
Borrowers fiscal year 2006 through the end of the fiscal year ending December 31, 2010, and (iv) copies of the federal and
provincial (if applicable) Canadian income Tax returns of the Canadian Borrower for Fiscal Years 2003 and 2004.
(c) Closing Certificates; Certified Certificate of Incorporation; Good Standing Certificates; etc. The Administrative
Agent shall have received (i) a certificate of each Loan Party, dated the Effective Date and executed by its Secretary,
Assistant Secretary or other Officer, which shall (A) certify the resolutions of its Board of Directors, members or other body
authorizing the execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by name and
title and bear the signatures of the Financial Officers and any other officers of such Loan Party authorized to sign the Loan
Documents to which it is a party, and (C) contain appropriate attachments, including the certificate or articles of
incorporation or organization of each Loan Party certified by the relevant authority of the jurisdiction of organization of
such Loan Party and a true and correct copy of its by-laws or operating, management or partnership agreement, and (ii) a
long form good standing certificate or certificate of status for each Loan Party from its jurisdiction of organization.
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(d) No Default Certificate. The Administrative Agent shall have received a certificate, signed by a Financial Officer of
each Borrower and each other Loan Party, on the initial Borrowing date (i) stating that no Default has occurred and is
continuing, (ii) stating that the representations and warranties contained in Article III are true and correct as of such date,
and (iii) certifying any other factual matters as may be reasonably requested by the Administrative Agent.
(e) Fees. The Lenders and the Administrative Agent shall have received (i) all fees required to be paid, and (ii) all
expenses for which invoices have been presented (including the reasonable fees and expenses of legal counsel), on or before
the Effective Date. All such amounts will be paid with proceeds of Loans made on the Effective Date and will be reflected
in the funding instructions given by the Borrowers to the Administrative Agent on or before the Effective Date.
(f) Lien Searches. The Administrative Agent shall have received the results of a recent lien search in each of the
jurisdictions where assets of the Loan Parties are located, and such search shall reveal no liens on any of the assets of the
Loan Parties except for liens permitted by Section 6.02 or discharged on or prior to the Effective Date pursuant to a pay-off
letter or other documentation satisfactory to the Administrative Agent.
(g) Pay-Off Letter. The Administrative Agent shall have received satisfactory pay-off letters for all existing
Indebtedness to be repaid from the proceeds the initial Borrowing, confirming that all Liens upon any of the property of the
Loan Parties constituting Collateral will be terminated concurrently with such payment and all letters of credit issued or
guaranteed as part of such Indebtedness shall have been cash collateralized, supported by a Letter of Credit or rolled over as
an Existing Letter of Credit.
(h) Funding Accounts. The Administrative Agent shall have received a notice setting forth the deposit account of the
Borrowers and the Canadian deposit account of the Canadian Borrower (domiciled in Canada) (the Funding Account) to
which the Administrative Agent, Canadian Funding Bank or any Lender is authorized by the Borrowers and the Canadian
Borrower to transfer the proceeds of any Borrowings requested or authorized pursuant to this Agreement. Any reference to
the Funding Accounts in this Agreement, in respect of Canadian Borrowings, shall mean the Canadian Borrowers deposit
account domiciled in Canada.
(i) Collateral Access and Control Agreements. The Administrative Agent shall have received each (i) Collateral Access
Agreement required to be provided pursuant to Section 4.13 of the Security Agreement and (ii) Deposit Account Control
Agreements required to be provided pursuant to Section 4.14 of the Security Agreement.
(j) Solvency. The Administrative Agent shall have received a solvency certificate, in form and substance reasonably
satisfactory to the Administrative Agent, from a Financial Officer.
(k) Borrowing Base Certificate. The Administrative Agent shall have received a Borrowing Base Certificate which
calculates the Borrowing Base as of a mutually agreed Business Day, which Business Day shall be as recent as practicable
and in no event shall be more than 15 days prior to the Effective Date.
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(l) Pledged Stock; Stock Powers; Pledged Notes. The Administrative Agent shall have received (i) the certificates
representing the shares of Capital Stock pledged pursuant to the Security Agreement, together with an undated stock power
for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note
(if any) pledged to the Administrative Agent pursuant to the Security Agreement endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank) by the pledgor thereof.
(m) Filings, Registrations and Recordings. Each document (including any Uniform Commercial Code or PPSA
financing statement) required by the Collateral Documents or under law or reasonably requested by the Administrative
Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the
Lenders, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with
respect to Liens expressly permitted by Section 6.02), shall be in proper form for filing, registration or recordation.
(n) Insurance. The Administrative Agent shall have received evidence of insurance coverage in form, scope, and
substance reasonably satisfactory to the Administrative Agent and otherwise in compliance with the terms of Section 5.09
and Section 4.12 of the Security Agreement.
(o) Letter of Credit Application. The Administrative Agent shall have received a properly completed letter of credit
application if the issuance of a Letter of Credit will be required on the Effective Date.
(p) Consents and Approvals. The Administrative Agent shall have received evidence from the Borrowers that all
governmental and third party consents and approvals necessary in connection with the Transactions and the continuing
operations of the Borrowers and their Subsidiaries shall have been obtained on satisfactory terms and shall be in full force
and effect.
(q) Other Documents. The Administrative Agent shall have received such other documents as the Administrative
Agent or the Issuing Bank may have reasonably requested.
The Administrative Agent shall notify the Borrowers and the Lenders of the Effective Date, and such notice shall be conclusive
and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to
Section 9.02) at or prior to 3:00 p.m., Chicago time, on October 15, 2005 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on the occasion of any Borrowing, and
of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following
conditions:
(a) The representations and warranties of the Borrowers set forth in this Agreement shall be true and correct in all
material respects on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable (except in the case of representations and warranties that relate by their terms to a specified
date).
(b) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.
(c) After giving effect to any Borrowing or the issuance of any Letter of Credit, Availability is not less than zero.
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Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a
representation and warranty by the Borrowers on the date thereof as to the matters specified in paragraphs (a), (b) and (c) of this
Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable
hereunder shall have been paid in full and all Letters of Credit shall have expired or terminated (or been cash collateralized or
backstopped in a manner reasonably satisfactory to the Administrative Agent) and all LC Disbursements shall have been
reimbursed, each Loan Party executing this Agreement covenants and agrees, jointly and severally with all of the Loan Parties,
with the Lenders that:
SECTION 5.01. Financial Statements; Borrowing Base and Other Information. The Borrowers will furnish to the
Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of Holdings, its audited consolidated balance sheet and related
statements of operations, stockholders equity and cash flows (all with segment information for Canadian operations
consistent with the 10-K filed by Holdings with the SEC for that fiscal year) as of the end of and for such year, setting forth
in each case in comparative form the figures for the previous fiscal year, all reported on by independent public accountants
of recognized national standing (without a going concern or like qualification or exception and without any qualification
or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP, followed by any management letter prepared by said accountants;
(b) within 45 days after the end of each of the first three fiscal quarters of Holdings, its consolidated balance sheet and
related statements of operations and cash flows (all with segment information for Canadian operations, consistent with the
10-Q filed by Holdings with the SEC for that fiscal quarter) as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods
of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers
as presenting fairly in all material respects the financial condition and results of operations of Holdings and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year-end audit adjustments and the
absence of footnotes;
(c) within 30 days after the end of each fiscal month of Holdings, its consolidated balance sheet and related statements
of operations and cash flows as of the end of and for such fiscal month and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in
all material respects the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP (on a FIFO basis), subject to normal year-end audit adjustments and the
absence of footnotes;
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(d) concurrently with any delivery of financial statements under clause (a) or (b) or (c) above, a certificate of a
Financial Officer of the Administrative Borrower in substantially the form of Exhibit D (i) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.13 (if
such compliance has been triggered pursuant to the terms of this Agreement) and (iii) stating whether any change in GAAP
or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 and, if
any such change has occurred, specifying the effect of such change on the financial statements accompanying such
certificate;
(e) within 45 days of the filing thereof, copies of the Canadian Borrowers federal and provincial (if applicable)
Canadian income Tax returns for the Fiscal Year to which such financial statements in clause (a) apply;
(f) as soon as available, but in any event not more than 30 days following the end of each fiscal year of the Borrowers,
a copy of the plan and forecast (including a projected consolidated balance sheet, income statement and funds flow
statement) of Holdings and its Subsidiaries on a consolidated basis for each month of the upcoming fiscal year (the
Projections) in form reasonably satisfactory to the Administrative Agent;
(g) as soon as available but in any event within 20 days of the end of each calendar month, and at such other times as
may be necessary to re-determine availability of Advances hereunder or as may be requested by the Administrative Agent,
as of the period then ended, a Borrowing Base Certificate and supporting information in connection therewith, together with
any additional reports with respect to the Borrowing Base as the Administrative Agent may reasonably request; and the
PP&E Component of the Borrowing Base shall be updated (i) from time to time upon receipt of periodic valuation updates
received from the Administrative Agents asset valuation experts, (ii) concurrent with the sale or commitment to sell any
material assets constituting part of the PP&E Component, (iii) in the event such assets constituting a material part of the
PP&E Component are idled for any reason other than routine maintenance or repairs for a period in excess of ten
(10) consecutive days, or (iv) in the event that the value of such assets is otherwise impaired, as determined in the
Administrative Agents Permitted Discretion; provided that (A) at the option of the Borrowers at any time or (B) at the
request of the Administrative Agent in the event that either (x) an Event of Default has occurred and is continuing or
(y) Availability is less than $35,000,000 (subject to Availability increases to more than $40,000,000 as set forth in
Section 6.13), the reports required pursuant to this clause will be delivered by Wednesday of each calendar week (for the
calendar week most recently ended) or more frequently;
(h) as soon as available but in any event within 20 days of the end of each calendar month and at such other times as
may be reasonably requested by the Administrative Agent in its Permitted Discretion, as of the period then ended, to the
extent practicable delivered electronically in a text formatted file:
(i) a detailed aging of the Borrowers Accounts (1) including all invoices aged by due date (with notation of the
terms offered) and (2) reconciled to the Borrowing Base Certificate delivered as of such date prepared in a manner
reasonably acceptable to the Administrative Agent, together with a summary specifying the name and balance due for
each Account Debtor;
(ii) a schedule detailing the Borrowers Inventory, in form reasonably satisfactory to the Administrative Agent,
(1) by location (showing Inventory in transit, any Inventory located with a third party under any consignment, bailee
arrangement, or warehouse agreement), by class and by product type, which Inventory shall be valued at the lower of
cost (determined on a first-in, first-out basis) or market and adjusted for Reserves as the Administrative Agent has
previously indicated to the Borrowers are deemed by the Administrative Agent to be appropriate, (2) including a report
of any variances or other results of Inventory counts performed by the Borrowers since the last Inventory schedule
(including information regarding sales or other reductions, additions, returns, credits issued by Borrowers and
complaints and claims made against the Borrowers), and (3) reconciled to the Borrowing Base Certificate delivered as
of such date;
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(iii) a worksheet of calculations prepared by the Administrative Borrower to determine Eligible Accounts,
Eligible Inventory and Eligible Equipment, such worksheets detailing the Accounts, Inventory and Equipment
excluded from Eligible Accounts, Eligible Inventory and Eligible Equipment and the reason for such exclusion; and
(iv) a reconciliation of the Borrowers Accounts and Inventory between the amounts shown in the Borrowers
general ledger and financial statements and the reports delivered pursuant to clauses (i) and (ii) above;
provided that (A) at the option of the Borrowers at any time or (B) at the request of the Administrative Agent in the event that
either (x) an Event of Default has occurred and is continuing or (y) Availability is less than $35,000,000 (subject to Availability
increases to more than $40,000,000 as set forth in Section 6.13), the reports required pursuant to this clause will be delivered by
Wednesday of each calendar week (for the calendar week most recently ended) or more frequently, provided that, with respect to
the reports required in clauses (i) and (ii) above, weekly reporting shall include only summary schedules (and shall not include
the report of variances required in clause (ii)(2) above) unless the detailed schedules are specifically requested by the
Administrative Agent, with the detailed schedules continuing on a monthly basis, and the reconciliation required under clause
(iv) above shall been delivered at all times on a monthly basis;
(i) as soon as available but in any event within 20 days of the end of each calendar month, as of the month then ended,
a schedule and aging of the Borrowers accounts payable, to the extent practicable delivered electronically in a text
formatted file;
(j) promptly upon the Administrative Agents reasonable request:
(i) copies of invoices in connection with the invoices issued by any Borrower in connection with any Accounts,
credit memos, shipping and delivery documents, and other information related thereto;
(ii) copies of purchase orders, invoices, and shipping and delivery documents in connection with any Inventory or
Equipment purchased by any Loan Party;
(iii) a schedule detailing the Borrowers Equipment comprising the PP&E Component, in form satisfactory to the
Administrative Agent, by location and type; and
(iv) a schedule detailing the balance of all intercompany accounts of the Loan Parties;
(k) promptly upon the Administrative Agents reasonable request, as of the period then ended, copies of the
Borrowers sales journals, cash receipts journals (identifying trade and non-trade cash receipts) and debit memo/credit
memo journals;
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(l) promptly upon the Administrative Agents reasonable request, copies of certain income Tax returns filed by any
Loan Party with the U.S. Internal Revenue Service or the Canada Revenue Agency, to be provided 45 days after filing, if
requested;
(m) promptly upon the Administrative Agents request, a certificate of good standing or certificate of status, as
applicable, for each Loan Party from the appropriate governmental officer in its jurisdiction of incorporation, formation, or
organization;
(n) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and
other materials filed by any Borrower or any Subsidiary with the Securities and Exchange Commission, Securities
Commission of any Province of Canada or any Governmental Authority succeeding to any or all of the functions of said
Commission(s), or with any national securities exchange, or distributed by any Borrower to its shareholders generally, as
the case may be;
(o) concurrently with the delivery of monthly Borrowing Base Certificates pursuant to this Section 5.01 (and once
monthly in the event that Borrowing Base Certificates are delivered more frequently than monthly hereunder), a copy of the
prior months account statement provided by the depository bank to the Borrowers for any bank account that contains
amounts in trust for the payment of Canadian tobacco tax liabilities; and
(p) promptly following any request therefor, such other information regarding the operations, business affairs and
financial condition of any Borrower or any Subsidiary, or compliance with the terms of this Agreement, as the
Administrative Agent may reasonably request.
SECTION 5.02. Notices of Material Events. The Borrowers will furnish to the Administrative Agent prompt written notice
of any of the following of which any Borrower acquires knowledge:
(a) the occurrence of any Default;
(b) receipt of any notice of any governmental investigation or any litigation or proceeding commenced or threatened
against any Loan Party that (i) seeks damages in excess of $5,000,000, (ii) seeks injunctive relief, (iii) is asserted or
instituted against any Plan, its fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan Party, (v) alleges the
violation of any law regarding, or seeks remedies in connection with, any Environmental Laws with damages in excess of
$5,000,000, or (vi) contests any tax, fee, assessment, or other governmental charge in excess of $5,000,000;
(c) any Lien (other than Permitted Encumbrances) or claim made or asserted against any of the Collateral in an amount
in excess of $500,000;
(d) any loss, damage, or destruction to the Collateral in the amount of $1,000,000 or more per occurrence, whether or
not covered by insurance (for the avoidance of any doubt, this provision excludes workers compensation, auto and general
liability claims);
(e) any and all default notices received under or with respect to any leased location or public warehouse where
Collateral is located;
(f) the fact that a Loan Party has entered into a Swap Agreement or an amendment to a Swap Agreement, together with
copies of all agreements evidencing such Swap Agreement or amendments thereto (which shall be delivered within two
Business Days);
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(g) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could
reasonably be expected to result in liability of any Borrower and its Subsidiaries in an aggregate amount exceeding
$2,500,000; and
(h) any other development that results in, or would reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section (other than notices under clause (f) unless reasonably requested by the Administrative
Agent) shall be accompanied by a statement of a Financial Officer or other executive officer of the Administrative Borrower
setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with
respect thereto.
SECTION 5.03. Existence; Conduct of Business. Each Loan Party will, and will cause each Subsidiary (other than inactive
Subsidiaries that have no material assets) to, (a) do or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence and the rights, qualifications, licenses, permits, franchises, governmental authorizations,
intellectual property rights, licenses and permits material to the conduct of its business, and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted, provided that the foregoing shall not prohibit any
merger, amalgamation, consolidation, liquidation or dissolution permitted under Section 6.03, and (b) carry on and conduct its
business in substantially the same fields of enterprise as it is presently conducted and in substantially the same manner as it is
presently conducted except where a failure to do so would not reasonably be expected to have a Material Adverse Effect.
SECTION 5.04. Payment of Obligations. Each Loan Party will, and will cause each Subsidiary to, pay or discharge all
Material Indebtedness and all other material liabilities and obligations, including Taxes, before the same shall become delinquent
or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings,
(b) such Loan Party or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with
GAAP and (c) none of the Collateral becomes subject to forfeiture or loss as a result of the contest.
SECTION 5.05. Maintenance of Properties. Each Loan Party will, and will cause each Subsidiary to, keep and maintain all
property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, except in
each case where a failure to do so would not reasonably be expected to have a Material Adverse Effect.
SECTION 5.06. Books and Records; Inspection Rights. Each Loan Party will, and will cause each Subsidiary to, (i) keep
proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to
its business and activities and (ii) permit any representatives designated by the Administrative Agent (including employees of the
Administrative Agent or any consultants, accountants, lawyers and appraisers retained by the Administrative Agent), upon
reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and (in the presence of such Loan Party) independent accountants, all
at such reasonable times and as often as reasonably requested. Any Lender may participate, at such Lenders own expense, in any
examination conducted by the Administrative Agent. The Loan Parties acknowledge that the Administrative Agent, after
exercising its rights of inspection, may prepare and distribute to the Lenders certain Reports pertaining to the Loan Parties assets
for internal use by the Administrative Agent and the Lenders.
SECTION 5.07. Compliance with Laws. Except with respect to matters governed by Section 5.04, each Loan Party will,
and will cause each Subsidiary to, comply with all Requirements of Law applicable to it or its property, except where the failure
to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.
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SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be used only to finance the working capital needs of the
Borrowers in the ordinary course of business, to refinance certain existing Indebtedness and for other general business purposes
of the Borrowers. No part of the proceeds of any Loan and no Letter of Credit will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.
SECTION 5.09. Insurance. Each Loan Party will, and will cause each Subsidiary to, maintain with financially sound and
reputable carriers having a financial strength rating of at least A+ by A.M. Best Company insurance in such amounts and against
such risks (including loss or damage by fire and loss in transit; theft, burglary, pilferage, larceny, embezzlement, and other
criminal activities; business interruption; and general liability) and such other hazards, as is customarily maintained by
companies of established repute engaged in the same or similar businesses operating in the same or similar locations. The
Borrowers will furnish to the Administrative Agent, upon request, information in reasonable detail as to the insurance so
maintained.
SECTION 5.10. Casualty and Condemnation. The Borrowers (a) will furnish to the Administrative Agent prompt written
notice of any casualty or other insured damage to any material portion of the Collateral or the commencement of any action or
proceeding for the taking of any material portion of the Collateral or interest therein under power of eminent domain or by
condemnation or similar proceeding and (b) will ensure that the Net Proceeds of any such event (whether in the form of
insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with the applicable provisions of
this Agreement and the Collateral Documents
SECTION 5.11. Appraisals and Field Examinations. At any time that the Administrative Agent reasonably requests, the
Borrowers and the Subsidiaries will provide the Administrative Agent with appraisals or updates thereof of their Inventory and
Equipment and other Collateral from an appraiser selected and engaged by the Administrative Agent, and prepared on a basis
satisfactory to the Administrative Agent, such appraisals and updates to include, without limitation, information required by
applicable law and regulations; provided, however, that (a) if no Default or Event of Default has occurred and is continuing,
(i) only one such appraisal per calendar year of Inventory and one such appraisal per calendar year of Equipment shall be at the
sole expense of the Loan Parties and (ii) only two field examinations of the Collateral and business operations of the Borrowers
per calendar year shall be at the sole expense of the Loan Parties, and (b) upon the occurrence and during the continuation of a
Default or an Event of Default, the Administrative Agent may conduct as many appraisals and field examinations as it deems
appropriate in its Permitted Discretion and each such appraisal or field examination shall be at the sole expense of the Loan
Parties.
SECTION 5.12. Depository Banks. Each Borrower and each Subsidiary (other than inactive Subsidiaries) will maintain one
or more of the Lenders or another financial institution reasonably acceptable to the Administrative Agent as its principal
depository bank, including for the maintenance of operating, administrative, cash management, collection activity, and other
deposit accounts for the conduct of its business.
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SECTION 5.13. Additional Collateral; Further Assurances. (a) Subject to applicable law, each Borrower and each
Subsidiary that is a Loan Party shall cause each of its domestic and Canadian Subsidiaries formed or acquired after the date of
this Agreement in accordance with the terms of this Agreement to become a Loan Party by executing the Joinder Agreement set
forth as Exhibit E-1 hereto (the Loan Party Joinder Agreement). Notwithstanding the foregoing, if the newly formed or
acquired Subsidiary has assets that are to be included in the Borrowing Base, such Subsidiary shall become a Borrower
hereunder by executing the Joinder Agreement set forth as Exhibit E-2 hereto (the Borrower Joinder Agreement and
collectively with the Loan Party Joinder Agreement, the Joinder Agreements, and each individually a Joinder Agreement).
Upon execution and delivery thereof, each such Person (i) shall automatically become either a Loan Guarantor or a Borrower, as
appropriate in the reasonable judgment of the Administrative Agent, hereunder and thereupon shall have all of the rights,
benefits, duties, and obligations in such capacity under the Loan Documents and (ii) will grant Liens to the Administrative
Agent, for the benefit of the Administrative Agent and the Lenders, in any material property of such Person which constitutes
Collateral, including any material parcel of real property located in the U.S. or Canada owned by such Person, except for Equity
Interests in a foreign subsidiary representing more than 65% of the total combined voting power in such foreign subsidiary.
(b) Each Borrower and each Subsidiary that is a Loan Party will cause (i) 100% of the issued and outstanding Equity
Interests of each of its domestic and Subsidiaries in Canada and (ii) 65% of the issued and outstanding Equity Interests
entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity
Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2) in each foreign Subsidiary (excluding
Subsidiaries in Canada) directly owned by any Loan Party to be subject at all times to a first priority, perfected Lien in
favor of the Administrative Agent pursuant to the terms and conditions of the Loan Documents or other security documents
as the Administrative Agent shall reasonably request.
(c) Subject to the foregoing, each Loan Party will, and will cause each Subsidiary to, execute and deliver, or cause to
be executed and delivered, to the Administrative Agent such documents, agreements and instruments, and will take or cause
to be taken such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds
of trust and other documents and such other actions or deliveries of the type required by Section 4.01, as applicable), which
may be required by law or which the Administrative Agent may, from time to time, reasonably request to carry out the
terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens
created or intended to be created by the Collateral Documents, all at the expense of the Loan Parties.
(d) If any material assets (including any real property or improvements thereto or any interest therein) are acquired by
any Borrower or any Subsidiary that is a Loan Party after the Effective Date (other than assets constituting Collateral under
the Security Agreement that become subject to the Lien in favor of the Security Agreement upon acquisition thereof), the
Borrowers will notify the Administrative Agent thereof, and, if requested by the Administrative Agent, the Borrowers will
cause such assets, except for Equity Interests in a foreign subsidiary representing more than 65% of the total combined
voting power in such foreign subsidiary, to be subjected to a Lien securing the Secured Obligations and will take, and cause
the Subsidiary Loan Parties to take, such actions as shall be necessary or reasonably requested by the Administrative Agent
to grant and perfect such Liens, including actions described in paragraph (c) of this Section, all at the expense of the Loan
Parties.
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ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees, expenses and
other amounts payable under any Loan Document have been paid in full and all Letters of Credit have expired or terminated (or
been cash collateralized or backstopped in a manner reasonably satisfactory to the Administrative Agent) and all LC
Disbursements shall have been reimbursed, the Loan Parties covenant and agree, jointly and severally, with the Lenders that:
SECTION 6.01. Indebtedness. No Loan Party will, nor will it permit any Subsidiary to, create, incur or suffer to exist any
Indebtedness, except:
(a) the Secured Obligations;
(b) Indebtedness existing on the date hereof (after giving effect to all Borrowings made on the Effective Date) and set
forth in Schedule 6.01;
(c) Indebtedness of any Borrower to any Subsidiary and of any Subsidiary to any Borrower or any other Subsidiary,
provided that (i) Indebtedness of any Subsidiary that is not a Loan Party to any Borrower or any Subsidiary that is a Loan
Party shall be subject to Section 6.04 and (ii) Indebtedness of any Borrower to any Subsidiary and Indebtedness of any
Subsidiary that is a Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Secured Obligations
on terms reasonably satisfactory to the Administrative Agent;
(d) Guarantees by any Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of any
Borrower or any other Subsidiary, provided that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01,
(ii) Guarantees by any Borrower or any Subsidiary that is a Loan Party of Indebtedness of any Subsidiary that is not a Loan
Party shall be subject to Section 6.04 and (iii) Guarantees permitted under this clause (d) shall be subordinated to the
Secured Obligations of the applicable Subsidiary on the same terms (if any) as the Indebtedness so Guaranteed is
subordinated to the Secured Obligations;
(e) Indebtedness which represents an extension, refinancing, or renewal of any of the Indebtedness described in clauses
(b), (h), (j) and (k) hereof; provided that, (i) the principal amount of such Indebtedness is not increased, (ii) any Liens
securing such Indebtedness are not extended to any additional property of any Loan Party, (iii) no Borrower that is not
originally obligated with respect to repayment of such Indebtedness is required to become obligated with respect thereto,
(iv) such extension, refinancing or renewal does not result in a shortening of the average weighted maturity of the
Indebtedness so extended, refinanced or renewed, (v) the terms of any such extension, refinancing, or renewal are not
materially less favorable to the obligor thereunder than the original terms of such Indebtedness, (vi) if the Indebtedness that
is refinanced, renewed, or extended was subordinated in right of payment to the Secured Obligations, then the terms and
conditions of the refinancing, renewal, or extension Indebtedness must include subordination terms and conditions that are
at least as favorable to the Administrative Agent and the Lenders as those that were applicable to the refinanced, renewed,
or extended Indebtedness, and (vii) in the case of extensions, refinancings or renewals of Indebtedness described in clause
(l), the pro forma Fixed Charge Coverage Ratio required under that clause has been maintained;
(f) Indebtedness owed to any person providing workers compensation, health, disability or other employee benefits or
property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such person, in each
case incurred in the ordinary course of business;
(g) Indebtedness of any Borrower or any Subsidiary in respect of performance bonds, bid bonds, appeal bonds, surety
bonds and similar obligations, in each case provided in the ordinary course of business;
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(h) Indebtedness secured by purchase money security interests, conditional sales or other title retention agreements
(including Capital Leases) with respect to equipment, fixtures and/or facilities acquired by any Loan Party in the ordinary
course of business, provided that (a) any Liens securing such Indebtedness attach only to the assets so acquired, (B) such
Indebtedness is incurred no later than ninety (90) days following the acquisition of such assets and does not exceed 100% of
the purchase price of such assets and (C) the aggregate principal amount of such Indebtedness does not exceed $5,000,000
at any one time outstanding;
(i) Indebtedness arising in connection with swaps, hedges and other derivative transaction entered into in the ordinary
course of business;
(j) Indebtedness under sale and leaseback transactions permitted by Section 6.06; and
(k) in the event that Holdings and its consolidated Subsidiaries have a pro forma Fixed Charge Coverage Ratio
including the effect of proposed Indebtedness (for the twelve month period ending on the last month-end prior to the date on
which proposed Indebtedness is incurred for which financial information is available) of at least 1.1 to 1.0, other unsecured
Indebtedness of the Borrowers and the Subsidiaries in an aggregate principal amount not exceeding $75,000,000 at any time
outstanding, which Indebtedness may include Indebtedness assumed or acquired in connection with, or consisting of the
deferred purchase price of, any Permitted Acquisition.
SECTION 6.02. Liens. No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or permit 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 of any thereof, except:
(a) Liens created pursuant to any Loan Document;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of any Borrower or any Subsidiary existing on the date hereof and set forth in
Schedule 6.02 and any replacement Lien in connection with the refinancing, replacement, renewal of the Indebtedness
underlying such Liens to the extent such Indebtedness is permitted by Section 6.01; provided that (i) such Lien shall not
apply to any other property or asset of any Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations
which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding
principal amount thereof;
(d) Liens on fixed or capital assets acquired, constructed or improved by any Borrower or any Subsidiary; provided
that (i) such security interests secure Indebtedness permitted by Section 6.01, (ii) such security interests and the
Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such
construction or improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets and (iv) such security interests shall not apply to any other property or
assets of any Borrower or any Subsidiary;
(e) any Lien existing on any property or asset (other than Accounts and Inventory) prior to the acquisition thereof by
any Borrower or any Subsidiary or existing on any property or asset (other than Accounts or Inventory) of any Person that
becomes a Loan Party after the date hereof prior to the time such Person becomes a Loan Party; provided that (i) such Lien
is not created in contemplation of or in connection with such acquisition or such Person becoming a Loan Party, as the case
may be, (ii) such Lien shall not apply to any other property or assets of the Loan Party and (iii) such Lien shall secure only
those obligations which it secures on the date of such acquisition or the date such Person becomes a Loan Party, as the case
may be and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;
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(f) Liens of a collecting bank arising in the ordinary course of business under Section 4-208 of the Uniform
Commercial Code in effect in the relevant jurisdiction covering only the items being collected upon;
(g) Liens arising out of sale and leaseback transactions permitted by Section 6.06;
(h) Liens granted by a Subsidiary that is not a Loan Party in favor of any Borrower or another Loan Party in respect of
Indebtedness owed by such Subsidiary; and
(i) Liens arising under operating leases on Equipment that does not constitute a portion of the PP&E Component.
SECTION 6.03. Fundamental Changes. (a) No Loan Party will, nor will it permit any Subsidiary to, merge/amalgamate into
or consolidate with any other Person, or permit any other Person to merge/amalgamate into or consolidate with it, or liquidate or
dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred
and be continuing (i) any Subsidiary of any Borrower may merge/amalgamate into such Borrower in a transaction in which such
Borrower is the surviving corporation, provided that in order for the assets of such Subsidiary to be included in the Borrowing
Base, all eligibility requirement hereunder (including all appraisal and examination requirements) must be met, (ii) any Loan
Party (other than any Borrower) may merge/amalgamate with any other Person in a transaction in which the surviving entity is or
becomes a Loan Party, provided that if such other Person is not a Loan Party, the transaction must be permitted by Section 6.04,
(iii) any Borrower other than Holdings may merge/amalgamate into any other Borrower, and (iv) any Subsidiary that is not a
Loan Party may liquidate or dissolve if the Borrowers determine in good faith that such liquidation or dissolution is in the best
interests of the Borrowers and is not materially disadvantageous to the Lenders; provided that any such merger/amalgamation
involving a Person that is not a wholly owned Subsidiary immediately prior to such merger/amalgamation shall not be permitted
unless also permitted by Section 6.04.
(b) No Loan Party will, nor will it permit any of its Subsidiaries to, engage in any business other than businesses of the
type conducted by the Borrowers and their Subsidiaries on the date of execution of this Agreement and businesses
reasonably related thereto.
(c) Holdings will not engage in any business or activity other than the ownership of all the outstanding shares of capital
stock of its Subsidiaries and activities incidental thereto. Holdings will not own or acquire any assets (other than Equity
Interests of its Subsidiaries and the cash proceeds of any Restricted Payments permitted by Section 6.08).
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. No Loan Party will, nor will it permit any
Subsidiary to, purchase, hold or acquire (including pursuant to any merger/amalgamation with any Person that was not a Loan
Party and a wholly owned Subsidiary prior to such merger/amalgamation) any capital stock, evidences of indebtedness or other
securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a
business unit (whether through purchase of assets, merger/amalgamation or otherwise), except:
(a) Permitted Investments, subject to control agreements in favor of the Administrative Agent for the benefit of the
Lenders or otherwise subject to a perfected security interest in favor of the Administrative Agent for the benefit of the
Lenders;
(b) investments and guarantees in existence on the date of this Agreement and described in Schedule 6.04, and
replacements thereof on terms not materially less favorable to the Loan Parties;
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(c) investments by the Borrowers and the Subsidiaries in Equity Interests in their respective Subsidiaries, provided that
(A) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Security Agreement (subject to the
limitations applicable to common stock of a Foreign Subsidiary referred to in Section 5.12) and (B) the aggregate amount of
investments by Loan Parties in Subsidiaries that are not Loan Parties (together with outstanding intercompany loans
permitted under clause (B) to the proviso to Section 6.04(d) and outstanding Guarantees permitted under the proviso to
Section 6.04(e)) shall not exceed $2,500,000 at any time outstanding (in each case determined without regard to any
write-downs or write-offs);
(d) loans or advances made by any Borrower to any Subsidiary and made by any Subsidiary to any Borrower or any
other Subsidiary, provided that (A) any such loans and advances made by a Loan Party shall be evidenced by a promissory
note pledged pursuant to the Security Agreement and (B) the amount of such loans and advances made by Loan Parties to
Subsidiaries that are not Loan Parties (together with outstanding investments permitted under clause (B) to the proviso to
Section 6.04(c) and outstanding Guarantees permitted under the proviso to Section 6.04(e)) shall not exceed $2,500,000 at
any time outstanding (in each case determined without regard to any write-downs or write-offs);
(e) Guarantees constituting Indebtedness permitted by Section 6.01, provided that the aggregate principal amount of
Indebtedness of Subsidiaries that are not Loan Parties that is Guaranteed by any Loan Party shall (together with outstanding
investments permitted under clause (B) to the proviso to Section 6.04(c) and outstanding intercompany loans permitted
under clause (B) to the proviso to Section 6.04(d)) shall not exceed $2,500,000 at any time outstanding (in each case
determined without regard to any write-downs or write-offs);
(f) loans or advances made by a Loan Party to its employees on an arms-length basis in the ordinary course of business
consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum
of $100,000 to any employee and up to a maximum of $2,500,000 in the aggregate at any one time outstanding;
(g) other equity investments in customers and third party vendors in the ordinary course of business in an aggregate
amount not to exceed $2,500,000;
(h) subject to Sections 4.2(a) and 4.4 of the Security Agreement, notes payable, or stock or other securities issued by
Account Debtors to a Loan Party pursuant to negotiated agreements with respect to settlement of such Account Debtors
Accounts in the ordinary course of business, consistent with past practices;
(i) investments in the form of Swap Agreements permitted by Section 6.07;
(j) investments of any Person existing at the time such Person becomes a Subsidiary of any Borrower or consolidates
or merges with any Borrower or any of the Subsidiaries (including in connection with a Permitted Acquisition) so long as
such investments were not made in contemplation of such Person becoming a Subsidiary or of such merger;
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(k) investments received in connection with the dispositions of assets permitted by Section 6.05;
(l) investments constituting deposits described in clauses (c) and (d) of the definition of the term Permitted
Encumbrances;
(m) in the event that at the date any Acquisition is made (i) Holdings and its consolidated Subsidiaries have a pro
forma Fixed Charge Coverage Ratio including the effect of such Acquisition (for the twelve month period ending as of the
most recent month-end for which financial data is available) of at least 1.1 to 1.0 and (ii) the Borrowers have pro forma
Availability of not less than $40,000,000, Permitted Acquisitions; provided that promptly after making any Permitted
Acquisition, the Borrowers shall ensure that any assets acquired in such Acquisition shall be subject to a perfected security
interest in favor of the Administrative Agent, subject only to Permitted Encumbrances and other Liens permitted under the
terms of this Agreement;
(n) any other Permitted Acquisition (determined without regard to clause (e) of the definition of Permitted
Acquisition), if at the effective time of such Acquisition the Borrowers have pro forma Availability (on a 60-day look-back
and look-forward basis) of not less than $125,000,000; provided that promptly after making any Permitted Acquisition, the
Borrowers shall ensure that any assets acquired in such Acquisition shall be subject to a perfected security interest in favor
of the Administrative Agent, subject only to Permitted Encumbrances and other Liens permitted under the terms of this
Agreement;
(o) any other investment made in exchange for, or with the proceeds of the issuance of, any Equity Interests of
Holdings; and
(p) loans or advances evidenced by notes receivable from Account Debtors entered into in the ordinary course of the
Borrowers business or other payments made to customers in the ordinary course of the Borrowers business.
SECTION 6.05. Asset Sales. No Loan Party will, nor will it permit any Subsidiary to, sell, transfer, lease or otherwise
dispose of any asset, including any Equity Interest owned by it, nor will the Borrowers permit any Subsidiary to issue any
additional Equity Interest in such Subsidiary (other than to a Borrower or another Subsidiary in compliance with Section 6.04),
except:
(a) sales, transfers and dispositions of (i) inventory in the ordinary course of business and (ii) used, obsolete, worn out
or surplus equipment or property, or equipment or property that is replaced, in the ordinary course of business;
(b) sales, transfers and dispositions to any Borrower or any Subsidiary, provided that any such sales, transfers or
dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with Section 6.09;
(c) sales, transfers and dispositions of accounts receivable in connection with the compromise, settlement or collection
thereof;
(d) sales, transfers and dispositions of investments permitted by clauses (g), (i) and (k) of Section 6.04;
(e) sale and leaseback transactions permitted by Section 6.06;
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(f) dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain
or by condemnation or similar proceeding of, any property or asset of any Borrower or any Subsidiary; and
(g) sales, transfers and other dispositions of assets (other than Equity Interests in a Subsidiary unless all Equity
Interests in such Subsidiary are sold) that are not permitted by any other paragraph of this Section, provided that the
aggregate fair market value of all assets sold, transferred or otherwise disposed of in reliance upon this paragraph (g) shall
not exceed $1,000,000 during any calendar year;
provided that all sales, transfers, leases and other dispositions permitted hereby (other than those permitted by paragraphs (a)(ii),
(b), (c) and (f) above) shall be made for fair value.
SECTION 6.06. Sale and Leaseback Transactions. No Loan Party will, nor will it permit any Subsidiary to, enter into any
arrangement, directly or indirectly, whereby it shall sell or transfer any material property, real or personal, used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to
use for substantially the same purpose or purposes as the property sold or transferred, except for any such sale of any fixed or
capital assets by any Borrower or any Subsidiary that is made for cash consideration in an amount not less than the fair value of
such fixed or capital asset and is consummated within 90 days after such Borrower or such Subsidiary acquires or completes the
construction of such fixed or capital asset; provided that the Borrowers may engage in a sale and leaseback of the real property
located at 1055 Salt River Road, Leitchfield, Kentucky.
SECTION 6.07. Swap Agreements. No Loan Party will, nor will it permit any Subsidiary to, enter into any Swap
Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which any Borrower or any Subsidiary has
actual exposure (other than those in respect of Equity Interests of any Borrower or any of its Subsidiaries), and (b) Swap
Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of any Borrower or
any Subsidiary; provided that the Borrowers may enter into other types of Swap Agreements in the ordinary course of business if
the Borrowers have established appropriate reserves with respect to such Swap Agreements as determined by the Administrative
Agent in its reasonable discretion.
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness. (a) No Loan Party will, nor will it permit any
Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation
(contingent or otherwise) to do so, except:
(i) each of the Borrowers may declare and pay dividends with respect to its common stock payable solely in
additional shares of its common stock, and, with respect to its preferred stock, payable solely in additional shares of
such preferred stock or in shares of its common stock,
(ii) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests,
(iii) the Borrowers may make Restricted Payments, not exceeding $1,000,000 during any fiscal year, pursuant to
and in accordance with stock option plans or restricted stock plans for management or employees of the Borrowers and
their Subsidiaries,
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(iv) in the event that at the time of such Restricted Payment (A) Holdings and its consolidated Subsidiaries have a
pro forma Fixed Charge Coverage Ratio including such Restricted Payment (for the twelve month period ending on
the most recent month-end for which financial data is available) of at least 1.1 to 1.0, (B) the Borrowers have pro
forma Availability of not less than $40,000,000 and (C) no Default or Event of Default has occurred or would result
therefrom, Holdings may declare and pay cash dividends with respect to its capital stock in an aggregate amount
during the term of this Agreement not to exceed $75,000,000,
(v) the Borrowers may make stock repurchases in an aggregate amount during the term of this Agreement not to
exceed $10,000,000, and
(A) any Subsidiary or Borrower may make a Restricted Payment to any other Borrower.
(b) No Loan Party will, nor will it permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any
payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any
Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any
Indebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments as and when due in respect of any
Indebtedness, or prepayments of principal in connection with assets sales permitted hereunder, other than payments in
respect of the Subordinated Indebtedness prohibited by the subordination provisions thereof;
(iii) refinancings of Indebtedness to the extent permitted by Section 6.01;
(iv) payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness;
(v) on the Effective Date, the Borrowers may prepay all amounts outstanding under the current Tranche B Notes
(including interest and applicable premium) in an amount not to exceed $8,000,000 in the aggregate, replace all letters
of credit issued under the Tranche B Facility with Letters of Credit and pay all charges relating to such replacement;
and
(vi) payments made under the PCT Guarantee and the RCT Guarantee, if any.
SECTION 6.09. Transactions with Affiliates. No Loan Party will, nor will it permit any Subsidiary to, sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates that are not Loan Parties, except (a) transactions that (i) are in the
ordinary course of business and (ii) are at prices and on terms and conditions not less favorable to such Borrower or such
Subsidiary than could be obtained on an arms-length basis from unrelated third parties, (b) transactions between or among any
Borrower and any Subsidiary that is a Loan Party not involving any other Affiliate, (c) any investment permitted by
Sections 6.04(c) or 6.04(d), (d) any Indebtedness permitted under Section 6.01(c), (e) any Restricted Payment permitted by
Section 6.08, (f) loans or advances to employees permitted under Section 6.04, (g) the payment of reasonable fees to directors of
any Borrower or any Subsidiary who are not employees of any Borrower or any Subsidiary, and compensation and employee
benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of any Borrower or its
Subsidiaries in the ordinary course of business and (h) any issuances of securities or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans
approved by any Borrowers board of directors.
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SECTION 6.10. Restrictive Agreements. No Loan Party will, nor will it permit any Subsidiary to, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon
(a) the ability of such Loan Party or any of its Subsidiaries to create, incur or permit to exist any Lien upon any of its property or
assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or
to make or repay loans or advances to any Borrower or any other Subsidiary or to Guarantee Indebtedness of any Borrower or
any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan
Document, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 6.10
(but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction
or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary or any property pending such sale, provided such restrictions and conditions apply only to the Subsidiary or
property that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or
conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness, (v) clause (a) of the foregoing shall not apply to
customary provisions in leases restricting the assignment thereof, and (vi) clause (a) of the foregoing shall not apply to
agreements that permit the Liens on the Collateral in favor of the Administrative Agent under the Loan Documents, but prohibit
other Liens.
SECTION 6.11. Amendment of Material Documents. No Loan Party will, nor will it permit any Subsidiary to, amend,
modify or waive any of its rights under (a) any agreement relating to any Subordinated Indebtedness or (b) its certificate of
incorporation, by-laws, operating, management or partnership agreement or other organizational documents, in each case to the
extent any such amendment, modification or waiver would reasonably be expected to be materially adverse to the Lenders.
SECTION 6.12. Interest Deduction. The Canadian Borrower will not in any fiscal year, without delivering to the
Administrative Agent prior notice of such proposed deduction and evidence of compliance with all Canadian withholding tax
requirements arising in connection with such proposed deduction, deduct any interest or other amounts paid to the
Administrative Agent in respect of the Loans (excluding Canadian Revolving Loans and the Canadian Swingline Loans) in
computing its taxable income earned in Canada for purposes of the Income Tax Act (Canada).
SECTION 6.13. Fixed Charge Coverage Ratio. In the event that at any time the Borrowers have Availability less than
$35,000,000, the Borrowers will not permit the Fixed Charge Coverage Ratio of Holdings and its consolidated Subsidiaries,
determined as of the end of each fiscal quarter of Holdings (for the period of four consecutive fiscal quarters ending on such
date), beginning with the fiscal quarter of Holdings most recently ended on the date that Availability was first less than
$35,000,000, to be less than 1.1 to 1.0; provided, however, that if, at any time after this Section 6.13 has been triggered, the
Borrowers maintain (i) average Availability greater than or equal to $40,000,000 for a 90-day period and (ii) Availability not less
than $35,000,000 at all times during such 90-day period, the requirements of this Section 6.13 shall no longer be deemed to be
triggered.
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ARTICLE VII
Events of Default
If any of the following events (Events of Default) shall occur:
(a) the Borrowers shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC
Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;
(b) the Borrowers (i) shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount
referred to in clause (a) of this Article) payable under this Agreement, when and as the same shall become due and payable
or (ii) shall fail to pay the Administrative Agent or any Lender for any out-of-pocket expenses owed to a third party payable
under and arising in connection with the Loan Documents within 5 days of the due date thereof;
(c) any representation or warranty made or deemed made by or on behalf of any Loan Party or any Subsidiary in or in
connection with this Agreement or any Loan Document or any amendment or modification thereof or waiver thereunder, or
in any report, certificate (including, without limitation, any Borrowing Base Certificate), financial statement or other
document furnished pursuant to or in connection with this Agreement or any Loan Document or any amendment or
modification thereof or waiver thereunder, shall prove to have been materially incorrect when made or deemed made;
(d) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in Section 5.01(g),
5.02(a), 5.03 (with respect to a Loan Partys existence), 5.08, 6.03, 6.05, 6.06, 6.12 or 6.13 of this Agreement or in
Section 4.1(a), 4.1(b), 4.1(c), 4.1(d), 4.11 or 4.12 or Article VII of the Security Agreement;
(e) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement,
the Security Agreement or any other Loan Document (other than those which constitute a default under another Section of
this Article), and such failure shall continue unremedied for a period of (i) 10 Business Days after the earlier of the date on
which an officer of any Loan Party obtains knowledge of such breach or notice thereof from the Administrative Agent
(which notice will be given at the request of the Required Lenders) if such breach relates to terms or provisions of
Section 5.01 (other than Section 5.01(g)), 5.02 (other than Section 5.02(a)), 5.03 through 5.07, 5.09, 5.10 or 5.12 of this
Agreement or Section 4.1 (other than Section 4.1(a) through 4.1(d)), 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.13, 4.14, 4.15 or
4.16 of the Security Agreement or (ii) 15 Business Days after the earlier of the date on which an officer of any Loan Party
obtains knowledge of such breach or notice thereof from the Administrative Agent (which notice will be given at the
request of the Required Lenders) if such breach relates to terms or provisions of any other Section of this Agreement, the
Security Agreement or any other Loan Document;
(f) any Loan Party or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness, when and as the same shall become due and payable, and as a result, or as
a result of any other event or condition occurs, any Material Indebtedness becomes or is declared due prior to its scheduled
maturity; provided that this clause (f) shall not apply to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets securing such Indebtedness;
(g) an involuntary proceeding shall be commenced or an involuntary petition or proposal shall be filed seeking
(i) liquidation, reorganization, consolidation or other relief in respect of a Loan Party or any Subsidiary of any Loan Party
or its debts, or of a substantial part of its assets, or which seeks a stay or has the effect of staying any creditor, under any
federal, state, provincial or foreign bankruptcy, insolvency, receivership , liquidation, winding up, corporate or similar law
now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, monitor, sequestrator, conservator,
administrator or similar official for any Loan Party or any Subsidiary of any Loan Party or for a substantial part of its assets,
and, in any such case, such proceeding, petition or proposal shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
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(h) any Loan Party or any Subsidiary of any Loan Party shall (i) voluntarily commence any proceeding or file any
petition, proposal or intent to file a proposal seeking liquidation, reorganization, consolidation or other relief under any
federal, state, provincial or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding, petition, proposal or
intent to file a proposal described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, monitor, sequestrator, conservator, administrator or similar official for such Loan Party or Subsidiary of
any Loan Party or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition or
proposal filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any
action for the purpose of effecting any of the foregoing;
(i) any Loan Party or any Subsidiary of any Loan Party shall become unable, admit in writing its inability or fail
generally to pay its debts as they become due;
(j) one or more judgments for the payment of money in an aggregate amount in excess of $2,500,000 which is not
covered by insurance (or an indemnity for which the obligor thereunder has admitted liability and, in the Administrative
Agents reasonable estimation, has the ability to pay) shall be rendered against any Loan Party, any Subsidiary of any Loan
Party or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon
any assets of any Loan Party or any Subsidiary of any Loan Party to enforce any such judgment or any Loan Party or any
Subsidiary of any Loan Party shall fail within 30 days to discharge one or more non-monetary judgments or orders which,
individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, and which judgments or
orders, in any such case, are not stayed on appeal or otherwise being appropriately contested in good faith by proper
proceedings diligently pursued;
(k) (x) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all
other ERISA Events that have occurred, could reasonably be expected to either (i) result in a Material Adverse Effect or
(ii) result in liability of any Borrower and its Subsidiaries in an aggregate amount exceeding $2,500,000 for all periods, or
(y) any Lien arises in connection with any Plan;
(l) a Change in Control shall occur;
(m) the Loan Guaranty shall fail to remain in full force or effect or any action shall be taken by any Loan Party to
discontinue or to assert the invalidity or unenforceability of the Loan Guaranty, or any Loan Guarantor shall fail in any
material respect to comply with any of the material terms or provisions of the Loan Guaranty to which it is a party, or any
Loan Guarantor shall deny that it has any further liability under the Loan Guaranty to which it is a party, or shall give notice
to such effect;
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(n) (i) any Collateral Document shall for any reason fail to create a valid and perfected first priority security interest in
any Collateral having an aggregate value in excess of $500,000 purported to be covered thereby, except as permitted by the
terms of this Agreement or (ii) any Collateral Document, or any Collateral Document shall fail to remain in full force or
effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of any Collateral Document,
or (iii) any Loan Party shall fail to comply in any material respect with any of the material terms or provisions of any
Collateral Document and in the case of this clause (iii), such failure shall continue unremedied for a period of 10 Business
Days after the earlier of the date on which an officer of any Loan Party obtains knowledge of such breach or notice thereof
from the Administrative Agent; or
(o) any material provision of this Agreement or any material Loan Document for any reason ceases to be valid, binding
and enforceable in accordance with its terms (or any Loan Party shall challenge the enforceability of this Agreement or any
material Loan Document or shall assert in writing, or engage in any action or inaction based on any such assertion, that any
provision of any of this Agreement or any of the other material Loan Documents has ceased to be or otherwise is not valid,
binding and enforceable in accordance with its terms); or
(p) any Loan Party is criminally indicted or convicted under any law and such indictment or conviction would, in the
Administrative Agents reasonably determination, be likely to result in a Material Adverse Effect;
then, and in every such event (other than an event with respect to any Borrower described in clause (g) or (h) of this Article), and
at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required
Lenders shall, by notice to the Borrowers, take either or both of the following actions, at the same or different times: (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to
be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers;
and in case of any event with respect to any Borrower described in clause (g) or (h) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrowers accrued hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers. Upon the occurrence and the
continuance of an Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, exercise any
rights and remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies
provided under the UCC, the PPSA, the BIA or the Companies Creditors Arrangement Act (Canada).
ARTICLE VIII
The Administrative Agent
Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes
the Administrative Agent to take such actions on its behalf, including execution of the other Loan Documents, and to exercise
such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and
powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender
as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates
may accept deposits from, lend money to and generally engage in any kind of business with the Loan Parties or any Subsidiary of
a Loan Party or other Affiliate thereof as if it were not the Administrative Agent hereunder.
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The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents.
Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any
duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing as directed by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information relating to any Loan Party or any of its Subsidiaries
that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrowers
or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of
any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the creation, perfection
or priority of Liens on the Collateral or the existence of the Collateral, or (vi) the satisfaction of any condition set forth in
Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been
signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The
Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and
other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any
such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or
more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any
and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for
herein as well as activities as Administrative Agent.
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Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the
Administrative Agent may resign at any time by notifying the Lenders, the Issuing Bank and the Borrowers. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the Borrowers, to appoint a successor. If no successor
shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders and
the Issuing Bank, appoint a successor Administrative Agent which shall be a commercial bank or an Affiliate of any such
commercial bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrowers
to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the
Borrowers and such successor. After the Administrative Agents resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective
Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges 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 credit analysis and decision to
enter into this Agreement. Each Lender also acknowledges 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 from time to time deem
appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other
Loan Document or related agreement or any document furnished hereunder or thereunder.
Each Lender hereby agrees that (a) it has requested a copy of each Report prepared by or on behalf of the Administrative
Agent; (b) the Administrative Agent (i) makes no representation or warranty, express or implied, as to the completeness or
accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a
Report and (ii) shall not be liable for any information contained in any Report; (c) the Reports are not comprehensive audits or
examinations, and that any Person performing any field examination will inspect only specific information regarding the Loan
Parties and will rely significantly upon the Loan Parties books and records, as well as on representations of the Loan Parties
personnel and that the Administrative Agent undertakes no obligation to update, correct or supplement the Reports; (d) it will
keep all Reports confidential and strictly for its internal use, not share the Report with any Loan Party or any other Person except
as otherwise permitted pursuant to this Agreement; and (e) without limiting the generality of any other indemnification provision
contained in this Agreement, it will pay and protect, and indemnify, defend, and hold the Administrative Agent and any such
other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other
amounts (including reasonable attorney fees) incurred by as the direct or indirect result of any third parties who might obtain all
or part of any Report through the indemnifying Lender.
The Syndication Agents and the Documentation Agents shall not have any right, power, obligation, liability, responsibility
or duty under this Agreement other than those applicable to all Lenders as such.
Each Lender (including, without limitation, any assignee or transferee of all or any part of any of the Obligations owing by
any Borrower) that is not a United States Person (as such term is defined in Section 7701(a)(30) of the Code) shall deliver to the
Administrative Agent two original copies (one for the Borrowers) of:
(i) properly completed IRS Form W-8BEN before the payment of any interest in the first calendar year and before the
payment of any interest in each third succeeding calendar year (if it is then permitted to do so under law) during which
interest may be paid to such Lender under this Agreement properly claiming such Lender is eligible for an exemption from
or a reduction of withholding tax under a United States of America tax treaty or a provision of the Code or the regulations
thereunder;
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(ii) properly completed IRS Form W-8ECI before the payment of any interest is due in the first taxable year of such
Lender and in each succeeding taxable year (if it is then permitted to do so under law) of such Lender during which interest
may be paid to such Lender under this Agreement properly claiming such Lender is exempt from United States of America
withholding tax or interest paid under this Agreement because it is effectively connected with a United States of America
trade or business of such Lender; or
(iii) such other form or forms as may be required under the Code or other laws of the United States of America (if it is
then permitted to do so under law) as a condition to exemption from, or reduction of, United States of America withholding
tax.
Such Lender agrees to promptly notify the Administrative Agent of any change in circumstances which would modify or
render invalid any claimed exemption or reduction.
If any Lender claims exemption from, or reduction of, withholding tax under a United States of America tax treaty by
providing IRS Form W-8BEN and such Lender sells, assigns, grants a participation in, or otherwise transfers all or part of the
Obligations owing to such Lender, pursuant to Section 9.04 hereof, such Lender agrees to notify the Administrative Agent of the
percentage amount in which it is no longer the beneficial owner of the respective Obligations of the Borrowers to such Lender.
To the extent of such percentage amount, the Administrative Agent will treat such Lenders IRS Form W-8BEN as no longer
valid.
Each Canadian Lender (including, without limitation, any assignee or transferee of all or any part of any of the Obligations
owing by the Canadian Borrower) that is not a Canadian resident, or an authorized foreign bank (as such term is defined in the
Income Tax Act (Canada)), for Canadian tax purposes shall deliver to the Administrative Agent (if it is then permitted to do so
under law) two original copies (one for the Borrower) of such other form or forms as may be required under a Canadian tax
treaty or any provision of Canadian federal or provincial law as a condition to or exemption from, or reduction of, Canadian
withholding tax, if such Lender is so qualified. Such Canadian Lender agrees to promptly notify the Administrative Agent of any
change in circumstances which would modify or render invalid any claimed exemption or reduction.
If any Lender is entitled to a reduction in the applicable withholding tax, the Administrative Agent (acting through its
Canada Branch or otherwise) may withhold from any interest payment to such Lender an amount equivalent to the applicable
withholding tax after taking into account such reduction. If the forms or other documentation required by subsection (a) or
subsection (c), as applicable, of this Section are not delivered to the Administrative Agent (acting through its Canada Branch or
otherwise), then the Administrative Agent (acting through its Canada Branch or otherwise) may withhold from any interest
payment to such Lender not providing such forms or other documentation an amount equivalent to the applicable withholding
tax.
If the IRS or any other Governmental Authority of the United States of America or other jurisdiction asserts a claim that the
Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such Lender failed to notify the Administrative Agent
of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Lender shall indemnify the Administrative Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as Tax or otherwise, including penalties and interest, and including any Taxes imposed by any jurisdiction
on the amounts payable to the Administrative Agent under this Section, together with all costs and expenses (including
reasonable attorneys fees and expenses). The obligation of the Lenders under this subsection shall survive the payment of all
Obligations and the resignation or replacement of the Administrative Agent.
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Each Canadian Lender hereby certifies that it is an authorized foreign bank as defined in the Income Tax Act (Canada)
and it holds its interest in the Canadian Loans in the course of its Canadian banking business as defined in the Income Tax Act
(Canada).
The Canadian Funding Bank, to the extent any of its functions, actions or obligations under this Agreement, including, the
administration of any Loans, shall be afforded the same protections, agreements, etc. available to the Administrative Agent under
this Article VIII.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. (a) Except in the case of notices and other communications expressly permitted to be given by
telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:
(i)
if to any Loan Party, to the Administrative Borrower at:

