Exhibit 10.9  

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Execution Version

KINRO, INC.
LIPPERT COMPONENTS, INC.

Guaranteed By:

DREW INDUSTRIES INCORPORATED

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NOTE PURCHASE AND PRIVATE SHELF AGREEMENT

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FEBRUARY 11, 2005

$60,000,000 PRIVATE SHELF FACILITY

 

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TABLE OF CONTENTS  

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1. AUTHORIZATION OF ISSUE OF SHELF NOTES 1   2. PURCHASE AND SALE OF SHELF NOTES
2     2A. Facility 2     2B. Issuance Period 2     2C. Request for Purchase 3  
  2D. Rate Quotes 3     2E. Acceptance 3     2F. Market Disruption 4     2G.
Facility Closings 4     2H. Fees 5   3. CONDITIONS OF CLOSING 6     3A.
Conditions to Effectiveness 6     3B. Conditions to Closing Each Purchase of
Shelf Notes 9   4. PREPAYMENTS 10     4A. Required Prepayments of Shelf Notes 11
    4B. Optional Prepayment With Yield-Maintenance Amount 11     4C. Prepayment
with Yield-Maintenance Amount Pursuant to Intercreditor Agreement 11     4D.
Notice of Optional Prepayment 11     4E. Application of Prepayments 11     4F.
No Acquisition of Shelf Notes 11   5. AFFIRMATIVE COVENANTS 12     5A. Financial
Statements; Notice of Defaults 12     5B. Information Required by Rule 144A 14  
  5C. Other Information 14     5D. [Intentionally Omitted] 14     5E. Compliance
with Law 14     5F. Insurance and Maintenance of Properties 15     5G.
[Intentionally Omitted] 15     5H. Payment of Taxes and Claims 15     5I.
Corporate Existence, Etc 15  

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TABLE OF CONTENTS  

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  5J. Books and Records; Inspection 15     5K. Subsidiary Guaranty; Security
Documents 16     5L. Further Assurances 17     5M. Succession Plan 17   6.
NEGATIVE COVENANTS 17     6A. Transactions with Affiliates 17     6B. Merger,
Consolidation, Etc 18     6C. Liens 18     6D. Limitations on Indebtedness 19  
  6E. Restrictive Agreements 20     6F. Limitation on Subsidiary Indebtedness
and Issuance of Preferred Stock 20     6G. Limitation on Restricted Payments 21
    6H. Sale of Assets 21     6I. Limitation on Priority Debt 22     6J. Minimum
Consolidated Tangible Net Worth 22     6K. Leverage Ratio 22     6L. Minimum
Debt Service Ratio 22     6M. Limitation on Investments 22     6N. Hedging
Agreements 22     6O. Amendment of Certain Documents 23     6P. Terrorism
Sanctions Regulations 23   7. EVENTS OF DEFAULT 23     7A. Acceleration 23    
7B. Rescission of Acceleration 27     7C. Notice of Acceleration or Rescission
27     7D. Other Remedies 27   8. REPRESENTATIONS, COVENANTS AND WARRANTIES 27  
  8A. Organization 28     8B. Financial Statements 28     8C. Actions Pending 28
    8D. Outstanding Indebtedness 28  

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TABLE OF CONTENTS  

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  8E. Title to Properties 28     8F. Taxes 29     8G. Conflicting Agreements and
Other Matters 29     8H. Offering of Shelf Notes 30     8I. Use of Proceeds 30  
  8J. ERISA 30     8K. Governmental Consent 31     8L. Compliance With Laws 31  
  8M. Disclosure 31     8N. Hostile Tender Offers 31     8O. Investment Company
Act 31     8P. Public Utility Holding Company Act 31     8Q. Foreign Assets
Control Regulations, etc 31   9. REPRESENTATIONS OF THE PURCHASERS 32     9A.
Nature of Purchase 32     9B. Source of Funds 32   10. DEFINITIONS; ACCOUNTING
MATTERS 34     10A. Yield-Maintenance Terms 34     10B. Other Terms 35   11.
 PARENT GUARANTY 54   12.  CONFIDENTIALITY 54   13.  MISCELLANEOUS 55     13A.
Shelf Note Payments 55     13B. Expenses 55     13C. Consent to Amendments 56  
  13D. Form, Registration, Transfer and Exchange of Shelf Notes; Lost Shelf
Notes 57     13E. Persons Deemed Owners; Participations 57     13F. Survival of
Representations and Warranties; Entire Agreement 58     13G. Successors and
Assigns 58     13H. Independence of Covenants 58     13I. Notices 58  

 

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  13J. Payments Due on Non-Business Days 59     13K. Severability 59     13L.
Descriptive Headings 59     13M. Satisfaction Requirement 59     13N. Governing
Law 59     13O. Severalty of Obligations 59     13P. Counterparts 59     13Q.
Binding Agreement 60     13R. Jury Waiver 60     13S. Personal Jurisdiction 61  

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Schedules and Exhibits

 

    Information Schedule       Schedule 3A(1) — Initial Subsidiary Guarantors
and Pledgors Schedule 6A — Transactions with Affiliates Schedule 6C — Existing
Liens Schedule 6D — Existing Indebtedness Schedule 6F — Subsidiary Indebtedness
Schedule 8B — Material Changes Schedule 8C — Litigation Schedule 8G — Debt
Agreements Which Restrict the Incurrence of Indebtedness       Exhibit A — Form
of Shelf Note       Exhibit B — Form of Request for Purchase       Exhibit C —
Form of Confirmation of Acceptance       Exhibit D-1 — Form of Parent Guaranty
Exhibit D-2 — Form of Subsidiary Guaranty       Exhibit E — Form of
Intercreditor Agreement       Exhibit F — Form of Subordination Agreement      
Exhibit G — Form of Pledge Agreement       Exhibit H-1 — Form of Closing Opinion
for Counsel to Credit Parties Exhibit H-2 — Form of Closing Opinion for Special
Ohio Counsel to Kinro Exhibit H-3 — Form of Shelf Opinion for Counsel to Credit
Parties Exhibit H-4 — Form of Shelf Opinion for Special Ohio Counsel to Kinro  
    Exhibit I — Form of Officer’s Certificate       Exhibit J — Form of
Secretary’s Certificate for the Credit Parties       Exhibit K — Form of Trust
Agreement

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KINRO, INC.
LIPPERT COMPONENTS, INC.
200 Mamaroneck Avenue
White Plains, New York 10601

Guaranteed By:
DREW INDUSTRIES INCORPORATED

As of February 11, 2005

Prudential Investment Management, Inc.
(herein called “Prudential”)

Each Prudential Affiliate (as hereinafter defined)
which becomes bound by certain provisions of
this Agreement as hereinafter provided (the “Purchasers”)

c/o Prudential Capital Group
1114 Avenue of the Americas, 30th Floor
New York, NY 10036

Ladies and Gentlemen:

                                KINRO, INC., an Ohio corporation (“Kinro”),
LIPPERT COMPONENTS, INC., a Delaware corporation (“Lippert Components”, and
together with Kinro, collectively, the “Co-Issuers”), and DREW INDUSTRIES
INCORPORATED, a Delaware corporation (the “Parent”, and, together with the
Co-Issuers, the “Obligors”), each hereby agrees with you as follows:

                1.              AUTHORIZATION OF ISSUE OF SHELF NOTES.

                  Each of the Co-Issuers will, jointly and severally with each
other Co-Issuer, authorize the issue of its senior promissory notes (the “Shelf
Notes”) in the aggregate principal amount of up to $60,000,000, to be dated the
date of issue thereof, to mature, in the case of each Shelf Note so issued, no
more than 7 years after the date of original issuance thereof, to have an
average life, in the case of each Shelf Note so issued, of no more than 7 years
after the date of original issuance thereof, to bear interest on the unpaid
balance thereof from the date thereof at the rate per annum, and to have such
other particular terms, as shall be set forth, in the case of each Shelf Note so
issued, in the Confirmation of Acceptance with respect to such Shelf Note
delivered pursuant to paragraph 2E, and to be substantially in the form of
Exhibit A attached hereto. The terms “Shelf Note” and “Shelf Notes” as used
herein shall include each Shelf Note delivered pursuant to any provision of this
Agreement and each Shelf Note delivered in substitution or exchange for any such
Shelf Note pursuant to any such provision. Shelf Notes which have (i) the same
final

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maturity, (ii) the same principal prepayment dates, (iii) the same principal
prepayment amounts (as a percentage of the original principal amount of each
Shelf Note), (iv) the same interest rate, (v) the same interest payment periods
and (vi) the same date of issuance (which, in the case of a Shelf Note issued in
exchange for another Shelf Note, shall be deemed for these purposes the date on
which such Shelf Note’s ultimate predecessor Shelf Note was issued), are herein
called a “Series” of Shelf Notes.

                2.              PURCHASE AND SALE OF SHELF NOTES.

                                2A.          Facility.  Prudential is willing to
consider, in its sole discretion and within limits which may be authorized for
purchase by Prudential Affiliates from time to time, the purchase of Shelf Notes
by Prudential Affiliates pursuant to this Agreement. The willingness of
Prudential to consider such purchase of Shelf Notes is herein called the
“Facility”. At any time, (i) $60,000,000, minus (ii) the aggregate principal
amount of Shelf Notes purchased and sold pursuant to this Agreement prior to
such time, minus (iii) the aggregate principal amount of Accepted Notes (as
hereinafter defined) which have not yet been purchased and sold hereunder prior
to such time, is herein called the “Available Facility Amount” at such time.
NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF SHELF
NOTES BY PRUDENTIAL AFFILIATES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS
UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY PRUDENTIAL AFFILIATE SHALL BE
OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE SHELF NOTES, OR TO QUOTE RATES,
SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OF SHELF NOTES, AND
THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR ANY
PRUDENTIAL AFFILIATE.

                                2B.          Issuance Period. Shelf Notes may be
issued and sold pursuant to this Agreement until the earlier of (i) the third
anniversary of the date of this Agreement (or if such anniversary is not a
Business Day, the Business Day next preceding such anniversary) and (ii) the
thirtieth day after Prudential shall have given to the Co-Issuers, or the
Co-Issuers shall have given to Prudential, written notice stating that it elects
to terminate the issuance and sale of Shelf Notes pursuant to this Agreement (or
if such thirtieth day is not a Business Day, the Business Day next preceding
such thirtieth day). The period during which Shelf Notes may be issued and sold
pursuant to this Agreement is herein called the “Issuance Period”.

                                2C.          Request for Purchase.  The
Co-Issuers may from time to time during the Issuance Period make requests for
purchases of Shelf Notes (each such request being herein called a “Request for
Purchase”). Each Request for Purchase shall be made to Prudential by facsimile
or overnight delivery service, and shall (i) specify the aggregate principal
amount of Shelf Notes covered thereby, which shall not be less than $5,000,000
and not be greater than the Available Facility Amount at the time such Request
for Purchase is made, (ii) specify the principal amounts, final maturities
(which shall be no more than 7 years from the date of issuance), principal
prepayment dates and amounts (which shall result in an average life of no

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more than 7 years) and interest payment periods (quarterly or semi-annually in
arrears) of the Shelf Notes covered thereby (provided, however, that no more
than $20,000,000 in aggregate principal amount of Shelf Notes outstanding from
time to time may be due in any calendar year), (iii) specify the use of proceeds
of such Shelf Notes, (iv) specify the proposed day for the closing of the
purchase and sale of such Shelf Notes, which shall be a Business Day during the
Issuance Period not less than 10 days and not more than 30 days after the making
of such Request for Purchase, (v) specify the number of the account and the name
and address of the depository institution to which the purchase prices of such
Shelf Notes are to be transferred on the Closing Day for such purchase and sale,
(vi) certify that the representations and warranties contained in paragraph 8
are true on and as of the date of such Request for Purchase, subject to such
changes and exceptions thereto, if any, as may be indicated in the Request for
Purchase and are reasonably acceptable to Prudential, (vii) certify that there
exists on the date of such Request for Purchase no Event of Default or Default,
(viii) specify the Designated Spread for such Shelf Notes and (ix) be
substantially in the form of Exhibit B attached hereto. Each Request for
Purchase shall be in writing and shall be deemed made when received by
Prudential.

                                2D.          Rate Quotes.  Not later than five
Business Days after the Co-Issuers shall have given Prudential a Request for
Purchase pursuant to paragraph 2C, Prudential may, but shall be under no
obligation to, provide to the Co-Issuers by telephone or facsimile, in each case
between 9:30 A.M. and 1:30 P.M. New York City local time (or such later time as
Prudential may elect) interest rate quotes for the several principal amounts,
maturities, principal prepayment schedules, Designated Spreads and interest
payment periods of Shelf Notes specified in such Request for Purchase. Each
quote shall represent the interest rate per annum payable on the outstanding
principal balance of such Shelf Notes, until such balance shall have become due
and payable, at which Prudential or a Prudential Affiliate would be willing to
purchase such Shelf Notes at 100% of the principal amount thereof.

                                2E.          Acceptance.  Within 30 minutes
after Prudential shall have provided any interest rate quotes pursuant to
paragraph 2D or such shorter period as Prudential may specify to the Co-Issuers
(such period herein called the “Acceptance Window”), the Co-Issuers may, subject
to paragraph 2F, elect to accept such interest rate quotes as to not less than
$5,000,000 aggregate principal amount of the Shelf Notes specified in the
related Request for Purchase. Such election shall be made by an Authorized
Officer of each of the Co-Issuers notifying Prudential by telephone or facsimile
within the Acceptance Window that each of the Co-Issuers elects to accept such
interest rate quotes, specifying the Shelf Notes (each such Shelf Note being
herein called an “Accepted Note”) as to which such acceptance (herein called an
“Acceptance”) relates. The day the Co-Issuers notify Prudential of an Acceptance
with respect to any Accepted Notes is herein called the “Acceptance Day” for
such Accepted Notes. Any interest rate quotes as to which Prudential does not
receive an Acceptance within the Acceptance Window shall expire, and no purchase
or sale of Shelf Notes hereunder shall be made based on such expired interest
rate quotes. Subject to paragraphs 2B and 2F and the other terms and conditions
hereof, the Co-Issuers agree jointly and severally to sell to a Prudential
Affiliate, and Prudential agrees to cause the purchase by a Prudential Affiliate
of, the Accepted Notes at 100% of the principal amount of such Accepted Notes.
As soon as practicable following the Acceptance Day, the Co-Issuers and each
Prudential Affiliate which is to purchase any such Accepted Notes will execute

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a confirmation of such Acceptance substantially in the form of Exhibit C
attached hereto (herein called a “Confirmation of Acceptance”). If the
Co-Issuers should fail to execute and return to Prudential within three Business
Days following receipt thereof a Confirmation of Acceptance with respect to any
Accepted Notes, Prudential or any Prudential Affiliate may at its election at
any time prior to its receipt thereof cancel the closing with respect to such
Accepted Notes by so notifying the Co-Issuers in writing.

                                2F.           Market Disruption.
 Notwithstanding the provisions of paragraph 2E, if Prudential shall have
provided interest rate quotes pursuant to paragraph 2D and thereafter prior to
the time an Acceptance with respect to such quotes shall have been notified to
Prudential in accordance with paragraph 2E the domestic market for U.S. Treasury
securities or other financial instruments shall have closed or there shall have
occurred a general suspension, material limitation, or significant disruption of
trading in securities generally on the New York Stock Exchange or in the
domestic market for U.S. Treasury securities or other financial instruments,
then such interest rate quotes shall expire, and no purchase or sale of Shelf
Notes hereunder shall be made based on such expired interest rate quotes. If the
Co-Issuers thereafter notify Prudential of the Acceptance of any such interest
rate quotes, such Acceptance shall be ineffective for all purposes of this
Agreement, and Prudential shall promptly notify the Co-Issuers that the
provisions of this paragraph 2F are applicable with respect to such Acceptance.