Core-Mark International, Inc.
395 Oyster Point Blvd. #415
South San Francisco, California 94080
Attention: Treasurer
Facsimile No: (650) 589-4010
(ii) if to the Administrative Agent, the Issuing Bank, the Swingline Lender or the Canadian Swingline Lender, to Chase at:
JPMorgan Chase Bank, N.A.
2200 Ross Avenue, 3 rd Floor
Dallas, Texas 75201
Attention: Courtney Jeans
Facsimile No: (214) 965-4731)
(iii) if to any other Lender, to it at its address or facsimile number set forth in its Administrative Questionnaire.
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All such notices and other communications (i) sent by hand or overnight courier service, or mailed by certified or registered mail,
shall be deemed to have been given when received or (ii) sent by facsimile shall be deemed to have been given when sent,
provided that if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of
business on the next Business Day for the recipient.
(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic
communications (including e-mail and internet or intranet websites) pursuant to procedures approved by the Administrative
Agent and the Canadian Funding Bank, as applicable; provided that the foregoing shall not apply to notices pursuant to
Article II or to compliance and no Event of Default certificates delivered pursuant to Section 5.01(d) unless otherwise
agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrowers (on behalf of
the Loan Parties) may, in their discretion, agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to
particular notices or communications. All such notices and other communications (i) sent to an e-mail address shall be
deemed received upon the senders receipt of an acknowledgement from the intended recipient (such as by the return
receipt requested function, as available, return e-mail or other written acknowledgement), provided that if not given during
the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening
of business on the next Business Day for the recipient, and (ii) posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (b)(i)
of notification that such notice or communication is available and identifying the website address therefor.
(c) Any party hereto may change its address or facsimile number for notices and other communications hereunder by
notice to the other parties hereto.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the Administrative Agent, the Issuing Bank or any
Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent, the Issuing Bank and the Lenders hereunder and under any other Loan Document are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or
consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose
for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may
have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended
or modified except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrowers and the Required Lenders or, (ii) in the case of any other Loan Document, pursuant to an agreement or
agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto,
with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any
Lender without the written consent of such Lender, (ii) reduce or forgive the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the
written consent of each Lender affected thereby, (iii) postpone any scheduled date of payment of the principal amount of
any Loan or LC Disbursement, or any date for the payment of any interest, fees or other Obligations payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender affected thereby, (iv) change Section 2.18(b) or (d) in a manner that would alter
the manner in which payments are shared, without the written consent of each Lender, (v) increase the advance rates set
forth in the definition of Borrowing Base, add new categories of eligible assets or make less restrictive the
non-discretionary criteria for the exclusion of eligible assets, without the written consent of each Revolving Lender,
(vi) change
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any of the provisions of this Section or the definitions of Required Lenders or Supermajority Revolving Lenders or any
other provision of any Loan Document specifying the number or percentage of Lenders (or Lenders of any Class) required
to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the
written consent of each Lender, (vii) release any Loan Guarantor from its obligation under its Loan Guaranty (except as
otherwise permitted herein or in the other Loan Documents), without the written consent of each Lender, or (viii) except as
provided in clauses (c) and (d) of this Section or in any Collateral Document, release a portion of the Collateral valued in
the aggregate in excess of $50,000,000 during any calendar year, without the written consent of each Lender; provided
further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the
Issuing Bank, the Canadian Funding Bank, the Swingline Lender or the Canadian Swingline Lender hereunder without the
prior written consent of the Administrative Agent, the Issuing Bank, the Swingline Lender or the Canadian Swingline
Lender, as the case may be. The Administrative Agent may also amend the Commitment Schedule to reflect assignments
entered into pursuant to Section 9.04.
(c) The Lenders hereby irrevocably authorize the Administrative Agent, at its option and in its reasonable discretion, to
release any Liens granted to the Administrative Agent by the Loan Parties on any Collateral (i) upon the termination of all
Commitments, payment and satisfaction in full in cash of all Secured Obligations (other than Unliquidated Obligations),
and the cash collateralization of all Unliquidated Obligations in a manner satisfactory to the Administrative Agent,
(ii) constituting property being sold or disposed of if the Loan Party disposing of such property certifies to the
Administrative Agent that the sale or disposition is made in compliance with the terms of this Agreement (and the
Administrative Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting property
leased to a Loan Party under a lease which has expired or been terminated in a transaction permitted under this Agreement,
or (iv) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of
the Administrative Agent and the Lenders pursuant to Article VII. Except as provided in the preceding sentence, the
Administrative Agent will not release any Liens on Collateral without the prior written authorization of the Required
Lenders; provided that, the Administrative Agent may in its discretion, release its Liens on Collateral valued in the
aggregate not in excess of $2,500,000 during any calendar year without the prior written authorization of the Required
Lenders. Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan
Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral.
(d) If, in connection with any proposed amendment, waiver or consent requiring the consent of each Lender or each
Lender affected thereby, the consent of the Required Lenders is obtained, but the consent of other necessary Lenders is not
obtained (any such Lender whose consent is necessary but not obtained being referred to herein as a Non-Consenting
Lender), then the Borrowers may elect within thirty (30) days after the failure to obtain such consent, with the written
consent of the Administrative Agent which written consent shall not be unreasonably delayed or withheld, to replace a
Non-Consenting Lender as a Lender party to this Agreement, provided that, concurrently with such replacement, (i) another
bank or other entity which is reasonably satisfactory to the Borrowers and the Administrative Agent shall agree, as of such
date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment
and Assumption and to become a Lender for all purposes under this Agreement and to assume all obligations of the
Non-Consenting Lender to be terminated as of such date and to comply with the requirements of clause (b) of Section 9.04,
and (ii) the Borrowers shall pay to such Non-Consenting Lender in same day funds on the day of such replacement all
interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrowers hereunder to and
including the date of termination, including without limitation payments due to such Non-Consenting Lender under
Sections 2.15 and 2.17, provided that the Borrowers shall not be obligated to make any payment to such Lender on the day
of such replacement under Section 2.16.
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SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrowers shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent, in connection with the syndication and distribution (including, without limitation, via the
internet or through a service such as Intralinks) of the credit facilities provided for herein, the preparation and administration of
the Loan Documents or any amendments, modifications or waivers of the provisions of the Loan Documents (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the
Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder, (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent or the Issuing Bank
(including with respect to the Existing Letters of Credit), including the reasonable fees, charges and disbursements of any
counsel for the Administrative Agent or the Issuing Bank, in connection with the enforcement, collection or protection of its
rights in connection with the Loan Documents, including its rights under this Section, including all such reasonable out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit, (iv) after the
occurrence and during the continuance of a Default or an Event of Default, all reasonable out-of-pocket expenses incurred by any
Lender, including the reasonable fees, charges and disbursements of any counsel for such Lender, in connection with the
enforcement, collection or protection of its rights in connection with the Loan Documents, including its rights under this Section,
including all such reasonable out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of
such Loans or Letters of Credit, and (v) all reasonable out-of-pocket expenses incurred by the Administrative Agent or the
Issuing Bank, including the reasonable fees, charges and disbursements of any counsel for the Administrative Agent or the
Issuing Bank, in connection with the Loans made or Letters of Credit issued hereunder. Expenses being reimbursed by the
Borrowers under this Section include, without limiting the generality of the foregoing and subject to the terms of this Agreement,
reasonable costs and expenses incurred in connection with:
(i) appraisals;
(ii) field examinations and the preparation of Reports based on (A) the fees charged by a third party retained by
the Administrative Agent or (B) the internally allocated fees for each Person employed by the Administrative Agent
with respect to each field examination, including field examination fees equal to $850 per day per examiner (plus
reasonable out-of-pocket-expenses);
(iii) lien and title searches and title insurance;
(iv) taxes, fees and other charges for filing financing statements and continuations, and other actions necessary or
appropriate to perfect, protect, and continue the Administrative Agents Liens;
(v) sums paid or incurred to take any action required of any Loan Party under the Loan Documents that such Loan
Party fails to pay or take as required; and
(vi) forwarding loan proceeds, collecting checks and other items of payment, and establishing and maintaining the
accounts and lock boxes, and costs and expenses of preserving and protecting the Collateral.
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All of the foregoing costs and expenses may be charged to the Borrowers as Revolving Loans or to another deposit account, all
as described in Section 2.18(c).
(b) The Borrowers shall indemnify the Administrative Agent, the Issuing Bank and each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an Indemnitee) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, penalties, liabilities and related expenses, including the reasonable fees,
charges and disbursements of any counsel for any Indemnitee, reasonably incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) in the case of the Administrative Agent, the Issuing Bank and their
Related Parties, the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, the
performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) the case of the Administrative Agent, the Issuing Bank and their Related
Parties, any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to
honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not
strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by any Borrower or any of its Subsidiaries, or any Environmental
Liability related in any way to any Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, penalties, liabilities or related expenses are determined by a court
of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee.
(c) To the extent that the Borrowers fail to pay any amount required to be paid by them to the Administrative Agent,
the Issuing Bank, the Canadian Funding Bank, the Swingline Lender or the Canadian Swingline Lender under paragraph
(a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank, the Swingline
Lender or the Canadian Swingline Lender, as the case may be, such Lenders Applicable Percentage or Canadian
Applicable Percentage, as applicable, (determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage,
penalty, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the
Canadian Funding Bank, the Issuing Bank, the Swingline Lender or the Canadian Swingline Lender in its capacity as such.
(d) To the extent permitted by applicable law, no Loan Party shall assert, and each hereby waives, any claim against
any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after written demand therefor.
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SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing
Bank that issues any Letter of Credit), except that (i) no Borrower may 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 any
Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank 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
Issuing Bank 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 Commitment and the
Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:
(A) the Administrative Borrower, provided that no consent of the Administrative Borrower shall be required for
an assignment to a Lender, an Affiliate of a Lender (other than an assignment by a Canadian Lender to a Lender or an
Affiliate which is not a resident of Canada, or an authorized foreign bank for purposes of the Income Tax Act
(Canada)) or an Approved Fund or, if a Default or an Event of Default has occurred and is continuing, any other
assignee;
(B) the Administrative Agent; and
(C) the Issuing Bank.
(ii) Assignments shall be subject to the following additional conditions:
(A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire
remaining amount of the assigning Lenders 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
Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Administrative Borrower and the Administrative Agent otherwise consent, provided that
no such consent of the Administrative Borrower shall be required if an Event of Default has occurred and is
continuing;
(B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lenders
rights and obligations under this Agreement;
(C) (i) no Lender (who is not a Canadian Lender) shall assign all or any part of its Commitment or US domestic
Loans unless such Lenders related Affiliate assigns the same percentage of its Canadian Revolving Commitment and
Canadian Revolving Loans to the same assignee (or related Affiliate of the same assignee), (ii) no Canadian Lender
shall assign all or any part of its Canadian Revolving Commitment or Canadian Revolving Loans unless such Lenders
related Affiliate assigns the same percentage of its US Commitment and US domestic Loans to the same assignee (or
related Affiliate of the same assignee),
(D) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and
Assumption, together with a processing and recordation fee of $3,500; and
(E) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire and any tax forms required by Section 2.17(e).
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For the purposes of this Section 9.04(b), the term Approved Fund means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the
effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment
and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lenders 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 2.15, 2.16, 2.17 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this
Section 9.04 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) Notwithstanding the foregoing, the Swingline Lender shall not be permitted to make a partial assignment of
the Swingline Loans and the Canadian Swingline Lender shall not be permitted to make a partial assignment of the
Canadian Swingline Loans. Notwithstanding anything contained in this Agreement to the contrary, (i) no assignee of a
Canadian Lender shall be permitted to seek any indemnification for, or the payment of, any Indemnified Taxes or
Other Taxes described in Section 2.17 hereof or any penalties, interest and reasonable expenses arising therefrom or
with respect thereto from the Canadian Borrower, unless amounts payable to the Lender from which the assignee
received its assignment (the assignor) would have also been subject to, or such assignor would have also been
required to pay, such Indemnified Taxes or Other Taxes and (ii) no assignee of a Lender (who is not a Canadian
Lender) shall be permitted to seek any indemnification for, or the payment of, any Indemnified Taxes or Other Taxes
described in Section 2.17 hereof or any penalties, interest and reasonable expenses arising therefrom or with respect
thereto from the Borrowers, unless amounts payable to the assignor would have also been subject to, or such assignor
would have also been required to pay, such Indemnified Taxes or Other Taxes; provided, however, that the limitations
contained in this Section shall not apply to any assignees who are assigned their interests hereunder after a Default or
Event of Default.
(v) The Administrative Agent, acting for this purpose as an agent of the Borrowers, shall maintain at one of its
offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders (and any changes thereto, whether by assignment or otherwise), and the Commitment of, and
principal amount of the Loans and LC Disbursements and interest thereon owing to and paid to, each Lender pursuant
to the terms hereof from time to time (the Register). The entries in the Register shall be conclusive absent manifest
error, and the Borrowers, the Administrative Agent, the Issuing Bank 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.
The Register shall be available for inspection by the Borrowers, the Issuing Bank and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.
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(vi) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an
assignee, the assignees completed Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to
such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register; provided that if either the assigning Lender
or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.05, 2.06(d) or
(e), 2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no obligation to accept such Assignment and
Assumption and record the information therein in the Register unless and until such payment shall have been made in
full, together with all accrued interest thereon. 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 Borrowers, the Administrative Agent, the Issuing Bank or the
Swingline Lender, sell participations to one or more banks or other entities (a Participant) in all or a portion of such
Lenders rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to
it); provided that (A) such Lenders 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 Borrowers, the
Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lenders 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; 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 9.02(b) that affects such Participant. Subject to paragraph
(c)(ii) of this Section, each Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and
2.17 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 9.08 as though it
were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater payment under Section 2.15, 2.16 or 2.17 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 Borrowers prior written consent. A Participant (A) in
the case of a participant that would be a Foreign Lender if it were a Lender, shall not be entitled to the benefits of
Section 2.17 unless the Borrowers are notified of the participation sold to such Participant, and (B) such Participant
agrees, for the benefit of the Borrowers, to comply with Section 2.17(e) as though it were a Lender. For greater
certainty, any Canadian Lender that intends to sell a participation to a Person which is not a resident of Canada or an
authorized foreign bank (for purposes of the Income Tax Act (Canada)) shall give prior written notice thereof to the
Canadian Borrower. No Lender (who is not a Canadian Lender) shall sell any participation in its US Commitments or
US domestic Loans unless such Lenders related Affiliate sells a participation interest of an equal percentage of its
Canadian Revolving Commitment and Canadian Revolving Loans to the same Participant or a related Affiliate of such
Participant, and no Canadian Lender shall sell any participation in its Canadian Revolving Commitments or Canadian
Revolving Loans unless such Lender (or its related Affiliate) sells an equal percentage of its US Commitment and US
domestic Loans to the same Participant or a related Affiliate of such Participant.
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(iii) Each Lender having sold a participation in any of its Obligations, acting solely for this purpose as agent for
the Borrowers, shall maintain a register for the recordation of the names and addresses of such Participants (and each
change thereto, whether by assignment or otherwise) and the rights, interests or Obligations of such Participants in any
Obligation, in any Commitment and in any right to receive any payments hereunder.
(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including without limitation 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.
SECTION 9.05. Survival. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan
Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other
Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank
or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
has not been cash collateralized or back-stopped and so long as the Commitments have not expired or terminated. The provisions
of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters
of Credit and the Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to
fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as
provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of
each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by facsimile shall
be effective as delivery of a manually executed counterpart of this Agreement.
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SECTION 9.07. Severability. Any provision of any Loan Document held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of any Borrower or any Loan Guarantor against any of and
all the Secured Obligations held by such Lender, irrespective of whether or not such Lender shall have made any demand under
the Loan Documents and although such obligations may be unmatured. The applicable Lender shall notify the Borrowers and the
Administrative Agent of such set-off or application, provided that any failure to give or any delay in giving such notice shall not
affect the validity of any such set-off or application under this Section. The rights of each Lender under this Section are in
addition to other rights and remedies (including other rights of setoff) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process; Judicial Reference. (a) The Loan Documents
(other than those containing a contrary express choice of law provision) shall be governed by and construed in accordance with
the laws of the State of New York, but giving effect to federal laws applicable to national banks.
(b) Each Loan Party hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any U.S. Federal or New York State court sitting in New York, New York in any action or proceeding arising
out of or relating to any Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document
shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action
or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts
of any jurisdiction.
(c) Each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively
do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out
of or relating to this Agreement or any other Loan Document in any court (including US and Canadian courts) referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in
Section 9.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
(e) If any action or proceeding is filed in a court of the State of California by or against any party hereto in connection
with any of the transactions contemplated by this Agreement or any document related hereto, (a) the court shall, and is
hereby directed to, make a general reference pursuant to California Code of Civil Procedure Section 638 to a referee or
referees to hear and determine all of the issues in such action or proceeding (whether of fact or of law) and to report a
statement of decision, provided that at the option of Lender, any such issues pertaining to a provisional remedy as defined
in California Code of Civil Procedure Section 1281.8 shall be heard and determined by the court, and (b) the Borrowers
shall be solely responsible to pay all fees and expenses of any referee appointed in such action or proceeding.
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SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of
reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates
directors, officers, employees and agents, including accountants, legal counsel and other advisors who need to know such
information (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of
such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority
following notice to the Borrowers of such request by the Administrative Agent and an opportunity for the Borrowers to protest to
such regulatory authority if practicable, (c) to the extent required by Requirement of Law or by any subpoena or similar legal
process following notice to the Borrowers of such requirement by the Administrative Agent and an opportunity for the
Borrowers to contest if practicable, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the
Loan Parties and their obligations, (g) with the consent of the Borrowers, (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, the Issuing Bank
or any Lender on a nonconfidential basis from a source other than the Borrowers, and (i) to a Lenders regulatory authorities in
the course of any examination of its books and records. For the purposes of this Section, Information means all information
received from the Borrowers relating to any Borrower or its business, other than any such information that is available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by any Borrower; provided
that, in the case of information received from any Borrower after the date hereof, such information is clearly identified at the
time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section
shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain
the confidentiality of such Information as such Person would accord to its own confidential information.
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SECTION 9.13. Several Obligations; Nonreliance; Violation of Law. The respective obligations of the Lenders hereunder
are several and not joint and the failure of any Lender to make any Loan or perform any of its obligations hereunder shall not
relieve any other Lender from any of its obligations hereunder. Each Lender hereby represents that it is not relying on or looking
to any margin stock for the repayment of the Borrowings provided for herein. Anything contained in this Agreement to the
contrary notwithstanding, neither the Issuing Bank nor any Lender shall be obligated to extend credit to the Borrowers in
violation of any Requirement of Law.
SECTION 9.14. USA PATRIOT Act. Each Lender that is subject to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the Act) hereby notifies the Borrowers that pursuant to the requirements
of the Act, it is required to obtain, verify and record information that identifies the Borrowers, which information includes the
name and address of the Borrowers and other information that will allow such Lender to identify the Borrowers in accordance
with the Act.
SECTION 9.15. Disclosure. Each Loan Party and each Lender hereby acknowledges and agrees that the Administrative
Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with any of
the Loan Parties and their respective Affiliates.
SECTION 9.16. Appointment for Perfection. Each Lender hereby appoints each other Lender as its agent for the purpose of
perfecting Liens, for the benefit of the Administrative Agent and the Lenders, in assets which, in accordance with Article 9 of the
UCC, the PPSA or any other applicable law can be perfected only by possession. Should any Lender (other than the
Administrative Agent) obtain possession of any such Collateral, such Lender shall notify the Administrative Agent thereof, and,
promptly upon the Administrative Agents request therefor shall deliver such Collateral to the Administrative Agent or otherwise
deal with such Collateral in accordance with the Administrative Agents instructions.
SECTION 9.17. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate
applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under
applicable law (collectively the Charges), shall exceed the maximum lawful rate (the Maximum Rate) which may be
contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate
of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were
not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in
respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such
Lender.
SECTION 9.18. Judgment Currency. If for the purpose of obtaining judgment in any court it is necessary to convert an
amount due hereunder in the currency in which it is due (the Original Currency) into another currency (the Second
Currency), the rate of exchange applied shall be that at which, in accordance with normal banking procedures, the
Administrative Agent could purchase in the Chicago foreign exchange market, the Original Currency with the Second Currency
on the date two (2) Business Days preceding that on which judgment is given. Each Borrower agrees that its obligation in respect
of any Original Currency due from it hereunder shall, notwithstanding any judgment or payment in such other currency, be
discharged only to the extent that, on the date the Lender receives payment of any sum so adjudged to be due hereunder in the
Second Currency, the Administrative Agent may, in accordance with normal banking procedures, purchase, in the Chicago
foreign exchange market, the Original Currency with the amount of the Second Currency so paid; and if the amount of the
Original Currency so purchased or could have been so purchased is less than the amount originally due in the Original Currency,
each Borrower agrees as a separate obligation and notwithstanding any such payment or judgment to indemnify the
Administrative Agent against such loss. The term rate of exchange in this Section 9.18 means the spot rate at which the
Administrative Agent, in accordance with normal practices, is able on the relevant date to purchase the Original Currency with
the Second Currency, and includes any premium and costs of exchange payable in connection with such purchase.
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ARTICLE X
Loan Guaranty
SECTION 10.01. Guaranty. Each Loan Guarantor hereby agrees that it is jointly and severally liable for, and, as primary
obligor and not merely as surety, absolutely and unconditionally guarantees to the Lenders the prompt payment when due,
whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Secured Obligations and all
reasonable costs and expenses including, without limitation, all court costs and reasonable attorneys and paralegals fees and
expenses paid or incurred after the occurrence and during the continuance of an Event of Default by the Administrative Agent,
any Lender and the Issuing Bank in endeavoring to collect all or any part of the Secured Obligations from, or in prosecuting any
action against, any Borrower, any Loan Guarantor or any other guarantor of all or any part of the Secured Obligations (such costs
and expenses, together with the Secured Obligations, collectively the Guaranteed Obligations). Each Loan Guarantor further
agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from
it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal. All terms of this Loan Guaranty
apply to and may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended any
portion of the Guaranteed Obligations.
SECTION 10.02. Guaranty of Payment. This Loan Guaranty is a guaranty of payment and not of collection. Each Loan
Guarantor waives any right to require the Administrative Agent, the Issuing Bank or any Lender to sue any Borrower, any Loan
Guarantor, any other guarantor, or any other person obligated for all or any part of the Guaranteed Obligations (each, an
Obligated Party), or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed
Obligations.
SECTION 10.03. No Discharge or Diminishment of Loan Guaranty. (a) Except as otherwise provided for herein, the
obligations of each Loan Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in full in cash of the Guaranteed Obligations or a
signed waiver or release executed by the Administrative Agent), including: (i) any claim of waiver, release, extension, renewal,
settlement, surrender, alteration, or compromise of any of the Guaranteed Obligations, by operation of law or otherwise other
than as written; (ii) any change in the corporate existence, structure or ownership of any Borrower or any other guarantor of or
other person liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar
proceeding affecting any Obligated Party other than such Loan Guarantor, or their assets or any resulting release or discharge of
any obligation of any Obligated Party other than such Loan Guarantor; or (iv) the existence of any claim, setoff or other rights
which any Loan Guarantor may have at any time against any Obligated Party, the Administrative Agent, the Issuing Bank, any
Lender, or any other person, whether in connection herewith or in any unrelated transactions.
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(b) The obligations of each Loan Guarantor hereunder are not subject to any defense or setoff, counterclaim,
recoupment, or termination whatsoever by reason of the invalidity, illegality, or unenforceability of any of the Guaranteed
Obligations or otherwise, or any provision of applicable law or regulation purporting to prohibit payment by any Obligated
Party, of the Guaranteed Obligations or any part thereof.
(c) Further, the obligations of any Loan Guarantor hereunder are not discharged or impaired or otherwise affected by:
(i) the failure of the Administrative Agent, the Issuing Bank or any Lender to assert any claim or demand or to enforce any
remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver or modification of or supplement to
any provision of any agreement relating to the Guaranteed Obligations; (iii) any release, non-perfection, or invalidity of any
indirect or direct security for the obligations of the Borrowers for all or any part of the Guaranteed Obligations or any
obligations of any other guarantor of or other person liable for any of the Guaranteed Obligations; (iv) any action or failure
to act by the Administrative Agent, the Issuing Bank or any Lender with respect to any collateral securing any part of the
Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of
the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent
vary the risk of such Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a matter of
law or equity (other than the indefeasible payment in full in cash of the Guaranteed Obligations).
SECTION 10.04. Defenses Waived. To the fullest extent permitted by applicable law, each Loan Guarantor hereby waives
any defense based on or arising out of any defense of any Borrower or any Loan Guarantor or the unenforceability of all or any
part of the Guaranteed Obligations from any cause, or the cessation from any cause of the liability of any Borrower or any Loan
Guarantor, other than the indefeasible payment in full in cash of the Guaranteed Obligations. Without limiting the generality of
the foregoing, each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent
permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any
person against any Obligated Party, or any other person. The Administrative Agent may, at its election, foreclose on any
Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of
foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Obligations,
compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any Obligated Party or
exercise any other right or remedy available to it against any Obligated Party, without affecting or impairing in any way the
liability of such Loan Guarantor under this Loan Guaranty except to the extent the Guaranteed Obligations have been fully and
indefeasibly paid in cash. To the fullest extent permitted by applicable law, each Loan Guarantor waives any defense arising out
of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of any Loan Guarantor against any Obligated Party or any security.
SECTION 10.05. Rights of Subrogation. No Loan Guarantor will assert any right, claim or cause of action, including,
without limitation, a claim of subrogation, contribution or indemnification that it has against any Obligated Party, or any
collateral, until the Loan Parties and the Loan Guarantors have fully performed all their obligations to the Administrative Agent,
the Issuing Bank and the Lenders.
SECTION 10.06. Reinstatement; Stay of Acceleration. If at any time any payment of any portion of the Guaranteed
Obligations is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, or reorganization of any
Borrower or otherwise, each Loan Guarantors obligations under this Loan Guaranty with respect to that payment shall be
reinstated at such time as though the payment had not been made and whether or not the Administrative Agent, the Issuing Bank
and the Lenders are in possession of this Loan Guaranty. If acceleration of the time for payment of any of the Guaranteed
Obligations is stayed upon the insolvency, bankruptcy or reorganization of any Borrower, all such amounts otherwise subject to
acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Loan
Guarantors forthwith on demand by the Lender.
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SECTION 10.07. Information. Each Loan Guarantor assumes all responsibility for being and keeping itself informed of the
Borrowers financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty,
and agrees that neither the Administrative Agent, the Issuing Bank nor any Lender shall have any duty to advise any Loan
Guarantor of information known to it regarding those circumstances or risks.
SECTION 10.08. Termination. The Lenders may continue to make loans or extend credit to the Borrowers based on this
Loan Guaranty until five days after it receives written notice of termination from any Loan Guarantor. Notwithstanding receipt of
any such notice, each Loan Guarantor will continue to be liable to the Lenders for any Guaranteed Obligations created, assumed
or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals, extensions, modifications and
amendments with respect to, or substitutions for, all or any part of that Guaranteed Obligations.
SECTION 10.09. [Intentionally omitted.]
SECTION 10.10. Maximum Liability. The provisions of this Loan Guaranty are severable, and in any action or proceeding
involving any state or provincial corporate law, or any state, provincial, federal or foreign bankruptcy, insolvency, reorganization
or other law affecting the rights of creditors generally, if the obligations of any Loan Guarantor under this Loan Guaranty would
otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of such Loan Guarantors
liability under this Loan Guaranty, then, notwithstanding any other provision of this Loan Guaranty to the contrary, the amount
of such liability shall, without any further action by the Loan Guarantors or the Lenders, be automatically limited and reduced to
the highest amount that is valid and enforceable as determined in such action or proceeding (such highest amount determined
hereunder being the relevant Loan Guarantors Maximum Liability. This Section with respect to the Maximum Liability of
each Loan Guarantor is intended solely to preserve the rights of the Lenders to the maximum extent not subject to avoidance
under applicable law, and no Loan Guarantor nor any other person or entity shall have any right or claim under this Section with
respect to such Maximum Liability, except to the extent necessary so that the obligations of any Loan Guarantor hereunder shall
not be rendered voidable under applicable law. Each Loan Guarantor agrees that the Guaranteed Obligations may at any time and
from time to time exceed the Maximum Liability of each Loan Guarantor without impairing this Loan Guaranty or affecting the
rights and remedies of the Lenders hereunder, provided that, nothing in this sentence shall be construed to increase any Loan
Guarantors obligations hereunder beyond its Maximum Liability.
SECTION 10.11. Contribution. In the event any Loan Guarantor (a Paying Guarantor) shall make any payment or
payments under this Loan Guaranty or shall suffer any loss as a result of any realization upon any collateral granted by it to
secure its obligations under this Loan Guaranty, each other Loan Guarantor (each a Non-Paying Guarantor) shall contribute to
such Paying Guarantor an amount equal to such Non-Paying Guarantors Applicable Percentage of such payment or payments
made, or losses suffered, by such Paying Guarantor. For purposes of this Article X, each Non-Paying Guarantors Applicable
Percentage with respect to any such payment or loss by a Paying Guarantor shall be determined as of the date on which such
payment or loss was made by reference to the ratio of (i) such Non-Paying Guarantors Maximum Liability as of such date
(without giving effect to any right to receive, or obligation to make, any contribution hereunder) or, if such Non-Paying
Guarantors Maximum Liability has not been determined, the aggregate amount of all monies received by such Non-Paying
Guarantor from any Borrower after the date hereof (whether by loan, capital infusion or by other means) to (ii) the aggregate
Maximum Liability of all Loan Guarantors hereunder (including such Paying Guarantor) as of such date (without giving effect to
any right to receive, or obligation to make, any contribution hereunder), or to the extent that a Maximum Liability has not been
determined for any Loan Guarantor, the aggregate amount of all monies received by such Loan Guarantors from any Borrower
after the date hereof (whether by loan, capital infusion or by other means). Nothing in this provision shall affect any Loan
Guarantors several liability for the entire amount of the Guaranteed Obligations (up to such Loan Guarantors Maximum
Liability). Each of the Loan Guarantors covenants and agrees that its right to receive any contribution under this Loan Guaranty
from a Non-Paying Guarantor shall be subordinate and junior in right of payment to the payment in full in cash of the
Guaranteed Obligations. This provision is for the benefit of both the Administrative Agent, the Issuing Bank, the Lenders and the
Loan Guarantors and may be enforced by any one, or more, or all of them in accordance with the terms hereof.
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SECTION 10.12. Liability Joint and Several. The obligations of each Loan Party as a Loan Guarantor under this Article X
is in addition to all obligations of each Loan Party to the Administrative Agent, the Issuing Bank and the Lenders under this
Agreement and the other Loan Documents to which such Loan Party is a party or in respect of any obligations or liabilities of the
other Loan Parties, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other
liability specifically provides to the contrary. The Loan Parties are jointly and severally liable for the repayment in full of the
Obligations.
ARTICLE XI
Multiple Borrower Provisions
SECTION 11.01. Independent Obligations; Subrogation. The obligations of each Borrower, as guarantor of another
Borrowers Obligations hereunder, are joint and several. To the maximum extent permitted by law, each Borrower hereby waives
any claim, right or remedy which it may now have or hereafter acquire against another Borrower that arises hereunder including,
without limitation, any claim, remedy or right of subrogation, reimbursement, exoneration, contribution, indemnification, or
participation in any claim, right or remedy of the Administrative Agent or any Lender against any Borrower or any Collateral
which Lender now has or hereafter acquires, whether or not such claim, right or remedy arises in equity, under contract, by
statute, under common law or otherwise until the Obligations hereunder are fully paid and finally discharged. In addition, each
Borrower hereby waives any right to proceed against another Borrower, now or hereafter, for contribution, indemnity,
reimbursement, and any other suretyship rights and claims, whether direct or indirect, liquidated or contingent, whether arising
under express or implied contract or by operation of law, which any Borrower may now have or hereafter have as against another
Borrower with respect to the Obligations hereunder until such Obligations are fully paid and finally discharged. Each Borrower
also hereby waives any rights of recourse to or with respect to any asset of any other Borrower until the Obligations hereunder
are fully paid and finally discharged.
SECTION 11.02. Authority to Modify Obligations and Security. Each Borrower (a Consenting Borrower) authorizes the
Administrative Agent and the Lenders, without notice or demand (except to the extent otherwise required under this Agreement)
and without affecting such Consenting Borrowers liability hereunder, from time to time, whether before or after any notice of
termination hereof or before or after any default in respect of the Obligations hereunder, to:
(a) accept, substitute, waive, decrease, increase, release, exchange or otherwise alter any Collateral, in whole or in part,
securing any other Borrowers (an Affected Borrower) Obligations;
(b) apply any and all such Collateral and direct the order or manner of sale thereof as the Administrative Agent, in its
discretion, may determine;
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(c) deal with any Affected Borrower as the Administrative Agent may elect;
(d) in the Administrative Agents reasonable discretion, settle, release on terms satisfactory to the Administrative
Agent, or by operation of law or otherwise, compound, compromise, collect or otherwise liquidate any Affected Borrowers
obligations and/or any of the Collateral in any manner, and bid and purchase any of the collateral at any sale thereof;
(e) apply any and all payments or recoveries from an Affected Borrower as the Administrative Agent, in its discretion,
may determine, whether or not such payment relates to the Obligations of the Consenting Borrower hereunder; and whether
such Obligations are secured or unsecured or guaranteed or not guaranteed by others; and
(f) apply any sums realized from Collateral furnished by an Affected Borrower upon any of its indebtedness or
obligations to the Administrative Agent or any Lender as the Administrative Agent, in its discretion, may determine,
whether or not such indebtedness relates to the Obligations of the Consenting Borrower hereunder.
SECTION 11.03. Waiver of Defenses. Upon an Event of Default by any Borrower in respect of any Obligations hereunder,
the Administrative Agent may, at its option and without notice to the other Borrowers, proceed directly against any Borrower to
collect and recover the full amount of the liability hereunder, or any portion thereof, and each Borrower waives any right to
require the Administrative Agent to:
(a) proceed against any other Borrower or any other person whomsoever;
(b) proceed against or exhaust any Collateral given to or held by the Administrative Agent or any Lender in connection
with the Obligations hereunder;
(c) give notice of the terms, time and place of any public or private sale of any of the Collateral except as otherwise
provided herein or required by applicable law; or
(d) pursue any other remedy in the Administrative Agents power whatsoever.
A separate action or actions may be brought and prosecuted against a Borrower whether or not action is brought against any
other Borrower and whether any other Borrower be joined in any such action or actions.
SECTION 11.04. Right to Dispose of Security; Impairment of Rights. Each Borrower hereby authorizes and empowers the
Administrative Agent in its discretion, without any notice or demand to such Borrower whatsoever (except as otherwise required
under this Agreement) and without affecting the liability of such Borrower hereunder, to exercise any right or remedy which the
Administrative Agent may have available to it against any other Borrower, including, but not limited to, judicial foreclosure,
exercise of rights of power of sale without judicial action, or taking a deed or an assignment in lieu of foreclosure as to any
Collateral, and such Borrower hereby waives any defense to the recovery by the Administrative Agent against such Borrower of
any deficiency after such action notwithstanding any impairment or loss of any right of reimbursement or subrogation or other
right or remedy against another Borrower or against any Collateral for the Obligations hereunder.
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SECTION 11.05. Additional Waivers. Each Borrower waives any defense arising by reason of any disability or other
defense of any other Borrower or by reason of any cessation from any cause whatsoever of the liability of the other Borrower or
by reason of any act or omission of the Administrative Agent, any Lender or others which directly or indirectly results in or aids
the discharge or release of any other Borrower or any Obligations hereunder or any Collateral by operation of law or otherwise.
No exercise by the Administrative Agent of, and no omission of the Administrative Agent to exercise, any power or authority
recognized herein and no impairment or suspension of any right or remedy of the Administrative Agent against any Borrower or
any Collateral shall in any way suspend, discharge, release, exonerate or otherwise affect any of the Obligations of Borrower
hereunder or any Collateral furnished by any Borrower or give to any Borrower any right of recourse against the Administrative
Agent. Each Borrower specifically agrees that the failure of the Administrative Agent: (a) to perfect any lien on or security
interest in any property heretofore or hereafter given by any Borrower to secure payment of the Obligations hereunder, or to
record or file any document relating thereto; or (b) to file or enforce a claim against the estate (either in administration,
bankruptcy or other proceeding) of any Borrower shall not in any manner whatsoever terminate, diminish, exonerate or otherwise
affect the liability of any Borrower hereunder.
SECTION 11.06. No Right To Information. Each Borrower waives the right, if any, to require the Administrative Agent to
disclose to such Borrower any information it may now have or hereafter acquire concerning another Borrowers character, credit,
Collateral, financial condition or other matters. Each Borrower has established adequate means to obtain from the other
Borrowers on a continuing basis financial and other information pertaining to such other Borrowers business and affairs, and
assumes the responsibility for being and keeping informed of the financial and other conditions of the other Borrowers and of all
circumstances bearing upon the risk of nonpayment of the Obligations hereunder which diligent inquiry would reveal. The
Administrative Agent need not inquire into the powers of any Borrower or the authority of any of its respective officers,
directors, partners or agents acting or purporting to act in its behalf, and any Obligations hereunder created in reliance upon the
purported exercise of such power or authority is hereby guaranteed. All Obligations to the Administrative Agent heretofore, now,
or hereafter created shall be deemed to have been granted at each Borrowers special insistence and request and in consideration
of and in reliance upon this Agreement.
SECTION 11.07. Notices, Demands, Etc. Except as expressly provided by this Agreement, the Administrative Agent shall
be under no obligation whatsoever to make or give to any Borrower, and each Borrower hereby waives diligence, all rights of
setoff and counterclaim against Lender, all demands, presentments, protests, notices of protests, notices of nonperformance,
notices of dishonor, and all other notices of every kind or nature, including notice of the existence, creation or incurring of any
new or additional Obligations hereunder.
SECTION 11.08. Subordination. Except as otherwise provided in this Section 11.08, any indebtedness of any Borrower
now or hereafter owing to another Borrower is hereby subordinated to the Obligations of the Borrowers to the Administrative
Agent and the Lenders hereunder, whether heretofore, now or hereafter created, and whether before or after notice of termination
hereof, and, following the occurrence and during the continuation of an Event of Default, no Borrower shall, without the prior
consent of the Administrative Agent, pay in whole or in part any of such indebtedness nor will any Borrower accept any payment
of or on account of any such indebtedness at any time while such Borrower remains liable hereunder. At the request of the
Administrative Agent, after the occurrence and during the continuance of an Event of Default, each Borrower shall pay to the
Administrative Agent all or any part of such subordinated indebtedness and any amount so paid to the Administrative Agent at
its request shall be applied to payment of the Obligations hereunder. Each payment on the indebtedness of a Borrower to another
Borrower received in violation of any of the provisions hereof shall be deemed to have been received by such Borrower as
trustee for the Administrative Agent and shall be paid over to the Administrative Agent immediately on account of the
Obligations hereunder, but without otherwise affecting in any manner such Borrowers liability under any of the provisions of
this Agreement. Each Borrower agrees to file all claims against any other Borrower in any bankruptcy or other proceeding in
which the filing of claims is required by law in respect of any indebtedness of any other Borrower to such Borrower, and the
Administrative Agent shall be entitled to all of any such Borrowers rights thereunder. If for any reason any Borrower fails to file
such claim at least thirty (30) days prior to the last date on which such claim should be filed, the Administrative Agent, as such
Borrowers attorney-in-fact, is hereby authorized to do so in such Borrowers name or, in the Administrative Agents discretion,
to assign such claim to, and cause a proof of claim to be filed in the name of, the Administrative Agents nominee. In all such
cases, whether in administration, bankruptcy or otherwise, the person or persons authorized to pay such claim shall pay to the
Administrative Agent the full amount payable on the claim in the proceeding, and to the full extent necessary for that purpose
such Borrower hereby assigns to the Administrative Agent all such Borrowers rights to any payments or distributions to which
such Borrower otherwise would be entitled. If the amount so paid is greater than such Borrowers liability hereunder, the
Administrative Agent will pay the excess amount to the party entitled thereto.
99
SECTION 11.09. Revival. If any payments of money or transfers of property made to the Administrative Agent or any
Lender by any Borrower should for any reason subsequently be declared to be fraudulent (within the meaning of any state or
federal law relating to fraudulent conveyances), preferential or otherwise voidable or recoverable in whole or in part for any
reason (hereinafter collectively called voidable transfers) under the bankruptcy code or any other federal or state or provincial
law, and the Administrative Agent or such Lender is required to repay or restore any such voidable transfer, or the amount or any
portion thereof, then as to any such voidable transfer or the amount repaid or restored and all costs and expenses (including
attorneys fees) of the Administrative Agent or such Lender related thereto, Borrowers liability hereunder shall automatically be
revived, reinstated and restored and shall exist as though such voidable transfer had never been made to the Administrative
Agent or such Lender.
SECTION 11.10. Understanding of Waivers. Each Borrower warrants and agrees that the waivers set forth in this Article XI
are made with full knowledge of their significance and consequences. If any of such waivers are determined to be contrary to any
applicable law or public policy, such waivers shall be effective only to the maximum extent permitted by law.
SECTION 11.11. Unlimited Liability. The Obligations of the Borrowers hereunder shall be in addition to any obligations of
the Borrowers to the Administrative Agent and the Lenders heretofore given or hereafter to be given to the Administrative Agent
or any Lender unless such other obligations are expressly modified or terminated in writing. The Obligations of the Borrowers to
the Administrative Agent and the Lenders shall at all times be deemed to be the aggregate liability of the Borrowers under the
terms of this Agreement and of any other obligations heretofore or hereafter incurred by any Borrower to the Administrative
Agent or any Lender under this Agreement or the Loan Documents and not expressly terminated or modified in writing.
SECTION 11.12. International as Agent for Borrowers. Each Borrower hereby irrevocably appoints International as the
borrowing agent and attorney-in-fact for all Borrowers (the Administrative Borrower) which appointment shall remain in full
force and effect unless and until the Administrative Agent shall have received prior written notice signed by each Borrower that
such appointment has been revoked and that another Borrower has been appointed Administrative Borrower. Each Borrower
hereby irrevocably appoints and authorizes the Administrative Borrower (i) to provide the Administrative Agent with all notices
with respect to Loans and Letters of Credit obtained for the benefit of any Borrower and all other notices and instructions under
this Agreement and (ii) to take such action as the Administrative Borrower deems appropriate on its behalf to obtain Loans and
Letters of Credit and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this
Agreement. It is understood that the handling of the Loans and Collateral of Borrowers in a combined fashion, as more fully set
forth herein, is done solely as an accommodation to Borrowers in order to utilize the collective borrowing powers of Borrowers
in the most efficient and economical manner and at their request, and that neither the Administrative Agent nor any Lender shall
incur liability to any Borrower as a result hereof. Each Borrower expects to derive benefit, directly or indirectly, from the
handling of the Loans and the Collateral in a combined fashion since the successful operation of each Borrower is dependent on
the continued successful performance of the integrated group. To induce the Administrative Agent and the Lenders to do so, and
in consideration thereof, each Borrower hereby jointly and severally agrees to indemnify the Administrative Agent and each
Lender and hold the Administrative Agent and each Lender harmless against any and all liability, expense, loss or claim of
damage or injury, made against the Administrative Agent or any Lender by any Borrower or by any third party whosoever,
arising from or incurred by reason of (a) the handling of the Loans and Collateral of Borrowers as herein provided, (b) reliance
by the Administrative Agent or any Lender on any instructions of the Administrative Borrower, or (c) any other action taken by
the Administrative Agent or any Lender hereunder or under the other Loan Documents, except that Borrowers will have no
liability to the Administrative Agent or any Lender under this Section 11.12 with respect to any liability that has been finally
determined by a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of the
Administrative Agent or such Lender, as the case may be.
100
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
BORROWERS:
By: /s/ Stacy Loretz-Congdon
Name: Stacy Loretz-Congdon
Title: Treasurer
Title: Treasurer
Title: Treasurer
Title: Treasurer
Title: Treasurer
Title: Treasurer
- Credit Agreement Signature Pages -