                                2G.          Facility Closings.  Not later than
11:30 A.M. (New York City local time) on the Closing Day for any Accepted Notes,
the Co-Issuers will deliver to each Purchaser listed in the Confirmation of
Acceptance relating thereto at the offices of the Prudential Capital Group, 1114
Avenue of the Americas, 30th Floor, New York, NY 10036 (or such other address as
Prudential may specify in writing), the Accepted Notes to be purchased by such
Purchaser in the form of one or more Shelf Notes in authorized denominations as
such Purchaser may request for each Series of Accepted Notes to be purchased on
such Closing Day, dated the Closing Day and registered in such Purchaser’s name
(or in the name of its nominee), against payment of the purchase price thereof
by transfer of immediately available funds for credit to the Co-Issuers’ account
specified in the Request for Purchase of such Shelf Notes. If the Co-Issuers
fail to tender to any Purchaser the Accepted Notes to be purchased by such
Purchaser on the scheduled Closing Day for such Accepted Notes as provided above
in this paragraph 2G, or any of the conditions specified in paragraph 3 shall
not have been fulfilled by the time required on such scheduled Closing Day, the
Co-Issuers shall, prior to 1:00 P.M. New York City local time, on such scheduled
Closing Day notify Prudential (which notification shall be deemed received by
each Purchaser) in writing whether (i) such closing is to be rescheduled (such
rescheduled date to be a Business Day during the Issuance Period not less than
one Business Day and not more than 10 Business Days after such scheduled Closing
Day (the “Rescheduled Closing Day”)) and certify to Prudential (which
certification shall be for the benefit of each Purchaser) that the Co-Issuers
reasonably believe that they will be able to comply with the conditions set
forth in paragraph 3 on such Rescheduled Closing Day and that the Co-Issuers
will pay the Delayed Delivery Fee in accordance with paragraph 2H(2) or (ii)
such closing is to be canceled and that the Co-Issuers will pay the Cancellation
Fee as provided in paragraph 2H(3). In the event that the Co-Issuers shall fail
to give such notice referred to in the preceding sentence, Prudential (on behalf
of each Purchaser) may at its election, at any time after 1:00 P.M., New York
City local time, on such

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scheduled Closing Day, notify the Co-Issuers in writing that such closing is to
be canceled and the Co-Issuers are obligated to pay the Cancellation Fee as
provided in paragraph 2H(3). Notwithstanding anything to the contrary appearing
in this Agreement, the Co-Issuers may elect to reschedule a closing with respect
to any given Accepted Notes on not more than one (1) occasion, unless Prudential
shall have otherwise consented in writing.

                                2H.          Fees.

 

                                  2H(1)            Issuance Fee.  The Co-Issuers
will pay to each Purchaser in immediately available funds a fee (herein called
the “Issuance Fee”) on each Closing Day in an amount equal to 0.10% of the
aggregate principal amount of Shelf Notes sold to such Purchaser on such Closing
Day.                                     2H(2)            Delayed Delivery Fee.
 If the closing of the purchase and sale of any Accepted Note is delayed for any
reason beyond the original Closing Day for such Accepted Note, the Co-Issuers
will pay to the Purchaser of such Accepted Note (a) on the Cancellation Date or
actual closing date of such purchase and sale and (b) if earlier, the next
Business Day following 90 days after the Acceptance Day for such Accepted Note
and on the Business Day following the end of each 90-day period ending
thereafter, a fee (herein called the “Delayed Delivery Fee”) calculated as
follows:  

                  (BEY - MMY) X DTS/360 X PA  

  where “BEY” means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note; “MMY” means Money Market Yield, i.e., the yield per
annum on a commercial paper investment of the highest quality selected by
Prudential on the date Prudential receives notice of the delay in the closing
for such Accepted Note having a maturity date or dates the same as, or closest
to, the Rescheduled Closing Day or Rescheduled Closing Days (a new alternative
investment being selected by Prudential each time such closing is delayed);
“DTS” means Days to Settlement, i.e., the number of actual days elapsed from and
including the original Closing Day with respect to such Accepted Note (in the
case of the first such payment with respect to such Accepted Note) or from and
including the date of the next preceding payment (in the case of any subsequent
delayed delivery fee payment with respect to such Accepted Note) to but
excluding the date of such payment; and “PA” means Principal Amount, i.e., the
principal amount of the Accepted Note for which such calculation is being made.
In no case shall the Delayed Delivery Fee be less than zero. Nothing contained
herein shall obligate any Purchaser to purchase any Accepted Note on any day
other than the Closing Day for such Accepted Note, as the same may be
rescheduled from time to time in compliance with paragraph 2G.    
                                2H(3)            Cancellation Fee.  If the
Co-Issuers at any time notify Prudential in writing that they are canceling the
closing of the purchase and sale of any Accepted Note, or if Prudential or any
Prudential Affiliate notifies the Co-Issuers in writing under the circumstances
set forth in the last sentence of paragraph 2E or the

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  penultimate sentence of paragraph 2G that the closing of the purchase and sale
of such Accepted Note is to be canceled, or if the closing of the purchase and
sale of such Accepted Note is not consummated on or prior to the last day of the
Issuance Period (the date of any such notification, or the last day of the
Issuance Period, as the case may be, being herein called the “Cancellation
Date”), the Co-Issuers will pay the Purchasers in immediately available funds an
amount (the “Cancellation Fee”) calculated as follows:

 

PI X PA

 

  where “PI” means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) on the
Acceptance Day for such Accepted Note by (b) such bid price; and “PA” has the
meaning ascribed to it in paragraph 2H(2). The foregoing bid and ask prices
shall be as reported by TradeWeb LLC (or, if such data for any reason ceases to
be available through TradeWeb LLC, any publicly available source of similar
market data as is then customarily used by Prudential). Each price shall be
rounded to the second decimal place. In no case shall the Cancellation Fee be
less than zero.

 

                3.            CONDITIONS OF CLOSING.

                                3A.          Conditions to Effectiveness.
Prudential’s obligation to enter into this Agreement and to make the Facility
available to the Co-Issuers is subject to the satisfaction, on or before the
Effective Date, of the following conditions:

 

                                   3A(1)            Prudential shall have
received the following documents, each duly executed and delivered by the party
or parties thereto and in form and substance satisfactory to Prudential:  

                                  (i)              the Parent Guarantee
Agreement, dated as of the date hereof, executed by the Parent in favor of
Prudential and the holders from time to time of the Shelf Notes, in the form of
Exhibit D-1 hereto (as amended, restated, supplemented or otherwise modified
from time to time, the “Parent Guaranty”);    
                                (ii)            the Subsidiary Guarantee
Agreement, dated as of the date hereof, executed by each of the Subsidiary
Guarantors in favor of Prudential and the holders from time to time of the Shelf
Notes, in the form of Exhibit D-2 hereto (as amended, restated, supplemented or
otherwise modified from time to time, the “Subsidiary Guaranty”);    
                                (iii)            the Intercreditor Agreement,
dated as of the date hereof, by and among the Bank Lenders, JPMorgan Chase Bank,
N.A., in its capacity as administrative agent for the Bank Lenders and as
Collateral Agent, Prudential, each of the other holders from time to time of the
Shelf Notes and the Security

 

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  Trustee, in the form of Exhibit E hereto (as amended, restated, supplemented
or otherwise modified from time to time, the “Intercreditor Agreement”);    
                                (iv)           the Subordination Agreement,
dated as of the date hereof, by and among the Credit Parties, Prudential and
each of the other holders from time to time of the Shelf Notes, in the form of
Exhibit F hereto (as amended, restated, supplemented or otherwise modified from
time to time, the “Subordination Agreement”);    
                                (v)            the Pledge and Security
Agreement, dated as of the date hereof, executed by the Obligors and the
Subsidiary Guarantors (other than any Subsidiary Guarantors that are limited
liability companies or limited partnerships) in favor of the Security Trustee,
as secured party, for the benefit of the holders from time to time of Shelf
Notes, in the form of Exhibit G hereto (as amended, supplemented or otherwise
modified from time to time, the “Pledge Agreement”), and the relevant Credit
Parties shall have delivered to the Collateral Agent to be held on behalf of the
Security Trustee in accordance with the terms of the Pledge Agreement and the
Intercreditor Agreement (x) certificates representing the Capital Stock pledged
by such Credit Parties thereunder together with related undated stock powers (or
other similar instruments) endorsed in blank, (y) Form UCC-1 financing
statements in respect of all partnership interests and limited liability company
interests in which a Lien is granted thereunder, and (z) instruments of consent,
waiver, and recognition in the form of Exhibit B to the Pledge Agreement duly
executed by each Credit Party that is (A) a partnership and by each partner
therein and (B) a limited liability company and by each member thereof;    
                                (vi)           the Collateralized Trust
Agreement, dated as of the date hereof, by and between Prudential, each of the
holders of the Shelf Notes from time to time and the Security Trustee, in the
form of Exhibit K hereto (as amended, supplemented or otherwise modified from
time to time, the “Trust Agreement”);    
                                (vii)          such other certificates,
documents and agreements as Prudential may request (including those referenced
in paragraph 3B); and  

                                  3A(2)            Opinions of Counsel.
 Prudential shall have received:  

                                  (i)              from Bingham McCutchen LLP, a
favorable opinion satisfactory to Prudential as to such matters incident to the
matters herein contemplated as it may reasonably request.    
                                (ii)            from (a) Phillips Nizer LLP,
special counsel to the Credit Parties and (b) Squire, Sanders & Dempsey LLP,
special Ohio counsel to Kinro, favorable opinions satisfactory to Prudential and
substantially in the forms of Exhibit H-1 and Exhibit H-2, respectively,
attached hereto. The Obligors hereby direct each such counsel to deliver such
opinion and understand and agree that

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  Prudential and each Purchaser will and is hereby authorized to rely on such
opinion.  

                                  3A(3)            Representations and
Warranties; No Default.  The representations and warranties contained in this
Agreement and each of the other Transaction Documents shall be true on and as of
the Effective Date; there shall exist on the Effective Date no Event of Default
or Default; and each of the Obligors shall have delivered to such Purchaser an
Officer’s Certificate, dated the Effective Date, to both such effects
substantially in the form attached hereto as Exhibit I.    
                                3A(4)            Constitutive and Authorization
Documents.  Prudential shall have received from each Credit Party a certificate
substantially in the form of Exhibit J attached hereto, certifying as to the
incumbency of the Persons executing the Transaction Documents and other
documents in connection therewith on behalf of such Credit Party and attaching
copies of such Credit Party’s constitutive documents, as in effect on the
Effective Date, good standing certificates, and the resolutions authorizing its
execution and delivery of the Transaction Documents to which it is a party, and
certifying as to such other matters as Prudential may reasonably request.    
                                3A(5)            [Intentionally Omitted]    
                                3A(6)            Payment of Existing
Indebtedness.   The Obligors shall have paid in full all amounts outstanding
under the Existing Note Agreement and each other document, instrument and
agreement relating thereto, and Prudential shall have received documentation or
other evidence satisfactory to it that such amounts have been paid and such
documents, instruments and agreements have been terminated.    
                                3A(7)            Perfection of Liens.
  Prudential shall have received (a) copies of each certificate representing
Capital Stock of the Co-Issuers and their Subsidiaries pledged pursuant to the
Pledge Agreement, together with copies of appropriate instruments of transfer
thereof, in each case in form and substance satisfactory to Prudential and
certified by a senior financial officer of the Parent as being true, correct and
complete copies thereof, (b) evidence satisfactory to Prudential that the
Security Trustee (or any agent or designee thereof) is in possession of such
certificates and instruments of transfer and (c) evidence satisfactory to
Prudential of the perfection of its Liens in any uncertificated Capital Stock of
the Co-Issuers and their Subsidiaries pledged pursuant to the Pledge Agreement
(it being understood that delivery to Prudential of copies of the filed UCC-1
financing statements with the appropriate secretaries’ of state, naming the
Security Trustee as secured party for the benefit of the holders from time to
time of the Shelf Notes shall constitute satisfactory evidence). The Liens of
the Security Trustee on the Capital Stock pledged by the Credit Parties pursuant
to the Pledge Agreement shall be valid and enforceable and shall not be subject
to any other Liens (other than Liens in favor of the Collateral Agent permitted
by clause (viii) of the definition of Permitted Liens).

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                                  3A(8)            UCC Searches.  Prudential
shall have received copies of Requests for Information or Copies (Form UCC-11)
or equivalent reports listing all effective financing statements which name the
Credit Parties or any of their respective Subsidiaries (under any present name
and previous name) as debtor and which are filed in the offices of their
respective jurisdictions of organization and any other states as reasonably
requested by such Purchaser, together with copies of such financing statements.
                                    3A(9)            Payment of Closing
Expenses. The Obligors shall have paid at the closing the fees, charges and
disbursements of the special counsel to Prudential and the Purchasers as
presented by such counsel in a statement on the Effective Date and for which the
Obligors are responsible in accordance with paragraph 13B.    
                                3A(10)         Proceedings.  All proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incident thereto shall be satisfactory in form and substance to
Prudential, and Prudential shall have received all such counterpart originals or
certified or other copies of such documents as it may reasonably request.

 

                                3B.          Conditions to Closing Each Purchase
of Shelf Notes. The obligation of any Purchaser to purchase and pay for any
Shelf Notes is subject to the satisfaction, on or before the Closing Day for
such Shelf Notes, of the following conditions:

 

                                  3B(1)            Shelf Notes.  Such Purchaser
shall have received the Shelf Note(s) to be purchased by such Purchaser, dated
the applicable Closing Day with respect to such Shelf Notes.    
                                3B(2)            Private Placement Number. Such
Purchaser shall have received a Private Placement Number issued by Standard &
Poor’s CUSIP Service Bureau (in connection with the Securities Valuation Office
of the National Association of Insurance Commissioners) for the Shelf Notes to
be purchased by it.                                     3B(3)           
Opinions of Counsel.  Such Purchaser shall have received from (a) Phillips Nizer
LLP, special counsel to the Credit Parties (or such other counsel designated by
the Credit Parties and acceptable to the Purchaser(s)) and (b) Squire, Sanders &
Dempsey LLP, special Ohio counsel to Kinro (or such other counsel designated by
Kinro and acceptable to the Purchaser(s)), favorable opinions satisfactory to
Prudential and substantially in the forms of Exhibit H-3 and Exhibit H-4,
respectively, attached hereto. The Obligors hereby direct each such counsel to
deliver such opinion, agree that the issuance and sale of any Shelf Notes will
constitute a reconfirmation of such direction, and understand and agree that
each Purchaser receiving such an opinion will and is hereby authorized to rely
on such opinion.                                     3B(4)           
Representations and Warranties; No Default.  The representations and warranties
contained in this Agreement and each of the other

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  Transaction Documents shall be true on and as of such Closing Day, except to
the extent of (a) changes caused by the transactions herein contemplated, and
(b) such changes or exceptions thereto as may be indicated in the Request for
Purchase and are reasonably acceptable to Prudential. In addition, there shall
exist on such Closing Day no Event of Default or Default; and each of the
Obligors shall have delivered to such Purchaser an Officer’s Certificate, dated
such Closing Day, to both such effects substantially in the form attached hereto
as Exhibit I.                                     3B(5)            Constitutive
and Authorization Documents. Such Purchaser shall have received from each Credit
Party a certificate substantially in the form of Exhibit J attached hereto,
certifying as to the incumbency of the Persons executing the Shelf Notes and
other documents, agreements and certificates in connection therewith on behalf
of such Credit Party and attaching copies of such Credit Party’s constitutive
documents, as in effect on such Closing Day, good standing certificates, and,
where applicable, the resolutions authorizing its execution of and issuance of
the Shelf Notes, and certifying as to such other matters as the Purchasers may
reasonably request.                                     3B(6)           
[Intentionally Omitted]                                       3B(7)           
Purchase Permitted by Applicable Laws. The purchase of and payment for the Shelf
Notes to be purchased by such Purchaser on the applicable Closing Day (including
the use of the proceeds of such Shelf Notes by the Co-Issuers) shall not violate
any applicable law or governmental regulation (including, without limitation,
Section 5 of the Securities Act or Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and shall not subject such Purchaser to
any tax, penalty or liability under or pursuant to any applicable law or
governmental regulation, and such Purchaser shall have received such
certificates or other evidence as it may request to establish compliance with
this condition.                                     3B(8)            Payment of
Certain Fees.  The Co-Issuers shall have paid to Prudential or any Purchaser, as
applicable, any fees due it pursuant to or in connection with this Agreement,
including any Issuance Fee due pursuant to paragraph 2H(1) and any Delayed
Delivery Fee due pursuant to paragraph 2H(2).    
                                3B(9)            Payment of Closing Expenses.
The Obligors shall have paid at the closing the fees and disbursements of the
special counsel to Prudential and the Purchasers as presented by such counsel in
a statement on the Closing Day and for which the Co-Issuers are responsible in
accordance with paragraph 13B.    
                                3B(10)         Proceedings. All proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incident thereto shall be satisfactory in form and substance to
such Purchaser, and such Purchaser shall have received all such counterpart
originals or certified or other copies of such documents as it may reasonably
request.