By:
/s/ Stacy Loretz-Congdon

Name:
Title:
Treasurer

By:

Name:
Title:
Treasurer
MINTER-WEISMAN CO.
By:

Name:
Title:
Treasurer
LENDERS:
JPMORGAN CHASE BANK, N.A., as
Administrative Agent, Issuing Bank,
Swingline Lender and a Revolving Lender
By: /s/ Courtney Jeans
Name: Courtney Jeans
Title: Vice President
TORONTO BRANCH, as Canadian
Swingline Lender and a Canadian Lender
By: /s/ Steve Voigt
Name: Steve Voigt
GENERAL ELECTRIC CAPITAL

CORPORATION, as Co-Syndication Agent
and a Revolving Lender
By:
/s/ Philip F. Carfora

Name: Philip F. Carfora
Title: Duly Authorized Signatory
GE CANADA FINANCE HOLDING

COMPANY, as a Canadian Lender
By:
/s/
Name:
Title: Duly Authorized Signatory
WACHOVIA CAPITAL FINANCE

CORPORATION (WESTERN), as
Co-Syndication Agent and a Revolving Lender
By:
/s/ Gary D. Cassianni

Name: Gary D. Cassianni
CONGRESS FINANCIAL CORPORATION

(CANADA), as a Canadian Lender
By:
/s/ Enza Aposta

Name: Enza Aposta
BANK OF AMERICA, N.A., as

Co-Documentation Agent and a Revolving
Lender
By:
/s/ Stephen King

Name:
Stephen King
Title:
Vice President
BANK OF AMERICA, N.A., CANADIAN

BRANCH, as a Canadian Lender
By:
/s/ L. M. Junior Del Brocco

Name:
L. M. Junior Del Brocco
Title:
Senior Vice President
WELLS FARGO FOOTHILL, LLC, as

Co-Documentation Agent and a Revolving
Lender
By:
/s/ Juan Barrera

Name: Juan Barrera
WELLS FARGO FINANCIAL

CORPORATION CANADA, as a Canadian
Lender
By:
/s/ Nick Scarfo

Name: Nick Scarfo
UNION BANK OF CALIFORNIA, N.A., as

a Revolving Lender
By: /s/ Michele Mojabi
Michele Mojabi
Vice President
UNION BANK OF CALIFORNIA,
CANADA BRANCH, as a Canadian Lender
By: /s/ James Chepyha
James Chepyha
Vice President
THE BANK OF NOVA SCOTIA, as a

Revolving Lender and a Canadian Lender
By: /s/ Chris Osborn
Name: Chris Osborn
Title: Managing Director
HARRIS N.A., as a Revolving Lender

By: /s/ Graeme Robertson
Name: Graeme Robertson
BANK OF MONTREAL, as a Canadian
Lender
By: /s/ Ben Ciallella
Name: Ben Ciallella
COMMITMENT SCHEDULE
Revolving
Commitment
Lender
JPMorgan Chase Bank, N.A.
General Electric Capital Corporation
GE Canada Finance Holding Company
Wachovia Capital Finance Corporation (Western)
Congress Financial Corporation (Canada)
Bank of America, N.A.
Wells Fargo Foothill, LLC
Wells Fargo Financial Corporation Canada
Union Bank of California, N.A.
The Bank of Nova Scotia
Harris N.A.
Bank of Montreal
$
$
$
$
$
$
$
$
Total
Canadian
Commitment
50,000,000
32,500,000
-032,500,000
-032,500,000
32,500,000
-025,000,000
22,500,000
22,500,000
-0-
Cdn.$ 22,000,000
-0Cdn.$ 14,300,000
-0Cdn.$ 14,300,000
Cdn.$ 14,300,000
-0Cdn.$ 14,300,000
Cdn.$ 11,000,000
Cdn.$ 9,900,000
-0Cdn.$ 9,900,000
250,000,000
Cdn.$ 110,000,000
Commitment Schedule
Schedule 2.06 to Credit Agreement

Letters of Credit
As of September 30, 2005
Beneficiary
LOC #
LC Amount
Purpose
Issuing Bank
Reliance Insurance
P269131
55,177.00
Workers Comp
JPM
National Union Fire Insurance

Pittsburgh
P203003
3,845,818.00
Workers Comp
JPM
Travelers Casualty
P226559
500,000.00
Florida Tobacco Tax

Bond
JPM
Zurich American Insurance
S856307
6,250,000.00
Casualty Insurance
ABN
AMRO/GECC
Hartford Fire Insurance
S856784
1,238,755.37
Bond for various

juristictions
ABN
AMRO/GECC
Greenwich Insurance Company
S856316
156,000.00
Bond surety for

licensing
ABN
AMRO/GECC
Alberta Used Oil Management

(CD $25,000.00)
P324232T04983
21,525.741
Surety for oil material

recycling
RBC/GECC
Imperial Tobacco Canada

(CD $2,500,000.00)
P324852T04983
2,152,574.481
Credit terms &

discounts
RBC/GECC
Saskatchewan Finance
(CD $500,000.00)
P326443T04983
430,514.901
Tobacco tax
RBC/GECC
Manitoba Finance
(CD $500,000.00)
P329985T04983
430,514.901
Tobacco tax
RBC/GECC
Ontario Minister of Finance

(CD $1,000,000.00)
P326661T04983
861,029.791
Tobacco tax
RBC/GECC
Insurance for casualty

program
Wachovia
Surety for
membership
Wachovia/GECC
Insurance for
Casualty program
Svenska
Bank/GECC
Liberty Mutual Insurance
SM211657W
2,508,750.00
Affiliated Foods
SE445389W
300,000.00
Old Republic Insurance Co
S04070
10,000,000.00
Total Letters of
Credit
28,750,660.18
Note:
1- LC face value is in CD dollars. This summary shows the amount in US$ based on the Sept 30rd
F/X rate
1.1614
Schedule 3.05(a) to Credit Agreement

Owned Real Estate and Leased Properties
SCHEDULE OF OWNED REAL ESTATE
DIV
LESSOR
85
PROPERTY
LOCATION
N/A
PROPERTY
ADDRESS
TYPE
1055 SALT RIVER ROAD, 42754

LEITCHHFIELD, KY
WAREHOUSE AND
LAND
SCHEDULE OF REAL ESTATE LEASES

DIV
LESSOR
US WAREHOUSE
7
PRUDENTIAL Prisa
16
SHELEY & BARBARA DEDRICK
(LOUIS SCHULTZ CO)
68
NORTH MARKET CENTER L.P.
21
West Vernon, LLC (ANTHONY BRENT
CORP)
23
FGW PROPERTIES
35
PROLOGIS CALIFORNIA I LLC
44
NL PROPERTIES;GVA Kidder Mathews
45
BROER CO.
48
MONTANO TENANTS IN COMMON
53
DEVELOPMENT SVCS/AMER
53
CROWN WEST REALTY LLC
61
VASCONCELOS, LOU & ELAINE
65
VALLEY VIEW INDUSTRIAL CENTER
C/O HARSCH INVESTMENTS
PROPERTIES
71
75
170
178
92
CVP PARTNERSHIP INC.

MADISON WAREHOUSE CORP
NATHAN LANE ASSOCIATES, LLP
Paid by wire transfer
NORTH CHURCH LANE PROPERTIES
II. LLC
THEOPACIFIC
PROPERTY
LOCATION
HAYWARD, CA
PROPERTY
ADDRESS
TYPE
31300 MEDALLION DR, 94544
WAREHOUSE
SACRAMENTO, CA
SACRAMENTO, CA
3970 PELL CIRCLE, 95838

1520 National Drive, 95834
WAREHOUSE
WAREHOUSE
LOS ANGELES, CA
BAKERSFIELD, CA
CORONA, CA
2311 E. 48TH ST., VERNON, 90058

200 Core-Mark Court, 93307
353 MEYER CIRCLE, 92879
13551 S.E. JOHNSON RD,Milwaukie, OR
97222
303 N.E. F STREET, 97526
5600 SECOND NW, 87107
NORTH 1015 DYER RD. 99212
3808 N. SULLIVAN ST BUILDING 35A
99216
245 TELEGRAPH ST 89502
3950 WEST HARMON RD, 89103
WAREHOUSE
WAREHOUSE
WAREHOUSE
1030 WEST 3130 SOUTH, 84119

6401 Will ROGERS BLVD SUITE 200, 76134
WAREHOUSE
WAREHOUSE
1035 NATHAN LANE NORTH, 55441
WAREHOUSE
4820 CHURCH LANE, 30080
WAREHOUSE
311 REED CIRCLE (AMI), 92879
WAREHOUSE
PORTLAND, OR
GRANTS PASS, OR
ALBUQUERQUE, N.M.
SPOKANE,WA
SPOKANE,WA
RENO, NV
LAS VEGAS, NV
SO. SALT LAKE CITY,

UT
FORT WORTH, TX
PLYMOUTH, MN
SMYRNA, GA
CORONA, CA (AMI)
256
MAJESTIC REALTY CO
AURORA, CO
MAJESTIC REALTY CO
AURORA, CO
256
3797 N. Windsor Drive, Aurora, Colorado

80011
3797 N. Windsor Drive, Aurora, Colorado
80011
WAREHOUSE
WAREHOUSE
WAREHOUSE
WAREHOUSE
WAREHOUSE
WAREHOUSE
WAREHOUSE
WAREHOUSE
WAREHOUSE
Schedule 3.05(a) to Credit Agreement

Owned Real Estate and Leased Properties
DIV
LESSOR
PROPERTY
LOCATION
PROPERTY
ADDRESS
TYPE
US OTHER
21
WORLD M.A.P.
35
35
PROLOGIS
FUTURES REAL ESTATE
PARTNERSHIP & INVESTORS
PROPERTY mgmnt Group
NW BUILDING CORP RE LAKE
44
45
45
45
48
71
71
75
DAVID AND PEGGY FRANKE

BILL & CATHY DAVIDSON
LAND GROUP-LLC
AADF WAREHOUSING CORP (Third
Party)
MT SALES JIM MEYER
PLATTE COUNTRY MINI
WAREHOUSE
Rilite Aggregate (pd to BRUNO
BENNA)
Valley Storage (third Party)
Ninth West Properties (Third Party)
US Cold Storage (Third Party)
16
US Cold Storage (Third Party)
99
99
ERNESTO RUFINO
KASHIWA FUDOSAN
99
KASHIWA FUDOSAN
99
KASHIWA FUDOSAN
53
56
61
BURBANK, CA
1419 N SAN FERNANDO BLVD #100

burbank CA 91504
5545 W LATHAM PHONIX AZ 85043
2125 ELCAMINO REAL 92054
SALES
SALES/DELIVERY
REDMOND, OR
EUREKA, CA
GRANTS PASS, OR
ALB
9316 LAKEVIEW AVE S.W. SUITE A

LAKEWOOD WA
580 NE HEMLOCK, UNIT 102 97756
10 WEST 7TH ST. 95501
1060 S.E. M Street 97526
5600 2nd ST NW, Alb NM 87107
MISSOULA, MT
Plate City, MO
2801 South Russel St., Missoula 59801

15905HWY 273
Sales office
Mini warehouse
PHOENIX, AZ
OCEANSIDE, CA
LAKE WOOD, WA
RENO, NV
SLC
SLC
FW
Sacramento
SAN FRANCISCO, CA
SO SAN FRANCISCO,
CA
SO SAN FRANCISCO,
CA
SO SAN FRANCISCO,
CA
TRUCK LOT, adjacent to S. of 245 Telegraph

St 89502
1911 South 900 West
2313 South West 900 West, 84104
2554 Downing Drive, FortWorth TX 76106
3100 52nd Avenue,CA 95823
SALES
SALES
SALES
SALES
outside storage
outside storage
LOT
Outside Storage
Outside Storage
Outside Storage
frozen product storage
152 LOMBARD ST, #608

395 OYSTER PT #415
CORP. APT
CORP. HDQ
395 OYSTER PT #410
CORP. HDQ
395 OYSTER PT #114
storage / suite 114
$U.S. TOTAL
CANADIAN WAREHOUSE
20
MADISON PACIFIC
30
Heathcliff properties and Bergen

properties paid to Canreal Mgmnt
79
MARION HOLDINGS LTD / APEX
172
Summit Reit
previously alberta Paid to Western Spirit
Previously paid to BEUTEL GOODMAN
REAL ESTATE
CANADIAN OTHER
88
GWL Realty Advisors (previously
BENTALL Real Estate Services LP in
trust for Knightsbridge
172
Summit Reit Prop MGMNT
172
Previously Roycom (4.5) Property Fund

LTD / remit to: O&Y Enterprise
MTE Logistix (third Party)
BURNABY, B.C.
7800 RIVERFRONT GATE Burnaby B.C.,

V5J 5L3
2924 JACKLIN ROAD V9B 3Y5
WAREHOUSE
WINNIPEG, MAN
CALGARY, ALBERTA
99 BANNISTER RD., R2R 0S2

8225 30TH ST., S.E. T2C 1H7
WAREHOUSE
WAREHOUSE
RICHMOND, B.C.
13211 DELF PLACE, V6V 2A2
MIS/TAX
VICTORIA, B.C.
CALGARY/EDMON
SALES
Calgary Alberta Outside
storage
WAREHOUSE
6028 - 103 Street
SALES
6505 48th E ST, Calgary Alberta
Outside
SCHEDULE 3.05(b)
to
CREDIT AGREEMENT
INTELLECTUAL PROPERTY
Trademarks
Mark
Legal Entity
Core-Mark
International,
CORE-MARK
Inc.
Core-Mark
International,
CORE-MARK
Inc.
Core-Mark
CORE-MARK &
International,
Design (new design) Inc.
CORE-MARK
Core-Mark
INTERNATIONAL International,
& Design (New
Inc.
Design Logo)
CORE-MARK &
Core-Mark
Design (YOU CAN International,
COUNT ON US)
Inc.
Core-Mark
CORE-MARK
INTERNATIONAL International,
& Design Logo (YOU Inc.
CAN COUNT ON
US)
Core-Mark
International,
SMARTSTOCK
Inc.
Country
Canada
Classes
NA
App. No.
480,956
App. Date
1/15/82
Reg. No.
TMA272,823
Reg. Date
Status
10/15/82 Registered
73/360,195
4/16/82
1,283,707
6/26/84 Registered
729,697
5/19/93
TMA433,460
5/3/94 Registered
74/389,810
5/13/93
1,834,121
5/3/94 Registered
729,698
5/19/93
TMA432,801
5/3/94 Registered
United States 42
74/391,973
5/18/93
1,834,123
5/3/94 Registered
United States 35
75/334,833
8/2/97
2,271,065
8/17/99 Registered
United States 42
Canada
NA
United States 42
Canada
NA
Tradenames
The company uses and has registered a number of trade names including derivatives of the legal corporate names listed on schedule
3.15. In addition, the company runs its two consolidation warehouses using the names Allied Merchandising Industry and Artic
Cascade and a number of derivatives thereof.
SCHEDULE 3.06
to
CREDIT AGREEMENT
LITIGATION AND ENVIRONMENTAL MATTERS
None.
SCHEDULE 3.10
to
CREDIT AGREEMENT
Plan Unfunded Pension Liability
Actuarially Underfunded Plans (on funding assumption basis)
1.
Core-Mark International, Inc. Non-Bargaining Employees Pension Plan for plan year 01/01/05: $1,442,741
2.
ABCO Markets, Inc. Retirement Plan for Arizona Warehouse and Distribution Employees for plan year 01/01/05: $59,042
3.
Godfrey Company Subsidiaries Pension Plan for plan year 01/01/05: $87,083
Disclosure Schedule 3.12

to
Credit Agreement
Material Agreements
1.
Amended and Restated Administrative Claims Guaranty Agreement dated as of August 31, 2004, by and between
Core-Mark Holding Company, Inc. and the Post Confirmation Trust.
2.
Subordinated Secured Guaranty Agreement dated dated as of August 20, 2004, by and between Core-Mark Holding
Company, Inc. and the Reclamation Creditors Trust for the benefit of the holders of Allowed Class 3(B) TLV Reclamation
Claims.
3.
Junior Subordinated Secured Guaranty Agreement dated as of August 20, 2004, by and between Core-Mark Holding
Company, Inc. and the Reclamation Creditors Trust for the benefit of the holders of Allowed Net Non-TLV Reclamation
Claims.

2005 SCHEDULE OF INSURANCE As of September 2, 2005
Policy
CASUALTY
1 Commercial General
Liability
2 Business Automobile
Liability & Physical
Damage
Policy
Number
Policy
Period
Carrier
Limits
Deductible
Including ALAE
Premium
RG2-691-436369-025
1/1/05-1/1/06 Liberty Mutual

Fire
Insurance
Company
$3,000,000 Per Occurrence

$3,000,000 Products Agg
$5,000,000 General Agg
$1,000,000 Fire Legal
ALAE Outside Policy Limit
$500,000
ALAE Outside
Deductible
$213,955
Plus TRIA &
Assessments
$1,500 and $971
AS2-691-436369-015

Fire
Insurance
Company
$2,000,000 CSL
ALAE Outside Policy Limit
$500,000
ALAE Outside
Deductible
$388,699
Plus TRIA
$11,950
Comprehensive
$500,000 Deductible
Collision $500,000
Deductible
3 Excess Automobile
Liability
4 Workers Compensation
& Employers Liability
AS2-691-436369-015

Fire
Insurance
Company
$3,000,000 Excess $2,000,000
None
$195,000
WA7-69D-436369-045
All states except OR/WI
& AZ

Fire
Insurance
Company
Coverage A: Statutory
$500,000
ALAE Outside
Deductible
$802,450
Plus TRIA &
Assessments
WC7-691-436369-025
OR/WI
5 General Liability
(ADC/Core-Mark)
RG2-691-436369-065
Note: Coverage applies

only to the contract
between Core-Mark
International, Inc.
(ADC Corp.) and
Circle-K Stores, Inc.
Coverage B:
$1,000,000/BI by Accident
$1,000,000/BI by Disease Each
Employee
$1,000,000/BI by Disease
Policy Limit or
Where Required by Law
Unlimited

Fire
Insurance
Company

$2,000,000 Products Aggregate
$2,000,000 General Aggregate
$2,000,000 Personal &
Advertising Injury
$300,000 Damages to Premises
Rented to you
$10,000 Medical Payments
$27,940 and
$109,924
Guaranteed Cost
No Deductible
$65,556
Guaranteed Cost
No Deductible
$121,026
8313 B West Latham

Tolleson, AZ
6 Automobile Liability
(ADC/Core-Mark)
Incl. Auto Physical
Damage (APD)
AS2-691-436369-055

Fire
Insurance
Company

between Core-Mark
International, Inc.
(ADC Corp.) and
(AZ CM + ADC)
APD Comprehensive &

Collision Coverage
$50,000 Limit
314525-8
6/1/04-5/31/05 State
Compensation
Fund of Arizona
$30,170
$2,500
Comprehensive
Deductible $2,500
Collision Deductible
Guaranteed Cost
$304,384
Subject to Annual
Audit incl. EL Limit
Incr $6k
N/A
Guaranteed Cost
$61,059
Coverage B:
$1,000,000 BI by Accident
$1,000,000 BI by Disease Each
Employee
$1,000,000 BI by Disease
Policy Limit

between Core-Mark
International, Inc.
(ADC Corp.) and
$2,000,000 Any One Accident

CSL
$100,000
Uninsured/Underinsured
Motorists
WC7 691 436369-075

Fire
(AZ CM + ADC)
Insurance
Company

between Core-Mark
International, Inc.
(ADC Corp.) and
9 General Liability
(RDC/Core-Mark)
between Core-Mark
International, Inc. (RDC
Corp.) and Valero.
Coverage B:
$1,000,000/BI by Disease Each
Employee
$1,000,000/BI by Disease
Policy Limit or
RG2 691-436369-095

Fire
Insurance
Company

$2,000,000 Products Agg
$2,000,000 General Agg
$300,000 Fire Legal (any one
premise)
$10,000 Medical Expense (any
one person)
Assumes $4,317,259
Annual Payroll
N/A
Guaranteed Cost
$39,004
Plus TRIA $390
Assumes
$249,000,000
Annual Sales

Policy
10 Business Auto
Liability
(RDC/CM)
Policy
Number
AS2 691
436369-085
Policy
Period
Carrier
3/1/05-12/31/05 Liberty Mutual Fire
Insurance Company
Note: Coverage
applies only to
the contract
between
Core-Mark
International,
Inc. (RDC
Corp.) and
Valero.
11 Auto Physical
Damage
(RDC/CM)
Limits
$2,000,000 CSL
$5,000 Medical Payments
Deductible
Including ALAE
N/A
Guaranteed Cost
$100,000 Uninsured/Underinsured Motorist
AS2 691
436369-085

Insurance Company
$115,000 Limit Symbol 2 & 8
Assumes 26 Power Units
$2,500 Comp/Coll Deductible

Retained Loss Projection $9,500
Note: Coverage
applies only to
the contract
between
Core-Mark
International,
Inc. (RDC
Corp.) and
Valero.
12 Workers
Compensation
& Employers
Liability
(RDC/CM)
WC7 691
436369-105

Insurance Company
N/A
Guaranteed Cost
Coverage B:
$1,000,000/BI by Disease Each Employee
$1,000,000/BI by Disease Policy Limit or
BE 297 9831
14 Excess Liability LQ1871073620060
15 Underground
Storage Tank
Liability
$33,733
Assumes 26 Power Units
Note: Coverage
applies only to
the contract
between
Core-Mark
International,
Inc. (RDC
Corp.) and
Valero.
13 Umbrella
Liability
Lead
Premium
$136,588
Plus TRIA $917
1/1/05-1/1/06
National Union Fire

Insurance Company
$25,000,000
1/1/05-1/1/06
Liberty Insurance
$25,000,000 Excess $25,000,000
Underwriters, Inc.
$10,000,000 Excess $50,000,000
55 Water Street, 18th (Added $10mm 3/1/05-12/31/05 $16,760 for
Fl.
RDC)
New York, NY 10041
212.208.4179
$298,565
Plus TRIA $1,749
Assumes $6,996,240
Annual Payroll
$10,000
$281,779
None
$85,000
$16,760
Charged RDC for addl
$10m Limits
$5,000
$860
UST G21740883
2/27/05-2/27/06 Illinois Union Ins. Co.

(ACE)
16 Foreign
Liability
CXC068011
7/1/04-12/31/05 ACE Master Liability

Extended
Program
6/1/05-12/31/05 Two River Way, Suite
#1100
Houston, TX 77056
713.403.3000
$3,000,000
None
$5,095
US$
Plus extension premium
$ 3,252
US$
17 Canadian
General
Liability
CGL322703
7/1/04-12/31/05 ACE-INA Canadian

Extended
Liability
6/1/05-12/31/05 Toronto, Canada
$3,000,000
None
$52,504
US$
18 Canadian Auto
Liability
AF 9936550
6/1/04-12/31/05 Zurich Ins. Co.

Extended
Toronto, Canada
6/1/05-12/31/05
C$4,000,000
C$1,000
for Auto Property Damage
$68,845
US$
$50,714
$3,254,998
$2,000,000
Total Casualty (excl. Taxes/TRIA)

Policy
PROPERTY
19 Property
including
Boiler &
Machinery and
including ADC
Policy
Number
7558556
20 Property
Including
Boiler &
Machinery and
including ADC
TBD
21 Property
Including
Boiler &
Machinery and
including ADC
PL218405
Policy
Period
Carrier
Limits
Deductible
Including ALAE
$25,000,000 lead US Locations

Refer to Policy for additional sub-limits
$25,000/Core deductible
Earth Movement: $100,000 Per Occurrence EXCEPT
Earth Movement California Locations: 5% TIV per location /
$250,000 (min) Flood: $100,000 Per Occurrence EXCEPT
Flood-Zone A Buildings per location: 5%TIV /$500,000 (min.)
Flood-Zone A Contents per location: 5%TIV /$500,000 (min.)
Flood-Zone A Time Element 3 day waiting period
Windstorm: $100,000 EXCEPT
all of FL: 5%TIV per location /$100,000 (min)
Named Windstorm: 5%TIV per location / $100,000 (min)
$773,962
Excluding taxes
and surcharges
8/1/05-8/1/06 American Home Assurance Co.
$25,000,000 lead Canada Locations

Refer to Policy for additional sub-limits
$25,000/Core
Earth Movement: $100,000 Per Occurrence
USD 133,805
Flood: $100,000 Per Occurrence

Windstorm: $100,000
Named Windstorm: 5%TIV per location / $100,000 (min)
8/1/05-8/1/06 Lloyds of London
$50,000,000
Excess $25,000,000
Program Sublimits Apply
Refer to Cover Note for Excess Wording Clause
7596090
3/1/05-3/1/06 Lexington Insurance Co.

Eastern Risk Specialists
1700 Market Street, Suite #1810
Philadelphia, PA 19103
215.255.6363
Policy Limit $19,000,000

Additional Sublimits Apply
$104,870
Excluding taxes
and surcharges
for US Locations
USD 18,130
for Canada locations
(One policy issued for US & Canada but

Marsh Dallas bills for the US Locations &
Marsh Toronto bills for the Canada Locations)
22 Property /
Boiler &
Machinery
(RDC)
Premium
8/1/05-8/1/06 Lexington Insurance Co.