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                4.              PREPAYMENTS.  The Shelf Notes shall be subject
to required prepayment as and to the extent provided in paragraph 4A. The Shelf
Notes shall also be subject to prepayment under the circumstances set forth in
paragraph 4B and paragraph 4C. Any prepayment made by the Co-Issuers pursuant to
any other provision of this paragraph 4 shall not reduce or otherwise affect its
obligation to make any required prepayment as specified in paragraph 4A.

                                4A.          Required Prepayments of Shelf
Notes.  Each Series of Shelf Notes shall be subject to required prepayments, if
any, set forth in the Shelf Notes of such Series.

                                4B.          Optional Prepayment With
Yield-Maintenance Amount.  The Shelf Notes shall be subject to prepayment, in
whole at any time or from time to time in part (in integral multiples of
$100,000 and in a minimum amount of $1,000,000), at the option of the
Co-Issuers, at 100% of the principal amount so prepaid plus interest thereon to
the prepayment date and the Yield-Maintenance Amount, if any, with respect to
each such Shelf Note. Any partial prepayment of the Shelf Notes pursuant to this
paragraph 4B shall be applied in satisfaction of remaining required payments of
principal in inverse order of their scheduled due dates.

                                4C.          Prepayment with Yield-Maintenance
Amount Pursuant to Intercreditor Agreement.  The Shelf Notes prepaid with a
distribution made pursuant to the terms of the Intercreditor Agreement shall be
made at 100% of the principal amount so prepaid, plus interest thereon to the
prepayment date and the Yield-Maintenance Amount, if any, with respect to each
such Shelf Note. Any partial prepayment of the Shelf Notes pursuant to this
paragraph 4(C) shall be applied in satisfaction of remaining required payments
of principal in inverse order of their scheduled due dates.

                                4D.          Notice of Optional Prepayment.  The
Co-Issuers shall give the holder of each Shelf Note to be prepaid pursuant to
paragraph 4B irrevocable written notice of such prepayment not less than 10
Business Days prior to the prepayment date, specifying such prepayment date, the
aggregate principal amount of the Shelf Notes to be prepaid on such date, the
principal amount of the Shelf Notes held by such holder to be prepaid on that
date and that such prepayment is to be made pursuant to paragraph 4B. Notice of
prepayment having been given as aforesaid, the principal amount of the Shelf
Notes specified in such notice, together with interest thereon to the prepayment
date and together with the Yield-Maintenance Amount, if any, herein provided,
shall become due and payable on such prepayment date. The Co-Issuers shall, on
or before the day on which they give written notice of any prepayment pursuant
to paragraph 4B, give telephonic notice of the principal amount of the Shelf
Notes to be prepaid and the prepayment date to each Significant Holder which
shall have designated a recipient for such notices in the Purchaser Schedule
attached to the applicable Confirmation of Acceptance for such Significant
Holder or by notice in writing to the Co-Issuers.

                                4E.          Application of Prepayments.  In the
case of each prepayment of less than the entire unpaid principal amount of all
outstanding Shelf Notes of any Series pursuant to paragraph 4A, the amount to be
prepaid shall be applied pro rata to all outstanding Shelf Notes of such Series
according to the respective unpaid principal amounts thereof. In the case of
each prepayment of less than the entire unpaid principal amount of all
outstanding Shelf Notes

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pursuant to paragraphs 4B or 4C, the amount to be prepaid shall be applied pro
rata to all outstanding Shelf Notes of all Series according to the respective
unpaid principal amounts thereof.

                                4F.           No Acquisition of Shelf Notes.
 The Obligors shall not, and shall not permit any of their Subsidiaries or
Affiliates to, prepay or otherwise retire in whole or in part prior to their
stated final maturity (other than by prepayment pursuant to paragraphs 4A, 4B or
4C or upon acceleration of such final maturity pursuant to paragraph 7A), or
purchase or otherwise acquire, directly or indirectly, Shelf Notes held by any
holder.

                5.            AFFIRMATIVE COVENANTS.  During the Issuance Period
and so long thereafter as any Shelf Note or other amount owing under this
Agreement or any other Transaction Document shall remain unpaid, the Obligors
covenant as follows:

                                5A.          Financial Statements; Notice of
Defaults.  The Obligors will deliver to each holder of any Shelf Notes in
triplicate:

 

                                  (i)              within 45 days after the end
of each of the first three fiscal quarters of each fiscal year of the Parent,
(i) its consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such fiscal
quarter (except in the case of statements of stockholders’ equity and statements
of cash flows) and the then elapsed portion of the fiscal year, setting forth in
each case (except in the case of stockholders’ equity) 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 authorized financial officers as presenting fairly in all material
respects the financial condition and results of operations of the Parent 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, and (ii) consolidating balance sheets of the Parent and of
each Co-Issuer setting forth such information separately for the Parent and for
each Co-Issuer and related consolidating statements of operations of the Parent
and of each Co-Issuer setting forth such information separately for the Parent
and each Co-Issuer as of the end of and for such 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 sheets, as of the end of) the previous fiscal year, all of which shall
be certified by the chief financial officer of the Parent as fairly presenting
the financial condition and results of operations therein shown in accordance
with GAAP consistently applied subject to normal year-end adjustments and the
absence of footnotes;                                     (ii)            within
90 days after the end of each fiscal year of the Parent, (i) its audited
consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows 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 KPMG LLP or other independent public accountants of recognized national
standing (without a “going concern” or like qualification or exception and
without any qualification or

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  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 the Parent and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, and (ii) consolidating balance sheets setting forth such information
separately for the Parent and for each Co-Issuer as of the end of such fiscal
year and consolidating statements of operations setting forth such information
separately for the Parent and for each Co-Issuer for such fiscal year, such
consolidating balance sheet and consolidating statements of operations to be
certified by the chief financial officer of the Parent as fairly presenting the
financial condition and results of operations of the Parent and each Co-Issuer
as of the end of, and for, such fiscal period in accordance with GAAP;    
                                (iii)            concurrently with any delivery
of financial statements under clause (i) or (ii) above, an Officer’s Certificate
of the Parent (i) certifying as to whether a Default or Event of Default has
occurred and, if a Default or Event of 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 paragraphs 6C, 6D, 6F, 6H, 6I, 6J, 6K and 6L  and (iii) stating
whether any change in the application of GAAP in respect of the audited
financial statements referred to in paragraph 8B has occurred and, if any such
change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;    
                                (iv)           concurrently with any delivery of
financial statements under clause (ii) above, a certificate of the accounting
firm that reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial statements of
any Default or Event of Default (which certificate may be limited to the extent
required by accounting rules or guidelines), and promptly after receipt by the
Parent, a copy of each management letter (if prepared) of such accounting firm
(together with any response thereto prepared by the Parent);    
                                (v)            promptly (a) after the same
become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by the Parent or any Subsidiary thereof
with the Securities and Exchange Commission (or any governmental body or agency
succeeding to any or all of the functions of said Commission) or with any
national securities exchange, or distributed by the Parent to its shareholders
generally, as the case may be; and (b) copies of any documents and information
furnished to any other government agency (except if in the ordinary course of
business), including the Internal Revenue Service;    
                                (vi)           promptly, a copy of any amendment
or waiver of any provision of any agreement or instrument referred to in
paragraph 6O;                                     (vii)          not later than
the time furnished to such Person, a copy of any certificate or notice given by
any Credit Party to the Administrative Agent (as such term is defined in the
Bank Credit Agreement) and/or the Bank Lenders, or received by any

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  Credit Party from the Administrative Agent or any Bank Lender in connection
with the Bank Credit Agreement; and    
                                (viii)         promptly following any request
therefor, such other information regarding the operations, business affairs and
financial condition of each Credit Party or any Subsidiary thereof, or
compliance with the terms of this Agreement, the Shelf Notes or the other
Transactions Documents, as Prudential or any holder of Shelf Notes may
reasonably request.

 

                                5B.          Information Required by Rule 144A.
 The Parent covenants that it will, upon the request of the holder of any Shelf
Note, provide such holder, and any qualified institutional buyer designated by
such holder, such financial and other information as such holder may reasonably
determine to be necessary in order to permit compliance with the information
requirements of Rule 144A under the Securities Act in connection with the resale
of Shelf Notes, except at such times as the Parent is subject to and in
compliance with the reporting requirements of section 13 or 15(d) of the
Exchange Act. For the purpose of this paragraph 5B, the term “qualified
institutional buyer” shall have the meaning specified in Rule 144A under the
Securities Act.

                                5C.          Other Information.  Each Obligor
covenants that it will deliver to each Significant Holder:

 

                                  5C(1)            Notice of Default or Event of
Default  — promptly after a Responsible Officer becoming aware of the existence
of any Default or Event of Default or that any Person has given any notice or
taken any action with respect to a claimed default hereunder or that any Person
has given any notice or taken any action with respect to a claimed default of
the type described in paragraph 7A(iii) of this Agreement, a written notice
specifying the nature and period of existence thereof and what actions the
Obligors are taking or propose to take with respect thereto;    
                                5C(2)            ERISA — 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 Credit
Party and its Subsidiaries in an aggregate amount exceeding $250,000;    
                                5C(3)            Actions, Proceedings  —
promptly after the commencement thereof, written notice of the filing or
commencement of any action, suit or proceeding by or before any Governmental
Authority or arbitration board or tribunal against or affecting any Credit Party
or any Affiliate thereof that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect; and    
                                5C(4)            Material Adverse Effect  —
prompt written notice of any other development that results in, or could
reasonably be expected to result in, a Material Adverse Effect.

 

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Each notice delivered under this Section shall be accompanied by a statement of
a Responsible Officer or other executive officer of a Co-Issuer or the Parent
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.  

                                5D.          [Intentionally Omitted]

                                5E.          Compliance with Law.

   

                                  (i)              Without limiting paragraph
6P, the Obligors will, and will cause each of its Subsidiaries to, comply with
all laws, rules, regulations and orders of any Governmental Authority applicable
to it or its property (including, without limitation, the USA Patriot Act),
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.    
                                (ii)             Without limiting the preceding
paragraph, each Obligor will, and will cause each of its Subsidiaries to (a)
comply in all material respects with, and use reasonable best efforts to ensure
compliance in all material respects by all tenants and subtenants, if any, with,
all applicable Environmental Laws; and (b) conduct and complete (or cause to be
conducted and completed) all investigations, studies, sampling and testing, and
all remedial, removal and other actions required under Environmental Laws and in
a timely fashion comply in all material respects with all lawful orders and
directives of all governmental authorities regarding Environmental Laws except
to the extent that the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not be reasonably
expected to have a Material Adverse Effect.

 

                                5F.           Insurance and Maintenance of
Properties. Each Obligor will, and will cause each of its Subsidiaries to, (i)
keep and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted, and (ii) maintain,
with financially sound and reputable insurance companies, insurance in such
amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations, including, without limitation, insurance against fire, and public
liability insurance against such risks and in such amounts, and having such
deductible amounts as are customary, with companies in the same or similar
businesses and which is no less than may be required by law.

                                5G.          [Intentionally Omitted]

                                5H.          Payment of Taxes and Claims. Each
Obligor will, and will cause each of its Subsidiaries to, pay its obligations,
including tax liabilities, that, if not paid, could result in a Material Adverse
Effect 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 Obligor or such Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP, (c) the failure
to make payment pending such contest could not

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reasonably be expected to result in a Material Adverse Effect, and (d) the same
shall be paid or discharged or fully and adequately bonded before it might
become a Lien upon any property or asset of such Obligor or Subsidiary.

                                5I.            Corporate Existence, Etc.  Each
Obligor will, and will cause each of its Subsidiaries to, 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, licenses, permits, privileges and franchises
material to the conduct of its business; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted under
paragraph 6B.

                                5J.           Books and Records; Inspection. 
Each Obligor will, and will cause each of its Subsidiaries to, 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. Each
Obligor will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Security Trustee and any holder of Notes, 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 independent accountants, and to verify the
status of any Collateral, all at such reasonable times and as often as
reasonably requested.

                                5K.          Subsidiary Guaranty; Security
Documents.  If any Person (a) after the Effective Date becomes (whether upon its
formation, by acquisition of stock or other interests therein, or otherwise) a
Subsidiary of any Credit Party (a “New Subsidiary”), (b) that was an Inactive
Subsidiary of a Credit Party ceases to be an Inactive Subsidiary of a Credit
Party but continues to be a Subsidiary thereof, or (c) any Person becomes
directly or indirectly liable for (whether by way of becoming a co-borrower,
guarantor or otherwise) all or any part of the Indebtedness under, or in respect
of, the Bank Credit Agreement, the Obligors shall promptly (i) cause such New
Subsidiary, formerly Inactive Subsidiary or other Person to become a Subsidiary
Guarantor pursuant to an instrument in form, scope, and substance satisfactory
to the Required Holders, (ii) deliver or cause to be delivered, or assign, to
the Security Trustee (x) subject to the Lien in favor of the Security Trustee
under the Pledge Agreement, the certificates representing shares of stock or
other interests of the New Subsidiary, formerly Inactive Subsidiary or other
Person owned by an Obligor (or Subsidiary thereof), together with appropriate
instruments of transfer required under the Pledge Agreement, and (y) an
amendment to the Pledge Agreement, reflecting the foregoing in the form thereof
prescribed under the Pledge Agreement; and (iii) cause such New Subsidiary,
formerly Inactive Subsidiary or other Person to become a party to the Pledge
Agreement (and any other documents required to be executed in connection
therewith) pursuant to one or more instruments or agreements satisfactory in
form and substance to the Security Trustee, the effect of which shall be to
secure all amounts owing hereunder and in respect of the Shelf Notes by a first
priority Lien on and security interest in (which Lien and security interest may
be pari passu with a like Lien and security interest in favor of the Collateral
Agent on behalf of the Bank Lenders) the Capital Stock of such New Subsidiary,
formerly Inactive Subsidiary or other Person, provided, however, that in any
event, prior to the time that any New Subsidiary, formerly Inactive Subsidiary
or other Person receives the proceeds of, or makes, any loan or advance or other
extension of credit, from or to, or otherwise becomes the obligor or obligee in
respect of any Indebtedness of, any Obligor or Subsidiary thereof, the

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Obligors shall (A) cause to be taken, in respect of any such obligor, the
actions referred to in the preceding clauses (i), (ii), and (iii), and (B) in
the case of any such obligee, cause such obligee to become a party to the
Subordination Agreement pursuant to one or more instruments or agreements
satisfactory in form and substance to the Required Holders. Notwithstanding the
foregoing, LCC shall not be required to become a Subsidiary Guarantor and not
more than sixty percent (60%) of its stock shall be required to be pledged to
the Security Trustee as Collateral so long as (i) (x) LCC shall not be a
guarantor of any of the Indebtedness owing in respect of the Bank Credit
Agreement or of any other obligation of another Credit Party and (y) not more
than sixty percent (60%) of its Capital Stock shall have been pledged as
collateral for any of the Indebtedness owing in respect of the Bank Credit
Agreement or any other obligation of any other Credit Party, and (ii) Treas.
Reg. Sec. 1.956-2(c) would require inclusion of the earnings and profits of LCC
in the earnings of Lippert Components for United States income tax purposes if
LCC were a Subsidiary Guarantor or if a percentage equal to or greater than
66-2/3 percent (66-2/3%) of its outstanding Capital Stock were pledged as
collateral for any obligation of the Obligors.