Eastern Risk Specialists
$25,000/Core
$100,000 Earth movement
$100,000 Wind
$42,684
Annual Premium Includes surplus
lines tax and stamping fee
Total Property
$1,073,451
Excluding taxes
and surcharges
Note:
Coverage
applies only to
the contract
between
Core-Mark
International,
Inc. (RDC
Corp.) and
Valero.

Policy
PROFESSIONAL
LIABILITY &
FINANCIAL
23 Directors & Officers
Liability

Liability
Policy
Number
ELU086850-04
Policy
Period
Carrier
8/20/04-10/4/05 XL Specialty / ELU

Executive Liability Underwriters (ELU)
One Constitution Plaza, 16th Fl.
Hartford, CT 06103
860.948.1800
14-MGU-04-A4200 8/20/04-10/4/05 HCC Global behalf of U.S. Specialty

8 Forest Park Drive
Farmington, CT 06034
(860) 674-1900
Deductible
Including ALAE
Limits
Premium
$25,000,000
$0 Each Insured D&O $1,100,000

(Non-Indemnified)
$135,616
under Insuring
Agreement 1(A)
$1,000,000 Each
Securities Claim under
Insuring Agreement
1(C)
$250,000 All Other
Claims under Insuring
Agreement 1 (B)
Pending & Prior
Proceeding Date:
8/20/04
$15,000,000
Excess
$25,000,000
Pending & Prior Claim $341,000

Date: 8/20/04
$41,943

Liability
EPG 0002748
8/20/04-10/4/05 RLI Insurance Company

909 Lake Carolyn Parkway, Suite 800
Irving, TX 75030
(972) 677-2155
$10,000,000
Excess
$40,000,000
Pending & Prior Claim $180,000

Date: 8/20/04
$22,140
26 Fiduciary Liability
EPG 0002749
8/20/04-10/4/05 RLI Insurance Company

909 Lake Carolyn Parkway, Suite 800
Irving, TX 75030
(972) 677-2155
$10,000,000
$100,000 Each Claim
4/5/05-4/5/06 Quanta Specialty Lines Insurance Co
$10,000,000
27 Commercial Crime
CCR 400 28G 05
$67,870
$8,348
Pending or Prior
Litigation Date:
8/20/04
$250,000 Each Claim
$78,866
Plus SLT
taxes
28 Special Crime
647-1301
8/5/05-8/5/06 National Union Fire Insurance

Co. of Pittsburgh, PA (AIG)
8144 Walnut Hill Lane, Suite #1600
Dallas, TX 75231
800.843.1765
$5,000,000
None
$4,398
Total Professional $1,980,181

Liability & Financial
GRAND PREMIUM TOTAL (Excl.
Taxes, Assessments/TRIA)
$6,308,631

Company
Type of Entity
Core-Mark Holding
Company, Inc.
Corporation
Core-Mark Holdings
I, Inc.
Corporation
Core-Mark Holdings
II, Inc.
Corporation
Core-Mark Holdings
III, Inc.
Corporation
Core-Mark
International, Inc.
Corporation
Core-Mark
Midcontinent,
Inc.
Corporation
Minter-Weisman
Company
Corporation
Head Distributing
Company
Core-Mark
Interrelated
Companies, Inc.
C/M Products, Inc.
ASI Office
Automation, Inc.
General Acceptance
Corporation
Marquise Ventures
Company, Inc.
State of
Active/Inactive Incorporation
Organization
Number assigned
by State of
Incorporation
Federal Employer
Identification
Number
Authorized
Common Stock
Par Value of
Common Stock
Authorized
Preferred Stock
Par Value of
Preferred Stock
Issued as of
August 23, 2004
Issued as of Dec.
31, 2004
Active
Delaware
3845035
20-1489747
50,000,000
$0.01
n/a
n/a
9,815,375
9,815,375
Active
Delaware
3843173
20-1489777
1,000
$0.01
n/a
n/a
1,000
1,000
Active
Delaware
3843174
20-1489798
1,000
$0.01
n/a
n/a
1,000
1,000
Active
Delaware
3843172
20-1489834
1,000
$0.01
n/a
n/a
1,000
1,000
Active
Delaware
2484265
91-1295550
100
$0.0001
n/a
n/a
100
100
Active
Arkansas
CP00013272
74-2354997
2,000
$1.00
n/a
n/a
2,000
2,000
Active
Minnesota
1P-571
41-0809931
n/a
n/a
1,000
1,000
Corporation
Active
Georgia
7006574
58-1095258
n/a
n/a
773,136
[90,000 class A &
683,136 class B]
773,136
[90,000 class A &
683,136 class B]
Corporation
Corporation
Active
Inactive
California
California
734331
N/A
94-2317385
94-3104739
100,000
$1.00
10,000,000
shares [1,000,000
$0.01 (for
class A Voting]
[9,000,000 class bothing voting &
B non-voting] non-voting class)
1,000,000
1,000
$1.00
$1.00
n/a
n/a
n/a
n/a
1,000,000
100
1,000,000
100
300,000
Corporation
Inactive
California
N/A
95-3256944
300,000
$0.05
150,000
no par value
300,000
Corporation
Inactive
California
N/A
95-3895935
400,000
none
n/a
n/a
200
200
Corporation
Inactive
California
N/A
95-3983880
75,000
none
n/a
n/a
75,000
75,000
Updated on Sept. 9, 2005

1 of 1
Schedule 3.18
to Credit Agreement
Affiliate Transactions
Transactions with Directors and Management
Harvey L. Tepner, a member of our board of directors (and a member of our compensation committee and chairman of our
audit committee from August 2004 through September 2, 2005), is a Partner of Compass Advisers, LLP. Mr. Tepner is also a
Managing Director of Compass SRP Associates LLP, a special purpose joint venture that provided financial advisory and
investment banking services to the Official Committee of Unsecured Creditors of Fleming in connection with Flemings
bankruptcy. Compass Advisers, LLP owns a 50% interest in Compass SRP Associates LLP. Pursuant to the Plan, Compass SRP
Associates LLP has received total fees and expenses of approximately $4,781,000, of which $2,269,930 was distributed to
Compass Advisers, LLP. All fees and expenses paid to Compass SRP Associates LLP were approved by the United States
Bankruptcy Court for the District of Delaware after submission of applications by Compass SRP Associates LLP. Harvey L.
Tepner is a member of the board of directors of the Post Confirmation Trust of the Fleming Companies but recused himself from
any discussions regarding the compensation of Compass SRP Associates LLP.
One of our customers, Eureka Management Group LLC, is primarily owned by Ron McPherson, who is the father of Scott
McPherson, one of our Vice Presidents. The Company recorded net sales to Eureka Management Group LLC of approximately
$190,000 and $825,000 in the first six months of 2005 and 2004, respectively. These transactions were negotiated at arms-length
and in the ordinary course. As of June 30, 2005, we held a non-recourse note receivable of approximately $220,000 related to these
transactions, which is collateralized by a deed of trust on a convenience store owned by Eureka Management Group LLC.
Securities Issued Pursuant to Our 2004 and 2005 Long Term Incentive Plans
In August 2004, we approved the grant of options to purchase an aggregate of 1,060,422 shares of our common stock to certain
of our officers and employees under our 2004 Long Term Incentive Plan. The options have an exercise price of $15.50, the fair
value of a share of our common stock as determined pursuant to the Plan and have a three year vesting period. One third of the
shares vested on August 23, 2005, and the remaining shares vest in equal monthly installments over the two year period
commencing on August 23, 2005, for each consecutive month of service that individual provides to the Company. Certain
members of our management are entitled to accelerated vesting of their option shares and restricted stock units in the event that
they are terminated without cause or resign for good reason prior to the expiration of the vesting period or are terminated without
cause or resign for good reason within one year after a change of control of the company.
In addition in 2004, we issued an aggregate of 190,876 shares of restricted common stock and restricted stock units to certain
of our officers and employees under our 2004 Long Term Incentive Plan. The transfer restrictions with respect to one third of the
shares of restricted common stock lapsed on August 23, 2005 and the transfer restrictions with respect to the remaining shares of
restricted common stock lapse in equal monthly installments over the two year period commencing on August 23, 2005 for each
month of service provided by the stockholder to the Company. The restricted stock units vest over a three year period. One third of
the shares vested on August 23, 2005, and the remaining shares vest in equal monthly installments over the two year period
commencing on August 23, 2005, for each consecutive month of service that the individuals provide services to Company. If we
are acquired by a non-public company, then all unvested shares will immediately vest. In addition, if we are acquired by a public
company and the holder of the restricted stock is terminated without cause within one year after we are acquired, then all unvested
shares will immediately vest.
In February 2005, the Compensation Committee and the Board of Directors approved the grant of restricted stock units to
certain of our officers and employees under our 2005 Long Term Incentive Plan having a value of approximately $5.0 million with
a vesting commencement date of February 1, 2005. It is anticipated that such grants will be made in the fourth quarter of 2005.
Options Issued Pursuant to Our Directors Equity Incentive Plans
In August, 2004, we issued an option to purchase 7,500 shares to each of our non-employee directors under our 2004 Directors
Equity Incentive Plan. The options have an exercise price of $15.50, the fair value of a share of our common stock as determined
pursuant to the Plan. The options vest over three years. One third of the options vested on August 23, 2005, and the remaining
options vest in equal quarterly installments over the two year period commencing on August 23, 2005, for each consecutive
quarter that the grantee remains a director. Any unvested option shares will immediately vest upon a change of control of the
Company.
In August, 2005, we issued an option to purchase 7,500 shares to two new non-employee directors under our 2005 Directors
Equity Incentive Plan. The options have an exercise price of $27.03, the fair value of a share of our common stock as determined
by our Board of Directors as provided in the plan on the basis of the average trading price of our common stock over the twenty
trading days ending two trading days prior to the date of grant. The options vest over three years and expire after seven years. One
third of the options vest on August 12, 2006, and the remaining options vest in equal quarterly installments over the two year
period commencing on August 12, 2006, for each consecutive quarter that the grantee remains a director. Any unvested option
shares will immediately vest upon a change of control of the Company.
SCHEDULE 6.01
to
CREDIT AGREEMENT
INDEBTEDNESS
(1) Trust Guarantees (See Schedule 3.12)
The Company guarantees the payment of all Post Confirmation Trust administrative claims in excess of $56 million. In
addition, if the assets of the Reclamation Creditors Trust are inadequate to satisfy all of the allowed Trade Lien Vendor claims
in the RCT, the Company must pay such claims in full plus any accrued interest. The Company also guarantees all eligible but
unpaid non-TLV claims in the RCT up to a maximum of $15 million. The Plan of Reorganization limits the combined RCT
guarantee amounts of the TLV and non-TLV claims to no more than $137 million. Based on the estimates provided by the
Trusts and the Companys analysis, the assets of the Trusts are sufficient to satisfy the claims against it; therefore, the
Company believes that the fair value of its guarantee liability as of December 31, 2004 was not significant. However, if the
assets of the Trusts prove insufficient to pay the claims, the Company could be required to satisfy the guarantees.
(2) Surety Bonds Please refer to attached schedule of Surety Bonds.
(2) Capital Leases None.

BOND SCHEDULE
U.S. BOND LIABILITY
PRINCIPAL
CORE-MARK MIDCONTINENT,
INC.
OBLIGEE
STATE OF SOUTH
DAKOTA
BOND NO.
SURETY
41010768 PLATTE
RIVER
LIABILITY
1,000.00
HEAD DISTRIBUTING COMPANY STATE OF

DBA CORE-MARK
FLORIDA
41046887 PLATTE
RIVER
992,574.00
MINTER WEISMAN CO. DBA

COREMARK
STATE OF
WISCONSIN
41046890 PLATTE
RIVER
10,000.00
MINTER WEISMAN CO. DBA

COREMARK
STATE OF
WISCONSIN
41046891 PLATTE
RIVER
150,000.00
INC. DBA CORE-MARK
STATE OF
INDIANA
45035070 AVALON $
1,000.00 $
INC. DBA CORE-MARK
STATE OF
INDIANA
45035071 AVALON $
1,000.00 $
MINTER-WEISMAN CO. DBA

CORE-MARK
IOWA
DEPARTMENT OF
REVENUE &
FINANCE
45035073 AVALON $
3,500.00 $
FLEMING COMPANIES, INC.
STATE OF NEW
YORK
45035076 AVALON $
10,000.00 $

DBA CORE-MARK
FLORIDA
45035079 AVALON $
27,000.00 $
INC. DBA CORE-MARK
45035080 AVALON $
2,000.00 $
45035081 AVALON $
6,800.00 $
45035082 AVALON $
10,900.00 $
45035083 AVALON $
2,000.00 $
45035085 AVALON $
1,000.00 $
45035086 AVALON $
1,000.00 $
45035087 AVALON $
1,000.00 $
STATE OF
TENNESSEE,
COMMISSIONER
OF REVENUE
FLEMING COMPANIES, INC. DBA TENNESSEE
CORE-MARK
COMMISSIONER
OF REVENUE
TENNESSEE,
COMMISSIONER
OF REVENUE
DBA CORE-MARK
TENNESSEE,
COMMISSIONER
OF REVENUE
MINTER-WEISMAN-DEBTOR IN STATE OF
POSSESSION DBA
NEBRASKA
CORE-MARK
KANSAS
INC.
DEPARTMENT OF
REVENUE
STATE OF
INC.
NEBRASKA
INC.
STATE OF
LOUISIANA
45035088 AVALON $
10,000.00 $
INC. DBA CORE-MARK
45035089 AVALON $
1,000.00 $
CORE-MARK INTERNATIONAL,
INC. (SPOKANE DIVISION)
STATE OF
MISSOURI,
DIRECTOR OF
REVENUE
STATE OF
WASHINGTON
45035090 AVALON $
5,000.00 $
CORE-MARK INTERNATIONAL,
INC. (PORTLAND, OR)
STATE OF
WASHINGTON
45035091 AVALON $
5,000.00 $
INC.
STATE OF
OKLAHOMA
45035092 AVALON $
500.00 $
PREMIUM
BOND TYPE
150.00 CIGARETTE
DISTRIBUTOR
14,889.00 CIGARETTE
DISTRIBUTOR
150.00 CIGARETTE TAX
BOND
2,250.00 TOBACCO TAX
SURETY BOND
REGISTRATION
CERTIFICATE
BOND
100.00 OTHER
TOBACCO
PRODUCTS
DISTRIBUTORS
LICENSE BOND
100.00 DISTRIBUTION
OR SALE OF
CIGARETTES
AND/OR
TOBACCO
PRODUCTS
200.00 WHOLESALE
CIGARETTE
DEALERS BOND
540.00 TOBACCO
PRODUCTS
DISTRIBUTOR
BOND
100.00 TABOCCA
STAMP AFFIXING
AGENT BOND
EFFECTIVE
DATE
8/25/2005
10/1/2005
9/29/2005
9/29/2005
6/26/2005
EXPIRATION
RENEWAL
CLOSING
DATE
METHOD
METHOD
8/25/2006 ANNUAL
60 DAY
CANCELLATION
NOTICE
10/1/2006 ANNUAL
60 DAY
CANCELLATION
NOTICE
9/25/2006 ANNUAL
60 DAY
CANCELLATION
NOTICE
9/29/2006 ANNUAL
60 DAY
CANCELLATION
NOTICE
6/26/2006 ANNUAL
60 DAY
CANCELLATION
NOTICE
6/26/2005
6/26/2006 ANNUAL
60 DAY
CANCELLATION
NOTICE
6/30/2005
6/30/2006 ANNUAL
30 DAY
CANCELALTION
NOTICE
11/14/2005
11/14/2006 ANNUAL
10/30/2005
10/30/2006 ANNUAL
90 DAY
CANCELLATION
NOTICE
60 DAY
CANCELLATION
NOTICE
11/14/2005
11/14/2006 ANNUAL
60 DAY
CANCELLATION
NOTICE
11/14/2005
11/14/2006 ANNUAL
11/14/2005
11/14/2006 ANNUAL
30 DAY
CANCELALTION
NOTICE
60 DAY
CANCELLATION
NOTICE
100.00 CIGARETTE AND

TOBACCO TAX
CREDIT BOND
11/14/2005
11/14/2006 ANNUAL
60 DAY
CANCELLATION
NOTICE
100.00 WHOLESALE
CIGARETTE
DEALERS BOND
100.00 WHOLESALE
CIGARETTE
DEALERS BOND
100.00 WHOLESALE
CIGARETTE
DEALERS BOND
200.00 TOBACCO TAX
SURETY BOND
12/29/2004
12/29/2005 ANNUAL
1/1/2005
1/1/2006 ANNUAL
1/20/2005
1/20/2006 ANNUAL
3/2/2005
3/2/2006 ANNUAL
100.00 OTHER
TOBACCO
PRODUCTS
FIDELITY BOND
100.00 WHOLESALE
CIGARETTE
DEALERS BOND
100.00 WHOLESALE
CIGARETTE
DEALERS BOND
100.00 UNSTAMPED
TOBACCO
PRODUCT TAX
BOND
3/2/2005
3/2/2006 ANNUAL
30 DAY
CANCELALTION
NOTICE
30 DAY
CANCELALTION
NOTICE
30 DAY
CANCELALTION
NOTICE
30 DAY
CANCELALTION
NOTICE
90 DAY
CANCELLATION
NOTICE
3/5/2005
3/5/2006 ANNUAL
3/5/2005
3/5/2006 ANNUAL
3/22/2005
3/22/2006 ANNUAL
136.00 CIGARETTE AND

TOBACCO TAX
CREDIT BOND
218.00 TABOCCA
STAMP AFFIXING
AGENT BOND
30 DAY
CANCELALTION
NOTICE
30 DAY
CANCELALTION
NOTICE
30 DAY
CANCELALTION
NOTICE
Page 1 of 2

BOND SCHEDULE
PRINCIPAL
CORE-MARK
MIDCONTINENT,
INC.
CORE-MARK
MIDCONTINENT,
INC.
CORE-MARK
INTERNATIONAL,
INC.
OBLIGEE
STATE OF
OKLAHOMA
BOND NO.
SURETY
45035093 AVALON $
LIABILITY
PREMIUM
BOND TYPE
1,000.00 $
100.00 CIGARETTE STAMP
TAX BOND
STATE OF
ARKANSAS
45035094 AVALON $
1,500.00 $
STATE OF UTAH
45035096 AVALON $
500.00 $
STATE OF
NEBRASKA
45035097 AVALON $
1,000.00 $
IOWA
DEPARTMENT OF
REVENUE &
FINANCE
45035098 AVALON $
3,500.00 $
CORE-MARK
MIDCONTINENT,
INC.
STATE OF NORTH
DAKOTA
45035099 AVALON $
1,000.00 $
CORE-MARK
INTERNATIONAL,
INC.
HEAD DISTRIBUTING
COMPANY DBA
CORE-MARK
INTERSTATE
COMMERCE
COMMISSION
GEORGIA
DEPARTMENT OF
REVENUE
45035100 AVALON $
10,000.00 $
45035103 AVALON $
443,000.00 $
MINTER-WEISMAN CO. STATE OF NORTH

DBA CORE-MARK DAKOTA
45035104 AVALON $
1,000.00 $
CORE-MARK
MIDCONTINENT,
INC.
US DEPARTMENT
OF
AGRICULTURE
45035105 AVALON $
25,000.00 $
HEAD DISTRIBUTING
COMPANY DBA
CORE-MARK
US DEPARTMENT
OF
AGRICULTURE
45035106 AVALON $
25,000.00 $
MINTER-WEISMAN CO. US DEPARTMENT

DBA CORE-MARK OF
AGRICULTURE
45035107 AVALON $
30,000.00 $
CORE-MARK
INTERNATIONAL,
INC.
US DEPARTMENT
OF
AGRICULTURE
45035108 AVALON $
80,000.00 $
CORE-MARK
MIDCONTINENT,
INC. DBA
CORE-MARK
MINTER-WEISMAN CO.
DBA CORE-MARK
TENNESSEE
COMMISSIONER
OF REVENUE
45035109 AVALON $
2,000.00 $
STATE OF
MINNESOTA
45035110 AVALON $
20,000.00 $
1,886,774.00 $
CORE-MARK
MIDCONTINENT,
INC.
CORE-MARK
MIDCONTINENT,
INC.
TOTAL BOND
LIABILITY &
PREMIUM:
EFFECTIVE
DATE
3/22/2005
100.00 CIGARETTE STAMP

DEPUTY BOND
100.00 BOND FOR
CIGARETTES,
CIGARETTE
PAPERS, SNUFF,
CIGARS OR
TOBACCO DIST.
BOND
100.00 DISTRIBUTION OR
SALE OF
CIGARETTES
AND/OR TOBACCO
PRODUCTS
100.00 BOND FOR
CIGARETTES,
CIGARETTE
PAPERS, SNUFF,
CIGARS OR
TOBACCO DIST.
200.00 PROPERTY
BROKERS SURETY
BOND
8,860.00 CIGAR AND
CIGARETTE
DISTRIBUTORS
LICENSE BOND
100.00 BOND FOR
CIGARETTES,
CIGARETTE
PAPERS, SNUFF,
CIGARS OR
TOBACCO DIST.
500.00 PERISHABLE
AGRICULTUREAL
COMMODITIES
BOND
500.00 PERISHABLE
AGRICULTUREAL
COMMODITIES
BOND
600.00 PERISHABLE
AGRICULTUREAL
COMMODITIES
BOND
1,600.00 PERISHABLE
AGRICULTUREAL
COMMODITIES
BOND
100.00 TABACCO TAX
STAMP AFFIXING
AGENT BOND
400.00 WHOLESALE
PRODUCE DEALER
33,393.00 COLLATERAL TYPE:
LOC NO. S856316
CASH
CASH
U.S. TOTAL COLLATERAL
AMOUNT:
3/23/2005
3/5/2005
EXPIRATION RENEWAL
CLOSING
DATE
METHOD
METHOD
3/22/2006 ANNUAL
30 DAY
CANCELALTION
NOTICE
3/23/2006 ANNUAL
60 DAY
CANCELLATION
NOTICE
3/25/2006 ANNUAL
30 DAY
CANCELALTION
NOTICE
3/25/2005
3/25/2006 ANNUAL
30 DAY
CANCELALTION
NOTICE
30 DAY
CANCELALTION
NOTICE
6/30/2005
6/30/2006 ANNUAL
3/25/2005
3/25/2006 ANNUAL
30 DAY
CANCELALTION
NOTICE
3/15/2005
3/15/2006 ANNUAL
7/1/2005
6/30/2006 ANNUAL
30 DAY
CANCELALTION
NOTICE
60 DAY
CANCELLATION
NOTICE
6/30/2005
6/30/2006 ANNUAL
30 DAY
CANCELALTION
NOTICE
7/19/2005
7/19/2006 ANNUAL
30 DAY
CANCELALTION
NOTICE
7/19/2005
7/19/2006 ANNUAL
30 DAY
CANCELALTION
NOTICE
7/19/2005
7/19/2006 ANNUAL
30 DAY
CANCELALTION
NOTICE
7/19/2005
7/19/2006 ANNUAL
30 DAY
CANCELALTION
NOTICE
8/20/2005
8/20/2006 ANNUAL
60 DAY
CANCELLATION
NOTICE
10/26/2005
10/26/2006 ANNUAL
60 DAY
CANCELLATION
NOTICE
U.S. COLLATERAL AMOUNT:

$156,000.00
$674,000.00
$160,000.00
$990,000.00
Page 2 of 2
Schedule 6.02
to
CREDIT AGREEMENT
PART I EXISTING LIENS AND REGNS
US debtor liens, notice given by the following UCC financing statements:
DEBTOR
JURISDICTION
FILE NUMBER
FILING
DATE
TYPE OF
FILING
SECURED PARTY
DESCRIPTION OF COLLATERAL
Core-Mark
International,
Inc.
CA Secretary
of State
0101760233
01/12/01
UCC-1
Cisco Systems
Capital
Corporation
Specific equipment, subject to

capital lease No. 3340
Core-Mark
International,
Inc.
CA Secretary
of State
0106860439
03/06/01
UCC-1
Ameritech Credit
Corporation

capital lease No. 001-0027064-000
Core-Mark
International,
Inc.
CA Secretary
of State
0118060426
06/28/01
UCC-1
GATX Technology
Services Corporation

capital lease No. 2858-082
Core-Mark
International,
Inc.
CA Secretary
of State
05-7013736153
01/27/05
UCC-1
Smurfit-Stone
Container
Enterprises, Inc. dba
Smurfit Recycling
Company
60 Inch Baler made by Load King

Model V6030 placed at this location.
DEBTOR
Core-Mark
International,
Inc.
JURISDICTION
CA Secretary
of
State
FILE NUMBER
FILING
DATE
TYPE OF
FILING
SECURED PARTY
9602260755
01/19/96
UCC-1
MFP Technology
Services Inc.

96149C0167
05/24/96
UCC-3
Assignment
Norwest Equipment
Finance, Inc.
Refers to 9602260755
Assignment to Norwest Equipment
Finance, Inc. from MFP Technology
Services Inc.
96296C0339
10/21/96
UCC-3
Amendment
Norwest Equipment
Finance, Inc.
Amendment to 9602260755
Amendment to delete Appendix A
and to add Appendix A-1 attached
thereto.
96309C0613
10/31/96
UCC-3
Amendment
Norwest Equipment
Finance, Inc.
thereto.
00300C0401
10/17/00
UCC-3
Assignment
MFP Financial
Services Inc.
Refers to 9602260755
Assignment to MFP Financial
Services Inc. from Norwest
Equipment Finance, Inc.
00334C0314
11/14/00
UCC-3
Continuation
MFP Financial
Services Inc.
Continuation of 9602260755
02028C0265
01/25/02
UCC-3
Amendment
MFP Financial
Services Inc.
Changes Secured Partys address
to 9150 South Hills Blvd., Suite
250, Cleveland, OH 44147
Core-Mark
International,
Inc.
DE Secretary
of
State
1004639 6
01/11/01
UCC-1
Cisco Systems
Capital
Corporation

Core-Mark
International,
Inc.
DE Secretary
of
State
1091616 8
08/27/01
UCC-1
GATX Technology

Core-Mark
International,
Inc.
DE Secretary
of
State
1091617 6
08/27/01
UCC-1
GATX Technology

Core-Mark
International,
Inc.
DE Secretary
of
State
1091622 6
08/27/01
UCC-1
GATX Technology

DEBTOR
JURISDICTION
FILE NUMBER
FILING
DATE
TYPE OF
FILING
SECURED PARTY
Core-Mark
International,
Inc.
DE Secretary
of
State
2044477 2
01/25/02
UCC-1
MFP Financial
Services Inc.
Specific equipment subject to

In Lieu of the following:
9602260755 1/19/96 CA, SOS
(Amended 10/31/96 and
Continued 11/14/00)
Core-Mark
International,
Inc.
DE Secretary
of
State
2136947 3
05/10/02
UCC-1
Kyocera Mita
America
Incorporated
The equipment described below

and...relating to:
2- KYOCERA MITA VI-7360
Copier Systems
1- KYOCERA MITA 5530 Copier
Systems
1- KYOCERA MITA 2530 Copier
Systems
Core-Mark
International,
Inc.
DE Secretary
of
State
2185571 1
07/26/02
UCC-1
GATX Technology

Core-Mark
International,
Inc.
DE Secretary
of
State
2185574 5
07/26/02
UCC-1
GATX Technology

Core-Mark
International,
Inc.
DE Secretary
of
State
2185575 2
07/26/02
UCC-1
GATX Technology

Core-Mark
International,
Inc.
DE Secretary
of
State
2185576 0
07/26/02
UCC-1
GATX Technology

Core-Mark
International,
Inc.
DE Secretary
of
State
2185582 8
07/26/02
UCC-1
GATX Technology

Core-Mark
International,
Inc.
DE Secretary
of
State
2293924 1
11/12/02
UCC-1
GATX Technology

Core-Mark
International,
Inc.
DE Secretary
of
State
3086762 5
04/03/03
UCC-1
GATX Technology

DEBTOR
Core-Mark
International,
Inc.
JURISDICTION
DE Secretary
of
State
FILE NUMBER
FILING
DATE
TYPE OF
FILING
SECURED PARTY
3311461 1
11/25/03
UCC-1
Winkler, Inc.
Purchase money security interest all of

Debtors interest in personal property of
every kind and nature including all
receivables, contract rights...
4234228 7
08/19/04
UCC-3
Amendment
Winkler, Inc.
Refers to 3311461 1 Restated Collateral

Description - All goods purchased from
Secured Party by Debtor...which goods
shall constitute inventory of Debtor
(including those types of goods
described in Schedule A attached...)
Core-Mark
International,
Inc.
DE Secretary
of
State
4021209 4
01/27/04
UCC-1
Raymond Leasing
Corporation
Freight/Install RAYMOND R45TT

25018 Hawker 1812513 X3286
Core-Mark
International,
Inc.
DE Secretary
of
State
4043212 2
02/17/04
UCC-1
Raymond Leasing
Corporation
Freight/Install...Rentals Raymond
OPC30TT 32454 HAWKER 12125F15
XL289355, XB391925, XB391235,
XB391627, XB392723, XB392488
Raymond OPC30TT
Freight/Install...HAWKER PH3R12865
39161E03, 39162E03, 3916E03
Core-Mark
International,
Inc.
DE Secretary
of
State
5001946 4
01/04/05
UCC-1
CIT Technologies
Corporation

Core-Mark
International,
Inc.
DE Secretary
of
State
5066035 8
03/02/05
UCC-1
CIT Technologies
Corporation

Core-Mark
International,
Inc.
KY Secretary
of
State
2004-1993170-96
03/09/04
UCC-1
Winkler, Inc.
Purchase money security interest all of

Debtors interest in personal property of
every kind and nature including all
receivables, contract rights, inventory...
08/16/04
UCC-3
Amendment
Winkler, Inc.
Refers to 2004-1993170-96 Restated

Collateral Description - All goods
purchased from Secured Party by
Debtor...which goods shall constitute
inventory of Debtor (including those
types of goods described in Schedule A
attached...)
DEBTOR
Core-Mark
International,
Inc.
JURISDICTION
OR Secretary
of
State
FILE NUMBER
297278
FILING
DATE
TYPE OF
FILING
SECURED PARTY
01/25/96
UCC-1
MFP Technology
Services Inc.

05/29/96
UCC-3
Assignment
Norwest Equipment
Finance, Inc.
Refers to 297278
Assignment to Norwest Equipment
Finance, Inc. from MFP Technology
Services, Inc.
07/16/96
UCC-3
Amendment
Norwest Equipment
Finance, Inc.
Refers to 297278
thereto.
10/17/00
UCC-3
Assignment
MFP Financial
Services Inc.
Refers to 297278
Assignment to MFP Financial
Services Inc. from Norwest
Equipment Finance, Inc.
11/14/00
UCC-3
Continuation
MFP Financial
Services Inc.
Core-Mark
International,
Inc.
OR Secretary
of
State
596395
08/16/02
UCC-1
Les Schwab Tire

Centers of Portland
Contractual Security Agreement in all

present and future products and goods
and proceeds thereof...
Core-Mark
International,
Inc.
OR Secretary
of
State
482694
09/08/99
UCC-1
El Camino Resources
Ltd.

Core-Mark
International,
Inc.
TX Secretary
of
State
00-566197
08/16/00
UCC-1
SierraCities.com

capital lease No.244269/273537
05-00102499
04/04/05
UCC-3
Continuation
SierraCities.com
Continuation of 00-566197
2000-257-0316
09/13/00
UCC-1
El Camino Resources
Ltd.

capital lease 2858-073
Core-Mark
International,
Inc.
WA
Department of
Licensing
DEBTOR
Core-Mark
Interrelated
Companies Inc.
(Debtor
Tradename:
American
Merchandiser)
Core-Mark Mid
Continent, Inc.
JURISDICTION
CA Secretary
of
State
CO Secretary
of
State
FILE NUMBER
FILING
DATE
TYPE OF
FILING
SECURED PARTY
91109021
05/17/91
UCC-1
General Electric
Company, GE
Lighting
Inventory consisting of lamps and light

bulbs, ballasts, wiring devices, and
portable lighting products...Accounts
receivable, contract rights, chattel
paper, and any other right to the
payment of money and security...arising
from the sale, consignment or other
transfer by the Debtor of said inventory.
96032C0211
01/31/96
UCC-3
Continuation
General Electric
Company, GE
Lighting
96094C0232
04/02/96
UCC-3
Amendment
General Electric
Company, GE
Lighting
Refers to 91109021 Deletes the

tradename American Merchandiser.
Amends Debtors Address. Amends
Secured Partys Address.
01023C0008
01/16/01
UCC-3
Continuation
General Electric
Company, GE
Lighting
962030527
04/22/96
UCC-1
Advanta Business
Services Corp.
9 Elmo 1/3 B&W Chip Cameras, 9

Pelco Wall/Ceiling Mounts, 6MM
Auto Iris Lenses
962092630
12/11/96
UCC-3
Continuation
Advanta Business
Services Corp.
19972126300
12/30/97
UCC-3
Continuation
Advanta Business
Services Corp.
US judgment liens, notice given by the following filings:

DEBTOR
JURISDICTION
FILE NUMBER
FILING DATE
TYPE OF FILING
SECURED PARTY
JUDGMENT AMOUNT
Core-Mark
International, Inc.
TX Denton
County
Clerk
2000-R0111437
11/17/00
Judgment Lien
Rayatparsar, Reza
$1,338.28
Core-Mark
International, Inc.
OR Secretary
of
State, County of
Multnomah
303338 (former
file
no. S91331)
Filed: 03/20/96
Warrant Date:
01/31/96
Warrant and Writ of

Execution
Employment
Department
$2,275.87 (plus interest)
US tax liens, notice given by the following filings:

DEBTOR
JURISDICTION
FILE NUMBER
FILING DATE
TYPE OF FILING
SECURED PARTY
TAX AMOUNT
Head
Distributing
Company
GA Cobb
County
Superior Court
2004-0027059
02/12/04
State Tax Lien, Writ

of Fieri Facias
Wheels Inc.
$1,078.55
Core-Mark
International,
Inc.
NM Bernalillo
County Clerk
1996122649
11/12/96
State Tax Lien
New Mexico
Department
of Labor
$360.66
Canada regns, notice given by the following filings:

DEBTOR
JURISDICTION
REGN NUMBER
FILING
DATE
TYPE OF
FILING
SECURED PARTY
Core-Mark
International,
Inc.
Ontario
088182900881829
05/19/98
CSRA
National Trust
Company
Trust Indenture in the amount of

$20,000,000.00
Core-Mark
International,
Inc.
Ontario
89508828620030605
1316 1590 7166
06/05/03
PPSA
JPMorgan Chase
Bank
Inventory, Equipment, Accounts,

Other, Motor Vehicles
Core-Mark
International,
Inc.
BC
6529487
08/06/96
PPSA
The Chase
Manhattan
Bank, as Admin
Agent
All present and after-acquired

personal property of the debtor.
Core-Mark
International,
Inc.
BC
8232387
04/30/99
PPSA
Inland Kenworth
Kenworth T300
Core-Mark
International,
Inc.
BC
8486064
09/29/99
PPSA
Inland Kenworth
Kenworth T300
DEBTOR
JURISDICTION
REGN NUMBER
FILING
DATE
TYPE OF
FILING
SECURED PARTY
Core-Mark
International,
Inc.
Inland Kenworth
BC
8869850
05/15/00
PPSA
Paccar Leasing a
division of Paccar of
Canada Ltd.
2001 Kenworth T300
Core-Mark
International,
Inc.
BC
8955952
07/05/00
PPSA
Inland Kenworth
Kenworth T300
Core-Mark
International,
Inc.
BC
8971386
07/13/00
PPSA
Telecom Leasing
Canada
(TLC) Limited
Telecommunications Equipment
Lease #2010000414
Core-Mark
International,
Inc.
BC
9152139
11/01/00
PPSA
Ensign Pacific Lease

Ltd.
2001 Dodge Grand Caravan Sport
Core-Mark
International,
Inc.
Inland Kenworth
BC
9539288
07/03/01
PPSA
Paccar Leasing a
Canada Ltd.
3 2001 Kenworth T800s
Core-Mark
International,
Inc.
BC
9696226
10/02/01
PPSA
Paclease, a division
of
Inland Kenworth Ltd.
Kenworth T300
Core-Mark
International,
Inc.
BC
150022A
01/03/02
PPSA
IBM Canada Limited
Office machines and other

equipment
Core-Mark
International,
Inc.
BC
192737A
01/25/02
PPSA
of
Kenworth T800B
Core-Mark
International,
Inc.
BC
192743A
01/25/02
PPSA
of
2 Kenworth T800Bs
Core-Mark
International,
Inc.
BC
950618A
03/24/03
PPSA
Tele-Mobile
Company
Wireless communications handsets

and accessories
Core-Mark
International
Inc.
BC
975855A
04/04/03
Miscellaneous
Registrations
Act
Her Majesty the

Queen in the Right of
the Province of
British Columbia
All the debtors present and

after-acquired personal property,
including but not restricted to
machinery, equipment, furniture,
fixtures, inventory and receivables.
Core-Mark
International
Inc.
Inland Kenworth
BC
000670B
04/21/03
PPSA
Paccar Leasing, a
Canada Ltd.
2004 Kenworth T300 Straight
Core-Mark
International
Inc.
BC
062854B
05/23/03
PPSA
of
Kenworth T300
Core-Mark
International Inc
BC
087183B
06/05/03
PPSA
JPMorgan Chase
Bank

Core-Mark
International
Inc.
BC
099061C
12/17/04
PPSA
Xerox Canada Ltd.
Xerox equipment
DEBTOR
JURISDICTION
REGN NUMBER
FILING
DATE
TYPE OF
FILING
SECURED PARTY
Core-Mark
International Inc.
BC
133853C
01/12/05
PPSA
Konica Minolta
Business
Solutions (Canada)
Ltd.
Solutions DAffaires
Konica Minolta
(Canada)
Ltee
1 Minolta DI5510 photocopier

1 PI7200 print controller
1 Minolta C350 photocopier
1 Minolta DI1610 photocopier
with all attachments, accessories
and proceeds thereof
Core-Mark
International Inc.
BC
482397C
07/25/05
PPSA
Ryder Truck Rental

Canada Ltd.
2004 FRTL
Core-Mark
International Inc.
BC
482398C
07/25/05
PPSA
Ryder Truck Rental

Canada Ltd.
2004 FRTL
Core-Mark
International,
Inc.
Core-Mark
Internation (sic)
Inc.
BC
554730C
09/31/05
Repairers Lien
Act
Lions Gate Trailers

Ltd.
1995 Trailmobile Van

Amount: $1,932.51
Core-Mark
International,
Inc.
BC
573717C
09/12/05
Repairers Lien
Act
Lions Gate Trailers

Ltd.
1995 Trailmobile Van

Amount: $2,275.61
Core-Mark
International Inc
BC
599911C
09/26/05
PPSA
JPMorgan Chaser
Bank,
N.A., as Admin.
Agent
All of the debtors present and

after acquired personal property.
Core Mark
International Inc.
BC
610705C
09/30/05
Repairers Lien
Act
Kal Tire a Corporate

Partnership
1995 Trlmbl Vanpup

Amount: $2,534.28
Core Mark
International Inc
Alberta
00110810413
11/08/00
PPSA
Xerox Canada Ltd.
Xerox equipment
Core Mark
International Inc
C.T.S. Lease &
Rental
Alberta
04053107746
05/31/04
PPSA
Paccar Leasing a
Division of Paccar of
Canada Ltd.
2004 Wabash Trlr/Semi-Trailer
Core-Mark
International Inc
Alberta
03031023603
03/10/03
PPSA
Ryder Truck Rental

Canada Ltd.
1998 Intl 8100
Core-Mark
International Inc
Alberta
03031023652
03/10/03
PPSA
Ryder Truck Rental

Canada Ltd.
199 Intl F4900 (SBA)
Core-Mark
International Inc
Alberta
03031023678
03/10/03
PPSA
Ryder Truck Rental

Canada Ltd.
1999 Intl F4900 (SBA)
Core-Mark
International Inc
Alberta
03031023785
03/10/03
PPSA
Ryder Truck Rental

Canada Ltd.
2002 Intl 8100
Core-Mark
International Inc
Alberta
03031023793
03/10/03
PPSA
Ryder Truck Rental

Canada Ltd.
2002 Intl 8100
Core-Mark
International Inc
Alberta
03031023827
03/10/03
PPSA
Ryder Truck Rental

Canada Ltd.
2002 Intl 8100
DEBTOR
JURISDICTION
REGN NUMBER
FILING
DATE
TYPE OF
FILING
SECURED PARTY
Core-Mark
International Inc
Alberta
03031023835
03/10/03
PPSA
Ryder Truck Rental

Canada Ltd.
2002 Intl 8100
Core-Mark
International Inc
Alberta
05030829849
03/08/05
PPSA
Ryder Truck Rental

Canada Ltd.
2005 International 8600
Core-Mark
International Inc
Alberta
05030829872
03/08/05
PPSA
Ryder Truck Rental

Canada Ltd.
2005 International 8600
Core-Mark
International Inc
Alberta
05030829914
03/08/05
PPSA
Ryder Truck Rental

Canada Ltd.
2005 International F9400I
Core-Mark
International,
Inc.
Alberta
96080616228
08/06/96
PPSA
The Chase
Manhattan
Bank, as Admin.
Agent
All of the debtors present and

after acquired personal property.
Core-Mark
International,
Inc.
Alberta
02022705590
02/27/02
PPSA
Danka Canada Inc.
All goods supplied by the secured

party.
Core-Mark
International,
Inc.
Alberta
03032503017
03/25/03
PPSA
Tele-Mobile
Company

and accessories
Core-Mark
International,
Inc.
Manitoba
200305641404
03/24/03
PPSA
Tele-Mobile
Company

and accessories
Core-Mark
International,
Inc.
Manitoba
200409496007
05/31/04
PPSA
Paccar Leasing a
Canada Ltd.
2005 Kenworth T800 Tractor
Core-Mark
International,
Inc.
Manitoba
200421037409
11/23/04
PPSA
Paccar Leasing a
Canada Ltd.
2005 Kenworth T300 Straight Truck
Core-Mark
Internation (sic)
Inc.
Manitoba
960808109194
08/08/96
PPSA
Paccar of Canada
Ltd.
1997 Kenworth T300
Core-Mark
International Inc
Manitoba
980401109620
04/01/98
PPSA
The Chase
Manhattan Bank
All Assets.
Coremark (sic)
Manitoba
200121834501
06/13/01
PPSA
Paccar Leasing a
Canada Ltd.
2001 Hino FB1817
Coremark
International
Manitoba
200213346708
06/21/02
PPSA
Paccar Leasing a
Canada Ltd.
2003 Kenworth T300
Coremark
International
Manitoba
200118047701
04/27/01
PPSA
Paccar Leasing a
Canada Ltd.
2001 Kenworth T800 Tractor
10
PART II LIENS AND REGNS TO BE RELEASED AT CLOSING

US debtor liens to be released on or about October _____, 2005, notice given by the following UCC financing statements:
DEBTOR
JURISDICTION
FILE NUMBER
FILING
DATE
TYPE OF
FILING
SECURED PARTY
Core-Mark
Holding
Company, Inc.
DE Secretary
of
State
4239255 5
08/24/04
UCC-1
General Electric
Capital Corporation,
as Agent
All assets.
Core-Mark
Holding
Company, Inc.
DE Secretary
of
State
4239319 9
08/24/04
UCC-1
Wells Fargo Bank,

N.A., as Agent
All assets.
Core-Mark
Holdings I, Inc.
DE Secretary
of
State
4239244 9
08/24/04
UCC-1
General Electric
as Agent
All assets.
Core-Mark
Holdings I, Inc.
DE Secretary
of
State
4239317 3
08/24/04
UCC-1
Wells Fargo Bank,

N.A., as Agent
All assets.
Core-Mark
Holdings II, Inc.
DE Secretary
of
State
4239248 0
08/24/04
UCC-1
General Electric
as Agent
All assets.
Core-Mark
Holdings II, Inc.
DE Secretary
of
State
4239316 5
08/24/04
UCC-1
Wells Fargo Bank,

N.A., as Agent
All assets.
Core-Mark
Holdings III,
Inc.
DE Secretary
of
State
4239250 6
08/24/04
UCC-1
General Electric
as Agent
All assets.
Core-Mark
Holdings III,
Inc.
DE Secretary
of
State
4239314 0
08/24/04
UCC-1
Wells Fargo Bank,

N.A., as Agent
All assets.
Core-Mark
International, Inc
DE Secretary
of
State
4239253 0
08/24/04
UCC-1
General Electric
as Agent
All assets.
Core-Mark
International, Inc
DE Secretary
of
State
4239318 1
08/24/04
UCC-1
Wells Fargo Bank,

N.A., as Agent
All assets.
Core-Mark
Interrelated
Companies Inc.
CA Secretary
of
State
04-1002344583
08/24/04
UCC-1
General Electric
as Agent
All assets.
Core-Mark
Interrelated
Companies Inc.
CA Secretary
of
State
04-1002430155
08/24/04
UCC-1
Wells Fargo Bank,

N.A., as Agent
All assets.
11
DEBTOR
JURISDICTION
FILE NUMBER
FILING
DATE
TYPE OF
FILING
SECURED PARTY
Core-Mark
Midcontinent,
Inc.
AR Secretary
of
State
41265220678
08/24/04
UCC-1
General Electric
as Agent
All assets.
Core-Mark
Midcontinent,
Inc.
AR Secretary
of
State
41265247960
08/25/04
UCC-1
Wells Fargo Bank,

N.A., as Agent
All assets.
Core-Mark
Midcontinent,
Inc.
KY Grayson
County Clerk
Book 4,
Page 116;
91166
10/08/04
UCC-1 Fixture
Filing
General Electric
Capital Corporation
Certain land and

improvements located in
Grayson County,
Kentucky, more
specifically described
in Exhibit A thereto.
Head Distributing
Company
GA UCC
Central
Indexing System
0332004008386
08/25/04
UCC-1
General Electric
as Agent
All assets.
Head Distributing
Company
GA UCC
Central
Indexing System
0332004008407
08/25/04
UCC-1
Wells Fargo Bank,

N.A., as Agent
All assets.
Minter-Weisman
Co.
MN Secretary
of State
200412997595
08/24/04
UCC-1
General Electric
as Agent
All assets.
Minter-Weisman
Co.
MN Secretary
of State
200413011848
08/25/04
UCC-1
Wells Fargo Bank,

N.A., as Agent
All assets.
Canada regns to be released on or about October _____, 2005, notice given by the following filings:
DEBTOR
JURISDICTION
FILE NUMBER
FILING
DATE
TYPE OF
FILING
SECURED PARTY
Core-Mark
International,
Inc.
Ontario
60824485820040818
0956 1590 6218
08/18/04
PPSA
Wells Fargo Bank,

N.A., as Agent

Core-Mark
International,
Inc.
Ontario
60816249920040816
0943 1590 6099
08/16/04
PPSA
General Electric
as Agent

Core-Mark
International,
Inc.
BC
880037B
08/16/04
PPSA
General Electric
Capital Corporation

12
DEBTOR
JURISDICTION
FILE NUMBER
FILING
DATE
TYPE OF
FILING
SECURED PARTY
Core-Mark
International,
Inc.
BC
890556B
08/20/04
PPSA
Wells Fargo Bank,

N.A.

Core-Mark
International,
Inc.
Alberta
04081309629
08/13/04
PPSA
General Electric
Capital Corporation
All personal property and other

assets.
Core-Mark
International,
Inc.
Alberta
04081310536
08/13/04
PPSA
General Electric
Capital Corporation
All intellectual property
Core-Mark
International,
Inc.
Alberta
04081730022
08/17/04
PPSA
Wells Fargo Bank,

N.A.

assets.
Core-Mark
International,
Inc.
Alberta
04081731053
08/17/04
PPSA
Wells Fargo Bank,

N.A.
All intellectual property
Core-Mark
International,
Inc.
Saskatchewan
121139572
08/13/04
PPSA
General Electric
as Agent

Core-Mark
International,
Inc.
Saskatchewan
121139598
08/13/04
PPSA
General Electric
as Agent
All intellectual property.
Core-Mark
International,
Inc.
Saskatchewan
121164111
08/19/04
PPSA
Wells Fargo Bank,

N.A.

Core-Mark
International,
Inc.
Manitoba
200414938000
08/19/04
PPSA
General Electric
as Agent
Core-Mark
International,
Inc.
Manitoba
200414937003
08/19/04
PPSA
Wells Fargo Bank,

N.A. as Agent
Core-Mark
International,
Inc.
Manitoba
200414935906
08/19/04
PPSA
Wells Fargo Bank,

N.A., as Agent

assets.
Core-Mark
International,
Inc.
Manitoba
200414576809
08/13/04
PPSA
General Electric
as Agent

assets.
Core-Mark
International,
Inc.
Northwest
Territories
279810
08/13/04
PPSA
General Electric
Capital Corporation

Core-Mark
International,
Inc.
Northwest
Territories
281477
08/20/04
PPSA
Wells Fargo Bank,

N.A., as Agent

Core-Mark
International,
Inc.
Nunavut
59402
08/13/04
PPSA
General Electric
Capital Corporation

Core-Mark
International,
Inc.
Nunavut
59992
08/20/04
PPSA
Wells Fargo Bank,

N.A., as Agent

Core-Mark
International,
Inc.
Yukon
24348
08/17/04
PPSA
General Electric
as Agent

Core-Mark
International,
Inc.
Yukon
24355
08/17/04
PPSA
General Electric
as Agent
Core-Mark
International,
Inc.
Yukon
25515
08/19/04
PPSA
Wells Fargo Bank,

N.A.

Yukon
25523
08/19/04
PPSA

Wells Fargo Bank,

N.A.
Core-Mark
International,
Inc.
13
PART III EXISTING LIENS, SUBORDINATED OR PAID-OFF

The following financing statements give notice of liens given by debtor that are contractually subordinate to all liens granted
under the Pledge and Security Agreement (as it may be amended or modified from time to time, the Security Agreement) dated
as of October _____, 2005 by and among the Grantors (as defined in the Security Agreement) and JPMorgan Chase Bank, N.A.,
in its capacity as administrative agent for the lenders party to this Agreement:
DEBTOR
JURISDICTION
FILE NUMBER
FILING
DATE
TYPE OF
FILING
SECURED PARTY
Core-Mark
Holding
Company, Inc.
DE Secretary
of State
4241931 7
08/26/04
UCC-1
Reclamations
Creditors Trust
All assets.
Core-Mark
Holding
Company, Inc.
DE Secretary
of State
4241933 3
08/26/04
UCC-1
Reclamations
Creditors Trust
All assets.
PART IV FILINGS OF RECORD TO BE TERMINATED

The following financing statement gives notice of a lien given by debtor pursuant to a credit facility that has been terminated. All
loans and other obligations previously secured by such lien have been discharged in full. The Borrowers acknowledge and agree
that notwithstanding any other provision of this Agreement (a) this filing shall be terminated no later than December 1, 2005 and
(b) at no time shall the Borrower or any of its Subsidiaries create any lien that would be perfected by this filing:
DEBTOR
JURISDICTION
Cardinal
Wholesale,
Inc.
MN Secretary
of State
FILE NUMBER
FILING
DATE
TYPE OF
FILING
20024457058
6/20/02
UCC-1
SECURED PARTY
Deutsche Bank Trust

Company Americas
All assets.
14

Existing Investments
Stock Holdings
1) Investments
Company Name
Number
Shares
ILD Holdings, Inc.
Prudential Financial
Altria Group, Inc. Direct Stock Purchase and
Dividend Reinvestment Plan
Duckwall-Alco Stores
Ames Department Stores
Affiliated Foods, Inc.
600
51
Estimated Share
Price
120.00
65.87
Holdings
Value
Exchange
72,000
3,359
Holder
Non-Public
Head
Distributing
Company
NYSE
Minter Weisman Co.

Can
6.084
71.94
438
NYSE
6.102
71.94
439
NYSE
6.148
71.94
442
NYSE
Minter Weisman Co.

Can
Adel Grocery
Company
Core-Mark
Distribution
Inc
262
482
$
$
23.73
23.73
$
$
6,217
11,438
NASDAQ
NASDAQ
3,654
0.0015
Pink Sheet
169
6
25
$
$
$
207.10
206.00
100.00
$
$
$
35,000
1,236
2,500
133,075
Core-Mark
International,
Inc.
Core-Mark
Distributors
Core-Mark
Midcontinent
2) Notes Receivable
Customer Name
BLUE CHIP (Eureka Management Group)
MLK
LOGANVILLE CHEVRON
Original Date
Note Receivable
2/18/2003
218,510
11/10/1991
40,224
11/1/2000
15,568
3) Guarantees
Include by reference Schedule 6.01, item (1) to the Credit Agreement
SCHEDULE 6.10
to
CREDIT AGREEMENT
Restrictive Agreements
1.) Restricted Cash Agreement
Agreement made as of the 29th day of July, 2003, between: Her Majesty the Queen in Right of the Province of Alberta, as
represented by the Minister of Revenue and Core-Mark International, Inc., a Delaware Corporation, carrying on business in the
Provinces of British Columbia and Alberta.
EXHIBIT A
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the Assignment and Assumption) is dated as of the Effective Date set forth below and
is entered into by and between [Insert name of Assignor] (the Assignor) and [Insert name of Assignee] (the Assignee).
Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below
(as amended, the Credit Agreement), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms
and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby
irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and
the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the
Assignors rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments
delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit, guarantees,
and swingline loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims,
suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract
claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and
obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and
(ii) above being referred to herein collectively as the Assigned Interest). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the
Assignor.
1.
Assignor:
2.
Assignee:
[and is an Affiliate/Approved Fund of [identify Lender] 1]
3.
Borrower(s):
4.
Administrative Agent:
5.
Credit Agreement:
Select as applicable.
, as the administrative agent under the Credit Agreement

[The $250,000,000 Credit Agreement dated as of October [__], 2005 among Core-Mark Holding
Company, Inc., certain of its Affiliates, the Lenders parties thereto, JPMorgan Chase Bank, N.A.,
as Administrative Agent, and the other agents and lenders parties thereto]
Exhibit A
6. Assigned Interest:
Facility Assigned
Revolving Commitment
Aggregate Amount of
Commitment/Loans for
all Lenders
Amount of
Commitment/Loans
Assigned
$
$
$
$
$
$
Percentage Assigned of
Commitment/Loans2
%
%
%
_____, 20_____ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL

Effective Date:
BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
Title:
2
Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.
Exhibit A
[Consented to and]3 Accepted:

[NAME OF ADMINISTRATIVE AGENT],
as Administrative Agent
By:
Title:
[Consented to:]4
[NAME OF RELEVANT PARTY]
By:
Title:
3
4
To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.
To be added only if the consent of the Administrative Borrower and/or other parties (e.g. Swingline Lender, Issuing Bank)
is required by the terms of the Credit Agreement.
Exhibit A
ANNEX 1
]5
STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest,
(ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and
authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of any Borrower, any of their respective Subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by any Borrower, any of their respective Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and
to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that
are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective
Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents
and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently
and without reliance on the Administrative Agent or any other Lender, and (v) attached to the Assignment and Assumption is any
documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the
Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor 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 decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms
all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender. If the Assignee
will be a Canadian Lender under the Credit Agreement, the Assignee certifies that it is an authorized foreign bank as defined in
the Income Tax Act (Canada) and it will hold its interest in the Canadian Loans in the course of its Canadian banking business
as defined in the Income Tax Act (Canada).
2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have
accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective
Date.
5
Describe Credit Agreement at option of Administrative Agent.

Exhibit A
3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument.
Delivery of an executed counterpart of a signature page of this Assignment and Assumption by facsimile shall be effective as
delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be
governed by, and construed in accordance with, the law of the State of New York.
Exhibit A
EXHIBIT B
OPINION OF COUNSEL FOR THE BORROWERS
October __, 2005
To the Lenders and the Administrative
Agent Referred to Below
c/o JP Morgan Chase Bank, N.A.,
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
We have acted as counsel to Core-Mark Holding Company, Inc., Core-Mark International, Inc., Core-Mark Holdings I, Inc.,
Core-Mark Holdings II, Inc., and Core-Mark Holdings III, Inc., each a Delaware corporation (collectively, the Delaware
Corporate Opinion Parties), Core-Mark Interrelated Companies, Inc., a California corporation (the California Corporate
Opinion Party and together with the Delaware Corporate Opinion Parties, the Corporate Opinion Parties), and Core-Mark
Midcontinent, Inc., an Arkansas corporation, Head Distributing Company, a Georgia corporation, and Minter-Weisman Co., a
Minnesota corporation (collectively, the Designated Companies and together with the Corporate Opinion Parties, the Credit
Parties) in connection with the preparation, execution and delivery of, and the consummation of the transactions contemplated
by, the Credit Agreement dated as of September ____, 2005 (the Credit Agreement). Capitalized terms defined in the Credit
Agreement and used (but not otherwise defined) herein are used herein as so defined.
In so acting, we have examined originals or copies (certified or otherwise identified to our satisfaction) of (a) (i) the Credit
Agreement, (ii) the Security Agreement, (iii) the Deposit Account Control Agreements listed on Schedule 1 hereto (collectively,
the Transaction Documents) and (b) such corporate records, agreements, documents and other instruments, and such
certificates or comparable documents of public officials and of officers and representatives of the Credit Parties, and have made
such inquiries of such officers and representatives, as we have deemed relevant and necessary as a basis for the opinions
hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the
authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us
as certified, conformed or photostatic copies and the authenticity of the originals of such latter documents. As to all questions of
fact material to these opinions that have not been independently established, we have relied upon certificates or comparable
documents of officers and representatives of the Credit Parties and upon the representations and warranties of the Credit Parties
contained in the Agreement. We have also assumed (i) the valid existence of the Designated Companies, (ii) that the Designated
Companies have the requisite corporate power and authority to enter into and perform the Transaction Documents and (iii) the
due authorization, execution and delivery of the Transaction Documents by the Designated Companies. As used herein, to our
knowledge and of which we are aware mean the conscious awareness of facts or other information by any lawyer in our firm
actively involved in the transactions contemplated by the Credit Agreement.
Exhibit B
October _____, 2005

Page 2
Based on the foregoing, and subject to the qualifications stated herein, we are of the opinion that:
1. Each Delaware Corporate Opinion Party is a corporation validly existing and in good standing under the laws of the State
of Delaware and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its
business as now being conducted. Each Delaware Corporate Opinion Party is duly qualified to transact business and is in good
standing as a foreign corporation in each jurisdiction identified in Schedule 2 hereto.
2. The California Corporate Opinion Party is a corporation validly existing and in good standing under the laws of the State
of California and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its
business as now being conducted. The California Corporate Opinion Party is duly qualified to transact business and is in good
standing as a foreign corporation in each jurisdiction identified in Schedule 2 hereto.
3. Each Corporate Opinion Party has all requisite corporate power and authority to execute and deliver each Transaction
Document and to perform its respective obligations thereunder. The execution, delivery and performance by each of the
Corporate Opinion Parties of each Transaction Document to which it is a party have been duly authorized by all necessary
corporate action on the part of each Corporate Opinion Party. Each of the Transaction Documents has been duly and validly
executed and delivered by each such Corporate Opinion Party. Assuming the due authorization, execution and delivery thereof
by the other parties thereto, each of the Transaction Documents constitutes the legal, valid and binding obligation of each Credit
Party party thereto, enforceable against each such Credit Party in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors rights and remedies
generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that
(A) rights to indemnification and contribution thereunder may be limited by federal or state securities laws or public policy
relating thereto, (B) no opinion is expressed with respect to rights of set-off under the Transaction Documents, (C) certain
remedial provisions of the Transaction Documents are or may be unenforceable in whole or in part under the laws of the State of
New York, but the inclusion of such provisions does not affect the validity of the Transaction Documents, and the Transaction
Documents contain adequate provisions for the practical realization of the rights and benefits afforded thereby, (D) no opinion is
expressed with respect to any provision of any Transaction Document providing for liquidated damages and (E) no opinion is
expressed with respect to the enforceability of Section 9.09(e) of the Credit Agreement or the enforceability under the laws of the
State of California of any provision of any Transaction Document providing for waiver of jury trial or reference to a referee. No
opinion is expressed in this paragraph as to the attachment, perfection or priority of any liens granted pursuant to the Transaction
Documents.
Exhibit B
October ___, 2005

Page 3
4. The execution and delivery by each Credit Party of the Transaction Documents to which such Credit Party is a party and
the performance by such Credit Party of its respective obligations thereunder will not conflict with, constitute a default under or
violate (i) with respect to each Credit Party, any of the terms, conditions or provisions of the corporate charter or by-laws of such
Credit Party, (ii) any of the terms, conditions or provisions of any material document, agreement or other instrument listed on
Schedule 3 hereto, (iii) any New York, California, Delaware corporate or federal law or regulation (other than federal and state
securities or blue sky laws, as to which we express no opinion in this paragraph), including without limitation, Regulation T,
Regulation U and Regulation X of the Board of Governors of the Federal Reserve System or (iv) any judgment, writ, injunction,
decree, order or ruling of any court or governmental authority binding on any Credit Party of which we are aware.
5. No consent, approval, waiver, license or authorization or other action by or filing with any New York, California,
Delaware corporate or federal governmental authority is required in connection with the execution and delivery by any Credit
Party of the Transaction Documents, the consummation by any Credit Party of the transactions contemplated thereby or the
performance by any Credit Party of its respective obligations thereunder, except for (i) filings in connection with perfecting
security interests created by the Transaction Documents, (ii) federal and state securities or blue sky laws, as to which we express
no opinion in this paragraph, (iii) those already obtained and (iv) immaterial consents, approvals, waivers, license or
authorizations or other actions.
6. [Except as set forth in
], to our knowledge, there is no litigation, proceeding or governmental investigation
pending or overtly threatened against any Credit Party that relates to any of the transactions contemplated by the Transaction
Documents or which, if adversely determined, would have a material adverse effect on the business, assets or financial condition
of such Credit Parties and their respective subsidiaries taken as a whole.
7. (a) The execution and delivery of the Security Agreement creates a valid security interest in the Collateral (as defined in
the Security Agreement), as security for the Obligations. Assuming the filing of the financing statements on Form UCC 1
attached hereto as Exhibit A with the Secretary of State of the States of Delaware and California, as applicable, such security
interest is perfected, to the extent a security interest in the Collateral may be perfected by the filing of a financing statement
under the Uniform Commercial Code in effect in the State of Delaware (the DE UCC) and the Uniform Commercial Code in
effect in the State of California (the CA UCC).
(b) The execution and delivery of the Security Agreement creates a valid lien on and security interest in the Pledged
Collateral (as defined in the Security Agreement), as security for the Obligations. Assuming (i) delivery in the State of New
York to the Administrative Agent (the Pledgee) of all certificates that represent the Pledged Collateral, together with
stock powers properly executed in blank with respect thereto, and (ii) that the Pledgee was without notice of any adverse
claim (as such phrase is defined in Section 8-105 of the Uniform Commercial Code in effect in the State of New York (the
NY UCC and, together with the DE UCC and the CA UCC, the UCC) with respect to the Pledged Collateral, such
security interest is perfected and is free of any adverse claim.
Exhibit B
October ___, 2005

Page 4
The opinions in subparagraph (a) and, with respect to subclause A below, subparagraph (b) are subject to the following
exceptions:
A. that with respect to rights in the Collateral of any Grantor (as defined in the Security Agreement), we express
no opinion, and have assumed that such Grantor has rights in the Collateral;
B. that with respect to any Collateral as to which the perfection of a lien or security interest is governed by the
laws of any jurisdiction other than the States of New York, Delaware or California, we express no opinion;
C. that with respect to security interests in real property leases or insurance policies, we express no opinion;
D. that with respect to any Collateral which is or may become fixtures (as defined in Section 9-102(a)(41) of the
UCC) or a commercial tort claim (as defined in Section 9-102(a)(13) of the UCC), we express no opinion; and
E. that with respect to transactions excluded from Article 9 of the UCC by Section 9-109 thereof, we express no
opinion.
The opinion set forth in subparagraph (b) is also subject to the following exceptions:
F. that with respect to (i) federal tax liens accorded priority under law and (ii) liens created under Title IV of the
Employee Retirement Income Security Act of 1974 which are properly filed after the date hereof, we express no
opinion as to the relative priority of such liens and the security interests created by the Security Agreement or as to
whether such liens may be adverse claims; and
G. that with respect to any claim (including for taxes) in favor of any state or any of its respective agencies,
authorities, municipalities or political subdivisions which claim is given lien status and/or priority under any law of
such state, we express no opinion as to the relative priority of such liens and the security interests created by the
Security Agreement or as to whether such liens may be adverse claims.
In addition, the opinions in subparagraphs (a) and (b) are subject to (i) the limitations on perfection of security interests in
proceeds resulting from the operation of Section 9-315 of the UCC; (ii) the limitations with respect to buyers in the ordinary
course of business imposed by Sections 9-318 and 9-320 of the UCC; (iii) the limitations with respect to documents, instruments
and securities imposed by Sections 8-302, 9-312 and 9-331 of the UCC; (iv) the provisions of Section 9-203 of the UCC relating
to the time of attachment; and (v) Section 552 of Title 11 of the United States Code (the Bankruptcy Code) with respect to any
Collateral acquired by a Grantor subsequent to the commencement of a case against or by a Grantor under the Bankruptcy Code.
We further assume that all filings will be timely made and duly filed as necessary (i) in the event of a change in the name,
identity or corporate structure of a Grantor, (ii) in the event of a change in the location of a Grantor and (iii) to continue to
maintain the effectiveness of the original filings.
Exhibit B
October ___, 2005

Page 5
(c) The execution and delivery by the Grantors of the Security Agreement creates in favor of the Administrative Agent
a valid security interest in each Deposit Account described therein. Upon the execution and delivery of the Deposit Account
Control Agreements listed on Schedule 1 hereto by the Grantors, the Administrative Agent and the bank at which such
Deposit Account referenced in Schedule 1 is maintained, the security interest granted to the Administrative Agent in such
Deposit Account will be perfected.
The opinion set forth in this paragraph (c) is subject to the following exceptions:
A. that with respect to rights in or title to the Collateral of the Grantors (as such term is defined in the Security
Agreement), we express no opinion, and have assumed that the Grantors have rights in the Collateral; and
B. that with respect to any Collateral as to which the perfection of a lien or security interest is governed by the
laws of any jurisdiction other than the States of New York, Delaware or California, we express no opinion.
In addition, the opinion in paragraph (c) is subject to (i) the limitations on perfection of security interests in proceeds
resulting from the operation of Section 9-315 of the UCC; (ii) the limitations with respect to securities imposed by
Sections 8-302 and 9-312 of the UCC; (iii) the provisions of Section 9-203 of the UCC relating to the time of attachment; and
(iv) Section 552 of Title 11 of the United States Code (the Bankruptcy Code) with respect to any Collateral acquired by a
Grantor subsequent to the commencement of a case against or by a Grantor under the Bankruptcy Code.
8. No Credit Party is an investment company and none of the Credit Parties is a company controlled by an investment
company within the meaning of the Investment Company Act of 1940, as amended.
9. None of the Credit Parties is a holding company or subsidiary company as defined in, or subject to regulation under,
the Public Utility Holding Company Act of 1935.
The opinions expressed herein are limited to the laws of the State of New York, the laws of the State of California, the
corporate laws of the State of Delaware, Article 9 of the DE UCC, Article 9 of the CA UCC and the federal laws of the United
States, and we express no opinion as to the effect on the matters covered by this letter of the laws of any other jurisdiction. The
opinions expressed herein are rendered solely for your benefit in connection with the transactions described herein. Those
opinions may not be used or relied upon by any other person, nor may this letter or any copies hereof be furnished to a third
party, filed with a governmental agency, quoted, cited or otherwise referred to without our prior written consent.
Very truly yours,
Exhibit B
Schedule 1 to Form of Legal Opinion

Deposit Account Control Agreements
Schedule 1-1

Foreign Jurisdictions
Schedule 2-1

Material Agreements
Schedule 3-1
Exhibit A to Form of Legal Opinion

UCC-1 Financing Statements
EXHIBIT C
BORROWING BASE CERTIFICATE
See attached.
Exhibit C
Credit Agreement
Core-Mark International Inc. Consolidated
Borrowing Base Certificate Smmary
Consolidated
Core-Mark
Gross A/R as of
Inter-company A/R
Net A/R as of
7/31/2005
7/31/2005
Less:
Past Due Accounts > 60 Days from Due Date
Credit Balances >60 Days from Due Date
Past Due Accounts > 90 Days from Invoice Date
Employee Receivables (status 79)
Cash & Carry Customers (status 81)
Factory Representatives (status 87)
Government Accounts (status 88)
Notes Receivable (status 91)
Bankruptcy/Collection/Court Action (status 92-94)
Cross-Age (=>50.0%)
COD Customers
Chargebacks
Contra Accounts
Unapplied Cash
Customer Rebates
Customer Deposits
Unreconciled Aging to G/L Variance (Jul)
Pre-Bill Reserve
Overconcentration 20%, 10%
Dilution Reserve > 5%
Clean Invoices
Others
Total Ineligible A/R
Eligible Accounts Receivable
Accounts Receivable Advance Rate
(A) Available Accounts Receivable
Inventory as of
0
0
0
85.0%
7/31/2005
Less:
Dry-room Inventory (35.0%)
Equipment/Displays
Shrink Reserve
Non-Cigs Inventory on Hand 180 Days (50.0%)
Non-Cigs Inventory on Hand 360 Days (100.0%)
Cigs Inventory on Hand 180 Days (25.0%)
U.S. Tobacco Stamps Reserve
Merchandise Income Reserve (PEI) as of Jun-05 (50.0%)
Perishable Reserve
Unreconciled Perpetual to G/L Variance
Inter-Company Profits
Outside Dryroom (processed offsite by 3rd party only)
Other Ineligibles
Total Ineligible Inventory
Eligible Inventory
Available Inventory
Plus:
Unaffixed Stamps Add-in (90%)
(B) Net Available Inventory
(C) Total Revolver Availability (A+B)
100% Unrestricted Cash

PP&E Component
(D) Plus: Total Unrestricted Cash and PP&E Component
$
$
$
0
0
0
Inventory Overadvance lesser of
Credit Agreement
Core-Mark International Inc. Consolidated
Borrowing Base Certificate Smmary
Consolidated
Core-Mark
(E) Plus: (I) $5000000 or (II) (90% of 78.4% NOLV)
NO
(F) Less: Collateral Reserves

U.S. Tobacco Stamps Liability In Excess of Stamps
Landlord Lien Reserve
Canadian Priority Claims
Canadian Tax Liability
Cash Reserves to Offset Canadian Tax Liability
Total Reserves
Borrowing Base Net of Collateral Reserves
Lesser of Borrowing Base (Net of Reserves) and Commitment
Less Exposure Reserves

Withholding Taxes
Banking Services
Canadian Priority Claims Employee Related
Total Reserves
Availability after Exposure Reserves
Outstanding US Revolving Loan Balance as of

Outstanding Canadian Revolving (US$) Loan Balance as of
Outstanding US First Funded Revolving Loan Balance as of
Total Loan Balance
Letter Of Credit Obligations
Excess Borrowing Base Availability
7/31/2005
7/31/2005
7/31/2005
Core-Mark Inc.
Borrowing Base
7/31/2005
c
c
c
o
x
r
n
s
j
d
x
cc
q
bb
dd
h
aa
z
e
p
e
q
r
r
r
v
u
l
t
i
x
z
(000)s
Gross A/R
Inter-company A/R
Net A/R
Ineligibles
Past Due Accounts > 60 Days from Due Date
Credit Balances >60 Days from Due Date
Past Due Accounts > 90 Days from Invoice Date
Employee Receivables (status 79)
Cash & Carry Customers (status 81)
Factory Representatives (status 87)
Federal Government Accounts (status 88)
Notes Receivable (status 91)
Bankruptcy/Collection/Court Action (status 92-94)
Cross-Age (=>50.0%)
COD Customers
Chargebacks
Contra Accounts
Unapplied Cash (Jul)
Customer Rebates (Jul)
Customer Deposits (Jul)
Unreconciled Aging to G/L Variance (Jul)
Pre-Bill Reserve
Overconcentration 20%, 10%
Dilution Reserve > 5%
Clean Invoice
Others
Total Ineligibles
Eligible Accounts Receivable
Advance Rate
Available Accounts Receivable
Inventory
Ineligibles
Dry-room Inventory
(35.0%)
Equipment/Displays
Shrink Reserve (Jul)
Non-Cigs Inventory on
Hand 180 Days (50.0%)
Jul
Non-Cigs Inventory on
Hand 360 Days
(100.0%) Jul
Cigs Inventory on Hand
180 Days (25.0%)- Jul
U.S. Tobacco Stamps
Reserve
Merchandise Income
Reserve (PEI) as of
Jun-05 (50.0%)
Perishable Ju1
Inter-Company Profits Jul
Outside Dryroom
(processed offsite by
3rd party only)
Unreconciled Aging to GL
Variance
Others
Total Ineligible
U.S.
Cigs & Affx Stamps
$
U.S.
$
$
$
$
Canada (US$)
$
$
85.0%
0
$
Non-Cigarettes
$
$
$
85.0%
0
85.0%
0
$
$
$
Canada (US$)
Cigarettes
Non-Cigarettes
$
Total
$
Total
$
Eligible Inventory
Advance Rate Lesser Of
(I) 65% of eligible
Inventory or
65.0%
$
65.0%
$
65.0%
$
$
$
0
0
100% Unrestricted Cash

PP&E Component
Total Unrestricted Cash
and PP&E Component
Inventory Overadvance
less of (I) $5000000 or (II)
(90% of 78.4% NOLV)
NO
Overadvance not included
$
$
0
0
$
$
0
0
$
$
0
0
$
$
0
0
65.0%
$
(II) (85% of 78.4% NOLV)
Unaffixed Stamps Add-in

(90%)
Available Inventory
Collateral Reserves
U.S. Tobacco Stamps
Liability In Excess of
Stamps
Landlord Lien Reserve
(Jul)
GST Tax
(Jul)
Cash Reserves to Offset
(Jul)
Total Reserves
Borrowing Base Net of

Collateral Reserves
Availability before
Exposure Reserves
Exposure Reserves
Witholding Taxes
Banking Services
Canadian Priority Claims
Employee Related
Availability after
Exposure Reserves
Schedule 2 to Borrowing Base

Canadian Priority Claims as of
July 31, 2005
25%
Canadian Exchange Rate

CDN$
75%
100%
Account Name
GL #
Goods and Services Taxes

Collected and Not Yet
Remitted
1186000
Employer Taxes Accrued

and Not Yey Submitted
1175000
Accrued Quebec Pension

Plan & Canada Pension
Plan Employer
Contributions and
Employee Contribution
Withholdings Not Yet
Remitted (Accrued
Medical)
1181001
Accrued Workers
Compensation
Premiums Not Yet
Remitted
1180002
Employee Stock Purchase

Plan
1181004
Accrued Workers
Compensation
Premiums Not Yet
Remitted
1181002
Accrued Wages Payable

Not Yet Remitted
1180004
Other Employee Benefits

Not Yet Remitted (Nest
Egg 401K)
1181005
Accrued Vacation Pay Not

Yet Remitted
1180000
Accrued Employee Income

Tax Withholdings Not
Yet Remitted
1171000
Total Canadian Reserves
US$
50%
Week 1
Week 2
Week 3
Week 4
percentages only applicable for GST
Schedule 3 to Borrowing Base Certificate

Letters Of Credit
July 31, 2005
Canadian Exchange Rate
1.2259
Description
Canadian L/Cs (000)
CDN$
US$
US L/Cs (000)
US$
Total L/Cs
US$
Svenska Old Republic

ABN Zurich
ABN Hartford
ABN St. Paul ABN Greenwich
JPM National Union Fire
JPM Reliance
JPM Travelers
WACHOVIA Liberty Mutual
Insurance
WACHOVIA Affiliated Foods
RBC Alberta Used Oil Mgmt
RBC Manitoba Finance
RBC Ontario Minister of Finance
RBC Saskatchewan Finance
RBC Imperial Tobacco Company
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0
0
0.000
0.000
0.000
0.000
0.000
0
0
0.000
0.000
0.0000
0.0000
0.000
0.0000
0.0000
0
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
Total L/C Reserve
0.000
0.000
0.000
0
0
0
Accounts Receivable Internal use only support to Schedule 1

Source AROR46C
As of
07/31/05
WSJ FX rate
1.2259
noon rate
US
Canada (CD$)
Canada (US$)
Total
Gross A/R
Intercompany
Other Ineligibles:
A/R >60 days
Credits >60 days
Employee (79)
Cash and carry (81)
Factory Reps (87)
Government (88)
Notes Rec (91)
Bankruptcy (92)
Collection (93)
Court Action (94)
Pct over 60 days>=50% (P)
O/T COD (T)
A/R chgbks (H)
Total Ineligible
Ineligibles excl credits

Per AROR46C
Difference
Source: AROD11D
Clean invoices
Inventory Balances - Internal use only support to Schedule 1

As of
07/31/05
Cigs
Stamps
US
Inside
PM Buydown
Outside
X-Dock
Dry Room 1
Total US
0
#DIV/0!
Cigars & Tob
0
#DIV/0!
#DIV/0!
Other
Total
0
#DIV/0!
0
#DIV/0!
#DIV/0!
0
0
0
0
0
0
100%
Less Unaffixed Stamps

Net US
Canada ( C$ )
Inside
Outside
X-Dock
Dry Room 1
Total CD Inventory
Excise Taxes 2
Total Canadian (CD$)
Noon F/X 3
Total Canadian (US$)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1.2259 --------------------------------------------------------->
0
0
0
0
#DIV/0!
#DIV/0!
Total Company (US$)
0
0
per BB
1
2
3
US and Canadian dry rooom inventory based on Jul 05 GL.

Excise Taxes (GL# S01405) as of Jul 2005 (n:\t\bb\ge\morptg\moinelig\month\CDexcisetaxes.xls)
Noon F/X as of
07/31/05
OTHER RESERVES
Intercompany Profits
Sales1
AMI
ARTIC
Total I/C
1
2
Year-to-date
Gross Profit 1
July-05
Inventory2
#DIV/0!
Total I/C
Profits
#DIV/0!
Income Statement from White Book

Asset Analysis Inventory
EXHIBIT D
COMPLIANCE CERTIFICATE
To:
The Lenders parties to the

Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain Credit Agreement dated as of,
(as amended,
modified, renewed or extended from time to time, the Agreement) among
(each a Borrower and collectively the
Borrowers), the other Loan Parties, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent for
the Lenders and as the Issuing Bank. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have
the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected
of each of the Borrowers;
2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed
review of the transactions and conditions of the Borrowers and their respective Subsidiaries during the accounting period covered
by the attached financial statements [for quarterly or monthly financial statements add: and such financial statements present
fairly in all material respects the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence
of footnotes];
3. The examinations described in paragraph 2 did not disclose, except as set forth below, and I have no knowledge of (i) the
existence of any condition or event which constitutes a Default during or at the end of the accounting period covered by the
attached financial statements or as of the date of this Certificate or (ii) any change in GAAP or in the application thereof that has
occurred since the date of the audited financial statements referred to in Section 3.04 of the Agreement;
4. I hereby certify that no Loan Party has changed (i) its name, (ii) its chief executive office, (iii) principal place of business,
(iv) the type of entity it is or (v) its state of incorporation or organization without having given the Agent the notice required by
Section 4.15 of the Security Agreement;
5. Schedule I attached hereto sets forth financial data and computations evidencing the Borrowers compliance with
Section 6.13 of the Agreement (if applicable under the terms of Section 6.13), all of which data and computations are true,
complete and correct; and
6. Schedule II hereto sets forth the computations necessary to determine the Applicable Rate commencing on the Business
Day this certificate is delivered.
Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the (i) nature of the condition or event, the
period during which it has existed and the action which the Borrowers have taken, is taking, or proposes to take with respect to
each such condition or event or (i) the change in GAAP or the application thereof and the effect of such change on the attached
financial statements:
Exhibit D
The foregoing certifications, together with the computations set forth in Schedule I and Schedule II hereto and the financial
statements delivered with this Certificate in support hereof, are made and delivered this _____ day of
, _______.
By:
Name:
Title:
Exhibit D
SCHEDULE I
Compliance as of
,
Provisions of
and
the Agreement
with
of
Exhibit D
SCHEDULE II
Borrowers Applicable Rate Calculation
Exhibit D
EXHIBIT E-1
LOAN PARTY JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this Agreement), dated as of
, ___, 200_, is entered into between
,a
(the New Subsidiary) and JPMORGAN CHASE BANK, N.A., in its capacity as
administrative agent (the Administrative Agent) under that certain Credit Agreement, dated as of
, _____, 200___
among
(each a Borrower and collectively the Borrowers), the Loan Parties party thereto, the Lenders party
thereto and the Administrative Agent (as the same may be amended, modified, extended or restated from time to time, the
Credit Agreement). All capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit
Agreement.
The New Subsidiary and the Administrative Agent, for the benefit of the Lenders, hereby agree as follows:
1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New
Subsidiary will be deemed to be a Loan Party under the Credit Agreement and a Loan Guarantor for all purposes of the Credit
Agreement and shall have all of the obligations of a Loan Party and a Loan Guarantor thereunder as if it had executed the Credit
Agreement. The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and
conditions contained in the Credit Agreement, including without limitation (a) all of the representations and warranties of the
Loan Parties set forth in Article III of the Credit Agreement, *[and]* (b) all of the covenants set forth in Articles V and VI of the
Credit Agreement *[and (c) all of the guaranty obligations set forth in Article X of the Credit Agreement. Without limiting the
generality of the foregoing terms of this paragraph 1, the New Subsidiary, subject to the limitations set forth in Section 10.10 of
the Credit Agreement, hereby guarantees, jointly and severally with the other Loan Guarantors, to the Administrative Agent and
the Lenders, as provided in Article X of the Credit Agreement, the prompt payment and performance of the Guaranteed
Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in
accordance with the terms thereof and agrees that if any of the Guaranteed Obligations are not paid or performed in full when
due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise), the New Subsidiary will, jointly and
severally together with the other Loan Guarantors, promptly pay and perform the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration or otherwise)
in accordance with the terms of such extension or renewal.]* *[The New Subsidiary has delivered to the Administrative Agent an
executed Loan Guaranty.]*
2. If required, the New Subsidiary is, simultaneously with the execution of this Agreement, executing and delivering such
Collateral Documents (and such other documents and instruments) as requested by the Administrative Agent in accordance with
the Credit Agreement.
3. The address of the New Subsidiary for purposes of Section 9.01 of the Credit Agreement is as follows:
Exhibit E
4. The New Subsidiary hereby waives acceptance by the Administrative Agent and the Lenders of the guaranty by the New
Subsidiary upon the execution of this Agreement by the New Subsidiary.
5. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument.
6. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by its authorized officer,
and the Administrative Agent, for the benefit of the Lenders, has caused the same to be accepted by its authorized officer, as of
the day and year first above written.
[NEW SUBSIDIARY]
By:
Name:
Title:
Acknowledged and accepted:
By:
Name:
Title:
Exhibit E
EXHIBIT E-2
BORROWER JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this Agreement), dated as of _____, _____, 200_, is entered into between
,a
(the New Subsidiary) and JPMORGAN CHASE BANK, N.A., in its capacity as
administrative agent (the Administrative Agent) under that certain Credit Agreement, dated as of
, _____,
200_____ among
(each a Borrower and collectively the Borrowers), the Loan Parties party thereto, the Lenders
party thereto and the Administrative Agent (as the same may be amended, modified, extended or restated from time to time, the
Credit Agreement). All capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit
Agreement.
The New Subsidiary and the Administrative Agent, for the benefit of the Lenders, hereby agree as follows:
1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New
Subsidiary will be deemed to be a Borrower for all purposes of the Credit Agreement and shall have all of the obligations of a
Borrower thereunder as if it had executed the Credit Agreement. The New Subsidiary hereby ratifies, as of the date hereof, and
agrees to be bound by, all of the terms, provisions and conditions contained in the Credit Agreement, including without
limitation (a) all of the representations and warranties of the Borrowers set forth in Article III of the Credit Agreement, (b) all of
the covenants set forth in Articles V and VI of the Credit Agreement and (c) all of the multiple borrower provisions of Article XI
of the Credit Agreement, including, without limitation, the appointment of Holdings as Administrative Borrower. Without
limiting the generality of the foregoing terms of this paragraph 1, the New Subsidiary, subject to the limitations set forth in
Section 10.10 of the Credit Agreement, hereby agrees, jointly and severally with the other Borrowers, that it is responsible for
the prompt payment and performance of the Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof.
2. If required, the New Subsidiary is, simultaneously with the execution of this Agreement, executing and delivering such
Collateral Documents (and such other documents and instruments) as requested by the Administrative Agent in accordance with
the Credit Agreement.
3. The address of the New Subsidiary for purposes of Section 9.01 of the Credit Agreement is as follows:
4. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument.
6. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
NEW YORK.
Exhibit E
IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by its authorized officer,
and the Administrative Agent, for the benefit of the Lenders, has caused the same to be accepted by its authorized officer, as of
the day and year first above written.
[NEW SUBSIDIARY]
By:
Name:
Title:
Acknowledged and accepted:
By:
Name:
Title:
Exhibit E
EXHIBIT F
FORM OF BORROWING REQUEST
Reference is made to that certain Credit Agreement, dated as of October [
], 2005, by and among Core-Mark
Holding Company, Inc. and certain of its Affiliates, as borrowers (collectively, the Borrowers); the other Loan Parties
signatory thereto; JPMorgan Chase Bank., N.A., as administrative agent for the Lenders (the Administrative Agent), and the
other Lenders signatory thereto from time to time (including all annexes, exhibits or schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the Credit Agreement). Capitalized terms used herein without
definition are so used as defined in the Credit Agreement.
The undersigned hereby gives irrevocable notice, pursuant to Section 2.03 of the Credit Agreement, of a request hereby for
a Revolving Borrowing as follows:
Aggregate Amount of Borrowing: [$][Cdn.]
Date of Borrowing:
Amount of Borrowing
[$][Cdn.$]
Type of Revolving Loan
Interest Period
[ABR][LIBOR][CDOR]
[Canadian Prime Rate] Loan
_____ Months
The requested Revolving Borrowing is to be wired as follows:

[Name of Bank]
[City of Bank]
Beneficiary:
Account No.:
ABA No.:
Attn:
The undersigned hereby certifies (as Administrative Borrower on behalf of each of the Borrowers) that on the date hereof
and on the Date of Borrowing set forth above, and after giving effect to the Borrowings requested hereby: (i) there exists and
there shall exist no Default or Event of Default under the Credit Agreement; (ii) the proceeds of the Revolving Borrowings will
be used in accordance with Section 5.08 of the Credit Agreement; (iii) each of the representations and warranties contained in the
Credit Agreement and the other Loan Documents is true and correct in all material respects (except in the case of representations
and warranties that relate by their terms to a specified date); and (iv) after giving effect to the requested Revolving Borrowings,
Availability is not less than zero.
Exhibit F
IN WITNESS WHEREOF, the Administrative Borrower has caused this Notice of Borrowing Request to be executed and
delivered by its duly authorized officer to the Administrative Agent and the Canadian Funding Bank as of the date first set forth
above.
By:
Name:
Title:
Exhibit F
EXHIBIT G
FORM OF REVOLVING NOTE
[
, 20__]
Each of the undersigned (each a Borrower and, collectively, the Borrowers), promises to pay to the order of
[
] (the Lender) the aggregate unpaid principal amount of all Revolving Loans made by the Lender to the
Borrowers pursuant to Article II of the Agreement (as hereinafter defined), in immediately available funds at the main office of
JPMorgan Chase Bank, N.A., as Administrative Agent, located at [
] or at such other location as the Administrative
Agent may designate from time to time in writing, together with interest on the unpaid principal amount hereof at the rates and
on the dates set forth in the Agreement. The Borrowers shall pay the principal of and accrued and unpaid interest on the
Revolving Loans and LC Disbursements in full on the Maturity Date.
The Lender shall, and is hereby authorized to, record on the schedule attached hereto, or to otherwise record in accordance
with its usual practice, the date and amount of each Loan and the date and amount of each principal payment hereunder.
This Revolving Note is one of the promissory notes referred to in, and issued pursuant to, Section 2.10(f) of the Agreement,
and is entitled to the benefits of, the Credit Agreement, dated as of October [_____], 2005 (which, as it may be amended, restated
or modified and in effect from time to time, is herein called the Agreement), among the Borrowers, the other Loan Parties, the
lenders party thereto, including the Lender, the Issuing Bank and JPMorgan Chase Bank, N.A., as Administrative Agent, to
which Agreement reference is hereby made for a statement of the terms and conditions governing this Revolving Note, including
the terms and conditions under which this Revolving Note may be prepaid or its maturity date accelerated. This Revolving Note
is secured pursuant to the Collateral Documents. Capitalized terms used herein and not otherwise defined herein are used with
the meanings attributed to them in the Agreement.
Demand, presentment, protest and notice of nonpayment of this Revolving Note are waived by the Borrowers to the extent
set forth in the Agreement. Upon and after the occurrence of any Default or Event of Default, this Revolving Note may, to the
extent set forth in the Agreement, and without demand or notice of legal process of any kind except as provided for in the
Agreement, be declared and immediately shall become due and payable.
THIS REVOLVING NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
NEW YORK.
Exhibit G
BORROWERS:
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
By:
Name:
Title:
Exhibit G

By:
Name:
Title:
MINTER-WEISMAN CO.
By:
Name:
Title:
Exhibit G
EXHIBIT H
FORM OF INTEREST ELECTION REQUEST
Reference is made to that certain Credit Agreement, dated as of October [_____], 2005, by and among Core-Mark Holding
Company, Inc. and certain of its Affiliates, as borrowers (collectively, the Borrowers); the other Loan Parties signatory thereto;
JPMorgan Chase Bank., N.A., as administrative agent for the Lenders (the Administrative Agent), and the other Lenders
signatory thereto from time to time (including all annexes, exhibits or schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the Credit Agreement). Capitalized terms used herein without definition are so used as
defined in the Credit Agreement.
The undersigned hereby gives irrevocable notice, pursuant to Section 2.08(b) of the Credit Agreement, of a request hereby
that the Revolving Borrowing set forth below be converted to the Type set forth below as follows:
Aggregate Amount of Borrowing:
[$][Cdn.]
Date of Borrowing:
Date of Conversion
Amount of Borrowing
[$][Cdn.$]
Type of Revolving Loan
Interest Period
[ABR][LIBOR][CDOR]
[Canadian Prime Rate] Loan
_____ Months
Exhibit H
IN WITNESS WHEREOF, the Administrative Borrower has caused this Notice of Borrowing Request to be executed and
delivered by its duly authorized officer to the Administrative Agent and the Canadian Funding Bank as of the date first set forth
above.
By:
Name:
Title:
Exhibit H
Exhibit 10.21
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (as it may be amended or modified from time to time, the Security
Agreement) is entered into as of October 12, 2005, by and among Core-Mark Holding Company, Inc., a Delaware corporation
(Holdings), Core-Mark International, Inc., a Delaware corporation (International), Core-Mark Holdings I, Inc., a Delaware
corporation (Holdings I), Core-Mark Holdings II, Inc., a Delaware corporation (Holdings II), Core-Mark Holdings III, Inc., a
Delaware corporation (Holdings III), Core-Mark Midcontinent, Inc., a Arkansas corporation (Midcontinent), Core-Mark
Interrelated Companies, Inc., a California corporation (Interrelated), Head Distributing Company, a Georgia corporation
(Head), Minter-Weisman Co., a Minnesota corporation (Minter-Weisman; each of Holdings, International, Holdings I,
Holdings II, Holdings III, Midcontinent, Interrelated, Head and Minter-Weisman referred to herein as a Grantor and
collectively such entities are referred to herein as the Grantors), and JPMorgan Chase Bank, N.A., in its capacity as
administrative agent (the Administrative Agent) for the lenders party to the Credit Agreement referred to below.
PRELIMINARY STATEMENT
Each of the Grantors, the Administrative Agent, the Loan Parties and the Lenders are entering into a Credit Agreement
dated as of October 12, 2005 (as it may be amended or modified from time to time, the Credit Agreement). The Grantors are
entering into this Security Agreement in order to induce the Lenders to enter into and extend credit to the Grantors under the
Credit Agreement.
ACCORDINGLY, the Grantors and the Administrative Agent, on behalf of the Lenders, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1. Terms Defined in Credit Agreement. All capitalized terms used herein and not otherwise defined shall have the
meanings assigned to such terms in the Credit Agreement.
1.2. Terms Defined in UCC. Terms defined in the UCC which are not otherwise defined in this Security Agreement are
used herein as defined in the UCC.
1.3. Definitions of Certain Terms Used Herein. As used in this Security Agreement, in addition to the terms defined in the
Preliminary Statement, the following terms shall have the following meanings:
Accounts shall have the meaning set forth in Article 9 of the UCC and as set forth in the PPSA, as applicable.
Article means a numbered article of this Security Agreement, unless another document is specifically referenced.
Assigned Contracts means, collectively, all of the Grantors rights and remedies under, and all moneys and claims for
money due or to become due to any Grantor under those contracts set forth on Exhibit J hereto, and any other material contracts,
and any and all amendments, supplements, extensions, and renewals thereof including all rights and claims of any Grantor now
or hereafter existing: (a) under any insurance, indemnities, warranties, and guarantees provided for or arising out of or in
connection with any of the foregoing agreements; (b) for any damages arising out of or for breach or default under or in
connection with any of the foregoing contracts; (c) to all other amounts from time to time paid or payable under or in connection
with any of the foregoing agreements; or (d) to exercise or enforce any and all covenants, remedies, powers and privileges
thereunder.
Chattel Paper shall have the meaning set forth in Article 9 of the UCC and as set forth in the PPSA, as applicable.
Closing Date means the date of the Credit Agreement.
Collateral shall have the meaning set forth in Article II.
Collateral Access Agreement means any landlord waiver or other agreement, in form and substance reasonably
satisfactory to the Administrative Agent, between the Administrative Agent and any third party (including any bailee, consignee,
customs broker, or other similar Person) in possession of any Collateral or any landlord of any Loan Party for any real property
where any Collateral is located, as such landlord waiver or other agreement may be amended, restated, or otherwise modified
from time to time.
Collateral Deposit Accounts shall have the meaning set forth in Section 7.1(a).
Collateral Report means any certificate (including any Borrowing Base Certificate), report or other document delivered
by any Grantor to the Administrative Agent or any Lender with respect to the Collateral pursuant to any Loan Document.
Collection Account shall have the meaning set forth in Section 7.1(b).
Commercial Tort Claims means the following existing commercial tort claims of the Grantors: None.
Control shall have the meaning set forth in Article 8 or, if applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9
of the UCC.
Copyrights means, with respect to any Person, all of such Persons right, title, and interest in and to the following: (a) all
copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications;
(b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable
under any of the foregoing, including, without limitation, damages or payments for past or future infringements for any of the
foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding
to any of the foregoing throughout the world.
Default means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both
would, unless cured or waived, become an Event of Default.
Deposit Account Control Agreements means agreements, in form and substance reasonably satisfactory to the
Administrative Agent, among any Loan Party, a banking institution holding such Loan Partys funds, and the Administrative
Agent with respect to collection and control of all deposits and balances held in a deposit account maintained by any Loan Party
with such banking institution.
Deposit Accounts shall have the meaning set forth in Article 9 of the UCC and shall include any bank account (with a
deposit function) domiciled in Canada.
Documents shall have the meaning set forth in Article 9 of the UCC and shall include documents of title as defined in
the PPSA.
Equipment shall have the meaning set forth in Article 9 of the UCC and as set forth in the PPSA, as applicable.
Event of Default shall have the meaning set forth in the Credit Agreement.
2
Excluded Equity means any Voting Stock in excess of 65% of the total outstanding Voting Stock of any direct Subsidiary
of any Grantor that is a Non-U.S. Person. For the purposes of this definition, Voting Stock means, as to any issuer, the issued
and outstanding shares of each class of capital stock or other ownership interests of such issuer entitled to vote (within the
meaning of Treasury Regulations 1.956-2(c)(2)).
Excluded Property means, collectively, (i) Excluded Equity, (ii) any permit, lease, license, contract, instrument or other
agreement held by any Grantor that prohibits or required the consent of any Person other than a Grantor and its Affiliates as a
condition to the creation by such Grantor of a Lien thereon, or any permit, lease, license contract or other agreement held by any
Grantor to the extent that any Requirement of Law applicable thereto prohibits the creation of a Lien thereon, but only, in each
case, to the extent, and for so long as, such prohibition is not terminated or rendered unenforceable or otherwise deemed
ineffective by the UCC or any other Requirement of Law (iii) any intent to use Trademark applications for which a statement
of use has not been filed (but only until such statement is filed) and (iv) Equipment owned by any Grantor that is subject to a
purchase money Lien or a Capital Lease if the contract or other agreement in which such Lien is granted (or in the
documentation providing for such Capital Lease) prohibits or requires the consent of any Person other than a Grantor and its
Affiliates as a condition to the creation of any other Lien on such Equipment; provided, however, Excluded Property shall not
include any Proceeds, substitutions or replacements of Excluded Property (unless such Proceeds, substitutions or replacements
would constitute Excluded Property).
Exhibit refers to a specific exhibit to this Security Agreement, unless another document is specifically referenced.
Fixtures shall have the meaning set forth in Article 9 of the UCC.
General Intangibles shall have the meaning set forth in Article 9 of the UCC and includes, without limitation, credits for
tobacco stamp taxes paid and intangibles as defined in the PPSA.
Goods shall have the meaning set forth in Article 9 of the UCC and as set forth in the PPSA, as applicable.
Instruments shall have the meaning set forth in Article 9 of the UCC and as set forth in the PPSA, as applicable.
Inventory shall have the meaning set forth in Article 9 of the UCC and as set forth in the PPSA, as applicable, and
includes, without limitation, unaffixed tobacco stamps.
Investment Property shall have the meaning set forth in Article 9 of the UCC.
Lenders means the lenders party to the Credit Agreement and their successors and assigns.
Letter-of-Credit Rights shall have the meaning set forth in Article 9 of the UCC.
Licenses means, with respect to any Person, all of such Persons right, title, and interest in and to (a) any and all licensing
agreements or similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims,
and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and
payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.
Lock Boxes shall have the meaning set forth in Section 7.1(a).
Lock Box Agreements shall have the meaning set forth in Section 7.1(a).
3
Patents means, with respect to any Person, all of such Persons right, title, and interest in and to: (a) any and all patents
and patent applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisions,
continuations, renewals, extensions, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments
now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and
future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights
corresponding to any of the foregoing throughout the world.
Pledged Collateral means all Instruments, Securities and other Investment Property of the Grantors, whether or not
physically delivered to the Administrative Agent pursuant to this Security Agreement; provided that stock and other ownership
interests in inactive Subsidiaries of the Loan Parties that do not have material assets shall not constitute Pledged Collateral.
PPSA means the Personal Property Security Act of Ontario (or any successor statute) or similar legislation (including,
without limitation, the Civil Code) of any other province or territory of Canada the laws of which are required by such legislation
to be applied in connection with the issue, perfection, enforcement, validity or effect of security interests.
Receivables means the Accounts, Chattel Paper, Documents, Investment Property, Instruments and any other rights or
claims to receive money which are General Intangibles or which are otherwise included as Collateral.
Required Secured Parties means (a) prior to an acceleration of the Obligations under the Credit Agreement, the Required
Lenders, and (b) after an acceleration of the Obligations under the Credit Agreement but prior to the date upon which the Credit
Agreement has terminated by its terms and all of the obligations thereunder have been paid in full or otherwise satisfied, Lenders
holding in the aggregate at least a majority of the sum of the Aggregate Credit Exposure plus the Banking Services Obligations.
Section means a numbered section of this Security Agreement, unless another document is specifically referenced.
Security has the meaning set forth in Article 8 of the UCC and as set forth in the PPSA, as applicable.
Stock Rights means all dividends, instruments or other distributions and any other right or property which any Grantor
shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for
any Equity Interest constituting Collateral, any right to receive an Equity Interest and any right to receive earnings, in which any
Grantor now has or hereafter acquires any right, issued by an issuer of such Equity Interest.
Supporting Obligations shall have the meaning set forth in Article 9 of the UCC.
Trademarks means, with respect to any Person, all of such Persons right, title, and interest in and to the following: (a) all
trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for
registration thereof and the goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as
licensee or licensor; (c) all renewals of the foregoing; (d) all income, royalties, damages, and payments now or hereafter due or
payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements
thereof; (e) all rights to sue for past, present, and future infringements of the foregoing, including the right to settle suits
involving claims and demands for royalties owing; and (f) all rights corresponding to any of the foregoing throughout the world.
UCC means the Uniform Commercial Code, as in effect from time to time, of the State of New York or of any other state
the laws of which are required as a result thereof to be applied in connection with the attachment, perfection or priority of, or
remedies with respect to, Administrative Agents or any Lenders Lien on any Collateral.
The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.
4
ARTICLE II
GRANT OF SECURITY INTEREST
2.1 Each of the Grantors hereby pledges, assigns and grants to the Administrative Agent, on behalf of and for the ratable
benefit of the Lenders, a security interest in all of its right, title and interest in, to and under all personal property and other
assets, whether now owned by or owing to, or hereafter acquired by or arising in favor of such Grantor (including under any
trade name or derivations thereof), and whether owned or consigned by or to, or leased from or to, such Grantor, and regardless
of where located (all of which will be collectively referred to as the Collateral), including, without limitation:
(i)
all Accounts;
(ii)
all Chattel Paper;
(iii)
all Copyrights, Patents and Trademarks;
(iv)
all Documents;
(v)
all Equipment;
(vi)
all Fixtures (excluding business fixtures not owned by the Grantors);
(vii)
all General Intangibles;
(viii) all Goods;

(ix)
all Instruments;
(x)
all Inventory;
(xi)
all Investment Property;
(xii)
all cash or cash equivalents;
(xiii) all letters of credit, Letter-of-Credit Rights and Supporting Obligations;

(xiv) all Deposit Accounts with any bank or other financial institution;
(xv)
all Commercial Tort Claims;
(xvi) all Assigned Contracts;

(xvii) and all accessions to, substitutions for and replacements, proceeds (including Stock Rights), insurance proceeds and
products of the foregoing, together with all books and records, customer lists, credit files, computer files, programs,
printouts and other computer materials and records related thereto and any General Intangibles at any time
evidencing or relating to any of the foregoing;
to secure the prompt and complete payment and performance of the Secured Obligations; provided, however, that
(notwithstanding any other provisions of this Agreement) Collateral shall not include any Excluded Property; and provided,
further, that if and when any property shall cease to be Excluded Property, such property shall be deemed at all times from and
after the date hereof to constitute Collateral.
5
2.2 The last day of the term of any lease, oral or written, or any agreement therefor, now held or hereafter acquired by a
Grantor, shall be excepted from the security interest hereby granted and shall not form part of the Collateral, but such Grantor
shall stand possessed of such one day remaining, upon trust to assign and dispose of the same as the Administrative Agent or any
assignee of such lease or agreement shall direct. If any such lease or agreement therefor contains a provision which provides in
effect that such lease or agreement may not be assigned, sub leased, charged or encumbered without the leave, license, consent or
approval of the lessor, the application of the security interest created hereby to any such lease or agreement shall be conditional
upon such leave, license, consent or approval having been obtained.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of the Grantors represents and warrants to the Administrative Agent and the Lenders that:
3.1. Title, Perfection and Priority. Each Grantor has good and valid rights in or the power to transfer the Collateral and title
to the Collateral with respect to which it has purported to grant a security interest hereunder, free and clear of all Liens except for
Liens permitted under Section 4.1(e), and has full power and authority to grant to the Administrative Agent the security interest
in such Collateral pursuant hereto. When financing statements have been filed in the appropriate offices against each Grantor in
the locations listed on Exhibit H, the Administrative Agent will have a fully perfected first priority security interest in that
Collateral in which a security interest may be perfected by filing, subject only to Liens permitted under Section 4.1(e); provided
that unless the Administrative Agent shall file fixture filings in the appropriate filing offices for the counties where the Fixtures
are located, the Administrative Agents perfected security interest in Fixtures may not be a first priority security interest.
3.2. Type and Jurisdiction of Organization, Organizational and Identification Numbers. The type of entity of each Grantor,
its state or province of organization, the organizational number issued to it by its state of organization and its federal employer
identification number are set forth on Exhibit A.
3.3. Principal Location. Except as may be notified to the Administrative Agent following the date hereof, each Grantors
mailing address and the location of its place of business (if it has only one) or its chief executive office (if it has more than one
place of business), is disclosed in Exhibit A; no Grantor has other places of business except those set forth in Exhibit A.
3.4. Collateral Locations. As of the date hereof, all of each Grantors locations where Collateral is located are listed on
Exhibit A. As of the date hereof, all of said locations are owned by each Grantor except for locations (i) which are leased by such
Grantor as lessee and designated in Exhibit A and (ii) at which Inventory is held in a public warehouse or is otherwise held by a
bailee or on consignment as designated in Exhibit A.
3.5. Deposit Accounts. As of the date hereof, all of each Grantors Deposit Accounts are listed on Exhibit B.
3.6. Exact Names. Each Grantors name in which it has executed this Security Agreement is the exact name as it appears in
such Grantors organizational documents, as amended, as filed with such Grantors jurisdiction of organization.
3.7. Letter-of-Credit Rights and Chattel Paper. As of the date hereof, Exhibit C lists all Letter-of-Credit Rights and Chattel
Paper of each Grantor, in each case having a value in excess of $150,000 individually or $500,000 in the aggregate. Promptly
upon request by the Administrative Agent following the occurrence and during the continuation of an Event of Default, all action
by each Grantor necessary or desirable to protect and perfect the Administrative Agents Lien on each item listed on Exhibit C
(including the delivery of all originals and the placement of a legend on all Chattel Paper as required hereunder) shall be duly
taken and thereafter the Administrative Agent will have a fully perfected first priority security interest in the Collateral listed on
Exhibit C, subject only to Liens permitted under Section 4.1(e).
6
3.8. Accounts and Chattel Paper.

(a) The names of the obligors, amounts owing, due dates and other information with respect to the Accounts and
Chattel Paper are and will be correctly stated in all material respects in all records of each Grantor relating thereto and in all
invoices and Collateral Reports with respect thereto furnished to the Administrative Agent by each Grantor from time to
time. As of the time when each Account or each item of Chattel Paper arises, each Grantor shall be deemed to have
represented and warranted that such Account or Chattel Paper, as the case may be, and all records relating thereto, are
genuine and in all material respects what they purport to be.
(b) The Accounts included on the most recent Borrowing Base Certificate are Eligible Accounts. All Accounts
represent bona fide sales of Inventory or rendering of services to Account Debtors in the ordinary course of each Grantors
business.
3.9. Inventory. The Inventory included on the most recent Borrowing Base Certificate is Eligible Inventory. Each Grantor
has good, indefeasible and merchantable title to its Inventory. The sale or other disposition of the Eligible Inventory by the
Administrative Agent following an Event of Default shall not require the consent of any Person and shall not constitute a breach
or default under any contract or agreement to which any Grantor is a party or to which such property is subject.
3.10. Intellectual Property. As of the date hereof, no Grantor has any interest in, or title to, any material Patent, Trademark
or Copyright except as set forth in Exhibit D. This Security Agreement is effective to create a valid and continuing Lien and,
upon filing of appropriate financing statements in the offices listed on Exhibit H and this Security Agreement with the United
States Copyright Office, the United States Patent and Trademark Office and the Canadian Intellectual Property Office, fully
perfected first priority security interests in favor of the Administrative Agent on each Grantors Patents, Trademarks and
Copyrights, such perfected security interests are enforceable as such as against any and all creditors of and purchasers from such
Grantor; and all action necessary or desirable to protect and perfect the Administrative Agents Lien on such Grantors Patents,
Trademarks or Copyrights shall have been duly taken.
3.11. Filing Requirements. None of the Equipment that constitutes a portion of the PP&E Component is covered by any
certificate of title, except for the vehicles described in Exhibit E. None of the Collateral is of a type for which security interests or
liens may be perfected by filing under any federal statute except for (a) vehicles and (b) Patents, Trademarks and Copyrights held
by each Grantor and described in Exhibit D.
3.12. No Financing Statements, Security Agreements. No financing statement or security agreement describing all or any
portion of the Collateral which has not lapsed or been terminated naming any Grantor as debtor has been filed or is of record in
any jurisdiction except (a) for financing statements or security agreements naming the Administrative Agent on behalf of the
Lenders as the secured party, (b) as permitted by Section 4.1(e), and (c) precautionary financing statements filed by lessors of
Equipment or Fixtures.
3.13. Pledged Collateral.
(a) As of the date hereof, Exhibit G sets forth a complete and accurate list of all material Pledged Collateral, including
all stock and other ownership interests in the Loan Parties that constitute Pledged Collateral. As of the date hereof, each
Grantor is the direct, sole beneficial owner and sole holder of record of the Pledged Collateral listed on Exhibit G as being
owned by it, free and clear of any Liens, except for the security interest granted to the Administrative Agent for the benefit
of the Lenders hereunder and as permitted by Section 4.1(e). Each Grantor further represents and warrants that (i) all
Pledged Collateral constituting an Equity Interest has been (to the extent such concepts are relevant with respect to such
Pledged Collateral) duly authorized, validly issued, are fully paid and non-assessable, (ii) with respect to any certificates
delivered to the Administrative Agent representing an Equity Interest, either such certificates are Securities as defined in
7
Article 8 of the UCC (and in the PPSA) as a result of actions by the issuer or otherwise, or, if such certificates are not
Securities, the Grantors have so informed the Administrative Agent so that the Administrative Agent may take steps to
perfect its security interest therein as a General Intangible, and (iii) all Pledged Collateral (unless subject to a prior Lien
permitted by Section 4.1(e)) held by a securities intermediary is covered by a control agreement among such Grantor, the
securities intermediary and the Administrative Agent pursuant to which the Administrative Agent has Control.
Notwithstanding anything to the contrary contained herein, prior to the occurrence and continuation of an Event of Default,
(A) the Administrative Agent will not perfect upon stock of third parties held by any Grantor or notes receivable held by
any Grantor and (B) the Grantors will have the ability to dispose of any such stock and notes receivable without the
requirement of consent from the Administrative Agent, provided that in the event that cash dominion is triggered pursuant
to Section 7.3(c), all proceeds of any such sale or disposition shall be deposited into the Administrative Agents Collection
Account.
(b) As of the date hereof, except as set forth in Exhibit G, the Grantors own 100% of the issued and outstanding Equity
Interests which constitute Pledged Collateral and none of the Pledged Collateral which represents Indebtedness owed to any
Grantor is subordinated in right of payment to other Indebtedness or subject to the terms of an indenture.
ARTICLE IV
COVENANTS
From the date of this Security Agreement, and thereafter until this Security Agreement is terminated, each of the Grantors
agrees that:
4.1. General.
(a) Collateral Records. Each Grantor will maintain, in all material respects, complete and accurate books and records
with respect to the Collateral, which books and records shall be consistent with all Collateral reports distributed by the
Borrowers to the Administrative Agent or any Lender, and furnish to the Administrative Agent, such reports relating to the
Collateral as the Administrative Agent may from time to time request in accordance with the Credit Agreement.
(b) Authorization to File Financing Statements; Ratification. Each Grantor hereby authorizes the Administrative Agent
to file, and if requested will deliver to the Administrative Agent, all financing statements and other documents as may from
time to time be requested by the Administrative Agent in order to maintain a first perfected security interest in the
Collateral. Any financing statement filed by the Administrative Agent may be filed in any filing office in any UCC or PPSA
jurisdiction and may (i) indicate the Collateral (1) as all assets of such Grantor or words of similar effect, regardless of
whether any particular asset comprised in the Collateral falls within the scope of the PPSA or Article 9 of the UCC or such
jurisdiction, or (2) by any other description which reasonably approximates the description contained in this Security
Agreement, and (ii) contain any other information required by the PPSA or part 5 of Article 9 of the UCC for the
sufficiency or filing office acceptance of any financing statement or amendment, including (A) whether such Grantor is an
organization, the type of organization and any organization identification number issued to such Grantor, and (B) in the case
of a financing statement filed as a fixture filing or indicating Collateral as as-extracted collateral or timber to be cut, a
sufficient description of real property to which the Collateral relates. Each Grantor also agrees to furnish any such
information to the Administrative Agent promptly upon request. Each Grantor also ratifies its authorization for the
Administrative Agent to have filed in any UCC or PPSA jurisdiction any initial financing statements or amendments thereto
if filed prior to the date hereof.
(c) Further Assurances. Each Grantor will, if so reasonably requested by the Administrative Agent, furnish to the
Administrative Agent, as often as the Administrative Agent reasonably requests, statements and schedules further
identifying and describing the Collateral and such other reports and information in connection with the Collateral as the
Administrative Agent may reasonably request, all in such detail as the Administrative Agent may specify in accordance
with the Credit Agreement. Each Grantor also agrees to take any and all actions necessary to defend title to the Collateral
against all persons and to defend the security interest of the Administrative Agent in the Collateral and the priority thereof
against any Lien not expressly permitted hereunder.
8
(d) Disposition of Collateral. No Grantor will sell, lease or otherwise dispose of the Collateral except for dispositions
specifically permitted pursuant to Section 6.05 of the Credit Agreement.
(e) Liens. No Grantor will create, incur, or suffer to exist any Lien on the Collateral except (i) the security interest
created by this Security Agreement, (ii) Permitted Encumbrances, and (iii) any other Liens permitted by the Credit
Agreement.
(f) Other Financing Statements. No Grantor will authorize the filing of any financing statement naming it as debtor
covering all or any portion of the Collateral, except as permitted by Section 4.1(e) and precautionary financing statements
filed by lessors of Equipment and Fixtures. Each Grantor acknowledges that it is not authorized to file any financing
statement or amendment or termination statement with respect to any financing statement without the prior written consent
of the Administrative Agent, subject to such Grantors rights under Section 9-509(d)(2) of the UCC.
(g) Locations. No Grantor will (i) maintain any Collateral having a value in excess of $150,000 at any location other
than those locations listed on Exhibit A, (ii) otherwise change, or add to, its locations without providing written notification
of such changed or added locations to the Administrative Agent (and such Grantor will concurrently therewith use
commercially reasonable efforts to obtain a Collateral Access Agreement for each such location to the extent required by
the Credit Agreement), (iii) change its principal place of business or chief executive office from the location identified on
Exhibit A without providing 21 days prior written notice to the Administrative Agent (and such Grantor will concurrently
therewith use commercially reasonable efforts to obtain a Collateral Access Agreement for each such location to the extent
required by the Credit Agreement and subject to the terms of Section 4.13), or (iv) maintain any Collateral at any locations
outside of the United States or Canada.
4.2. Receivables.
(a) Certain Agreements on Receivables. No Grantor will (i) make or agree to make any discount, credit, rebate or other
reduction in the original amount owing on a Receivable or (ii) accept in satisfaction of a Receivable less than the original
amount thereof, in either case except in the ordinary course of such Grantors business, except that, prior to the occurrence
of an Event of Default, the Grantors may make discounts, credits, rebates and other reductions and accept satisfaction less
than the original amount of Accounts arising from the sale of Inventory in accordance with their present policies and in the
ordinary course of business.
(b) Collection of Receivables. Except as otherwise provided in this Security Agreement, each Grantor will collect and
enforce, at the Grantors sole expense, all amounts due or hereafter due to such Grantor under the Receivables in
accordance with its present policies and in the ordinary course of business.
(c) Delivery of Invoices. Each Grantor will deliver to the Administrative Agent promptly upon its request after the
occurrence and during the continuation of an Event of Default duplicate invoices with respect to each Account bearing such
language of assignment as the Administrative Agent shall reasonably specify.
(d) Electronic Chattel Paper. Promptly upon request by the Administrative Agent following the occurrence and during
the continuation of an Event of Default, each Grantor shall take all steps necessary to grant the Administrative Agent
Control of all electronic chattel paper having a value in excess of $150,000 individually or $500,000 in the aggregate in
accordance with the UCC and all transferable records as defined in each of the Uniform Electronic Transactions Act and
the Electronic Signatures in Global and National Commerce Act.
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4.3. Inventory and Equipment.