                                5L.          Further Assurances.  Each Obligor
will, and will cause its Subsidiaries to, execute any and all further documents,
financing statements, agreements and instruments, and take all further action
(including, without limitation, filing Uniform Commercial Code and other
financing statements and the establishment of and deposit of Collateral into
custody accounts) that may be required under applicable law, or that the
Required Holders or the Security Trustee may request, in order to effectuate the
transactions contemplated by the Transaction Documents and in order to grant,
preserve, protect and perfect the validity and first priority of the security
interests created or intended to be created by the Pledge Agreement, it being
understood that it is the intent of the parties that the Indebtedness owing
hereunder and under the Shelf Notes shall be secured by, among other things, all
the interests of each Obligor in each Subsidiary or Affiliate and of each
Subsidiary Guarantor in each Subsidiary or Affiliate, including any such
interests acquired subsequent to the Effective Date. Such security interests and
Liens will be created under the Pledge Agreement and other security agreements,
and other instruments and documents in form and substance satisfactory to the
Required Holders, and the Obligors shall deliver or cause to be delivered to the
holders of the Shelf Notes all such instruments and documents (including legal
opinions in substantially the forms of Exhibit H-1 and Exhibit H-2,
respectively, and lien searches) as the Required Holders shall reasonably
request to evidence compliance with this paragraph 5L. The Obligors agree to
provide such evidence as the Required Holders shall reasonably request as to the
perfection and priority status of each such security interest and Lien (which
Lien and security interest may be coordinate with a like Lien in favor of the
Collateral Agent for the benefit of the Bank Lenders).

                                5M.         Succession Plan.  The Parent shall
at all times have and keep in effect a succession plan for its principal
officers which has been approved by its board of directors (the “Succession
Plan”) and shall furnish to each Significant Holder upon request from time to
time a copy of the same, provided that such plan shall be kept confidential by
each such Significant Holder.

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                6.              NEGATIVE COVENANTS.  During the Issuance Period
and so long thereafter as any Shelf Note or other amount due hereunder is
outstanding and unpaid, each Obligor covenants as follows:

                                6A.          Transactions with Affiliates.
 Except as set forth on Schedule 6A hereto, each Obligor will not, and will not
permit any of its Subsidiaries to, enter into, directly or indirectly, any
transaction or Material group of related transactions (including the purchase,
lease, sale or exchange of properties of any kind or the rendering of any
service) with any Affiliate (other than a Credit Party or a Wholly-Owned
Subsidiary), except in the ordinary course and pursuant to the reasonable
requirements of such Obligor’s or such Subsidiary’s business and upon fair and
reasonable terms no less favorable to such Obligor or such Subsidiary than would
be obtainable in a comparable arm’s-length transaction with a Person not an
Affiliate.

                                6B.          Merger, Consolidation, Etc.  No
Obligor will, nor will it permit any of its Subsidiaries to, consolidate with or
merge with any other corporation or convey, transfer or lease substantially all
of its assets in a single transaction or series of transactions to any Person
unless: 

 

                                  (i)            (a) such merger, consolidation,
conveyance, transfer or lease is with or to another Credit Party, provided that
no Obligor may sell, convey, lease or otherwise transfer substantially all of
its assets to any Person or fail to survive any such merger or consolidation
related to it except as permitted by clause (b) of this paragraph 6B(i); or (b)
the successor formed by such consolidation or the survivor of such merger or the
Person that acquires by conveyance, transfer or lease substantially all of the
assets of any Obligor or any Subsidiary of any Obligor, as the case may be (the
“Successor Corporation”), shall be a solvent corporation organized and existing
under the laws of the United States of America or any State thereof (including
the District of Columbia), and if such transaction involves any Credit Party and
such Credit Party is not the Successor Corporation (x) such Successor
Corporation shall have executed and delivered to each holder of Shelf Notes its
assumption of the due and punctual performance and observance of each covenant
and condition of each Transaction Document to which such Credit Party is a
party, and (y) shall have caused to be delivered to each holder of Shelf Notes
an opinion of nationally recognized independent counsel, or other independent
counsel reasonably satisfactory to the Required Holders, to the effect that all
agreements or instruments effecting such assumption are enforceable in
accordance with their terms and comply with the terms hereof;    
                                (ii)           immediately prior to such
transaction and after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing; and    
                                (iii)          immediately prior to such
transaction and after giving effect thereto, each Co-Issuer (or any Successor
Corporation pursuant to paragraph 6B(i)(b)) would be permitted by the provisions
of paragraph 6D(vii) hereof to incur at least $1.00 of additional Indebtedness.

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No such conveyance, transfer or lease of substantially all of the assets of any
Obligor or any Subsidiary thereof shall have the effect of releasing such
Obligor or such Subsidiary or any Successor Corporation that shall theretofore
have become such in the manner prescribed in this paragraph 6B from its
liability under this Agreement, the Shelf Notes or the other Transaction
Documents to which it is a party.

                                6C.          Liens.  The Obligors will not, and
will not permit any of their respective Subsidiaries to, incur, assume or suffer
to exist any Lien upon any of its assets now or hereafter owned, or upon the
income or profits thereof, other than Permitted Liens. In any case wherein any
such assets are subjected or become subject to a Lien in violation of this
paragraph 6C, the Obligors will make or cause to be made provision whereby the
Shelf Notes will be secured equally and ratably with all obligations secured by
such Lien, and in any case the Shelf Notes shall have the benefit, to the full
extent that, and with such priority as the holders of Shelf Notes may be
entitled under applicable law, of an equitable Lien on such assets; provided,
however, that any Lien created, incurred or suffered to exist in violation of
this paragraph 6C shall constitute an Event of Default hereunder, whether or not
any such provision is made for an equal and ratable Lien pursuant to this
paragraph 6C. In no event shall a Lien be granted by any Obligor or any of their
respective Subsidiaries in respect of any of its property to or for the benefit
of any of the Bank Lenders, unless concurrently therewith a Lien of equal
priority (and on the same property) is granted to, or for the benefit of, the
holders of the Shelf Notes.

                                6D.          Limitations on Indebtedness.  The
Obligors will not, and will not permit any of their respective Subsidiaries to,
directly or indirectly, create, incur, assume or permit to exist any
Indebtedness, except:

 

                                  (i)            Indebtedness created hereunder
or under the other Transaction Documents;    
                                (ii)           Indebtedness of a Credit Party in
respect of amounts outstanding (including all amounts due, contingently or
otherwise, in respect of reimbursement obligations under letters of credit or
similar instruments and all related reimbursement agreements) under the Bank
Credit Documents, not in excess of the result of (x) $60,000,000 (subject to
further increase of up to $30,000,000 pursuant to Section 2.06A of the Credit
Agreement so long as no Event of Default is continuing at the time of any such
increase), minus (y) the aggregate amount of any permanent reductions in the
principal amount of the commitments under the revolving credit facility
established thereunder;    
                                (iii)          Indebtedness existing on the
Effective Date and set forth in Schedule 6D;    
                                (iv)          All renewals, extensions,
substitutions, refinancings, or replacements of any Indebtedness described in
clause (iii) above, in an amount not to exceed the amount so refinanced,
provided that the terms, covenants and restrictions in respect of such renewals,
extensions, substitutions, refundings or replacements are not

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  more materially onerous than the existing terms, covenants and restrictions of
such Indebtedness;                                     (v)           the
Interest Rate Hedging Exposure Amount, provided such amount does not at any time
exceed $2,000,000 in the aggregate;    
                                (vi)          Indebtedness of one Credit Party
to another Credit Party (other than the Parent); provided that (a) there is
adequate consideration for such Indebtedness and there is evidence of such
Indebtedness on each Credit Party’s books, (b) all of the outstanding Capital
Stock of each such Credit Party shall be owned 100% directly or indirectly by
the Parent and a Co-Issuer, (c) each such Credit Party to or by whom such
Indebtedness is owned, or who owns (directly or indirectly) any such Capital
Stock, shall be a party to (1) the Subordination Agreement, (2) if such Credit
Party is a Pledgor, the Pledge Agreement, and (3) if such Credit Party is a
Subsidiary, the Subsidiary Guaranty, (d) such Indebtedness shall at all times be
subject to the provisions of the Subordination Agreement as “Subordinated Debt”
(as defined in the Subordination Agreement), and (e) such Indebtedness shall not
be assigned or transferred by the obligee thereof to any Person other than
another Credit Party (and only so long as, after giving effect to such
assignment or transfer all the conditions of this proviso are met); and    
                                (vii)         to the extent not included above
in this paragraph 6D, other Indebtedness incurred by any Obligor or any of their
respective Subsidiaries; provided that, at the time of the incurrence thereof
and after giving effect thereto and to the application of the proceeds thereof,
Consolidated Indebtedness shall not exceed 55% of Consolidated Total
Capitalization.

 

                                6E.          Restrictive Agreements.  The
Obligors will not, and will not permit any of their respective Subsidiaries to,
directly or indirectly, enter into, incur or permit to exist any agreement or
other arrangement that prohibits, restricts or imposes any condition upon the
ability of such Obligor or any such Subsidiary, (i) to create, incur or permit
to exist any Lien upon any of its property or assets or revenues, whether now or
hereafter acquired, (ii) to pay dividends or make other distributions to any
Obligor with respect to any shares of its Capital Stock, (iii) to pay any
Indebtedness owed to any Obligor, (iv) to make or permit to exist loans or
advances to any Obligor, or (v) to sell transfer, lease or otherwise dispose of
any of its properties or assets to any Obligor; provided that (x) the foregoing
shall not apply to restrictions and conditions imposed by law or by this
Agreement or the Bank Credit Agreement, and (y) such Obligor or Subsidiary may
enter into such an agreement in connection with any Permitted Lien, so long as
such prohibition or limitation is by its terms effective only against the
property, assets or revenues subject to such Permitted Lien.

                                6F.           Limitation on Subsidiary
Indebtedness and Issuance of Preferred Stock.

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                                No Obligor will permit any of its Subsidiaries
(other than the Co-Issuers) to, at any time, directly or indirectly, incur,
create, assume, guarantee or become or be liable in any manner with respect to
any Indebtedness or issue any Preferred Stock except:

 

                                  (i)            Indebtedness of any such
Subsidiary outstanding on the Effective Date and set forth on Schedule 6F or any
refinancing, extension, renewal or refunding of any such Indebtedness in an
amount not to exceed the amount of such Indebtedness immediately prior to the
effectiveness of such refinancing, extension, renewal or refunding; provided
that the terms, covenants and restrictions in respect of such refinancing,
extension, renewal or refunding are not materially more onerous than the
existing terms, covenants and restrictions of such Indebtedness;    
                                (ii)           Indebtedness of any such
Subsidiary in respect of Guarantees delivered pursuant to the Bank Credit
Agreement; provided that such Subsidiary has executed the Subsidiary Guaranty on
the Effective Date or in accordance with the terms of paragraph 5K;    
                                (iii)          Preferred Stock of any such
Subsidiary issued on or prior to the Effective Date;    
                                (iv)          Indebtedness of, or Preferred
Stock issued by, any such Subsidiary to (or in favor of) a Co-Issuer or a
Subsidiary of a Co-Issuer, so long as such Indebtedness is permitted pursuant to
paragraph 6D(vi) hereof;                                     (v)           other
Indebtedness or Preferred Stock of any such Subsidiary, provided that such
Indebtedness and Preferred Stock together with the aggregate amount of
outstanding Indebtedness and the aggregate liquidation value of Preferred Stock
of such Subsidiary previously incurred and outstanding under this paragraph 6F
(other than Indebtedness incurred under clause (ii) hereof), does not at any
time exceed 25% of Consolidated Net Worth determined as of the end of the fiscal
quarter of the Parent then most recently ended; and provided, further, that the
aggregate Indebtedness of all Subsidiaries of the Obligors not secured by Liens
does not at any time exceed 15% of Consolidated Net Worth determined as of the
end of the fiscal quarter of the Parent then most recently ended.

 

                                6G.          Limitation on Restricted Payments. 
No Obligor will, nor will it permit any of its Subsidiaries to, directly or
indirectly, declare, make or pay, or agree to declare, make or pay or incur any
liability to make or pay, or cause or permit to be declared, made or paid, or
set aside any sum or property to declare, make or pay any Restricted Payment,
unless immediately before and after giving effect to such Restricted Payment the
following conditions are satisfied:

 

                   (i)            no Default of Event of Default has occurred
and is continuing; and

 

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                  (ii)           the Parent could incur at least $1.00 of
additional Indebtedness pursuant to paragraph 6D(vii) hereof.

 

                                6H.          Sale of Assets. Subject to the
provisions of paragraph 6B hereof, no Obligor will, nor will it permit any of
its Subsidiaries to, directly or indirectly, in a single transaction or a series
of transactions, sell, lease, transfer, abandon or otherwise dispose of, or
suffer to be sold, leased, transferred, abandoned or otherwise disposed of
(collectively, “Transfer”), assets (i) aggregating in excess of 10% of
Consolidated Total Assets (determined as of the end of the fiscal quarter most
recently ended as of the date of such Transfer) in any fiscal year, or (ii)
aggregating in excess of 40% of Consolidated Total Assets (determined as of the
Effective Date) when combined with all other Transfers of assets since the
Effective Date, except that:

                                (i)            any Credit Party or any of its
Subsidiaries may Transfer its assets to any Credit Party or any other
Wholly-Owned Subsidiary of any Obligor;

                                (ii)           any Credit Party or any of its
Subsidiaries may Transfer its assets in excess of the limitations set forth
above (such assets collectively the “Excess Assets”) only if the proceeds of
such sales of Excess Assets are used to purchase other property of a similar
nature of at least equivalent value (such property the “Excess Replacement
Assets”) within one year of such sale, provided, however, that there shall be no
Lien on any of the Excess Replacement Assets; and

                                (iii)          any Credit Party or any of its
Subsidiaries may Transfer its assets in the ordinary course of business
(including the disposal of obsolete assets not used or useful in such Credit
Party’s business).

                                6I.            Limitation on Priority Debt.
 Notwithstanding anything set forth in the definition of Permitted Liens or
paragraph 6F, the Obligors will not permit Priority Debt to exceed (a) at any
time on or prior to December 31, 2005, 33% of Consolidated Net Worth determined
as of the last day of the most recently ended fiscal quarter of the Parent, and
(b) at any time after December 31, 2005, 30% of Consolidated Net Worth
determined as of the last day of the most recently ended fiscal quarter of the
Parent.

                                6J.           Minimum Consolidated Tangible Net
Worth.  The Obligors will not permit Consolidated Tangible Net Worth at the end
of any fiscal quarter of the Parent commencing with the fiscal quarter ended
December 31, 2004 to be less than Ninety Million Dollars ($90,000,000), plus
fifty (50%) percent of the Consolidated Net Income for each fiscal quarter of
the Parent (but taking into account the Consolidated Net Income for a fiscal
quarter only if it is a positive number) ending after December 31, 2004 through
and including the then most recently ended fiscal quarter for which Consolidated
Tangible Net Worth is to be calculated.

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                                6K.          Leverage Ratio.  The Obligors will
not permit the Leverage Ratio, calculated as of the end of each fiscal quarter
of the Parent ending on or after the Effective Date, to be greater than
2.50:1.00.

                                6L.          Minimum Debt Service Ratio.  The
Obligors will not permit the Minimum Debt Service Ratio, calculated as of the
end of each fiscal quarter of the Parent ending on or after the Effective Date,
to be less than (i) for each fiscal quarter of the Parent ending on or before
December 31, 2005, 1.50:1.00, and (ii) for each fiscal quarter of the Parent
ending thereafter, 1.75:1.00.

                                6M.         Limitation on Investments.  No
Obligor will, nor will it permit any of its Subsidiaries to, purchase, hold or
acquire (including pursuant to any merger) 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 (except pursuant to this Agreement or the Bank Credit
Agreement) 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, except Permitted Loans and Investments.

                                6N.          Hedging Agreements.  No Obligor
will, nor will it permit any of its Subsidiaries to, enter into any Hedging
Agreement for purposes of speculation or investment, or otherwise outside of the
ordinary course of the business of such Obligor or Subsidiary, as the case may
be.

                                6O.          Amendment of Certain Documents.  No
Obligor will, nor will it permit any of its Subsidiaries to:

 

                  (i)              terminate, amend, waive or modify its
Certificate of Incorporation or By-Laws, or Certificate of Limited Partnership,
Certificate of Formation, Agreement of Limited Partnership, or Operating
Agreement as the case may be, except for amendments, modifications or waivers
that are not adverse in any respect to the holders of the Shelf Notes, or    
                (ii)             amend in any material respect the Bank Credit
Agreement or any of the other Bank Credit Documents entered into in connection
therewith without the prior written consent of the Required Holders (it being
understood that, without limiting the generality of the foregoing, any increase
in the aggregate amount of the commitments under the Bank Credit Agreement
(including, without limitation, any increase in such commitments pursuant to
Section 2.06A thereof) at any time when an Event of Default has occurred and is
continuing shall be deemed to be a material amendment).

 

                                6P.           Terrorism Sanctions Regulations.
 The Obligors will not and will not permit any Subsidiary to (a) become a Person
described or designated in the Specially Designated Nationals and Blocked
Persons List of the Office of Foreign Assets Control or in Section 1 of the

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Anti-Terrorism Order or (b) knowingly engage in any dealings or transactions
with any such Person.

                7.             EVENTS OF DEFAULT.

                                7A.          Acceleration.  If any of the
following events shall occur and be continuing for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or otherwise):

 

                  (i)  the Co-Issuers default in the payment of any principal
of, or Yield- Maintenance Amount payable with respect to, any Shelf Note when
the same shall become due, either by the terms thereof or otherwise as herein
provided; or                     (ii)  the Co-Issuers default in the payment of
any interest on any Shelf Note or any other amount due under this Agreement when
the same shall become due; or                     (iii)  any Credit Party or any
Subsidiary of any Credit Party defaults (whether as primary obligor or as
guarantor or other surety) in any payment of principal of or interest on any
other Indebtedness beyond any period of grace provided with respect thereto, or
any Credit Party or any Subsidiary of any Credit Party fails to perform or
observe any other agreement, term or condition contained in any agreement under
which any such obligation is created (or if any other event thereunder or under
any such agreement shall occur and be continuing) and the effect of such failure
or other event is to cause, or to permit the holder or holders of such
obligation (or a trustee on behalf of such holder or holders) to cause, such
obligation to become due (or to be repurchased by any Credit Party or any
Subsidiary of any Credit Party) prior to any stated maturity, provided that the
aggregate amount of all obligations as to which such a payment default shall
occur and be continuing or such a failure or other event causing or permitting
acceleration (or resale to any Credit Party or any Subsidiary of any Credit
Party) shall occur and be continuing exceeds at least $3,000,000 individually or
$5,000,000 in the aggregate, provided, further, that for purposes of this
paragraph 7A(iii), the principal amount of the Indebtedness of any Credit Party
or any Subsidiary of any Credit Party in respect of any Hedging Agreements at
any time shall be treated as Indebtedness in an amount equal to the maximum
aggregate amount (giving effect to any netting agreements) that any such Person
would be required to pay if such Hedging Agreement were terminated at such time;
or                     (iv)  any representation or warranty made by any Credit
Party herein or in any of the other Transaction Documents, or by any Credit
Party or any of their respective officers in any writing furnished in connection
with or pursuant to this Agreement or any of the other Transaction Documents
shall be false in any material respect on the date as of which made; or

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                  (v)  any Obligor fails to perform or observe any agreement
contained in paragraph 5 or paragraph 6; or                     (vi)  any Credit
Party fails to perform or observe any other agreement, term or condition
contained herein or in any of the other Transaction Documents, and such failure
shall not be remedied within 30 days after any Responsible Officer obtains
actual knowledge thereof; or                     (vii)  any Credit Party or any
of their respective Subsidiaries makes an assignment for the benefit of
creditors or is generally not paying its debts as such debts become due; or    
                (viii)  any decree or order for relief in respect of any Credit
Party or any of their respective Subsidiaries is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law, whether now or hereafter in effect
(herein called the “Bankruptcy Law”), of any jurisdiction; or    
                (ix)  any Credit Party or any of their respective Subsidiaries
petitions or applies to any tribunal for, or consents to, the appointment of, or
taking possession by, a trustee, receiver, custodian, liquidator or similar
official of such Credit Party or such Subsidiary, or of any substantial part of
the assets of any such Person, or commences a voluntary case under the
Bankruptcy Law of the United States or any proceedings (other than proceedings
for the voluntary liquidation and dissolution of a Subsidiary) relating to any
Credit Party or any of their respective Subsidiaries under the Bankruptcy Law of
any other jurisdiction; or                     (x)  any such petition or
application is filed, or any such proceedings are commenced, against any Credit
Party or any of their respective Subsidiaries and such Credit Party or such
Subsidiary by any act indicates its approval thereof, consent thereto or
acquiescence therein, or an order, judgment or decree is entered appointing any
such trustee, receiver, custodian, liquidator or similar official, or approving
the petition in any such proceedings, and such order, judgment or decree remains
unstayed and in effect for more than 30 days; or                     (xi)  any
order, judgment or decree is entered in any proceedings against any Credit Party
or any Subsidiary of any Credit Party decreeing the dissolution of such Credit
Party or Subsidiary and such order, judgment or decree remains unstayed and in
effect for more than 60 days: or                     (xii)  any order, judgment
or decree is entered in any proceedings against any Credit Party or any of their
respective Subsidiaries decreeing a split-up of such Credit Party or such
Subsidiary which requires the divestiture of assets representing a substantial
part, or the divestiture of the stock of a Subsidiary whose assets represent a
substantial

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  part, of the consolidated assets of any Credit Party and its Subsidiaries
(determined in accordance with generally accepted accounting principles) or
which requires the divestiture of assets, or stock of a Subsidiary, which shall
have contributed a substantial part of the consolidated net income of any Credit
Party and its Subsidiaries (determined in accordance with generally accepted
accounting principles) for any of the three fiscal years then most recently
ended, and such order, judgment or decree remains unstayed and in effect for
more than 60 days; or                     (xiii)  one or more final judgments in
an aggregate amount in excess of $100,000 is rendered against any Credit Party
or any of their respective Subsidiaries and, within 30 days after entry thereof,
any such judgment is not discharged or execution thereof stayed pending appeal,
or within 30 days after the expiration of any such stay, such judgment is not
discharged;                     (xiv)        (A) any Plan shall fail to satisfy
the minimum funding standards of ERISA or the Code for any plan year or part
thereof or a waiver of such standards or extension of any amortization period is
sought or granted under Section 412 of the Code, (B) a notice of intent to
terminate any Plan shall have been or is reasonably expected to be filed with
the PBGC or the PBGC shall have instituted proceedings under ERISA Section 4042
to terminate or appoint a trustee to administer any Plan or the PBGC shall have
notified any Credit Party, any Subsidiary of any Credit Party or any ERISA
Affiliate that a Plan may become a subject of such proceedings, (C) the
aggregate “amount of unfunded benefit liabilities” (within the meaning of
Section 4001(a)(18) of ERISA) under all Plans, determined in accordance with
Title IV of ERISA, shall exceed $1,000,000, (D) any Credit Party, any Subsidiary
of any Credit Party or any ERISA Affiliate shall have incurred or is reasonably
expected to incur any liability pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to employee benefit plans,
(E) any Credit Party or any ERISA Affiliate withdraws from any Multiemployer
Plan, or (F) any Credit Party or any Subsidiary of any Credit Party establishes
or amends any employee welfare benefit plan that provides post-employment
welfare benefits in a manner that would materially increase the liability of any
Credit Party or any Subsidiary of any Credit Party thereunder; and any such
event or events described in clauses (A) through (F) above, either individually
or together with any other such event or events, could reasonably be expected to
(x) result in liability of any Credit Party in any aggregate amount exceeding
$150,000 in any year or $350,000 for all periods or (y) have a Material Adverse
Effect;                     (xv)  any Subsidiary or the Parent shall fail to
observe or perform in any material respect any covenant, condition or agreement
contained in the Parent Guaranty or the Subsidiary Guaranty;    
                (xvi)  the Pledge Agreement shall, for any reason, be
terminated, cease to be in full force and effect or cease to create a valid,
perfected, first priority security interest in the Collateral described in the
Pledge Agreement or any party having granted any such

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  security interests (or any successor thereto or representative thereof) shall
make any claim or assertion to such effect, or any Credit Party (or any
successor thereto or representative thereof) shall claim or assert that this
Agreement, the Parent Guaranty, the Subsidiary Guaranty, the Pledge Agreement or
any right or remedy of any holder of Shelf Notes hereunder or thereunder shall
not be enforceable in accordance with its terms;                     (xvii)  any
of the Transaction Documents shall cease for any reason to be in full force and
effect or any party thereto (other than the Security Trustee or any holder from
time to time of a Shelf Note) shall purport to disavow its obligations
thereunder, shall declare that it does not have any further obligation
thereunder or shall contest the validity or enforceability thereof; or    
                (xviii)  a Change in Control shall occur;

 

then (a) if such event is an Event of Default specified in clause (i) or (ii) of
this paragraph 7A, any holder of any Shelf Note may at its option during the
continuance of such Event of Default, by notice in writing to the Co-Issuers,
terminate the Facility and/or declare all of the Shelf Notes held by such holder
to be, and all of the Shelf Notes held by such holder shall thereupon be and
become, immediately due and payable together with interest accrued thereon and
together with the Yield-Maintenance Amount, if any, payable with respect to such
Shelf Notes, without presentment, demand, protest or notice of any kind, all of
which are hereby waived by the Co-Issuers, (b) if such event is an Event of
Default specified in clause (viii), (ix) or (x) of this paragraph 7A with
respect to the Co-Issuers, the Facility shall automatically terminate and all of
the Shelf Notes at the time outstanding shall automatically become immediately
due and payable together with interest accrued thereon and together with the
Yield-Maintenance Amount, if any, payable with respect to each Shelf Note,
without presentment, demand, protest or notice of any kind, all of which are
hereby waived by the Co-Issuers, and (c) with respect to any event constituting
an Event of Default (including an Event of Default described in clauses (i) and
(ii) of this paragraph 7A), the Required Holder(s) of the Shelf Notes of any
Series may at its or their option during the continuance of such Event of
Default, by notice in writing to the Co-Issuers, terminate the Facility and/or
declare all of the Shelf Notes of such Series to be, and all of the Shelf Notes
of such Series shall thereupon be and become, immediately due and payable
together with interest accrued thereon and together with the Yield-Maintenance
Amount, if any, with respect to each Shelf Note of such Series, without
presentment, demand, protest or notice of any kind, all of which are hereby
waived by the Co-Issuers.

                                7B.          Rescission of Acceleration.  At any
time after any or all of the Shelf Notes of any Series shall have been declared
immediately due and payable pursuant to paragraph 7A, the Required Holder(s) of
the Shelf Notes of such Series may, by notice in writing to the Co-Issuers,
rescind and annul such declaration and its consequences if (i) the Co-Issuers
shall have paid all overdue interest on the Shelf Notes of such Series, the
principal of and Yield-Maintenance Amount, if any, payable with respect to any
Shelf Notes of such Series which have become due otherwise than by reason of
such declaration, and interest on such overdue interest and overdue principal
and Yield-Maintenance Amount at the rate specified in the Shelf Notes of

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such Series, (ii) the Co-Issuers shall not have paid any amounts which have
become due solely by reason of such declaration, (iii) all Events of Default and
Defaults, other than non-payment of amounts which have become due solely by
reason of such declaration, shall have been cured or waived pursuant to
paragraph 13C, and (iv) no judgment or decree shall have been entered for the
payment of any amounts due pursuant to the Shelf Notes of such Series or this
Agreement. No such rescission or annulment shall extend to or affect any
subsequent Event of Default or Default or impair any right arising therefrom.

                                7C.          Notice of Acceleration or
Rescission.  Whenever any Shelf Note shall be declared immediately due and
payable pursuant to paragraph 7A or any such declaration shall be rescinded and
annulled pursuant to paragraph 7B, the Co-Issuers shall forthwith give written
notice thereof to the holder of each Shelf Note of each Series at the time
outstanding.

                                7D.          Other Remedies.  If any Event of
Default or Default shall occur and be continuing, the holder of any Shelf Note
may proceed to protect and enforce its rights under this Agreement and such
Shelf Note and the other Transaction Documents by exercising such remedies as
are available to such holder in respect thereof under applicable law, either by
suit in equity or by action at law, or both, whether for specific performance of
any covenant or other agreement contained in this Agreement or any other
Transaction Document or in aid of the exercise of any power granted in this
Agreement or any other Transaction Document. No remedy conferred in this
Agreement or any other Transaction Document upon the holder of any Shelf Note is
intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to every other remedy conferred
herein, in any other Transaction Document or now or hereafter existing at law or
in equity or by statute or otherwise.

                8.              REPRESENTATIONS, COVENANTS AND WARRANTIES. Each
Co-Issuer hereby represents, covenants and warrants as follows (all references
to “Subsidiary” and “Subsidiaries” in this paragraph 8 shall be deemed omitted
if the Co-Issuers have no Subsidiaries at the time the representations herein
are made or repeated):

                                8A.          Organization.  Each Obligor is a
corporation duly organized and existing in good standing under the laws of its
jurisdiction of organization, each other Credit Party is duly organized and
existing in good standing under the laws of the jurisdiction in which it is
formed, and each Credit Party has the power to own its respective property and
to carry on its respective business as now being conducted.