(a) Maintenance of Goods. Each Grantor will do all things necessary to maintain, preserve, protect and keep the
Inventory and, in all material respects, the Equipment in good repair and working and saleable condition, except for
damaged or defective goods arising in the ordinary course of such Grantors business and except for ordinary wear and tear
in respect of the Equipment.
(b) Returned Inventory. If an Account Debtor returns any Inventory to any Grantor when no Event of Default exists,
then such Grantor shall promptly determine the reason for such return and shall issue a credit memorandum if appropriate to
the Account Debtor in the appropriate amount. In the event any Account Debtor returns a material amount of Inventory
outside the normal course of business to any Grantor when an Event of Default exists and the Obligations have been
accelerated pursuant to the terms of the Credit Agreement, such Grantor, upon the reasonable request of the Administrative
Agent, shall: (i) hold the returned Inventory in trust for the Administrative Agent; (ii) segregate all returned Inventory from
all of its other property; (iii) dispose of the returned Inventory solely according to the Administrative Agents written
instructions; and (iv) not issue any credits or allowances with respect thereto without the Administrative Agents prior
written consent. All returned Inventory shall be subject to the Administrative Agents Liens thereon. Whenever any
Inventory is returned, the related Account shall be deemed ineligible to the extent of the amount owing by the Account
Debtor with respect to such returned Inventory.
(c) Inventory Count; Perpetual Inventory System. The Grantors will conduct a physical count of the Inventory at least
once per Fiscal Year, and after and during the continuation of an Event of Default, at such other times as the Administrative
Agent reasonably requests. The Grantors, at their own expense, shall deliver to the Administrative Agent the results of each
physical verification, which any Grantor has made, or has caused any other Person to make on its behalf, of all or any
portion of its Inventory. The Grantors will maintain a perpetual inventory reporting system at all times.
(d) PP&E Component Equipment. Each Grantor shall promptly inform the Administrative Agent of any additions to or
deletions from the Equipment that constitutes a portion of the PP&E Component which individually exceed $250,000. The
Grantors shall not permit any Equipment that constitutes a portion of the PP&E Component to become a fixture with
respect to real property or to become an accession with respect to other personal property with respect to which real or
personal property the Administrative Agent does not have a Lien. The Grantors will not, if applicable, without the
Administrative Agents prior written consent, alter or remove any identifying symbol or number on any of the Grantors
Equipment constituting Collateral.
(e) Titled Vehicles. Each Grantor will give the Administrative Agent notice of its acquisition of any vehicle covered by
a certificate of title that constitutes a portion of the PP&E Component and deliver to the Administrative Agent, upon
request, the original of the vehicle title certificate with respect to any such vehicle and provide and/or file all other
documents or instruments necessary to have the Lien of the Administrative Agent noted on any such certificate or with the
appropriate state office.
4.4. Delivery of Instruments, Securities, Chattel Paper and Documents. Each Grantor will (a) promptly upon the request of
the Administrative Agent after the occurrence and during the continuation of an Event of Default, deliver to the Administrative
Agent the originals of all Chattel Paper, Securities and Instruments constituting Collateral (if any then exist), (b) hold in trust for
the Administrative Agent upon receipt and promptly upon the request of the Administrative Agent after the occurrence and
during the continuation of an Event of Default, deliver to the Administrative Agent any Chattel Paper, Securities and Instruments
constituting Collateral, (c) hold in trust for the Administrative Agent upon receipt and (i) upon the Administrative Agents
request, deliver to the Administrative Agent any Document evidencing, constituting or relating to Inventory, in each case having
a value in excess of $150,000 individually, and (ii) upon the Administrative Agents request after the occurrence and during the
continuation of an Event of Default, deliver to the Administrative Agent any Document evidencing, constituting or relating to
other Collateral, in each case having a value in excess of $150,000 individually, and (d) upon the Administrative Agents request,
deliver to the Administrative Agent a duly executed amendment to this Security Agreement, in the form of Exhibit I hereto (the
Amendment), pursuant to which the Grantor will pledge such additional Collateral. Each Grantor hereby authorizes the
Administrative Agent to attach each Amendment to this Security Agreement and agrees that all additional Collateral set forth in
such Amendments shall be considered to be part of the Collateral.
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4.5. Uncertificated Pledged Collateral. Each Grantor will take any actions necessary to cause (a) the issuers of uncertificated
securities which are Pledged Collateral and (b) any securities intermediary which is the holder of any Pledged Collateral, to
cause the Administrative Agent to have and retain Control over such Pledged Collateral. Without limiting the foregoing, the
Grantors will, with respect to Pledged Collateral held with a securities intermediary having a value in excess of $150,000
individually, cause such securities intermediary to enter into a control agreement with the Administrative Agent, in form and
substance reasonably satisfactory to the Administrative Agent, giving the Administrative Agent Control.
4.6. Pledged Collateral.
(a) Changes in Capital Structure of Issuers. No Grantor will (i) permit or suffer any issuer of an Equity Interest
constituting Pledged Collateral to dissolve, merge, liquidate, retire any of its Equity Interests or other Instruments or
Securities evidencing ownership, reduce its capital, sell or encumber all or substantially all of its assets (except for
Permitted Encumbrances and sales of assets permitted pursuant to Section 4.1(d)) or merge, amalgamate or consolidate with
any other entity, or (ii) vote any Pledged Collateral in favor of any of the foregoing, except in each case to the extent
permitted by the Credit Agreement.
(b) Issuance of Additional Securities. No Grantor will permit or suffer the issuer of an Equity Interest constituting
Pledged Collateral, if such issuer is a wholly owned Subsidiary of such Grantor, to issue additional Equity Interests, any
right to receive the same or any right to receive earnings, except to such Grantor.
(c) Registration of Pledged Collateral. After the occurrence and during the continuation of an Event of Default, each
Grantor will permit any registerable Pledged Collateral to be registered in the name of the Administrative Agent or its
nominee at any time at the option of the Required Secured Parties.
(d) Exercise of Rights in Pledged Collateral.
(i) Without in any way limiting the foregoing and subject to clause (ii) below, the Grantors shall have the right to
exercise all voting rights or other rights relating to the Pledged Collateral for all purposes not inconsistent with this
Security Agreement, the Credit Agreement or any other Loan Document; provided however, that no vote or other right
shall be exercised or action taken which would have the effect of impairing the rights of the Administrative Agent in
respect of the Pledged Collateral.
(ii) The Grantors will permit the Administrative Agent or its nominee at any time after the occurrence and during
the continuation of an Event of Default, without notice, to exercise all voting rights or other rights relating to Pledged
Collateral, including, without limitation, exchange, subscription or any other rights, privileges, or options pertaining to
any Equity Interest or Investment Property constituting Pledged Collateral as if it were the absolute owner thereof.
(iii) Each Grantor shall be entitled to collect and receive for its own use all cash dividends and interest paid in
respect of the Pledged Collateral to the extent not in violation of the Credit Agreement other than any of the following
distributions and payments (collectively referred to as the Excluded Payments): (A) dividends and interest paid or
payable other than in cash in respect of any Pledged Collateral, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any Pledged Collateral; (B) dividends and other
distributions paid or payable in cash in respect of any Pledged Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in capital of an issuer;
and (C) cash paid, payable or otherwise distributed, in respect of principal of, or in redemption of, or in exchange for,
any Pledged Collateral; provided however, that until actually paid, all rights to such distributions shall remain subject
to the Lien created by this Security Agreement; and
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(iv) All Excluded Payments and all other distributions in respect of any of the Pledged Collateral, whenever paid
or made, shall be delivered to the Administrative Agent to hold as Pledged Collateral and shall, if received by any
Grantor, be received in trust for the benefit of the Administrative Agent, be segregated from the other property or
funds of such Grantor, and be forthwith delivered to the Administrative Agent as Pledged Collateral in the same form
as so received (with any necessary endorsement).
4.7. Intellectual Property.
(a) Each Grantor shall notify the Administrative Agent promptly if it knows or has reason to know that any application
or registration relating to any material Patent, Trademark or Copyright (now or hereafter existing) may become abandoned
or dedicated, or of any adverse determination or development (including the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office, the
Canadian Intellectual Property Office or any court) regarding any Grantors ownership of any Patent, Trademark or
Copyright, its right to register the same, or to keep and maintain the same.
(b) If any Grantor, either directly or through any agent, employee, licensee or designee, files an application for the
registration of any material Patent, Trademark or Copyright with the United States Patent and Trademark Office, the United
States Copyright Office, the Canadian Intellectual Property Office or any similar office or agency such Grantor shall give
the Administrative Agent written notice thereof on a quarterly basis, and, upon request of the Administrative Agent, such
Grantor shall execute and deliver any and all security agreements as the Administrative Agent may reasonably request to
evidence the Administrative Agents first priority security interest on such Patent, Trademark or Copyright, and the General
Intangibles of such Grantor relating thereto or represented thereby.
(c) Each Grantor shall take all actions necessary or requested by the Administrative Agent to maintain and pursue each
application, to obtain the relevant registration and to maintain the registration of each of the material Patents, Trademarks
and Copyrights (now or hereafter existing), including the filing of applications for renewal, affidavits of use, affidavits of
noncontestability and opposition and interference and cancellation proceedings, unless such Grantor shall reasonably
determine that such Patent, Trademark or Copyright is not material to the conduct of such Grantors business.
(d) Each Grantor shall, unless it shall reasonably determine that such Patent, Trademark or Copyright is in no way
material to the conduct of its business or operations, promptly sue for infringement, misappropriation or dilution and to
recover any and all damages for such infringement, misappropriation or dilution, and shall take such other actions as the
Administrative Agent shall reasonably request under the circumstances to protect such Patent, Trademark or Copyright. In
the event that any Grantor institutes suit because any of the Patents, Trademarks or Copyrights constituting Collateral is
infringed upon, or misappropriated or diluted by a third party, such Grantor shall comply with Section 4.8.
4.8 Commercial Tort Claims. Each Grantor shall promptly, and in any event within two Business Days after the same is
acquired by it having a value in excess of $150,000 individually, notify the Administrative Agent of any commercial tort claim
(as defined in the UCC) acquired by it after the Closing Date and, unless the Administrative Agent otherwise consents, the
Grantor shall enter into an amendment to this Security Agreement, in the form of Exhibit I hereto, granting to Administrative
Agent a first priority security interest in such commercial tort claim.
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4.9. Letter-of-Credit Rights. If, following the occurrence and during the continuation of an Event of Default, any Grantor is
or becomes the beneficiary of a letter of credit, such Grantor shall promptly, and in any event within two Business Days after
becoming a beneficiary, notify the Administrative Agent thereof and if requested by the Administrative Agent promptly request
the issuer and/or confirmation bank to (i) consent to the assignment of any Letter-of-Credit Rights to the Administrative Agent
and (ii) if the Administrative Agent has the right to exercise cash dominion pursuant to the terms of Section 7.3 of this
Agreement, agree to direct all payments thereunder to a Deposit Account at the Administrative Agent or subject to a Deposit
Account Control Agreement for application to the Secured Obligations, in accordance with Section 2.18 of the Credit
Agreement, all in form and substance reasonably satisfactory to the Administrative Agent.
4.10. [Intentionally omitted.]
4.11. No Interference. Each Grantor agrees that it will not interfere with any right, power and remedy of the Administrative
Agent provided for in this Security Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the
exercise or beginning of the exercise by the Administrative Agent of any one or more of such rights, powers or remedies,
provided that the foregoing are exercised by the Administrative Agent in accordance with the terms hereof and all Requirements
of Law.
4.12. Insurance. (a) In the event any Collateral is located in any area that has been designated by the Federal Emergency
Management Agency or by any other Governmental Authority as a Special Flood Hazard Area or flood zone or area, the
Grantors shall purchase and maintain flood insurance on such Collateral (including any personal property which is located on
any real property leased by such Loan Party within a Special Flood Hazard Area or flood zone or area). The amount of all
insurance required by this Section shall at a minimum comply with applicable law, including, without limitation, the Flood
Disaster Protection Act of 1973, as amended. All premiums on such insurance shall be paid when due by the Grantors, and
copies of the policies delivered to the Administrative Agent. If the Grantors fail to obtain any insurance as required by this
Section, the Administrative Agent at the direction of the Required Lenders may obtain such insurance at the Grantors expense.
By purchasing such insurance, the Administrative Agent shall not be deemed to have waived any Default arising from the
Grantors failure to maintain such insurance or pay any premiums therefor.
(b) All insurance policies required under Section 5.09 of the Credit Agreement shall name the Administrative Agent
(for the benefit of the Administrative Agent and the Lenders) as an additional insured or as loss payee, as applicable, and
shall contain loss payable clauses or mortgagee clauses, through endorsements in form and substance satisfactory to the
Administrative Agent, which provide that: (i) all proceeds thereunder with respect to any Collateral shall be payable to the
Administrative Agent; (ii) no such insurance shall be affected by any act or neglect of the insured or owner of the property
described in such policy; and (iii) such policy and loss payable or mortgagee clauses may be canceled, amended, or
terminated only upon at least thirty days prior written notice given to the Administrative Agent.
4.13. Collateral Access Agreements. The Grantors shall use commercially reasonable efforts to obtain a Collateral Access
Agreement, from the lessor of each leased property, mortgagee of owned property or bailee or consignee with respect to any
warehouse, processor or converter facility or other location where Collateral is stored or located, which agreement or letter shall
provide access rights, contain a waiver or subordination of all Liens or claims that the landlord, mortgagee, bailee or consignee
may assert against the Collateral at that location, and shall otherwise be reasonably satisfactory in form and substance to the
Administrative Agent. With respect to such locations or warehouse space leased as of the Closing Date and thereafter, if the
Administrative Agent has not received a Collateral Access Agreement within 45 days after the Closing Date (or, if later, as of the
date such location is acquired or leased), Borrowers Eligible Inventory at that location shall be subject to such Reserves as may
be established by the Administrative Agent in accordance with the Credit Agreement. After the Closing Date, no real property or
warehouse space shall be leased by any Grantor and no Inventory shall be shipped to a processor or converter under
arrangements established after the Closing Date, unless and until a satisfactory Collateral Access Agreement shall first have been
obtained with respect to such location and if it has not been obtained, Borrowers Eligible Inventory at that location shall be
subject to the establishment of Reserves in accordance with the Credit Agreement. Each Grantor shall timely and fully pay and
perform its material obligations under all leases and other agreements with respect to each leased location or third party
warehouse where any Collateral is or may be located except in the case of a bona fide dispute.
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4.14. Deposit Account Control Agreements. Each Grantor will provide to the Administrative Agent upon the Administrative
Agents request, a Deposit Account Control Agreement duly executed on behalf of each financial institution holding a deposit
account of such Grantor as set forth in the Security Agreement other than (i) payroll, tax, escrow and other fiduciary accounts
(provided that such accounts will be funded only from an account that is subject to a Deposit Account Control Agreement and if
at any time any payments from account debtors or other proceeds of Collateral are sent directly to any of such accounts, a
Deposit Account Control Agreement will be required with respect to such account) and (ii) the deposit account maintained at
Wilson & Muir Bank & Trust Co., wherein Grantor will not retain collected funds for more than one business day (all other
funds being transferred to an account governed by a Deposit Account Control Agreement).
4.15. Change of Name or Location; Change of Fiscal Year. No Grantor shall (a) change its name as it appears in official
filings in the state or province of its incorporation or organization, (b) change its chief executive office, principal place of
business, mailing address, corporate offices or warehouses or locations at which Collateral is held or stored, or the location of its
records concerning the Collateral as set forth in the Security Agreement, (c) change the type of entity that it is, (d) change its
organization identification number, if any, issued by its state or province of incorporation or other organization, or (e) change its
state or province of incorporation or organization, in each case, unless the Administrative Agent shall have received at least thirty
days prior written notice of such change and the Administrative Agent shall have acknowledged in writing that either (1) such
change will not adversely affect the validity, perfection or priority of the Administrative Agents security interest in the
Collateral, or (2) any reasonable action requested by the Administrative Agent in connection therewith has been completed or
taken (including any action to continue the perfection of any Liens in favor of the Administrative Agent, on behalf of Lenders, in
any Collateral), provided that, any new location shall be in the continental U.S.
4.16 Assigned Contracts. Upon request by the Administrative Agent after the occurrence and during the continuation of an
Event of Default, each Grantor will use its best efforts to secure all consents and approvals necessary or appropriate for the
assignment to or for the benefit of the Administrative Agent of any Assigned Contract held by such Grantor and to enforce the
security interests granted hereunder. Each Grantor shall fully perform all of its material obligations under each of the Assigned
Contracts, and shall enforce all of its material rights and remedies thereunder, in each case, as it deems appropriate in its business
judgment; provided however, that no Grantor shall take any action or fail to take any action with respect to its Assigned
Contracts which would cause the termination of an Assigned Contract. Without limiting the generality of the foregoing, each
Grantor shall take all action necessary or appropriate to permit, and shall not take any action which would have any materially
adverse effect upon, the full enforcement of all indemnification rights under its Assigned Contracts. The Grantors shall notify the
Administrative Agent and the Lenders in writing, promptly after any Grantor becomes aware thereof, of any event or fact which
could give rise to a material claim by it for indemnification under any of its Assigned Contracts, and shall diligently pursue such
right and report to the Administrative Agent on all further developments with respect thereto. If the Administrative Agent has the
right to exercise cash dominion pursuant to the terms of Section 7.3 of this Agreement, the Grantors shall deposit into a Deposit
Account at the Administrative Agent or subject to a Deposit Account Control Agreement for application to the Secured
Obligations, in accordance with Section 2.18 of the Credit Agreement, all amounts received by any Grantor as indemnification or
otherwise pursuant to its Assigned Contracts. If any Grantor shall fail after the Administrative Agents demand to pursue
diligently any right under its Assigned Contracts, or if an Event of Default then exists, the Administrative Agent may, and at the
direction of the Required Secured Parties shall, directly enforce such right in its own or such Grantors name and may enter into
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such settlements or other agreements with respect thereto as the Administrative Agent or the Required Secured Parties, as
applicable, shall determine. In any suit, proceeding or action brought by the Administrative Agent for the benefit of the Lenders
under any Assigned Contract for any sum owing thereunder or to enforce any provision thereof, the Grantors shall indemnify and
hold the Administrative Agent and Lenders harmless from and against all expense, loss or damage suffered by reason of any
defense, setoff, counterclaims, recoupment, or reduction of liability whatsoever of the obligor thereunder arising out of a breach
by any Grantor of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing
from any Grantor to or in favor of such obligor or its successors. All such obligations of the Grantors shall be and remain
enforceable only against the Grantors and shall not be enforceable against the Administrative Agent or the Lenders.
Notwithstanding any provision hereof to the contrary, each Grantor shall at all times remain liable to observe and perform all of
its duties and obligations under its Assigned Contracts, and the Administrative Agents or any Lenders exercise of any of their
respective rights with respect to the Collateral shall not release any Grantor from any of such duties and obligations. Neither the
Administrative Agent nor any Lender shall be obligated to perform or fulfill any of any Grantors duties or obligations under its
Assigned Contracts or to make any payment thereunder, or to make any inquiry as to the nature or sufficiency of any payment or
property received by it thereunder or the sufficiency of performance by any party thereunder, or to present or file any claim, or to
take any action to collect or enforce any performance, any payment of any amounts, or any delivery of any property.
ARTICLE V
REMEDIES
5.1. [Intentionally omitted.]
5.2. Remedies.
(a) Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent may exercise
any or all of the following rights and remedies:
(i) those rights and remedies provided in this Security Agreement, the Credit Agreement, or any other Loan
Document; provided that, this Section 5.2(a) shall not be understood to limit any rights or remedies available to the
Administrative Agent and the Lenders prior to an Event of Default;
(ii) those rights and remedies available to a secured party under the UCC (whether or not the UCC applies to the
affected Collateral), the PPSA or under any other applicable domestic or foreign law (including, without limitation,
any law governing the exercise of a banks right of setoff or bankers lien) when a debtor is in default under a security
agreement;
(iii) give notice of sole control or any other instruction under any Deposit Account Control Agreement or other
control agreement with any securities intermediary and take any action therein with respect to such Collateral;
(iv) concurrently with written notice to the Grantors (except as specifically provided in Section 8.1 or elsewhere
herein), enter the premises of any Grantor where any Collateral is located (through self-help and without judicial
process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or
otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more parcels at public or
private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may
take place at such Grantors premises or elsewhere), for cash, on credit or for future delivery without assumption of
any credit risk, and upon such other terms as the Administrative Agent may deem commercially reasonable; and
15
(v) concurrently with written notice to the Grantors, transfer and register in its name or in the name of its nominee
the whole or any part of the Pledged Collateral, to exchange certificates or instruments representing or evidencing
Pledged Collateral for certificates or instruments of smaller or larger denominations, to exercise the voting and all
other rights as a holder with respect thereto, to collect and receive all cash dividends, interest, principal and other
distributions made thereon and to otherwise act with respect to the Pledged Collateral as though the Administrative
Agent was the outright owner thereof.
(b) The Administrative Agent, on behalf of the Lenders, shall comply with any applicable state, provincial or federal
law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely
affect the commercial reasonableness of any sale of the Collateral.
(c) The Administrative Agent shall have the right upon any such public sale or sales and, to the extent permitted by
law, upon any such private sale or sales, to purchase for the benefit of the Administrative Agent and the Lenders, the whole
or any part of the Collateral so sold, free of any right of equity redemption, which equity redemption each Grantor hereby
expressly releases.
(d) Until the Administrative Agent is able to effect a sale, lease, or other disposition of Collateral, the Administrative
Agent shall have the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the
purpose of preserving Collateral or its value or for any other purpose deemed appropriate by the Administrative Agent. The
Administrative Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of Collateral and
to enforce any of the Administrative Agents remedies (for the benefit of the Administrative Agent and Lenders), with
respect to such appointment without prior notice or hearing as to such appointment.
(e) Notwithstanding the foregoing, neither the Administrative Agent nor the Lenders shall be required to (i) make any
demand upon, or pursue or exhaust any of their rights or remedies against, any Grantor, any other obligor, guarantor,
pledgor or any other Person with respect to the payment of the Secured Obligations or to pursue or exhaust any of their
rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the
Collateral or any guarantee of the Secured Obligations or to resort to the Collateral or any such guarantee in any particular
order, or (iii) effect a public sale of any Collateral.
(f) Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the
Pledged Collateral and may be compelled to resort to one or more private sales thereof in accordance with clause (a) above.
Each Grantor also acknowledges that any private sale may result in prices and other terms less favorable to the seller than if
such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed
to have been made in a commercially unreasonable manner solely by virtue of such sale being private. The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit
any Grantor or the issuer of the Pledged Collateral to register such securities for public sale under the Securities Act of
1933, as amended, or under applicable state securities laws, even if such Grantor and the issuer would agree to do so.
(g) The Administrative Agent may, in addition to any other rights it may have, appoint by instrument in writing a
receiver or receiver and manager (both of which are herein called a Receiver) of all or any part of the Collateral or may
institute proceedings in any court of competent jurisdiction for the appointment of such a Receiver. Any such Receiver is
hereby given and shall have the same powers and rights and exclusions and limitations of liability as the Administrative
Agent has under this Security Agreement or the Credit Agreement, at law or in equity. In exercising any such powers, any
such Receiver shall, to the extent permitted by law, act as and for all purposes shall be deemed to be the agent of the
Grantors and the Administrative Agent and the Lenders shall not be responsible for any act or default of any such Receiver.
The Administrative Agent may appoint one or more Receivers hereunder or under the Credit Agreement and may remove
any such Receiver or Receivers and appoint another or others in his or their stead from time to time. Any Receiver so
appointed may be an officer or employee of the Administrative Agent. A court need not appoint, ratify the appointment by
the Administrative Agent of or otherwise supervise in any manner the actions of any Receiver. Upon a Grantor receiving
notice from the Administrative Agent of the taking of possession of the Collateral or the appointment of a Receiver, all
powers, functions, rights and privileges of each of the directors and officers of such Grantor with respect to the Collateral
shall cease, unless specifically continued by the written consent of the Administrative Agent.
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(h) The Administrative Agent may charge on its own behalf and pay to others, sums for costs and expenses incurred
including, without limitation, legal fees and expenses on a solicitor and his own client scale and Receivers and accounting
fees, in or in connection with seizing, collecting, realizing, disposing, enforcing or otherwise dealing with the Collateral and
in connection with the protection and enforcement of the rights of the Administrative Agent hereunder including, without
limitation, in connection with advice with respect to any of the foregoing. The amount of such sums shall be deemed
advanced to the Grantors by the Administrative Agent, shall become part of the Secured Obligations and shall be secured by
this Security Agreement.
5.3. Grantors Obligations Upon Events of Default. Upon the request of the Administrative Agent after the occurrence and
during the continuation of an Event of Default, the Grantors will:
(a) assemble and make available to the Administrative Agent the Collateral and all books and records relating thereto
at any place or places reasonably specified by the Administrative Agent in accordance with applicable law, whether at the
Grantors premises or elsewhere;
(b) permit the Administrative Agent, by the Administrative Agents representatives and agents, to enter, occupy and
use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located, to
take possession of all or any part of the Collateral or the books and records relating thereto, or both, to remove all or any
part of the Collateral or the books and records relating thereto, or both, and to conduct sales of the Collateral, without any
obligation to pay the Grantors for such use and occupancy;
(c) take, or cause an issuer of Pledged Collateral to take, any and all reasonable actions necessary to enable the
Administrative Agent to consummate a public sale or other disposition of the Pledged Collateral; and
(d) at its own expense, cause the independent certified public accountants then engaged by the Grantors or such other
auditors selected by the Grantors and reasonably acceptable to the Administrative Agent to prepare and deliver to the
Administrative Agent and each Lender, at any time, and from time to time, promptly upon the Administrative Agents
request, the following reports with respect to the Grantors: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts;
(iii) trial balances; and (iv) a test verification of such Accounts.
5.4. Grant of Intellectual Property License. For the purpose of enabling the Administrative Agent to exercise the rights and
remedies under this Article V at such time as the Administrative Agent shall be lawfully entitled to exercise such rights and
remedies following the occurrence and during the continuation of an Event of Default, each Grantor hereby (a) grants to the
Administrative Agent, for the benefit of the Administrative Agent and the Lenders, an irrevocable, nonexclusive license
(exercisable without payment of royalty or other compensation to any Grantor) to use, license or sublicense any Intellectual
property Rights now owned or hereafter acquired by any Grantor, and wherever the same may be located, and including in such
license access to all media in which any of the licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof and (b) irrevocably agrees that the Administrative Agent may sell any of
the Grantors Inventory directly to any person, including without limitation persons who have previously purchased the Grantors
Inventory from any Grantor and in connection with any such sale or other enforcement of the Administrative Agents rights
under this Security Agreement, may sell Inventory which bears any Trademark owned by or licensed to any Grantor and any
Inventory that is covered by any Copyright owned by or licensed to any Grantor and the Administrative Agent may finish any
work in process and affix any Trademark owned by or licensed to any Grantor and sell such Inventory as provided herein.
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ARTICLE VI
ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY
6.1. Account Verification. The Administrative Agent may at any time, in the Administrative Agents own name, in the
name of a nominee of the Administrative Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile or
otherwise) with the Account Debtors of such Grantor, parties to contracts with such Grantor and obligors in respect of
Instruments of such Grantor to verify with such Persons, to the Administrative Agents satisfaction, the existence, amount, terms
of, and any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other Receivables.
6.2. Authorization for Secured Party to Take Certain Action.
(a) Each Grantor irrevocably authorizes the Administrative Agent at any time and from time to time in the reasonable
discretion of the Administrative Agent and appoints the Administrative Agent as its attorney in fact (i) to execute on behalf
of such Grantor as debtor and to file financing statements necessary or desirable in the Administrative Agents reasonable
discretion to perfect and to maintain the perfection and priority of the Administrative Agents security interest in the
Collateral, (ii) either if the Administrative Agent has the right to exercise cash dominion pursuant to the terms of
Section 7.3 of this Agreement or upon the occurrence and during the continuation of an Event of Default, to endorse, apply
and, after the occurrence and during the continuation of any Event of Default, collect any cash proceeds of the Collateral,
(iii) to file a carbon, photographic or other reproduction of this Security Agreement or any financing statement with respect
to the Collateral as a financing statement and to file any other financing statement or amendment of a financing statement
(which does not add new collateral or add a debtor) in such offices as the Administrative Agent in its sole discretion deems
necessary or desirable to perfect and to maintain the perfection and priority of the Administrative Agents security interest
in the Collateral, (iv) upon the occurrence and during the continuation of an Event of Default, to contact and enter into one
or more agreements with the issuers of uncertificated securities which are Pledged Collateral or with securities
intermediaries holding Pledged Collateral as may be necessary or advisable to give the Administrative Agent Control over
such Pledged Collateral, (v) either if the Administrative Agent has the right to exercise cash dominion pursuant to the terms
of Section 7.3 of this Agreement or upon the occurrence and during the continuation of an Event of Default, to apply the
proceeds of any Collateral received by the Administrative Agent to the Secured Obligations as provided in Section 7.3,
(vi) upon the occurrence and during the continuation of an Event of Default, to discharge past due taxes, assessments,
charges, fees or Liens on the Collateral (except for such Liens as are specifically permitted hereunder), (vii) to contact
Account Debtors in accordance with the Administrative Agents customary practices in order to verify information
regarding the Accounts, (viii) upon the occurrence and during the continuation of an Event of Default, to demand payment
or enforce payment of the Receivables in the name of the Administrative Agent or such Grantor and to endorse any and all
checks, drafts, and other instruments for the payment of money relating to the Receivables, (ix) upon the occurrence and
during the continuation of an Event of Default, to sign such Grantors name on any invoice or bill of lading relating to the
Receivables, drafts against any Account Debtor of such Grantor, assignments and verifications of Receivables, (x) upon the
occurrence and during the continuation of an Event of Default, to exercise all of such Grantors rights and remedies with
respect to the collection of the Receivables and any other Collateral, (xi) upon the occurrence and during the continuation of
an Event of Default, to settle, adjust, compromise, extend or renew the Receivables, (xii) upon the occurrence and during
the continuation of an Event of Default, to settle, adjust or compromise any legal proceedings brought to collect
Receivables, (xiii) upon the occurrence and during the continuation of an Event of Default, to prepare, file and sign such
Grantors name on a proof of claim in bankruptcy or similar document against any Account Debtor of such Grantor,
(xiv) upon the occurrence and during the continuation of an Event of Default, to prepare, file and sign such Grantors name
on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the Receivables, (xv) upon
the occurrence and during the continuation of an Event of Default, to change the address for delivery of mail addressed to
such Grantor to such address as the Administrative Agent may designate and to receive, open and dispose of all mail
addressed to such Grantor, and (xvi) upon the occurrence and during the continuation of an Event of Default, to do all other
acts and things necessary to carry out this Security Agreement; and each Grantor agrees to reimburse the Administrative
Agent on demand for any payment made or any expense incurred by the Administrative Agent in connection with any of the
foregoing; provided that, this authorization shall not relieve any Grantor of any of its obligations under this Security
Agreement or under the Credit Agreement.
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(b) All acts of said attorney or designee in accordance with the terms hereof are hereby ratified and approved. The
powers conferred on the Administrative Agent, for the benefit of the Administrative Agent and Lenders, under this
Section 6.2 are solely to protect the Administrative Agents interests in the Collateral and shall not impose any duty upon
the Administrative Agent or any Lender to exercise any such powers.
6.3. Proxy. EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE ADMINISTRATIVE
AGENT AS THE PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 6.2 ABOVE) OF SUCH GRANTOR
WITH RESPECT TO THE PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE SUCH PLEDGED
COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY
SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF THE ADMINISTRATIVE AGENT AS PROXY AND
ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES
AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING
GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF
SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY
AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY SUCH PLEDGED
COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER
OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF A
DEFAULT.
6.4. Nature of Appointment; Limitation of Duty. THE APPOINTMENT OF THE AGENT AS PROXY AND
ATTORNEY-IN-FACT IN THIS ARTICLE VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE
UNTIL THE DATE ON WHICH THIS SECURITY AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION
8.14. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE AGENT, NOR ANY LENDER, NOR
ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR
OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR
ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO THEIR OWN GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT
JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY,
INDIRECT OR CONSEQUENTIAL DAMAGES.
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ARTICLE VII
COLLECTION AND APPLICATION OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS
7.1. Collection of Receivables.
(a) On or before the Closing Date, each Grantor shall (a) execute and deliver to the Administrative Agent Deposit
Account Control Agreements for each Deposit Account maintained by such Grantor into which all cash, checks or other
similar payments relating to or constituting payments made in respect of Receivables will be deposited, to the extent a
Deposit Account Control Agreement over such Deposit Account is required by the terms of Section 4.14 (each, a
Collateral Deposit Account), which Collateral Deposit Accounts are identified as such on Exhibit B, and (b) enter into to
irrevocable lockbox agreements in the form provided by or otherwise acceptable to the Administrative Agent for all existing
lock boxes of the Grantors into which all cash, checks or other similar payments relating to or constituting payments made
in respect of Receivables will be deposited (the Lock Boxes), which Lock Boxes are identified as such on Exhibit B,
which agreements shall be accompanied by an acknowledgment by the bank where the Lock Box is located of the Lien of
the Administrative Agent granted hereunder and of irrevocable instructions to wire all amounts collected therein to the
Collection Account (a Lock Box Agreement) upon receipt by the depository banks of a control notice from the
Administrative Agent pursuant to the terms of such agreements. After the Closing Date, each Grantor will comply with the
terms of Section 7.2.
(b) At all times that the Administrative Agent has the right to exercise cash dominion pursuant to the terms of
Section 7.3(c) of this Agreement and upon receipt by the depository banks of a control notice from the Administrative
Agent, each depository bank will restrict Grantors access to funds within the Collateral Deposit Account. Each Grantor
shall insure that future deposits constituting payments made in respect of Receivables continue to be made into Collateral
Deposit Accounts. At all times that the Administrative Agent has the right to exercise cash dominion pursuant to the terms
of Section 7.3(c) of this Agreement, (i) the Administrative Agent shall have sole access to the Lock Boxes and the
Collateral Deposit Accounts and each Grantor shall take all actions necessary to grant the Administrative Agent such sole
access, (ii) no Grantor shall remove any item from the Lock Boxes or the Collateral Deposit Accounts without the
Administrative Agents prior written consent, (iii) if any Grantor should refuse or neglect to notify any Account Debtor to
forward payments directly to a Lock Box subject to a Lock Box Agreement or a Collateral Deposit Account subject to a
Deposit Account Control Agreement after notice from the Administrative Agent, the Administrative Agent shall be entitled
to make such notification directly to Account Debtor, (iv) if notwithstanding the foregoing instructions, any Grantor
receives any proceeds of any Receivables, such Grantor shall receive such payments in trust for the Administrative Agent,
and shall immediately deposit all cash, checks or other similar payments related to or constituting payments made in respect
of Receivables received by it to a Collateral Deposit Account, (v) all funds deposited into any Lock Box subject to a Lock
Box Agreement or any Collateral Deposit Account will be swept on a daily basis into a collection account maintained by
the Grantor with the Administrative Agent (the Collection Account), and (vi) the Administrative Agent shall hold and
apply funds received into the Collection Account as provided by the terms of Section 2.18(b) of the Credit Agreement.
7.2. Covenant Regarding New Deposit Accounts; Lock Boxes. Before opening or replacing any Collateral Deposit Account,
other Deposit Account, or establishing a new Lock Box, the Grantors shall (a) obtain the Administrative Agents consent in
writing to the opening of such Deposit Account or Lock Box, and (b) cause each bank or financial institution in which it seeks to
open (i) a Deposit Account, to enter into a Deposit Account Control Agreement with the Administrative Agent in order to give
the Administrative Agent Control of such Deposit Account in the event rights of cash dominion are exercised, or (ii) a Lock Box,
to enter into a Lock Box Agreement with the Administrative Agent in order to give the Administrative Agent Control of the Lock
Box in the event rights of cash dominion are exercised. In the case of Deposit Accounts or Lock Boxes maintained with Lenders,
the terms of such letter shall be subject to the provisions of the Credit Agreement regarding setoffs. The main disbursement
accounts of the Borrowers shall at all times be located at a bank that is a Lender under the Credit Agreement or with banks
otherwise acceptable to the Administrative Agent in its Permitted Discretion.
7.3. Application of Proceeds; Deficiency. (a) At all times that Administrative Agent does not have the right to exercise cash
dominion or has chosen not to exercise such right, all amounts deposited into Grantors accounts shall remain at the disposal of
the Grantor and may be disbursed or otherwise used in the Grantors sole discretion.
(b) If, at any time, cash dominion under Section 7.3(c) has been triggered, and the Grantor thereafter maintains
(i) average Availability greater than or equal to $40,000,000 for a 90-day period and (ii) Availability not less than
$35,000,000 at all times during such 90-day period, the cash dominion in Section 7.3(c) shall no longer be deemed to be
triggered and discretionary rights to the use of funds in a depository account shall return to the Grantor and funds deposited
in Collateral Deposit Accounts shall no longer be swept into the Collection Account.
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(c) If at any time, (i) Availability is less than $35,000,000, or (ii) a Default or Event of Default has occurred and is
continuing, the Administrative Agent may exercise its cash dominion rights by delivering instructions to each depository
bank having a Deposit Account Control Agreement that requires all other cash proceeds in the account to be directed to the
Administrative Agents Collection Account as described in Section 7.1(b). If this Section 7.3(c) has been triggered, the
Administrative Agent shall (or, in the case of Canadian Collateral Deposit Accounts, may) have exclusive control over said
Collateral Deposit Account and any such proceeds shall be applied in the order set forth in Section 2.18(b) of the Credit
Agreement. If proceeds are being applied according to Section 2.18(b) of the Credit Agreement, the balance, if any, after all
of the Secured Obligations have been satisfied shall be deposited by the Administrative Agent into the Grantors general
operating account with the Administrative Agent or such other account with a Lender and subject to a Deposit Account
Control Agreement designated by the Grantors in writing to the Administrative Agent. The Grantors shall remain liable for
any deficiency if the proceeds of any sale or disposition of the Collateral are insufficient to pay all Secured Obligations,
including any reasonable attorneys fees and other reasonable expenses incurred by Administrative Agent or any Lender to
collect such deficiency.
ARTICLE VIII
GENERAL PROVISIONS
8.1. Waivers. Each Grantor hereby waives, to the extent permitted under applicable law, notice of the time and place of any
public sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made. To the
extent such notice may not be waived under applicable law, any notice made shall be deemed reasonable if sent to the Grantors,
addressed as set forth in Article IX, at least ten days prior to (i) the date of any such public sale or (ii) the time after which any
such private sale or other disposition may be made. To the maximum extent permitted by applicable law, each Grantor waives all
claims, damages, and demands against the Administrative Agent or any Lender arising out of the repossession, retention or sale
of the Collateral, except such as arise solely out of the gross negligence or willful misconduct of the Administrative Agent or
such Lender as finally determined by a court of competent jurisdiction. To the extent it may lawfully do so, each Grantor
absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the
Administrative Agent or any Lender, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any
and all rights or defenses it may have as a surety now or hereafter existing which, but for this provision, might be applicable to
the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale conferred
by this Security Agreement, or otherwise. Except as otherwise specifically provided herein, each Grantor hereby waives
presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with
this Security Agreement or any Collateral.
8.2. Limitation on Administrative Agents and Lenders Duty with Respect to the Collateral. The Administrative Agent
shall have no obligation to clean-up or otherwise prepare the Collateral for sale. The Administrative Agent and each Lender shall
use reasonable care with respect to the Collateral in its possession or under its control. Neither the Administrative Agent nor any
Lender shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or
nominee of the Administrative Agent or such Lender, or any income thereon or as to the preservation of rights against prior
parties or any other rights pertaining thereto. To the extent that applicable law imposes duties on the Administrative Agent to
exercise remedies in a commercially reasonable manner, the Grantors acknowledge and agree that it is commercially reasonable
for the Administrative Agent (i) to fail to incur expenses deemed significant by the Administrative Agent to prepare Collateral
for disposition or otherwise to transform raw material or work in process into finished goods or other finished products for
disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by
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other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or
disposed of, (iii) to fail to exercise collection remedies against Account Debtors or other Persons obligated on Collateral or to
remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against Account Debtors and other
Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise
dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized
nature, (vi) to contact other Persons, whether or not in the same business as the Grantors, for expressions of interest in acquiring
all or any portion of such Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral,
whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the
auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and
sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as
title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Administrative Agent against
risks of loss, collection or disposition of Collateral or to provide to the Administrative Agent a guaranteed return from the
collection or disposition of Collateral, or (xii) to the extent deemed appropriate by the Administrative Agent, to obtain the
services of other brokers, investment bankers, consultants and other professionals to assist the Administrative Agent in the
collection or disposition of any of the Collateral. Each Grantor acknowledges that the purpose of this Section 8.2 is to provide
non-exhaustive indications of what actions or omissions by the Administrative Agent would be commercially reasonable in the
Administrative Agents exercise of remedies against the Collateral and that other actions or omissions by the Administrative
Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 8.2. Without
limitation upon the foregoing, nothing contained in this Section 8.2 shall be construed to grant any rights to any Grantor or to
impose any duties on the Administrative Agent that would not have been granted or imposed by this Security Agreement or by
applicable law in the absence of this Section 8.2.
8.3. Compromises and Collection of Collateral. The Grantors and the Administrative Agent recognize that setoffs,
counterclaims, defenses and other claims may be asserted by obligors with respect to certain of the Receivables, that certain of
the Receivables may be or become uncollectible in whole or in part and that the expense and probability of success in litigating a
disputed Receivable may exceed the amount that reasonably may be expected to be recovered with respect to a Receivable. In
view of the foregoing, each Grantor agrees that the Administrative Agent may at any time and from time to time, if an Event of
Default has occurred and is continuing, compromise with the obligor on any Receivable, accept in full payment of any
Receivable such amount as the Administrative Agent in its sole discretion shall determine or abandon any Receivable, and any
such action by the Administrative Agent shall be commercially reasonable so long as the Administrative Agent acts in good faith
based on information known to it at the time it takes any such action.
8.4. Secured Party Performance of Debtor Obligations. Without having any obligation to do so, the Administrative Agent
may perform or pay any obligation which any Grantor has agreed to perform or pay in this Security Agreement and the Grantors
shall reimburse the Administrative Agent for any amounts paid by the Administrative Agent pursuant to this Section 8.4. The
Grantors obligation to reimburse the Administrative Agent pursuant to the preceding sentence shall be a Secured Obligation
payable on demand.
8.5. Specific Performance of Certain Covenants. Each Grantor acknowledges and agrees that a breach of any of the
covenants contained in Sections 4.1(d), 4.1(e), 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.12, 4.13, 4.14, 4.15, 4.16, 5.3, or 8.7 or in
Article VII will cause irreparable injury to the Administrative Agent and the Lenders, that the Administrative Agent and Lenders
have no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Administrative
Agent or the Lenders to seek and obtain specific performance of other obligations of the Grantors contained in this Security
Agreement, that the covenants of the Grantors contained in the Sections referred to in this Section 8.5 shall be specifically
enforceable against each Grantor.
8.6. Dispositions Not Authorized. No Grantor is authorized to sell or otherwise dispose of the Collateral except as set forth
in Section 4.1(d) and notwithstanding any course of dealing between the Grantors and the Administrative Agent or other conduct
of the Administrative Agent, no authorization to sell or otherwise dispose of the Collateral (except as set forth in Section 4.1(d))
shall be binding upon the Administrative Agent or the Lenders unless such authorization is in writing signed by the
Administrative Agent with the consent or at the direction of the Required Secured Parties.
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8.7. No Waiver; Amendments; Cumulative Remedies. No delay or omission of the Administrative Agent or any Lender to
exercise any right or remedy granted under this Security Agreement shall impair such right or remedy or be construed to be a
waiver of any Default or an acquiescence therein, and any single or partial exercise of any such right or remedy shall not
preclude any other or further exercise thereof or the exercise of any other right or remedy. No waiver, amendment or other
variation of the terms, conditions or provisions of this Security Agreement whatsoever shall be valid unless in writing signed by
the Administrative Agent with the concurrence or at the direction of the Lenders required under Section 9.02 of the Credit
Agreement and then only to the extent in such writing specifically set forth. All rights and remedies contained in this Security
Agreement or by law afforded shall be cumulative and all shall be available to the Administrative Agent and the Lenders until
the Secured Obligations have been paid in full.
8.8. Limitation by Law; Severability of Provisions. All rights, remedies and powers provided in this Security Agreement
may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the
provisions of this Security Agreement are intended to be subject to all applicable mandatory provisions of law that may be
controlling and to be limited to the extent necessary so that they shall not render this Security Agreement invalid, unenforceable
or not entitled to be recorded or registered, in whole or in part. Any provision in this Security Agreement that is held to be
inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any
other jurisdiction, and to this end the provisions of this Security Agreement are declared to be severable.
8.9. Reinstatement. This Security Agreement shall remain in full force and effect and continue to be effective should any
petition or proposal be filed by or against any Grantor for liquidation or reorganization, should any Grantor become insolvent or
make an assignment for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any
significant part of any Grantors assets, and shall continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a voidable
preference, fraudulent conveyance, or otherwise, all as though such payment or performance had not been made. In the event
that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and
deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.
8.10. Benefit of Agreement. The terms and provisions of this Security Agreement shall be binding upon and inure to the
benefit of the Grantors, the Administrative Agent and the Lenders and their respective successors and assigns (including all
persons who become bound as a debtor to this Security Agreement), except that no Grantor shall have the right to assign its
rights or delegate its obligations under this Security Agreement or any interest herein, without the prior written consent of the
Administrative Agent. No sales of participations, assignments, transfers, or other dispositions of any agreement governing the
Secured Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to the Administrative
Agent, for the benefit of the Administrative Agent and the Lenders, hereunder.
8.11. Survival of Representations. All representations and warranties of the Grantors contained in this Security Agreement
shall survive the execution and delivery of this Security Agreement.
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8.12. Taxes and Expenses. Any taxes (including income taxes) payable or ruled payable by Federal, Provincial or State
authority in respect of this Security Agreement shall be paid by the Grantors, together with interest and penalties, if any. The
Grantors shall reimburse the Administrative Agent for any and all out-of-pocket expenses and internal charges (including
reasonable attorneys, auditors and accountants fees and reasonable time charges of attorneys, paralegals, auditors and
accountants who may be employees of the Administrative Agent) paid or incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, collection and enforcement of this Security Agreement and in the audit,
analysis, administration, collection, preservation or sale of the Collateral (including the expenses and charges associated with any
periodic or special audit of the Collateral). Any and all costs and expenses incurred by any Grantor in the performance of actions
required pursuant to the terms hereof shall be borne solely by the Grantors.
8.13. Headings. The title of and section headings in this Security Agreement are for convenience of reference only, and
shall not govern the interpretation of any of the terms and provisions of this Security Agreement.
8.14. Termination. This Security Agreement shall continue in effect (notwithstanding the fact that from time to time there
may be no Secured Obligations outstanding) until (i) the Credit Agreement has terminated pursuant to its express terms and
(ii) all of the Secured Obligations have been indefeasibly paid and performed in full (or with respect to any outstanding Letters of
Credit, a cash deposit or Supporting Letter of Credit has been delivered to the Administrative Agent as required by the Credit
Agreement) and no commitments of the Administrative Agent or the Lenders which would give rise to any Secured Obligations
are outstanding.
8.15. Entire Agreement. This Security Agreement embodies the entire agreement and understanding between the Grantors
and the Administrative Agent relating to the Collateral and supersedes all prior agreements and understandings between the
Grantors and the Administrative Agent relating to the Collateral.
8.16. CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW
YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. PROVIDED,
HOWEVER, THAT IF ANY LAWS OF ANY JURISDICTION, OTHER THAN NEW YORK, SHALL GOVERN IN
REGARD TO THE VALIDITY, PERFECTION OR EFFECT OF PERFECTION OF ANY LIEN IN THE
COLLATERAL, OR IN REGARD TO PROCEDURAL MATTERS AFFECTING ENFORCEMENT OF ANY LIENS
IN THE COLLATERAL, SUCH LAWS OF SUCH OTHER JURISDICTION SHALL CONTINUE TO APPLY TO
THAT EXTENT.
8.17. CONSENT TO JURISDICTION. EACH GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN NEW
YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND EACH GRANTOR HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY GRANTOR AGAINST THE
ADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE
BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK. If any action or proceeding is filed in a court of the State
of California by or against any party hereto in connection with any of the transactions contemplated by this Agreement or any
document related hereto, (a) the court shall, and is hereby directed to, make a general reference pursuant to California Code of
Civil Procedure Section 638 to a referee or referees to hear and determine all of the issues in such action or proceeding (whether
of fact or of law) and to report a statement of decision, provided that at the option of Lender, any such issues pertaining to a
provisional remedy as defined in California Code of Civil Procedure Section 1281.8 shall be heard and determined by the
court, and (b) the Borrowers shall be solely responsible to pay all fees and expenses of any referee appointed in such action or
proceeding.
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8.18. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY
OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
8.19. Indemnity. Each Grantor hereby agrees to indemnify the Administrative Agent and the Lenders, and their respective
successors, assigns, agents and employees, from and against any and all liabilities, damages, penalties, suits, costs, and expenses
of any kind and nature (including, without limitation, all expenses of litigation or preparation therefor whether or not the
Administrative Agent or any Lender is a party thereto) imposed on, incurred by or asserted against the Administrative Agent or
the Lenders, or their respective successors, assigns, agents and employees, in any way relating to or arising out of this Security
Agreement, or the manufacture, purchase, acceptance, rejection, ownership, delivery, lease, possession, use, operation, condition,
sale, return or other disposition of any Collateral (including, without limitation, latent and other defects, whether or not
discoverable by the Administrative Agent or the Lenders or the Grantors, and any claim for Patent, Trademark or Copyright
infringement).
8.20. Counterparts. This Security Agreement may be executed in any number of counterparts, all of which taken together
shall constitute one agreement, and any of the parties hereto may execute this Security Agreement by signing any such
counterpart.
8.21. Judgment Currency. If for the purpose of obtaining judgment in any court it is necessary to convert an amount due
hereunder in the currency in which it is due (the Original Currency) into another currency (the Second Currency), the rate of
exchange applied shall be that at which, in accordance with normal banking procedures, the Lender(s) or the Administrative
Agent on behalf of the Lenders could purchase in the Chicago foreign exchange market, the Original Currency with the Second
Currency on the date two (2) Business Days preceding that on which judgment is given. Each Grantor agrees that its obligation
in respect of any Original Currency due from it hereunder shall, notwithstanding any judgment or payment in such other
currency, be discharged only to the extent that, on the Business Day following the date the Lender(s) or the Administrative Agent
on behalf of the Lenders receives payment of any sum so adjudged to be due hereunder in the Second Currency, the Lender(s) or
the Administrative Agent on behalf of the Lenders may, in accordance with normal banking procedures, purchase, in the Chicago
foreign exchange market, the Original Currency with the amount of the Second Currency so paid; and if the amount of the
Original Currency so purchased or could have been so purchased is less than the amount originally due in the Original Currency,
each Grantor agrees as a separate obligation and notwithstanding any such payment or judgment to indemnify the Lender(s) or
the Administrative Agent on behalf of the Lenders against such loss. The term rate of exchange in this Section 8.21 means the
spot rate at which the Administrative Agent, in accordance with normal practices, is able on the relevant date to purchase the
Original Currency with the Second Currency, and includes any premium and costs of exchange payable in connection with such
purchase.
25
It is the express wish of the parties that this agreement and any related documents be drawn up and executed in English. Il est la
volonte expresse des Parties que cette convention et tous les documents sy rattachant soient rediges et signes en anglais.
ARTICLE IX
NOTICES
9.1. Sending Notices. (a) Any notice required or permitted to be given under this Security Agreement shall be sent by
United States mail, telecopier, personal delivery or nationally established overnight courier service, and shall be deemed received
(i) when received, if sent by hand or overnight courier service, or mailed by certified or registered mail notices or (ii) when sent,
if sent by telecopier (except that, if not given during normal business hours for the recipient, shall be deemed to have been given
at the opening of business on the next Business Day for the recipient), in each case addressed to the Grantors at the address(es)
set forth on Exhibit A as their principal place of business, and to the Administrative Agent and the Lenders at the addresses set
forth in accordance with Section 9.01 of the Credit Agreement.
(b) Any reporting notice required to be given under this Security Agreement by the Grantors to the Administrative
Agent may be given on a quarterly basis unless otherwise specified herein.
9.2. Change in Address for Notices. Each of the Grantors, the Administrative Agent and the Lenders may change the
address for service of notice upon it by a notice in writing to the other parties.
ARTICLE X
THE ADMINISTRATIVE AGENT
JPMorgan Chase Bank, N.A. has been appointed Administrative Agent for the Lenders hereunder pursuant to Article VIII
of the Credit Agreement. It is expressly understood and agreed by the parties to this Security Agreement that any authority
conferred upon the Administrative Agent hereunder is subject to the terms of the delegation of authority made by the Lenders to
the Administrative Agent pursuant to the Credit Agreement, and that the Administrative Agent has agreed to act (and any
successor Administrative Agent shall act) as such hereunder only on the express conditions contained in such Article VIII. Any
successor Administrative Agent appointed pursuant to Article VIII of the Credit Agreement shall be entitled to all the rights,
interests and benefits of the Administrative Agent hereunder.
[Signature Page Follows]
26
IN WITNESS WHEREOF, the Grantors and the Administrative Agent have executed this Security Agreement as of the date
first above written.
GRANTORS:
Title: Treasurer
Title: Treasurer
Title: Treasurer
Title: Treasurer
Title: Treasurer
Title: Treasurer

By:

Title: Treasurer

By:

Title: Treasurer
MINTER-WEISMAN CO.
By:

Title: Treasurer

By: /s/ Courtney Jeans
Name: Courtney Jeans
My Commission Expires: 12-03-08

STATE OF California
COUNTY OF San Mateo
)
) SS
)
The foregoing instrument was acknowledged before me this 12 day of October, 2005, by Stacey Loretz-Congden, a
Treasurer of each of the Grantors, on behalf of said entities.
Notary Public Christina Vilches
My commission expires: 12-03-08
My Commission Expires:
STATE OF Texas
COUNTY OF Dallas
)
) SS
)
The foregoing instrument was acknowledged before me this 12 day of October, 2005, by Courtney Jeans, a V.P. of JPM
Chase, on behalf of said _____.
Notary Public Maria E. Cortes
My commission expires:
EXHIBIT A
to
Grantors Information and Collateral Locations
(See Sections 3.2, 3.3, 3.4, 9.1 of Security Agreement)
Paragraph 3.2
Type and Jurisdiction of Organization. Organizational and Identification Numbers.