                                8B.          Financial Statements.  

 

                    (i)          The Obligors have heretofore furnished to
Prudential (i) a consolidated balance sheet and statements of income,
stockholders equity and cash flows of the Parent and its Subsidiaries as of and
for the fiscal year ended December 31, 2003, reported on by KPMG LLP,
independent public accountants, and (ii) consolidating balance sheets of the
Parent and its Subsidiaries setting forth such information separately for the
Parent and each Subsidiary thereof and related consolidating statements of
operations for the Parent and its Subsidiaries setting forth such information
separately for the Parent and each

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  Subsidiary thereof as of and for the fiscal year ending December 31, 2003, and
including in comparative form the figures for the preceding fiscal year,
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 the Parent and of its Subsidiaries as of such dates
and for such periods in accordance with GAAP.    
                  (ii)            Since December 31, 2003, there has been no
material adverse change in the business, assets, operations, prospects or
condition, financial or otherwise, of any Credit Party. Except as disclosed on
Schedule 8B annexed hereto and as complete and correct as of the Effective Date,
the Credit Parties have no liabilities, contingent or otherwise, not disclosed
on the financial statements referred to in paragraph 8B(i), other than in
respect of goods and services arising in the ordinary course of business.

 

                                8C.          Actions Pending.  Except as
disclosed on Schedule 8C annexed hereto, there is no action, suit, investigation
or proceeding pending or, to the knowledge of the Obligors, threatened against
any of the Credit Parties or any of their respective Subsidiaries, or any
properties or rights such Persons, by or before any court, arbitrator or
administrative or governmental body which could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.

                                8D.          Outstanding Indebtedness.  None of
the Credit Parties, nor any of their respective Subsidiaries, has outstanding
any Indebtedness except as permitted by paragraphs 6D, 6F and 6I. There exists
no default under the provisions of any instrument evidencing such Indebtedness
or of any agreement relating thereto.

                                8E.          Title to Properties.  

 

                    (i)           Each Credit Party and its Subsidiaries has
good and marketable title (free of Liens except such as are set forth on
Schedule 6C annexed hereto (which is complete and correct as of the Effective
Date) or are otherwise Permitted Liens) to, or valid leasehold interests in, all
its real and personal property material to its business, except for minor
defects in title that do not interfere with its ability to conduct its business
as currently conducted or to utilize such properties for their intended
purposes. No Credit Party is a party to any contract, agreement, lease or
instrument (other than the Transaction Documents) the performance of which,
either unconditionally or upon the happening of any event, will result in or
require the creation of a Lien (except in favor of the Security Trustee) on any
of its property or assets (now owned or hereafter acquired) or otherwise result
in a violation of any Transaction Documents.    
                  (ii)          Each Credit Party owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by such Credit Party and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

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                                8F.           Taxes.  Each Credit Party has and
each of its Subsidiaries has timely filed or caused to be filed all Tax returns
and reports required to have been filed and has paid or caused to be paid all
Taxes required to have been paid by it, except Taxes (i) the amount of which, in
the aggregate, is not Material, or (ii) that are being contested in good faith
by appropriate proceedings and for which such Credit Party or such Subsidiary,
as applicable, has set aside on its books adequate reserves.

                                8G.          Conflicting Agreements and Other
Matters. Neither the Credit Parties nor any of their respective Subsidiaries is
a party to any contract or agreement or subject to any charter or other
corporate restriction which could reasonably be expected to result in a Material
Adverse Effect. Neither the execution nor delivery of this Agreement, the Shelf
Notes or any other Transaction Document, nor the offering, issuance and sale of
the Shelf Notes, nor fulfillment of nor compliance with the terms and provisions
hereof and of the Shelf Notes will conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under, or result in
any violation of, or result in the creation of any Lien upon any of the
properties or assets of any Credit Party or any of their respective Subsidiaries
pursuant to, the charter or by-laws of any such Person, any award of any
arbitrator or any agreement (including any agreement with stockholders of such
Person), instrument, order, judgment, decree, statute, law, rule or regulation
to which the Co-Issuers or any of their respective Subsidiaries is subject.
Neither the Credit Parties nor any of their respective Subsidiaries is a party
to, or otherwise subject to any provision contained in, any instrument
evidencing Indebtedness of such Person, any agreement relating thereto or any
other contract or agreement (including its charter) which limits the amount of,
or otherwise imposes restrictions on the incurring of, Indebtedness of such
Person of the type to be evidenced by the Shelf Notes or created by the
Subsidiary Guaranty except as set forth in the agreements listed in Schedule 8G
attached hereto (as such Schedule 8G may have been modified from time to time by
written supplements thereto delivered by the Co-Issuers to Prudential).

                                8H.          Offering of Shelf Notes.  Neither
the Co-Issuers nor any agent acting on its behalf has, directly or indirectly,
offered the Shelf Notes or any similar security of the Co-Issuers for sale to,
or solicited any offers to buy the Shelf Notes or any similar security of the
Co-Issuers from, or otherwise approached or negotiated with respect thereto
with, any Person other than Prudential Affiliates and not more than 20 other
institutional investors, and neither the Co-Issuers nor any agent acting on its
behalf has taken or will take any action which would subject the offer, issuance
or sale of the Shelf Notes to the provisions of Section 5 of the Securities Act
or to the provisions of any securities or Blue Sky law of any applicable
jurisdiction.

                                8I.            Use of Proceeds.  The proceeds of
the Shelf Notes will be used to repay certain existing Indebtedness of the
Co-Issuers and for other general corporate purposes. None of the proceeds of the
sale of any Shelf Notes will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any “margin
stock” as defined in Regulation U (12 CFR Part 207) of the Board of Governors of
the Federal Reserve System (herein called “margin stock”) or for the purpose of
maintaining, reducing or retiring any Indebtedness which was originally incurred
to purchase or carry any stock that is then currently a margin stock or for any
other purpose which might constitute the purchase of such

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 Shelf Notes a “purpose credit” within the meaning of such Regulation U. Neither
the Obligors nor any agent acting on their behalf has taken or will take any
action which might cause this Agreement or the Shelf Notes to violate Regulation
T, Regulation U or any other regulation of the Board of Governors of the Federal
Reserve System or to violate the Exchange Act, in each case as in effect now or
as the same may hereafter be in effect. Margin stock does not constitute more
than 5% of the value of the consolidated assets of the Parent and its
Subsidiaries, and the Parent does not have any present intention that margin
stock will constitute more than 5% of the value of such assets.

                                8J.           ERISA.  No accumulated funding
deficiency (as defined in section 302 of ERISA and section 412 of the Code),
whether or not waived, exists with respect to any Plan (other than a
Multiemployer Plan). No liability to the PBGC has been or is expected by the
Credit Parties, any Subsidiary or any ERISA Affiliate to be incurred with
respect to any Plan (other than a Multiemployer Plan) by the Credit Parties, any
Subsidiary, any of their respective Subsidiaries or any ERISA Affiliate which is
or would be materially adverse to the business, property or assets, condition
(financial or otherwise) or operations of the Credit Parties, any Subsidiary and
their respective Subsidiaries taken as a whole. Neither the Credit Parties, any
of their respective Subsidiaries nor any ERISA Affiliate has incurred or
presently expects to incur any withdrawal liability under Title IV of ERISA with
respect to any Multiemployer Plan which is or would be materially adverse to the
business, property or assets, condition (financial or otherwise) or operations
of the Credit Parties and their respective Subsidiaries taken as a whole. The
execution and delivery of this Agreement and the issuance and sale of the Shelf
Notes will be exempt from or will not involve any transaction which is subject
to the prohibitions of section 406 of ERISA and will not involve any transaction
in connection with which a penalty could be imposed under section 502(i) of
ERISA or a tax could be imposed pursuant to section 4975 of the Code. The
representation by the Obligors in the next preceding sentence is made in
reliance upon and subject to the accuracy of the representation of each
Purchaser in paragraph 9B as to the source of funds to be used by it to purchase
any Shelf Notes.

                                8K.          Governmental Consent.  Neither the
nature of the Credit Parties or of any of their Subsidiaries, nor any of their
respective businesses or properties, nor any relationship between any of the
Credit Parties or any of their respective Subsidiaries and any other Person, nor
any circumstance in connection with the offering, issuance, sale or delivery of
the Shelf Notes or the use of the proceeds thereof is such as to require any
authorization, consent, approval, exemption or any action by or notice to or
filing with any court or administrative or governmental body (other than the
filing of UCC financing statements) in connection with the execution and
delivery of this Agreement and the other Transaction Documents, the offering,
issuance, sale or delivery of the Shelf Notes or fulfillment of or compliance
with the terms and provisions hereof or of any other Transaction Document.

                                8L.          Compliance With Laws.  The Credit
Parties and their respective Subsidiaries and all of their respective properties
and facilities have complied at all times and in all respects with all foreign,
federal, state, local and regional statutes, laws, ordinances and judicial or
administrative orders, judgments, rulings and regulations, including without

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limitation, all Environmental Laws, except, in any such case, where failure to
comply could not reasonably be expected to result in a Material Adverse Effect.

                                8M.         Disclosure.  Neither this Agreement
or any of the other Transaction Documents nor any other document, certificate or
statement furnished to any Purchaser by or on behalf of any Credit Party or any
of their respective Subsidiaries in connection herewith contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein not misleading. There
is no fact peculiar to the any Credit Party or any of their respective
Subsidiaries which could reasonably be expected to result in a Material Adverse
Effect and which has not been set forth in this Agreement. The financial
projections delivered by the Parent to Prudential are reasonable on the date
delivered based on the assumptions contained therein and the best information
available to the Obligors.

                                8N.          Hostile Tender Offers.  None of the
proceeds of the sale of any Shelf Notes will be used to finance a Hostile Tender
Offer.

                                8O.          Investment Company Act.  Neither
any of the Credit Parties nor any of their respective Subsidiaries is an
“investments company” or a company “controlled” by an “investment company”
required to register within the meaning of the Investment Company Act of 1940,
as amended.

                                8P.           Public Utility Holding Company
Act.  Neither the Credit Parties nor any of their respective Subsidiaries is a
“holding company,” or a “subsidiary company” of a “holding company,” or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding
company,” as such terms are defined in the Public Utility Holding Company Act of
1935, as amended.

                                8Q.          Foreign Assets Control Regulations,
etc.

 

                   (i)            Neither the sale of the Shelf Notes by the
Co-Issuers hereunder nor their use of the proceeds thereof will violate the
Trading with the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or any enabling legislation or executive order relating
thereto.                      (ii)           Neither the Co-Issuers nor any of
their respective Subsidiaries (a) is a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign
Assets Control or in Section 1 of the Anti-Terrorism Order or (b) knowingly
engages in any dealings or transactions with any such Person. The Parent and its
Subsidiaries are in compliance, in all material respects, with the USA Patriot
Act.                      (iii)          No part of the proceeds from the sale
of the Shelf Notes hereunder will be used, directly or indirectly, for any
payments to any governmental official or employee, political party, official of
a political party, candidate for political office, or anyone else acting in an
official capacity, in order to obtain, retain or direct business or obtain any

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  improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended, assuming in all cases that such Act applies
to the Co-Issuers.

 

                9.              REPRESENTATIONS OF THE PURCHASERS.

                Each Purchaser represents as follows:

                                9A.          Nature of Purchase.  Such Purchaser
represents it is purchasing the Shelf Notes purchased by it hereunder for
investment for its own account or for one or more separate accounts maintained
by it or for the account of one or more pension or trust funds (or commingled
pension trust funds) and not with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act, provided that the
disposition of such Purchaser’s property shall at all times be and remain within
its control. Each Purchaser understands that the Shelf Notes have not been
registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under such circumstances where neither such
registration nor such an exemption is required by law, and that neither of the
Co-Issuers is required to register any of the Shelf Notes.

                                9B.          Source of Funds.  At least one of
the following statements is an accurate representation as to each source of
funds (a “Source”) to be used by such Purchaser to pay the purchase price of the
Shelf Notes to be purchased by such Purchaser hereunder:

 

                  (i)            the Source is an “insurance company general
account” (as the term is defined in the United States Department of Labor’s
Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves
and liabilities (as defined by the annual statement for life insurance companies
approved by the National Association of Insurance Commissioners (the “NAIC
Annual Statement”)) for the general account contract(s) held by or on behalf of
any employee benefit plan together with the amount of the reserves and
liabilities for the general account contract(s) held by or on behalf of any
other employee benefit plans maintained by the same employer (or affiliate
thereof as defined in PTE 95-60) or by the same employee organization in the
general account do not exceed 10% of the total reserves and liabilities of the
general account (exclusive of separate account liabilities) plus surplus as set
forth in the NAIC Annual Statement filed with such Purchaser’s state of
domicile; or                     (ii)           the Source is a separate account
that is maintained solely in connection with such Purchaser’s fixed contractual
obligations under which the amounts payable, or credited, to any employee
benefit plan (or its related trust) that has any interest in such separate
account (or to any participant or beneficiary of such plan (including any
annuitant)) are not affected in any manner by the investment performance of the
separate account; or                     (iii) the Source is either (a) an
insurance company pooled separate account, within the meaning of PTE 90-1 or (b)
a bank collective investment fund, within the meaning of the PTE 91-38 and,
except as disclosed by such Purchaser to the Co-Issuers in

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  writing pursuant to this clause (iii), no employee benefit plan or group of
plans maintained by the same employer or employee organization beneficially owns
more than 10% of all assets allocated to such pooled separate account or
collective investment fund; or                     (iv)          the Source
constitutes assets of an “investment fund” (within the meaning of Part V of PTE
84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset
manager” or “QPAM” (within the meaning of Part V of the QPAM Exemption), no
employee benefit plan’s assets that are included in such investment fund, when
combined with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning of
Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption
are satisfied, neither the QPAM nor a person controlling or controlled by the
QPAM (applying the definition of “control” in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Co-Issuers and (a) the identity of
such QPAM and (b) the names of all employee benefit plans whose assets are
included in such investment fund have been disclosed to the Co-Issuers in
writing pursuant to this clause (iv); or                     (v)           the
Source constitutes assets of a “plan(s)” (within the meaning of Section IV of
PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or
“INHAM” (within the meaning of Part IV of the INHAM exemption), the conditions
of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the
INHAM nor a person controlling or controlled by the INHAM (applying the
definition of “control” in Section IV(h) of the INHAM Exemption) owns a 5% or
more interest in the Co-Issuers and (a) the identity of such INHAM and (b) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have
been disclosed to the Co-Issuers in writing pursuant to this clause (v); or    
                (vi)          the Source is a governmental plan; or    
                (vii)         the Source is one or more employee benefit plans,
or a separate account or trust fund comprised of one or more employee benefit
plans, each of which has been identified to the Co-Issuers in writing pursuant
to this clause (vii); or                     (viii)        the Source does not
include assets of any employee benefit plan, other than a plan exempt from the
coverage of ERISA.

 

                                As used in this paragraph 9B, the terms
“employee benefit plan,” “governmental plan,” and “separate account” shall have
the respective meanings assigned to such terms in Section 3 of ERISA.

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                10.           DEFINITIONS; ACCOUNTING MATTERS.  For the purpose
of this Agreement, the terms defined in paragraphs 10A and 10B (or within the
text of any other paragraph) shall have the respective meanings specified
therein and all accounting matters shall be subject to determination as provided
in paragraph 10C.

                                10A.        Yield-Maintenance Terms.

                                “Called Principal” shall mean, with respect to
any Shelf Note, the principal of such Shelf Note that is to be prepaid pursuant
to paragraph 4B or paragraph 4C or is declared to be immediately due and payable
pursuant to paragraph 7A, as the context requires.

                                “Designated Spread” shall mean 0.50% in the case
of each Shelf Note of any Series unless the Confirmation of Acceptance with
respect to the Shelf Notes of such Series specifies a different Designated
Spread in which case it shall mean, with respect to each Shelf Note of such
Series, the Designated Spread so specified.

                                “Discounted Value” shall mean, with respect to
the Called Principal of any Shelf Note, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called Principal from their
respective scheduled due dates to the Settlement Date with respect to such
Called Principal, in accordance with accepted financial practice and at a
discount factor (as converted to reflect the periodic basis on which interest on
such Shelf Note is payable, if payable other than on a semi-annual basis) equal
to the Reinvestment Yield with respect to such Called Principal.

                                “Reinvestment Yield” shall mean, with respect to
the Called Principal of any Shelf Note, the Designated Spread over the yield to
maturity implied by (i) the yields reported as of 10:00 a.m. (New York City
local time) on the Business Day next preceding the Settlement Date with respect
to such Called Principal for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date on the display designated as “Page PX1” on Bloomberg Financial
Markets (or, if Bloomberg Financial Markets shall cease to report such yields in
Page PX1 or shall cease to be Prudential’s customary source of information for
calculating yield-maintenance amounts on privately placed notes, then such
source as is then Prudential’s customary source of such information), or if such
yields shall not be reported as of such time or the yields reported as of such
time shall not be ascertainable, (ii) the Treasury Constant Maturity Series
yields reported, for the latest day for which such yields shall have been so
reported as of the Business Day next preceding the Settlement Date with respect
to such Called Principal, in Federal Reserve Statistical Release H.15(519) (or
any comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date. Such implied yield shall be
determined, if necessary, by (a) converting U.S. Treasury bill quotations to
bond equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between yields reported for various maturities. The
Reinvestment Yield shall be rounded to that number of decimal places as appears
in the coupon of the applicable Shelf Note.

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                                “Remaining Average Life” shall mean, with
respect to the Called Principal of any Shelf Note, the number of years
(calculated to the nearest one-twelfth year) obtained by dividing (i) such
Called Principal into (ii) the sum of the products obtained by multiplying (a)
each Remaining Scheduled Payment of such Called Principal (but not of interest
thereon) by (b) the number of years (calculated to the nearest one-twelfth year)
which will elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled Payment.

                                “Remaining Scheduled Payments” shall mean, with
respect to the Called Principal of any Shelf Note, all payments of such Called
Principal and interest thereon that would be due on or after the Settlement Date
with respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date.

                                “Settlement Date” shall mean, with respect to
the Called Principal of any Shelf Note, the date on which such Called Principal
is to be prepaid pursuant to paragraph 4B or paragraph 4C or is declared to be
immediately due and payable pursuant to paragraph 7A, as the context requires.

                                “Yield-Maintenance Amount” shall mean, with
respect to any Shelf Note, an amount equal to the excess, if any, of the
Discounted Value of the Called Principal of such Shelf Note over the sum of (i)
such Called Principal plus (ii) interest accrued thereon as of (including
interest due on) the Settlement Date with respect to such Called Principal. The
Yield-Maintenance Amount shall in no event be less than zero.

                                10B.        Other Terms.

                                “Acceptance” shall have the meaning specified in
paragraph 2E.

                                “Acceptance Day” shall have the meaning
specified in paragraph 2E.

                                “Acceptance Window” shall have the meaning
specified in paragraph 2E.

                                “Accepted Note” shall have the meaning specified
in paragraph 2E.

                                “Affiliate” shall mean, at any time, and with
respect to any Person, (i) any other Person that at such time directly or
indirectly through one or more intermediaries Controls, or is Controlled by, or
is under common Control with, such first Person, and (ii) any Person
beneficially owning or holding, directly or indirectly, 10% or more of any class
of voting or equity interests of the Parent or any Subsidiary or any corporation
of which the Parent and its Subsidiaries beneficially own or hold, in the
aggregate, directly or indirectly, 10% or more of any class of voting or equity
interests. Unless the context otherwise clearly requires, any reference to an
“Affiliate” is a reference to an Affiliate of the Parent.

                                “Agreement, this” shall have the meaning
specified in paragraph 13C.

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                                “Anti-Terrorism Order” shall mean United States
Executive Order No. 13,224 of September 24, 2001, Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
Terrorism, 66 U.S. Fed. Reg. 49,079 (2001), as amended.

                                “Authorized Officer” shall mean (i) in the case
of the Obligors, each Obligor’s chief executive officer, its chief financial
officer, its treasurer, any vice president of such Obligors designated as an
“Authorized Officer” of the Obligor in the Information Schedule attached hereto
or any vice president of such Obligor designated as an “Authorized Officer” of
such Obligor for the purpose of this Agreement in an Officer’s Certificate
executed by such Obligor’s chief executive officer or chief financial officer
and delivered to Prudential, and (ii) in the case of Prudential, any officer of
Prudential designated as its “Authorized Officer” in the Information Schedule or
any officer of Prudential designated as its “Authorized Officer” for the purpose
of this Agreement in a certificate executed by one of its Authorized Officers.
Any action taken under this Agreement on behalf of any Obligor by any individual
who on or after the date of this Agreement shall have been an Authorized Officer
of such Obligor and whom Prudential in good faith believes to be an Authorized
Officer of such Obligor at the time of such action shall be binding on such
Obligor even though such individual shall have ceased to be an Authorized
Officer of such Obligor, and any action taken under this Agreement on behalf of
Prudential by any individual who on or after the date of this Agreement shall
have been an Authorized Officer of Prudential and whom the Obligors in good
faith believe to be an Authorized Officer of Prudential at the time of such
action shall be binding on Prudential even though such individual shall have
ceased to be an Authorized Officer of Prudential.

                                “Available Facility Amount” shall have the
meaning specified in paragraph 2A.

                                “Bank Credit Agreement” shall mean that certain
Amended and Restated Credit Agreement, dated as of the Effective Date, by and
among Kinro, Lippert Components, the Bank Lenders and JPMorgan Chase Bank, N.A.,
as administrative agent for the Bank Lenders, or any renewal, refinancing,
refunding or replacement thereof, as any of the foregoing may be amended,
restated or otherwise modified from time to time.

                                “Bank Credit Documents” shall mean the Bank
Credit Agreement, the revolving credit notes issued thereunder and each
document, agreement or instrument executed in connection therewith or related
thereto.

                                “Bank Lenders” shall mean the lenders from time
to time party to the Bank Credit Agreement.

                                “Bankruptcy Law” shall have the meaning
specified in clause (viii) of paragraph 7A.

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                                “Business Day” shall mean any day other than (i)
a Saturday or a Sunday, (ii) a day on which commercial banks in New York City
are required or authorized to be closed and (iii) for purposes of paragraph 2C
hereof only, a day on which Prudential is not open for business.

                                “Cancellation Date” shall have the meaning
specified in paragraph 2H(3).

                                “Cancellation Fee” shall have the meaning
specified in paragraph 2H(3).

                                “Capital Expenditures” shall mean, for any
period, the sum of all amounts that would, in accordance with GAAP, be included
as capital expenditures on a consolidated statement of cash flows for the Parent
and its consolidated Subsidiaries during such period (including the amount of
assets leased under any Capital Lease Obligation), less the net proceeds
received by such Persons during such period from sales of fixed tangible assets
as reflected on the consolidated statement of cash flows for that period.

                                “Capital Stock” shall mean, with respect to any
Person, any class of preferred, common or other capital stock, share capital or
similar equity interest of such Person, including limited or general partnership
interests in a partnership and units or membership interests in a limited
liability company.

                                “Capitalized Lease Obligation” shall mean any
rental obligation which, under GAAP, is or will be required to be capitalized on
the books of the Parent or any Subsidiary, taken at the amount thereof accounted
for as indebtedness (net of interest expenses) in accordance with GAAP.

                                “Change in Control” shall mean (a) the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Exchange Act and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof)
of Equity Interests representing more than 25% of the aggregate ordinary voting
power represented by the issued and outstanding Equity Interests of the Parent;
(b) occupation after the Effective Date of a majority of the seats (other than
vacant seats) on the board of directors of the Parent by Persons who were
neither (i) nominated by the board of directors of the Parent nor (ii) appointed
by directors so nominated; (c) the acquisition after the Effective Date of
direct or indirect Control of the Parent by any Person or group; or (d) the
ownership after the Effective Date by any Person other than the Parent of any
Equity Interests of any Co-Issuer, or the ownership by any Person other than a
Co-Issuer, or the Subsidiary of a Co-Issuer that is the owner thereof as of the
Effective Date (or such later date on which such Subsidiary Guarantor becomes a
Subsidiary Guarantor pursuant to the terms of this Agreement), of any Equity
Interests of any Subsidiary Guarantor.

                                “Closing Day” shall mean with respect to any
Accepted Note, the Business Day specified for the closing of the purchase and
sale of such Accepted Note in the Request for Purchase of such Accepted Note,
provided that (i) if the Co-Issuers and the Purchaser which is

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obligated to purchase such Accepted Note agree on an earlier Business Day for
such closing, the “Closing Day” for such Accepted Note shall be such earlier
Business Day, and (ii) if the closing of the purchase and sale of such Accepted
Note is rescheduled pursuant to paragraph 2G, the Closing Day for such Accepted
Note, for all purposes of this Agreement except references to “original Closing
Day” in paragraph 2H(2), shall mean the Rescheduled Closing Day with respect to
such Accepted Note.

                                “Co-Issuers” shall have the meaning specified in
the introductory paragraph hereto.

                                “Code” shall mean the Internal Revenue Code of
1986, as amended.

                                “Collateral” shall mean the shares of Capital
Stock of the Credit Parties in which a Lien has been created under the Pledge
Agreement in favor of the Security Trustee for the benefit of the holders of the
Shelf Notes to secure the obligations of the Credit Parties under this
Agreement, the Shelf Notes and the other Transaction Documents.

                                “Collateral Agent” shall mean JPMorgan Chase
Bank, N.A., in its capacity as collateral agent for the Bank Lenders.

                                “Confirmation of Acceptance” shall have the
meaning specified in paragraph 2E.

                                “Consolidated Indebtedness” shall mean, as of
any date of determination, all Indebtedness of the Parent and its Subsidiaries
as would be shown on a consolidated balance sheet of the Parent and its
Subsidiaries as of such date prepared in accordance with GAAP (other than the
undrawn amount of any letters of credit issued pursuant to the terms of the Bank
Credit Agreement).

                                “Consolidated Net Income” shall mean, for any
period, the net income or loss of the Parent and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP after
eliminating all offsetting debts and credits between the Parent and its
Subsidiaries and all other items required to be eliminated in the course of the
preparation of consolidated financial statements of the Parent and its
Subsidiaries in accordance with GAAP, but excluding: (i) extraordinary gains or
losses; (ii) net earnings and losses of any Subsidiary of the Parent accrued
prior to the date it became a Subsidiary of the Parent; (iii) net earnings of
any business entity (other than a direct or indirect Subsidiary of the Parent)
in which the Parent or any of its Subsidiaries has an ownership interest unless
such net earnings shall have been actually received by the Parent or its
Subsidiaries in the form of cash distributions; (iv) any portion of net earnings
of any Subsidiary of the Parent which for any reason is unavailable for
distribution to the Parent; (v) earnings or losses resulting from any write-up
or write-down of assets of the Parent and its Subsidiaries other than in the
ordinary course of business; (vi) any reversal of any

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contingency reserve to the extent such contingency reserve was taken prior to
the date hereof; and (vii) the cumulative effect of a change in accounting
principles.

                                “Consolidated Net Worth” shall mean, as of the
date of determination, (a) the sum of (i) the par value (or value stated on the
books of the Parent) of the Capital Stock (but excluding treasury stock and
capital stock subscribed and unissued) of the Parent and its Subsidiaries plus
(ii) the amount of the paid-in capital and retained earnings of the Parent and
its Subsidiaries, in each case as such amounts would be shown on a consolidated
balance sheet of the Parent and its Subsidiaries as of such date prepared in
accordance with GAAP, minus (b) to the extent included in clause (a), (i) all
amounts property attribute to Minority Interests, if any, in the stock and
surplus of Subsidiaries.

                                “Consolidated Tangible Net Worth” shall mean, as
of any date of determination, (a) the sum of (i) the par value (or value stated
on the books of the Parent) of the Capital Stock (but excluding treasury stock
and capital stock subscribed and unissued) of the Parent and its Subsidiaries
plus (ii) the amount of the paid-in capital and retained earnings of the Parent
and its Subsidiaries, in each case as such amounts would be shown on a
consolidated balance sheet of the Parent and its Subsidiaries as of such date
prepared in accordance with GAAP, minus (b) to the extent included in clause
(a), (i) all amounts properly attributable to Minority Interests, if any, in the
stock and surplus of Subsidiaries of the Parent, and (ii) the sum of the
following (without duplication of deductions in respect of items already
deducted in arriving at surplus and retained earnings): (A) cost of treasury
shares, (B) the book value of all assets which should be classified as
intangibles (but in any event including goodwill, research and development
costs, trademarks, trade names, copyrights, patents and franchises and
unamortized debt discount), and (C) any write-up in the book value of assets
resulting from a revaluation thereof (other than any such write-up made in
connection with the acquisition of an asset from a Person which is not an
Affiliate of a Credit Party and so long as such a write-up is made in accordance
with GAAP and is based on the Fair Market Value of the asset).

                                “Consolidated Total Assets” shall mean, as of
any date of determination, the total assets of the Parent and its Subsidiaries
as would be shown on a consolidated balance sheet of the Parent and its
Subsidiaries as of such date prepared in accordance with GAAP.

                                “Consolidated Total Capitalization” shall mean,
at any time, the sum of (i) Consolidated Indebtedness and (ii) Consolidated
Tangible Net Worth, in each case determined as of the last day of the fiscal
quarter of the Parent then most recently ended.

                                “Control” shall mean 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.

                                “Credit Parties” shall mean, collectively,
without duplication, the Obligors and the Subsidiary Guarantors.

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                                “Delayed Delivery Fee” shall have the meaning
specified in paragraph 2H(2).

                                “Distribution” shall mean means in respect of
any Person: (a) dividends or other distributions or payments on capital stock or
other equity interest of such Person (except distributions in such stock or
other equity interest); and (b) the redemption or acquisition of such stock or
other equity interests or of warrants, rights or other options to purchase such
stock or other equity interests (except when solely in exchange for such stock
or other equity interests) unless made, contemporaneously, from the net proceeds
of a sale of such stock or other equity interests.

                                “EBITDA” shall mean, for any period, income
before income taxes for such period, plus, to the extent deducted in determining
income for such period, interest expense, depreciation, amortization of tangible
or intangible assets, and any other non-cash charges, but excluding
extraordinary gains (or losses) and any gains (or losses) from the sale or
disposition of assets other than in the ordinary course of business; all on a
consolidated basis for the Parent and its Subsidiaries and all calculated in
accordance with GAAP.

                                “Effective Date” shall mean February 11, 2005.

                                “Environmental Laws” shall mean all federal,
state, local and foreign laws relating to pollution or protection of the
environment, including laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals, or industrial, toxic
or hazardous substances or wastes into the environment (including, without
limitation, ambient air, surface water, ground water or land), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes, and any and all
regulations, codes, plans, orders, decrees, judgments, injunctions, notices or
demand letters issued, entered, promulgated or approved thereunder.