Refer to Credit Agreement Schedule 3.15.
Paragraph 3.3
Principal Location.
395 Oyster Point Blvd.
Suite 415
Paragraph 3.4
Collateral Locations.
Refer to Credit Agreement Schedule 3.05(a).
Paragraph 9.1
Sending Notices.
395 Oyster Point Blvd.
Suite 415
Attn: Treasurer
Fax #: 650-589-4010
EXHIBIT B
to
(see Section 3.5 of Security Agreement)
As of September 2, 2005
Company Name
Name of Institution
Core-Mark International,
Inc.
JP Morgan Chase
Head Distributing Co.
Bank Of America
Inc.
Check if a
Collateral
Deposit
Account
Type of Account
Description of Account
Depository
US Cash Concentration account
Depository
Depository
Wells Fargo
Lockbox Depository
Depository / includes
Lockbox/NON CA
Inc.
Wells Fargo
Lockbox Depository
Depository / includes
Lockbox/CALIF
Inc.
Wells Fargo
Depository
Depository non a/r receipts
Inc.
Bank Of Montreal
Depository/Disbursement
C$ Concentration acct
Inc.
Scotia Bank
Depository
Visa / Calgary
Inc.
Scotia Bank
Depository
Visa / Vancouver
Inc.
Scotia Bank
Depository
Visa / Winnipeg
Inc.
Wilson & Muir
Depository
Kentucky Depository
EXHIBIT C
to
Letter of Credit Reporting, Chattel Paper
(See Section 3.7 of Security Agreement)
Letter of Credit Rights
None.
Chattel Paper
Refer to Credit Agreement Schedule 6.04 (2). [See Attached]

Existing Investments
Stock Holdings
1) Investments
Company Name
Number
Shares
Estimated Share
Price
Holdings
Value
Exchange
Holder
Head Distributing
Non-Public Company
ILD Holdings, Inc.
600
120.00
72,000
Prudential Financial
51
65.87
3,359
NYSE
Minter Weisman Co.

Can
6.084
71.94
438
NYSE
Minter Weisman Co.

Can
6.102
71.94
439
NYSE
Adel Grocery Company
6.148
71.94
442
NYSE
Core-Mark Distribution
Inc.
262
23.73
6,217
NASDAQ
Inc.
482
23.73
11,438
NASDAQ
3,654
169
6
25
$
$
$
$
0.0015
207.10
206.00
100.00
$
$
$
$
5
35,000
1,236
2,500
Pink Sheet
133,075
Altria Group, Inc. Direct Stock

Purchase and Dividend
Reinvestment Plan
Reinvestment Plan
Reinvestment Plan
Ames Department Stores

Core-Mark Distributors
Core-Mark Midcontinent
2) Notes Receivable
Customer Name
Original
Date
BLUE CHIP (Eureka Management Group)

MLK
LOGANVILLE CHEVRON
Note Receivable
2/18/2003
218,510
11/10/1991
40,224
11/1/2000
15,568
3) Guarantees
Include by reference Schedule 6.01, Item (1) to the Credit Agreement
EXHIBIT D
to
(See Sections 3.10 and 3.11 of Security Agreement)
Refer to Schedule 3.05(b) to the Credit Agreement. [See Attached]
SCHEDULE 3.05(b)
to
CREDIT AGREEMENT
Trademarks
Mark
Legal Entity
Country Classes
App. No.
App. Date
Reg. No.
Reg. Date
Status
CORE-MARK
Core-Mark
International, Inc.
Canada
NA
480,956
1/15/82
TMA272,823
10/15/82
Registered
CORE-MARK
Core-Mark
International, Inc.
United
States
42
73/360,195
4/16/82
1,283,707
6/26/84
Registered
CORE-MARK & Design

(new design)
Core-Mark
International, Inc.
Canada
NA
729,697
5/19/93
TMA433,460
9/16/94
Registered
CORE-MARK
INTERNATIONAL &
Design (New Design
Logo)
Core-Mark
International, Inc.
United
States
42
74/389,810
5/13/93
1,834,121
5/3/94
Registered
CORE-MARK & Design

(YOU CAN COUNT ON Core-Mark
US)
International, Inc.
Canada
NA
729,698
5/19/93
TMA432,801
9/2/94
Registered
CORE-MARK
INTERNATIONAL &
Design Logo (YOU CAN Core-Mark
COUNT ON US)
International, Inc.
United
States
42
74/391,973
5/18/93
1,834,123
5/3/94
Registered
Core-Mark
International, Inc.
United
States
35
75/334,833
8/2/97
2,271,065
8/17/99
Registered
SMARTSTOCK
Tradenames
The company uses and has registered a number of trade names including derivatives of the legal corporate names listed on
schedule 3.15. In addition, the company runs its two consolidation warehouses using the names Allied Merchandising Industry
and Artic Cascade and a number of derivatives thereof.
EXHIBIT E
to
Title Documents for PP Component of Equipment
Unit#
21
NEW
VENDOR
4/1/2005
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
747436
747437
747438
747439
747440
747441
747442
747443
747444
747445
749708
749709
749710
749711
749712
754702
754703
756077
756127
761792
761793
761794
761795
770295
770297
770298
770299
770300
6/14/2005
Ryd-Mt 16/61
Ryd-Mt 16/61
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
Ryd-Mt
16
M97047
332119
332120
332121
332122
332123
332124
332129
332125
332126
332127
332128
332130
332131
332132
334291
334292
334293
334294
DC
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
7
YEAR TYPE
MAKE
MODEL
VEHICLE
SERIAL NUMBER
1993
2000
2000
1996
1996
1996
1997
1996
1996
1996
1997
1997
1997
1997
1997
2000
2000
2000
2000
2002
2002
1980
2005
B
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
NAV/INTL
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
STRICK
UTILITY
22
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
27
28
1HTSCACLXRH574988
1PTO7ANEZ49005115
1PTO7ANE6Z9005149
1PTO7ANE7T9002365
1PTO7ANEXV9001049
1PTO7ANE6V9001050
1PTO7ANE5T9002364
1PTO7ANE9V9003651
1PTO7ANE3T9002363
1PTO7ANE2T9009206
1PTO7ANE0V9004705
1PT07ANE2V9004706
1PTO7ANE7V9007065
1PTO7ANE7V9007066
1PTO7ANE4V9005615
1PTO7ANE0Y9011562
1PTO7ANE2Y9011563
1PTO7ANE9Y9011561
1PTO7ANE1Y9011975
1PT01ANL629002050
1PT01ANL829002051
1997
1994
1995
1996
1997
1997
1997
1997
1997
1997
1999
1999
1999
1999
1999
1999
1999
1999
1999
2000
2000
2000
2000
2001
2001
2001
2001
2001
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
TRLMO
UTIL
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
UTILITY
UTILITY
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
27
28
53
28
28
28
28
28
28
28
28
28
28
28
28
28
28
35
48
28
28
28
28
28
28
28
28
28
1PTO7ANE5V9003324
1UYVS1285RU330703
1UYVS2537TU748001
1PTO7ANEXV9001052
1PTO7ANE7V9004703
1PTO7ANE9V9004704
1PTO7ANE4V9004707
1PTO7ANE6V9004708
1PTO7ANE8V9005617
1PTO7ANE6V9005616
1PTO7ANE3W9007101
1PTO7ANE5W9007102
1PTO7ANE1W9007100
1UYVS1284XU742303
1UYVS1286XU742304
1PTO7ANM1X9013276
1PTO7ANM3X9013277
1FTO7ANK1X9003722
1PTO1ANH4Y9003718
1PTO7ANE1Y9011568
1PTO7ANE8Y9011566
1PTO7ANEXY9011567
1PTO7ANE6Y9011565
1PTO1ANE519007321
1PTO1ANLE319007320
1PTO1ANE019007324
1PTO1ANL419007309
1PTO1ANL019007310
Title
239010
LICENSE #
9A47459
1WX1220
1WX1219
4CX672
1VL4890
1VL4891
1WB7274
1VC5664
1VC5665
1VC5657
1WA5435
1WA5436
1WC2783
1WC2785
1VL9158
1VT6224
1VT6225
1VT6223
1WM5155
1XA3157
1XA3159
1VB1749
1WN3124
1WN3125
1WH5496
1VL5003
1WA5433
1WA5434
1WA5437
1WA5438
1VL8834
1VL8835
1WE4595
1WE4596
1WE4594
1WF8786
1WF8787
1WL4266
1WL4267
1WL4333
1WL4385
1VT6006
1VT6004
1VT6005
1VT6002
1WF7672
1WF7673
1WF7670
1WF7675
1WF7674
EXHIBIT E
to
Title Document for PP Component of Equipment
Unit#
DC YEAR TYPE
MAKE
MODEL
VEHICLE
SERIAL NUMBER
21
21
21
21
21
21
21
21
21
21
21
21
21
21
21
21
21
21
21
21
21
21
21
21
21
21
1993
1993
1993
1993
1993
1994
1995
1995
1995
1996
1996
1995
1996
1997
1997
1997
2001
2001
2001
2001
2001
2001
2001
1997
1997
1997
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
1PTO7ANE2P9016908
1PTO7ANE3P9016905
1PTO7ANE4P9016906
1PTO7ANE6P9016910
1PTO7ANE5T9016909
1PTO7ANE3S9003463
1PTO7ANE8S9009209
1PTO7ANE4S9009210
1PTO7ANE6S9009208
1PTO7ANE5T9009671
1PTO7ANE7T9009672
1PTO7ANE9T9009673
1PTO7ANEOT9009674
1PTO7ANEXV9004694
1PTO7ANE1V9004695
1PTO7ANE4V9004691
1PTO7ANE219007213
1PTO7ANEX19007217
1PTO7ANE619007215
1PTO7ANE019007212
1PTO7ANE419007214
1PTO7ANE119007218
1PTO7ANE819007216
1PTO7ANE6V9004692
1PTO7ANE8V9004693
1PTO7ANE3V9004696
4AS5315
4AS5316
4AS5317
4AS5351
4AS5352
4AS5319
4AS5320
4AS5339
4AS5340
4AS5341
4AS5342
4AS5343
4AS5344
4AS5345
4AS5346
4AS5347
4AS5348
4AS5349
4AS5350
4AS5337
4AS5336
4AS5309
4AS5310
4AS5311
4AS5312
4AS5313
1PTO7ANE4P9007836
1PTO7ANE6P9007837 rfr removed
1PT07ANE1V9003323
1PT07ANE1V9003322
1PT07ANE5V9004697
totaled
1PT07ANE7V9004698 7-25-05
1PT07ANE9V9004699
1PT07ANE1V9004700
1PTO7ANE4Y9011564
1PTO7ANE0Y9011576
1PTO1ANL219007311
1PTO1ANL219007312
1UYVS23203U936904
1UYVS12823U128201
1UYVS23533U128301
1UYVS12845U632607
4AA8222
4AA8220
1WB7254
1WB7253
4AB6679
102T
103T
104T
105T
106T
108T
109T
111T
112T
113T
114T
115T
116T
117T
118T
119T
120T
121T
122T
123T
32T
33T
34T
35T
36T
37T
VENDOR
4/1/2005
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
T.C.I.-Mt
331002
331003
331595
331596
331597
Updated
4-1-05
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
23
23
23
23
23
1993
1993
1997
1997
1997
T
T
T
T
T
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
28
28
28
28
28
331598
331599
331600
334313
334314
863476
863477
871622
1282
1283
1284
NEW
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
23
23
23
23
23
23
23
23
23
23
23
23
1997
1997
1997
2000
2000
2002
2002
2003
2004
2004
2004
2005
T
T
T
T
T
T
T
T
T
T
T
T
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
28
28
28
28
28
32
32
32
28
35
28
28
Title
LICENSE #
4AB6676
4AB6678
1WA5431
1VT6003
1VT6007
4AA3222
4AA3221
4CH2455
4FC4354
EXHIBIT E
to
Title Document for PP Component of Equipment
Unit#
527746
768435
768739
768436
235626
256126
617567
617609
617610
617611
617612
617613
617614
617615
617616
617617
617618
710456
710457
710458
717511
717512
717513
717514
717515
717517
733343
733344
753778
753779
753780
756322
768430
768431
768432
768433
602962
NEW
NEW
VENDOR
DC YEAR TYPE MAKE MODEL
Updated 4-1-05
Ryd-Mt
35 1994
CG
EIGHT CONGEAR
GR
Ryd-Mt
35 2001
CG
TDNE CONGEAR
GR
Ryd-Mt
35 2001
CG
TDNE CONGEAR
GR
Ryd-Mt
35 2001
CG
TDNE CONGEAR
Ryd-Mt
35 1993
T
TRLMO 53 DRY
Ryd-Mt
35 1995
T
UTILITY
48
Ryd-Mt
35 1991
T
TRLMO
28
Ryd-Mt
35 1993
T
TRLMO
28
Ryd-Mt
35 1993
T
TRLMO
28
Ryd-Mt
35 1993
T
TRLMO
28
Ryd-Mt
35 1993
T
TRLMO
28
Ryd-Mt
35 1994
T
UTILITY
28
Ryd-Mt
35 1994
T
UTILITY
28
Ryd-Mt
35 1994
T
UTILITY
28
Ryd-Mt
35 1994
T
UTILITY
28
Ryd-Mt
35 1994
T
TRLMO
32
Ryd-Mt
35 1994
T
TRLMO
28
Ryd-Mt
35 1995
T
TRLMO
28
Ryd-Mt
35 1995
T
TRLMO
28
Ryd-Mt
35 1995
T
TRLMO
28
Ryd-Mt
35 1996
T
TRLMO
28
Ryd-Mt
35 1996
T
TRLMO
28
Ryd-Mt
35 1996
T
TRLMO
28
Ryd-Mt
35 1996
T
TRLMO
28
Ryd-Mt
35 1996
T
TRLMO
28
Ryd-Mt
35 1996
T
TRLMO
28
Ryd-Mt
35 1998
T
TRLMO
28
Ryd-Mt
35 1998
T
TRLMO
40
Ryd-Mt
35 1999
T
TRLMO
28
Ryd-Mt
Ryd-Mt
Ryd-Mt
Ryd-Mt
Ryd-Mt
Ryd-Mt
Ryd-Mt
Ryd-Mt
Ryd-Mt
Ryd-Mt
35
35
35
35
35
35
35
35
35
35
1999
1999
2000
2001
2001
2001
2001
2004
2005
2005
T
T
T
T
T
T
T
T
T
T
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
UTILITY
UTILITY
UTILITY
28
28
28
40
28
28
28
48
28
28
VEHICLE
SERIAL NUMBER
Title
LICENSE #
1E9501135R1016140
1VR3881
1PTOYR0G429000270
1WE1780
1PTOYR0G629000271
1WE1778
1PTOYR0G829000269
1H2V05324PB033427
1UYVS2482SM603427
1PT071NE3L9001679
1PT07ANE6P9016893
1PT07ANEXP9016895
1PT07ANE8P9016894
1PT07ANE1P9016896
1UYVS1295RU194601
1UYVS1297RU194602
1UYVS1299RU194603
1UYVS1290RU194604
1PTO7ANL0R9015014
1PT07ANE1R9012351
1PT07ANE0S9009205
1PT07ANE9S9009204
1PT07ANE7S9009203
1PT07ANE1T9009666
1PT07ANE3T9009667
1PT07ANE5T9009668
1PT07ANE7T9009669
1PT07ANE3T9009670
1PT07ANE4T9009676
1PTO7ANE6W9007088
1PTO1ANK8W9007103
1PTO7ANM7X9013282
1WE1779
X58573
QQ73603
1VE3607
1VM1258
1VJ8952
1VJ8949
1UU6565
1VN8167
1VN8168
1VN8169
1VN8170
1VR2075
1VR2867
1WX1337
1WK5882
1VT1073
1WR7881
1VT9806
1VT9811
1VT9749
1VT9807
1VT9816
1WG3583
1WG3587
1WH7397
out of svc
1PTO7ANM9X9013283 12-21-04
1PTO7ANM0X9013284
1PTO7ANE3X9003729
1PT07ANK619007206
1PT07ANK819007207
1PTO7ANE919007208
1PTO7ANE019007209
1UYVS24863U128401
1UYVS12855U683307
1UYVS12835U683306
1WH7394
1WH7395
1WL4406
1WE1768
1WE1775
1WE1776
1WE1777
EXHIBIT E
to
Unit#
803583
5331015
5331016
5331078
5331079
5331080
5331081
5331222
5331223
5331224
5331225
5331686
5331842
5331843
5334329
5332141
5332142
5334330
868223
868224
868225
871623
871624
871625
868226
868227
VENDOR
Updated 1-1-05
Storage
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
DC YEAR TYPE
MAKE
MODEL
VEHICLE
SERIAL NUMBER
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
44
1980
1994
1994
1994
1994
1994
1994
1996
1996
1996
1996
1997
1999
1999
1999
2000
2000
2000
2001
2001
2001
2002
2002
2002
2003
2003
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
PIKE
TRLMO
TRLMO
UTILITY
UTILITY
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
DRY
32
32
28
28
32
32
32
32
32
32
32
32
32
28
32
32
28
32
32
32
35
32
32
35
35
79V598
1PTO7ANLX9016880
1PTO7ANL19016881
1UYVS1283RU330702
1UYVS1281RU330701
1PTO7ANL8R9016721
1PTO7ANL6R9016720
1PTO1ANL3T9002358
1PTO1ANL3T9002359
1PTO1ANM8T9010613
1PTO1ANM8T9010614
1PTO1ANL1W9002995
1PTO1ANLOX9003685
1PTO1ANL2X9003686
1PTO7ANE5Y9011573
1PTO1ANL5Y9003733
1PTO1ANL3Y9003732
1PTO7ANE3Y9011572
1PTO7ANLX19007220
1PTO7ANL319007219
1PTO7ANL119007221
1UYVS23593U936801
1UYVS23293U936903
1UYVS23223U936905
1PTO1ANL629002050
11PYO1ANL829002051
45
45
45
45
45
45
45
45
45
45
45
45
1989
1994
1995
1986
1996
1996
1998
1999
2000
1991
2003
2003
P
T
T
T
T
T
T
T
T
T
T
T
FRTLNR
TRLMO
TRLMO
COMET
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
UTILITY
UTILITY
28
28
32
28
35
35
35
35
28
28
35
1FUKZKY85KH408653
1PTO7ANE3R9012352
1PTO7ANE5S9003464
1COR32014GS033490
1PTO7ANEXT9009665
1PTO1ANL5T9010612
1PTO1ANL9W9007104
1PTO1ANL3X9017581
1PTO1ANL219001900
1PTO7ANEON9006517
1UYVS128234995601
1UYVS23533U995701
Title LICENSE #
415Y9
HS77501
HS77503
HS75829
Updated 6-14-05
9829
1310
1320
1338
1340
1350
1360
1370
1380
9835
1390
1395
Artic/storage
YABH205
HP77963
HP88144
HP62662
HQ30394
HR15919
HR16000
HR69786
HS371143
HR42138
HS70790
EXHIBIT E
to
Unit#
823051
826409
827155
827156
831358
831359
831360
837672
842167
849041
855319
855320
861128
861129
861130
861131
866993
866994
868066
871621
871622
VENDOR
Updated 6-28-05
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
DC YEAR TYPE
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
1994
1989
1995
1995
1996
1996
1996
1997
1998
1999
2000
2000
2001
2001
2001
2001
2002
2002
2002
2002
2006
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
53
53
53
53
53
53
53
53
53
53
53
53
53
53
53
53
1980
1976
1980
1999
1999
1979
1988
1988
2001
2000
2000
2000
2000
2002
2002
2002
B
CG
CG
T
T
T
T
T
T
T
T
T
T
T
T
T
MAKE
MODEL
VEHICLE
SERIAL NUMBER
TRLMO
TRLMO
UTILITY
UTILITY
TRLMO
TRLMO
UTILITY
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
UTILITY
UTILITY
48
27
28
28
48
40
28
35
40
35
35
35
48
28
28
35
40
40
48
40
48
1PTO1ANH6R9003866
1PTO71NEOK9006062
1UYVS1281SU374302
1UYVS128XSU374301
1PTO1ANH6T9010419
1PT01ANK9V9001132
1PT07ANE2T9009675
1PTO1ANL8V9006041
1PTO1ANL1W9012622
1PTO1ANL1X9017580
1PTO7ANLXY9013819
1PTO7ANL6Y9013820
1PTO1ANH529000303
1PTO7ANE719007210
1PTO7ANE919007211
1PTO7ANL319007222
1PTO1ANKX29002706
1PTO1ANK029002049
1PT01ANH729003509
1UYVS24003U937001
1UYVS24815U683601
Title
LICENSE #
97175K
6039FTA
6038FTA
1807FTB
9828FTB
0284FTB
0851FTB
6895FTB
6755FTB
0316FTC
0317FTC
4232FTC
4233FTC
4230FTC
4231FTC
4274FTC
4283FTC
4285FTC
9240FTC
Updated 6-14-5
3
146
147
1796
3202
3203
12
218
219
48-1
48-2
232
253
228
54
103
102
FORD
LN6000 N61HVJE0027
TRLMO DOLLY N92063
TRLMO DOLLY CV1271
TRLMO
32
1PTO7ANMMX9013261
4442MH
TRLMO
32
1PTO7ANMMX9013262
4441MH
UTIL
27
7L94247003
selling 32031TR
UTIL
32
1UYVS2474JU903203
selling 2547KQ
UTIL
32
1UYVS2472JU903202
selling 2548KQ
TRLMO
28
1PT07ANE629000301
9522-NS
TRLMO
32
APT01ANL5Y9015218
3907MZ
TRLMO
32
1PT01ANL7Y9015219
3906MZ
TRLMO
48
1PT01ANH7Y9016219
3909MZ
TRLMO
48
1PT01ANH5Y9016218
3908MZ
UTILITY
32
1UYVS23253U936901
0699PJ
UTILITY
53
1UYVS25303U936701
0166PM
UTILITY
28
1UYVS12833U938601
0746PJ
EXHIBIT E
to
Unit#
NEW
NEW
760824
760825
VENDOR
DC YEAR TYPE
Updated 6-8-05
Ryd-Mt
65 1994
T
Ryd-Mt
65 1994
T
Ryd-Mt
65 1994
T
Ryd-Mt
65 1996
T
Ryd-Mt
65 1996
T
Ryd-Mt
65 1997
T
Ryd-Mt
65 1998
T
Ryd-Mt
65 1998
T
Ryd-Mt
65 1998
T
Ryd-Mt
65 1999
T
Ryd-Mt
65 1999
T
Ryd-Mt
65 2001
T
Ryd-Mt
65 2003
T
Ryd-Mt
65 2005
T
Ryd-Mt
65 2005
T
Ryd-Mt
65 2000
T
Ryd-Mt
65 2000
T
12324
2
826659
823046
823048
823049
826350
837351
837352
837353
837354
841951
842801
849243
849244
846127
871627
883917
883918
891616
891622
891623
Updated 2-2-05
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
631374
631375
631477
711409
735255
735368
737374
737375
737377
753776
753777
995711
71
71
71
71
71
71
71
71
71
71
71
71
71
71
71
71
71
71
71
71
71
71
1972
1984
1983
1985
1994
1988
1995
1996
1996
1996
1996
1999
1999
2000
2000
1999
2002
1997
1994
2005
2005
2005
CG
CG
CG
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
MAKE
MODEL
VEHICLE
SERIAL NUMBER
TRLMO
TRLMO
TRLMO
TRLMO
UTIL
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TMBL
UTIL
UTIL
UTIL
TRLMO
TRLMO
28
28
28
28
28
35
28
28
28
28
28
28
35
28
35
28
28
1PTO7ANE9R9013893
1PTO7ANE5R9013891
1PTO7ANE0R9013894
1PTO7ANE1T9002362
1UYVS12BOTU833806
1PTO1ANLXV9006042
1PTO7ANE6W9007089
1PTO7ANE8W9007090
1PTO7ANE8W9007093
1PTO7ANM5X9013278
1PTO7ANM5X9013279
1PT07ANE919007323
1UYVS23553U900801
1UYVS12875U683308
1UYVS23545U683809
1PTO7ANE3Y9011569
1PTO7ANEXY9011570
COMET
GR TDNE
AZTE
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
UTILITY
TRLMO
TRLMO
UTILITY
UTILITY
UTILITY
Dolly
Dolly
Dolly
40
28
48
42
48
35
28
28
28
48
48
48
48
35
53
50
35
48
48
4F00816DJ017404
1AZAA1D15D1013470
1UYVS2405FC405706
1UYVS1292RU194605
1PTO1ANHOJ9000739
1PTO11NJ2S9015098
1PTO1ANH9V9006898
1PTO1ANL3V9007047
1PTO1ANE3V9007064
1PTO1ANE1V9007063
1PTO7ANE4W9007091
1PTO1ANH8X9002375
1PTO1ANH1Y9003739
1PTO1ANH8Y9003740
1PTO1ANHXX9017492
1UYVS23573U938501
1PT01ACHXS9007900
1PTO1ANH9W9003629
1UYVS235154632803
1UYVS24845U683401
1UYVS24865U683402
Title
LICENSE #
4078AT
4079AT
4077AT
7448AT
05893AT
05648AT
0658AT
06459AT
04543AT
06803AT
06804AT
33455T
33772T
08158AT
08159AT
47210366
83087E
4F73454
85365E
52073K
32624L
82810K
32799L
34001L
45524L
64907L
256YPL
257YPL
521YKM
91874M
9077CK
9023CB
EXHIBIT E
to
Unit#
3
5
6
7
8
9
10
11
12
13
14
15
17
16
21
20
18
19
22
23
24
25
26
NEW
NEW
VENDOR
DC YEAR TYPE
Updated 4-1-05
72
1985
CG
72
1987
CG
72
1985
CG
72
1988
CG
72
1985
T
72
1994
T
72
1994
T
72
1994
T
72
1994
T
72
1994
T
72
1995
T
72
1995
T
72
1997
T
72
1997
T
72
1998
T
72
1998
T
72
1999
T
72
1999
T
72
2000
T
72
2000
T
72
2000
T
72
2000
T
72
2001
T
72
2001
T
72
2002
T
72
2003
T
72
2003
T
72
2005
T
72
2005
T
MAKE
MODEL
VEHICLE
SERIAL NUMBER
REGENT-1
TOW-2
TOW-5
FRUE-6
UTILITY
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
UTILITY
UTILITY
UTILITY
UTILITY
DOLLY
DOLLY
DOLLY
DOLLY
27 DRY
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
28
2R9E00311F1015108
TOW398712-131676
1DF660003F203646
TOW121866-131648
1UYVS1280F213206
1PTO7ANE3R9013888
1PTO7ANE5R9013889
1PTO7ANE7R9013887
1PTO7ANE8S9003460
1PTO7ANE8S9003461
1PTO7ANE8T9002360
1PTO7ANEXT9002361
1PTO7ANE9V9005612
1PTO7ANE0V9005613
1PTO7ANE7W9007098
1PTO7ANE9W9007099
1PTO7ANM5X9005972
1PTO7ANM5X9005973
1PTO7ANE7Y9011574
1PTO7ANE9Y9011575
1PTO7ANEXY9003730
1PTO7ANEXY9006093
1PTO7AWE519007318
1PTO7AW3719007319
1PTO7ANE129003168
1UYVS12873U938603
1UYVS12853U938602
1UYVS23555U683804
1UYVS23595U683806
Title
LICENSE #
905260
P17846
851683
425328
829034
825035
829033
833919
833921
897635
897636
985442
985443
W28593
W28594
ABN84529
ABN84530
P69032
P69033
LPP39318
LPP39319
R31458
R31456
R59533
541115
541114
EXHIBIT E
to
Unit#
835737
839768
839769
846695
846696
858300
858301
858302
858303
858304
861047
861048
861049
861050
867551
891600
891601
891602
891603
891604
891605
891606
891607
891608
891609
891610
891611
VENDOR
6/13/2005
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
DC YEAR TYPE
MAKE
MODEL
VEHICLE
SERIAL NUMBER
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
75
1997
1998
1998
2000
2000
2001
2001
2001
2001
2002
2002
2002
2002
2002
2002
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
2005
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
28
28
28
28
28
28
28
28
28
28
35
28
28
28
35
28
28
28
28
28
28
35
35
35
35
35
35
1PT07ANE2V9005614
1PTO7ANE3W9007096
1PTO7ANE5W9007097
1PTO7ANMMX9013280
1PTO7ANMMX9013281
1PTO7ANE519004550
1PTO7ANE719004551
1PTO7ANE919004552
1PTO7ANE019004553
1PTO7ANE219004554
1PTO7ANL529000872
1PTO7ANE729000873
1PTO7ANE929000874
1PTO7ANEO29000875
1PT1ANL829003510
1UYVS12835U632601
1UYVS12855U632602
1UYVS12875U632603
1UYVS12895U632604
1UYVS12805U632605
1UYVS12825U632606
1UYVS235X5U683801
1UYVS23515U683802
1UYVS23535U683803
1UYVS23525U683808
1UYVS23505U683807
1UYVS23575U683805
79
79
79
79
2005
2005
95
95
T
T
T
T
UTILITY
UTILITY
UTILITY
UTILITY
28
28
28
28
1UYVS12845U683301
1UYVS12865U683302
1UYVS128XSU507901
1UVYS1281SU507902
256
256
256
256
256
256
256
256
256
256
256
256
256
256
256
256
256
256
256
1996
1996
1997
1998
1998
2002
2002
2002
2003
2003
2005
2005
2005
2005
2005
2005
2005
2005
2005
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
TRLMO
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
UTILITY
35
35
48
35
48
28
28
28
48
48
1PTO1ANLOT9010159
1PTO1ANL9T9010158
1PTO1ANH5W9002994
1PTO1ANLOW9007105
1PTO1ANH4W9002244
1PTO1ANH129003506
1PTO1ANH329003507
1PTO1ANH529003508
1UYVS24863U050802
1UYVS24843U050801
35
1UYVS23545U683812
Title LICENSE #
Z01437
Z46676
Z46677
Z71311
70691Y
70692Y
70693Y
70694Y
70695Y
Z99684
Z99685
Z99686
Z99687
99757Y
W21592
W21593
W21842
W21841
W21840
W21843
W21736
W21734
W21735
W21858
W21857
W54202
Updated
1-1-05
NEW
NEW
47745
47746
5331226
5331227
5331694
5331774
5331833
866987
866988
866989
875405
875406
891614
891615
891616
891617
891618
891619
891620
891621
NEW
6/8/2005
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
Penske-Mt
NEW
Penske-Mt
256
2005
UTILITY
35
1UYV523525U683811
EXHIBIT F
to
Fixtures
Intentionally Omitted
EXHIBIT G
to
List of Pledged Collateral, Securities, and Other Investment Property
Refer to Schedule 3.15 of the Credit Agreement except for the stock of Core-Mark Holding Company, Inc. [See Attached]
All direct and indirect subsidiaries of Core-Mark Holding Company, Inc. (other than the companies listed below) are considered
Pledged Collateral.
C/M Products, Inc.
ASI Office Automation, Inc.
General Acceptance Corporation
Marquise Ventures Company, Inc.
EXHIBIT H
to
State and Provincial Offices in Which UCC and PPSA Financing Statements Have Been Filed
Refer to the states relating to active companies listed on Schedule 3.15 to the Credit Agreement. [See Attached]

Company
Type of
Entity
Core-Mark Holding
Company, Inc.
Corporation
Core-Mark Holdings
I, Inc.
Corporation
Core-Mark Holdings
II, Inc.
Corporation
Core-Mark Holdings
III, Inc.
Corporation
Core-Mark
International, Inc. Corporation
Core-Mark
Midcontinent,
Inc.
Corporation
Minter-Weisman
Company
Corporation
Head Distributing
Company
Corporation
Core-Mark
Interrelated
Companies, Inc.
C/M Products, Inc.
ASI Office
Automation, Inc.
General Acceptance
Corporation
Marquise Ventures
Company, Inc.
Organization
Number
Federal
assigned by
Employer Authorized Par Value of Authorized Par Value of Issued as of Issued as of
Active/
State of
State of
Identification Common
Common
Preferred
Preferred
August 23,
Dec. 31,
Inactive Incorporation Incorporation
Number
Stock
Stock
Stock
Stock
2004
2004
Active
Delaware
3845035
20-1489747
50,000,000
$0.01
n/a
n/a
9,81 5,375
9,815,375
Active
Delaware
3843173
20-1489777
1,000
$0.01
n/a
n/a
1,000
1,000
Active
Delaware
3843174
20-1489798
1,000
$0.01
n/a
n/a
1,000
1,000
Active
Delaware
3843172
20-1489834
1,000
$0.01
n/a
n/a
1,000
1,000
Active
Delaware
2484265
91-1295550
100
$0.0001
n/a
n/a
100
100
Active
Arkansas
CP00013272
74-2354997
2,000
$1.00
n/a
n/a
2,000
2,000
Active
Minnesota
1P-571
41-0809931
n/a
n/a
1,000
1,000
Active
100,000
$1.00
10,000,000
shares
(1,000,000
class A
$0.01 (for
Voting)
(9,000,000 bothing voting
class B
& non-voting
non-voting)
class)
n/a
n/a
$1.00
$1.00
n/a
n/a
n/a
n/a
1,00 0,000
100
1,000,000
100
300,000
$0.05
150,000
no par value
300,000
300,000
95-3895935
400,000
none
n/a
n/a
2 00
200
95-3983880
75,000
none
n/a
n/a
75,000
75, 000
Georgia
7006574
58-1095258
Corporation Active
Corporation Inactive
California
California
734331
N/A
94-2317385
94-3104739
1,000,000
1,000
California
N/A
95-3256944
California
N/A
California
N/A
773,136
773,136
(90,000 class (90,000 class
A & 683,136 A & 683,136
class B)
class B)
EXHIBIT I
(See Section 4.4 and 4.8 of Security Agreement)
AMENDMENT
This Amendment, dated
, _____ is delivered pursuant to Section 4.4 of the Security Agreement referred to below.
All defined terms herein shall have the meanings ascribed thereto or incorporated by reference in the Security Agreement. The
undersigned hereby certifies that the representations and warranties in Article III of the Security Agreement are and continue to be
true and correct. The undersigned further agrees that this Amendment may be attached to that certain Pledge and Security
Agreement, dated October [_____], 2005, between the undersigned, as the Grantors, and JPMorgan Chase Bank, N.A., as the
Administrative Agent, (the Security Agreement) and that the Collateral listed on Schedule I to this Amendment shall be and
become a part of the Collateral referred to in said Security Agreement and shall secure all Secured Obligations referred to in said
Security Agreement.
By:
Name:
Title:
EXHIBIT J
TO
PLEDGE & SECURITY AGREEMENT
Assigned Contracts
(See Assigned Contracts Definition)
None
SCHEDULE I TO AMENDMENT
STOCKS
Issuer
Certificate
Number(s)
Number of Shares
Percentage of
Outstanding Shares
Class of Stock
BONDS
Issuer
Number
Face Amount
Coupon Rate
Maturity
GOVERNMENT SECURITIES
Issuer
Number
Type
Face Amount
Coupon Rate
Maturity
OTHER SECURITIES OR OTHER INVESTMENT PROPERTY

(CERTIFICATED AND UNCERTIFICATED)
Issuer
Description of Collateral
Percentage Ownership Interest
[Add description of custody accounts or arrangements with securities intermediary, if applicable]

COMMERCIAL TORT CLAIMS
Description of Claim
Parties
Case Number; Name of

Court where Case was Filed
EXHIBIT 21.1
LIST OF SUBSIDIARIES OF CORE-MARK HOLDING COMPANY, INC.
Name of Subsidiary
Core-Mark Holdings I, Inc.
Core-Mark Holdings II, Inc.

Core-Mark Holdings III, Inc.1
Core-Mark International, Inc.
Core-Mark Midcontinent, Inc.
Core-Mark Interrelated Companies, Inc.
Head Distributing Company
Minter-Weisman Co.
ASI Office Automation, Inc.
1
Jurisdiction of Organization
Delaware
Delaware
Delaware
Delaware
Arkansas
California
Georgia
Minnesota
California
Core-Mark Holdings I, Inc. and Core-Mark Holdings II, Inc. each hold 50% of Core-Mark Holdings III, Inc.
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement No. 333-130065 and No. 333-145744 on Form S-8
of our report dated March 12, 2010, relating to the consolidated financial statements and financial statement schedule of
Core-Mark Holding Company, Inc., and the effectiveness of Core-Mark Holding Company, Inc.s internal control over financial
reporting dated March 12, 2010, appearing in this Annual Report on Form 10-K of Core-Mark Holding Company, Inc. for the
year ended December 31, 2009.
/s/ Deloitte & Touche LLP
San Francisco, California
March 12, 2010
EXHIBIT 31.1
CERTIFICATION
I, J. Michael Walsh, certify that:
1.
I have reviewed this annual report on Form 10-K of Core-Mark Holding Company, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4.
The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
5.
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
d)
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the
registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting;
and
The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons
performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and
report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrants internal control over financial reporting.

By: /s/ J. Michael Walsh
J. Michael Walsh
President and Chief Executive Officer
EXHIBIT 31.2
CERTIFICATION
I, Stacy Loretz-Congdon, certify that:
1.
I have reviewed this annual report on Form 10-K of Core-Mark Holding Company, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report;
4.
The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
5.
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
d)
Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the
registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting;
and
The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons
performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and
report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrants internal control over financial reporting.

Chief Financial Officer
EXHIBIT 32.1
CERTIFICATION
In connection with the annual report of Core-Mark Holding Company, Inc. (the Company) on Form 10-K for the period
ended December 31, 2009 as filed with the Securities and Exchange Commission (the Report), I, J. Michael Walsh, Chief
Executive Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350
of the U.S. Code, that to the best of my knowledge:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange
Act of 1934, and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company at the dates and for the periods indicated.
This Certification shall not be deemed filed with the Securities and Exchange Commission for purposes of Section 18 of
the Securities Exchange Act of 1934 or otherwise subject to the liability of that section.
By: /s/ J. Michael Walsh
J. Michael Walsh
President and Chief Executive Officer
EXHIBIT 32.2
CERTIFICATION
In connection with the annual report of Core-Mark Holding Company, Inc. (the Company) on Form 10-K for the period
ended December 31, 2009 as filed with the Securities and Exchange Commission (the Report), I, Stacy Loretz-Congdon, Chief
Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350
of the U.S. Code, that to the best of my knowledge:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange
Act of 1934, and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company at the dates and for the periods indicated.
This Certification shall not be deemed filed with the Securities and Exchange Commission for purposes of Section 18 of
the Securities Exchange Act of 1934 or otherwise subject to the liability of that section.
Chief Financial Officer
_____________________________________
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Transition Report Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of

Commission File Number:

CORE-MARK HOLDING COMPANY, INC.

395 Oyster Point Boulevard, Suite 415

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class

Securities registered pursuant to Section 12(g) of the Act: None

Source: Core-Mark Holding Company, Inc., 10-K, March 12, 2010

Smaller reporting company

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Source: Core-Mark Holding Company, Inc., 10-K, March 12, 2010

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ITEM 1.A. RISK FACTORS

ITEM 1.B. UNRESOLVED STAFF COMMENTS

ITEM 3. LEGAL PROCEEDINGS

ITEM 4. (REMOVED AND RESERVED)

ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS

ITEM 6. SELECTED FINANCIAL DATA

ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

ITEM 7.A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

ITEM 9.A. CONTROLS AND PROCEDURES

ITEM 9.B. OTHER INFORMATION

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

ITEM 11. EXECUTIVE COMPENSATION

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

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Source: Core-Mark Holding Company, Inc., 10-K, March 12, 2010

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Source: Core-Mark Holding Company, Inc., 10-K, March 12, 2010

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Customers, Products and Suppliers

Year Ended December 31,

Source: Core-Mark Holding Company, Inc., 10-K, March 12, 2010

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Source: Core-Mark Holding Company, Inc., 10-K, March 12, 2010

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Corporate and Available Information

Source: Core-Mark Holding Company, Inc., 10-K, March 12, 2010

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ITEM 1.A. RISK FACTORS

Source: Core-Mark Holding Company, Inc., 10-K, March 12, 2010

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Source: Core-Mark Holding Company, Inc., 10-K, March 12, 2010

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Source: Core-Mark Holding Company, Inc., 10-K, March 12, 2010