                                “Equity Interests” shall mean 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 their rights entitling the holder thereof
to purchase or acquire any such equity interest.

                                “ERISA” shall mean the Employee Retirement
Income Security Act of 1974, as amended.

                                “ERISA Affiliate” shall mean any corporation
which is a member of the same controlled group of corporations as any Credit
Party within the meaning of section 414(b) of the Code, or any trade or business
which is under common control with any Credit Party within the meaning of
section 414(c) of the Code.

                                “ERISA Event” shall mean (i) any “reportable
event”, as defined in Section 4043 of ERISA or the regulations issued thereunder
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

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“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 of an application for a waiver of
the minimum funding standard with respect to any Plan; (d) the incurrence by any
Credit Party or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan; (e) the receipt by any Credit
Party or any ERISA Affiliate from the PBGC or 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 Credit Party or any of its
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 Credit
Party or any ERISA Affiliate of any notice, or the receipt by any Multiemployer
Plan from any Credit Party 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, within the meaning of
Title IV of ERISA.

                                “Event of Default” shall mean any of the events
specified in paragraph 7A, provided that there has been satisfied any
requirement in connection with such event for the giving of notice, or the lapse
of time, or the happening of any further condition, event or act, and “Default”
shall mean any of such events, whether or not any such requirement has been
satisfied.

                                “Excess Assets” shall have the meaning specified
in paragraph 6H(ii).

                                “Excess Replacement Assets” shall have the
meaning specified in paragraph 6H(ii).

                                “Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended.

                                “Existing Note Agreement” shall mean that
certain Note Purchase Agreement, dated as of January 28, 1998, by and among the
Co-Issuers, Shoals Supply, Inc. and each of the purchasers named on Schedule A
thereto.

                                “Facility” shall have the meaning specified in
paragraph 2A.

                                “Fair Market Value” shall mean at any time and
with respect to any property, the sale value of such property that would be
realized in an arm’s-length sale at such time between an informed and willing
buyer and an informed and willing seller (neither being under a compulsion to
buy or sell).

                                “GAAP” shall mean generally accepted accounting
principles as in effect from time to time in the United States of America.

                                “Governmental Authority” shall mean

 

                  (i)             the government of

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                  (a)             the United States of America or any State or
other political subdivision thereof, or                     (b)            any
jurisdiction in which the Parent or any Subsidiary conducts all or any part of
its business, or which asserts jurisdiction over any properties of the Parent or
any Subsidiary, or  

                  (ii)            any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or pertaining to, any such
government.

 

                                “Guarantee” shall mean, with respect to any
Person (the “guarantor”), any obligation, contingent or otherwise, 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, (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
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. The amount of any Guarantee shall be equal to the
outstanding principal amount of the obligation guaranteed or such lesser amount
to which the maximum exposure of the guarantor shall have been specifically
limited.

                                “Guaranteed Obligations” shall have the meaning
specified in paragraph 11A.

                                “Hedge Treasury Note(s)” shall mean, with
respect to any Accepted Note, the United States Treasury Note or Notes whose
duration (as determined by Prudential) most closely matches the duration of such
Accepted Note.

                                “Hedging Agreement” shall mean any interest rate
protection agreement, foreign currency exchange agreement, commodity price
protection agreement or other interest or currency exchange rate or commodity
price hedging arrangement.

                                “Hedging Exposure Amount” shall mean the maximum
aggregate amount (giving effect to any netting agreements) that the Obligors and
the Subsidiaries thereof would be required to pay at any time if all of their
Hedging Agreements were terminated at such time.

                                “Hostile Tender Offer” shall mean, with respect
to the use of proceeds of any Shelf Note, any offer to purchase, or any purchase
of, shares of capital stock of any corporation or equity interests in any other
entity, or securities convertible into or representing the beneficial ownership
of, or rights to acquire, any such shares or equity interests, if such shares,
equity

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interests, securities or rights are of a class which is publicly traded on any
securities exchange or in any over-the-counter market, other than purchases of
such shares, equity interests, securities or rights representing less than 5% of
the equity interests or beneficial ownership of such corporation or other entity
for portfolio investment purposes, and such offer or purchase has not been duly
approved by the board of directors of such corporation or the equivalent
governing body of such other entity prior to the date on which the Co-Issuers
make the Request for Purchase of such Shelf Note.

                                “Inactive Subsidiary” shall mean, with respect
to any Person, a Subsidiary of such Person (i) that conducts no business
activities on the Effective Date nor on any date thereafter, (ii) the assets of
which Subsidiary have a Fair Market Value less than the smaller of (x) $50,000
or (y) one-half of one percent (.5%) of the consolidated assets of such Person
and its Subsidiaries; and (iii) the total liabilities of which are less than
$25,000; provided that if the assets of all such Subsidiaries that meet the
conditions of clauses (i), (ii) and (iii) (each, a “Specified Subsidiary”), in
the aggregate, exceed either of the thresholds of clause (ii), then there shall
be excluded from the term “Inactive Subsidiary” the Specified Subsidiary having
the greatest assets, and, if necessary, the Specified Subsidiary having the next
greatest assets, and so on, until the assets of the remaining Specified
Subsidiaries, in the aggregate, no longer exceed either of such thresholds of
clause (ii) (such remaining Specified Subsidiaries constituting the Inactive
Subsidiaries); provided further, that no Credit Party shall be an Inactive
Subsidiary.

                                “including” shall mean, unless the context
clearly requires otherwise, “including without limitation”.

                                “Indebtedness” of any Person means, without
duplication, (a) all obligations of such Person for borrowed money or with
respect to deposits or advances of any kind, (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 accrued expenses which are payable within one year or current
accounts payable in each case 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 Capitalized Lease Obligations of such Person
(and excluding from the definition of Indebtedness leases of real property or
personal property which are not Capital Leases), (i) all obligations, contingent
or otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty (other than performance guaranties) and (j) all
obligations, contingent or otherwise, of such Person in respect of bankers’
acceptances. The Indebtedness of any Person shall include the Indebtedness of
any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.

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                                “INHAM Exemption” shall have the meaning
specified n paragraph 9B(v).

                                “Intercreditor Agreement” shall have the meaning
specified in paragraph 3A(1).

                                “Interest Charges” shall mean, for any period of
four consecutive fiscal quarters of the Parent, all interest expense of the
Parent and its Subsidiaries determined on a consolidated basis in accordance
with GAAP.

                                “Interest Rate Hedging Exposure Amount” shall
mean the Hedging Exposure Amount attributable to Interest Rate Hedging
Agreements.

                                “Interest Rate Hedging Agreement” shall mean a
Hedging Agreement between a Co-Issuer and an Interest Rate Protection Merchant
which provides for interest rate protection.

                                “Interest Rate Protection Merchant” shall mean a
lender under the Bank Credit Agreement which provides Hedging Agreements to the
Co-Issuers or either of them for interest rate protection.

                                “Issuance Fee”  shall have the meaning specified
in paragraph 2H(1).

                                “Issuance Period” shall have the meaning
specified in paragraph 2B.

                                “Kinro” shall have the meaning specified in the
introductory paragraph hereto.

                                “LCC” shall mean Lippert Components of Canada,
Inc., an Ontario, Canada corporation.

                                “Leverage Ratio” shall mean, as of the end of
any fiscal quarter of the Parent, the ratio of (a) Consolidated Indebtedness
determined on the last day of such fiscal quarter to (b) EBITDA for the period
of four consecutive fiscal quarters of the Parent ending on the last day of such
fiscal quarter, each as determined on a Pro Forma Basis.

                                “Lien” shall mean any mortgage, pledge, security
interest, encumbrance, lien (statutory or otherwise) or charge of any kind
(including any agreement to give any of the foregoing, any conditional sale or
other title retention agreement, any lease in the nature thereof, and the filing
of or agreement to give any financing statement under the Uniform Commercial
Code of any jurisdiction) or any other type of preferential arrangement for the
purpose, or having the effect, of protecting a creditor against loss or securing
the payment or performance of an obligation.

                                “Lippert Components” shall have the meaning
specified in the introductory paragraph hereto.

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                                “Material” shall mean material in relation to
the business, operations, affairs, financial condition, assets, properties or
prospects of the Parent and its Subsidiaries taken as a whole.

                                “Material Adverse Effect” shall mean a Material
adverse effect on (a) the business, operations, affairs, financial condition,
assets, properties or prospects of the Parent and its Subsidiaries, taken as a
whole, (b) the ability of any Co-Issuer to perform its obligations under this
Agreement or any of the Shelf Notes, (c) the ability of the Parent to perform
its obligations under this Agreement or the Parent Guaranty, (d) the ability of
the Parent and its Subsidiaries, taken as a whole, to perform their obligations
under any of the other Transaction Documents, (e) the validity or enforceability
of this Agreement or any of the other Transaction Documents or (f) the Liens
granted by the Pledge Agreement.

                                “Minimum Debt Service Ratio” shall mean, on any
date of determination, the ratio of (i) EBITDA for the period of four
consecutive fiscal quarters then most recently ended, minus Capital Expenditures
made and dividends declared to the Parent’s shareholders during such period, to
(ii) the current portion of Consolidated Indebtedness (as determined as of such
determination date), plus Interest Charges for the period of four consecutive
fiscal quarters then most recently ended, in each case determined on a Pro Forma
Basis.

                                “Minority Interests” shall mean any shares of
stock of any class of a Subsidiary of any Person (other than directors’
qualifying shares as required by law) that are not owned by such Person and/or
one or more of such Person’s Subsidiaries. Minority Interests shall be valued by
valuing “Minority Interests” consisting of preferred stock at the voluntary or
involuntary liquidation value of such preferred stock, whichever is greater, and
by valuing “Minority Interests” consisting of common stock at the book value of
capital and surplus applicable thereto adjusted, if necessary, to reflect any
changes from the book value of such common stock required by the foregoing
method of valuing “Minority Interests” in preferred stock.

                                “Multiemployer Plan” shall mean any Plan which
is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of
ERISA.

                                “NAIC Annual Statement” shall have the meaning
specified in paragraph 9B(i).

                                “New Subsidiary” shall have the meaning
specified in paragraph 5K.

                                “Obligors” shall have the meaning specified in
the introductory paragraph hereto.

                                “Officer’s Certificate” shall mean, with respect
to any Obligor, a certificate signed in the name of such Obligor by an
Authorized Officer of such Obligor.

                                “Other Party” shall have the meaning specified
in paragraph 11E.

                                “Parent” shall have the meaning specified in the
introductory paragraph hereto.

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                                “Parent Guaranty” shall have the meaning
specified in paragraph 3A(1).

                                “PBGC” shall mean the Pension Benefit Guaranty
Corporation.

                                “Permitted Liens” shall mean the following: 

 

                                  (i)            any Lien existing on the date
hereof which is listed on Schedule 6C to this Agreement securing Indebtedness
listed on such schedule and any extensions, renewals and replacements of such
Indebtedness that do not increase the outstanding principal amount of such
Indebtedness secured by such Lien, provided that any such Lien shall secure only
those obligations which it secured as of the Effective Date (except that any
such Liens on properties constructed, improved or acquired with the proceeds of
industrial revenue or development bond issues representing Indebtedness of a
Credit Party owing directly or indirectly to GE Capital Finance, Inc., and which
Liens secure only such issues, whether such issues are outstanding as of the
Effective Date or which are thereafter outstanding, may secure other such issues
representing Indebtedness so owing to such obligee the proceeds of which have
been used by a Credit Party to construct, improve or acquire other property, so
long as such Liens do not extend to any property of a Credit Party not so
financed and secure only Indebtedness represented by such issues);    
                                (ii)           any Lien created to secure all or
any part of the purchase price, or to secure Indebtedness incurred or assumed to
pay all or any part of the purchase price or cost of construction, of any fixed
or capital assets acquired, constructed or improved by any Obligor or any
Subsidiary thereof after the Effective Date (other than Liens on any Restricted
Assets); provided that (a) such Lien secures Indebtedness permitted under this
Agreement, (b) such Lien and the Indebtedness secured thereby are incurred
within 180 days (and in the case of industrial revenue bonds, 360 days) prior to
or after such acquisition or the completion of such construction or improvement
or the placing in service, as the case may be, of the asset which is subject to
such Lien, (c) the Indebtedness secured thereby does not at any time exceed 85%
(in the case of real property and the improvements thereon) or 100% (in the case
of personal property, other than fixtures) of the cost of acquiring,
constructing or improving such fixed or capital assets, and (d) such Lien shall
not apply to any other property or assets of any Obligor or any Subsidiary
thereof;                                     (iii)          carriers’,
warehousemen’s, mechanics’, repairmen’s and other like Liens imposed by law in
an aggregate amount not exceeding $250,000 arising in the ordinary course of
business and securing obligations that are not overdue by more than 30 days or
are being contested in good faith by appropriate proceedings and for which
adequate reserves have been established therefor in accordance with GAAP on the
books of the relevant Obligor or Subsidiary, as the case may be, and as to which
the failure to

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  make payment during such contest could not reasonably be expected to have a
Material Adverse Effect;    
                                (iv)          pledges and deposits made in the
ordinary course of business in compliance with workers’ compensation,
unemployment insurance and other social security laws or regulations in respect
of which adequate reserves shall have been established;    
                                (v)           deposits to secure the performance
of bids, trade contracts, leases (other than Capitalized Lease Obligations),
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business
and not incurred or made in connection with the borrowing of money, the
obtaining of advances or credit or the payment of the deferred purchase price of
property;                                     (vi)          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
Obligor or any Subsidiary thereof;    
                                (vii)         Liens securing Indebtedness of one
Credit Party to another Credit Party (other than Liens on any Restricted
Assets); provided that (w) such Indebtedness is permitted under paragraphs 6D,
6F and 6I hereof (as applicable), (x) all of the outstanding capital stock or
other equity interests of each such Credit Party shall be owned 100% directly or
indirectly by the Parent, (y) each of such Credit Parties to or by whom such
Indebtedness is owed, or who owns (directly or indirectly) any stock referred to
in the preceding clause (x), shall have become party to the Subsidiary Guaranty
and (z) such Indebtedness shall not be assigned or transferred by the obligee
thereof to any Person other than another Credit Party such that after giving
effect to such assignment and transfer all of the foregoing conditions are
satisfied;                                     (viii)        Liens securing
Indebtedness outstanding under the Bank Credit Agreement so long as the Shelf
Notes are secured equally and ratably therewith pursuant to such documents,
instruments and agreements as shall be required by the Required Holders,
including without limitation an intercreditor agreement by and among the Bank
Lenders and the holders of the Shelf Notes in form satisfactory to the Required
Holders;                                     (ix)           Liens not otherwise
permitted by clauses (i) through (viii) above (other than Liens on any
Restricted Assets), provided that the aggregate amount of all Indebtedness
secured by such Liens shall not at any time exceed 15% of Consolidated Net Worth
(determined as of the last day of the then most recently ended fiscal quarter of
the Parent); and

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                                  (x)            Liens that extend, renew or
replace Liens permitted by clauses (i) through (ix);  

provided, however, that at no time shall Indebtedness secured by Liens described
in clauses (i), (ii) and (ix) exceed 55% of Consolidated Total Capitalization at
such time.

 

                Notwithstanding anything contained herein to the contrary, the
Obligors acknowledge and agree that they will not, and will not permit any of
their respective Subsidiaries to, create, incur, assume or permit to exist any
Liens in respect of any Indebtedness under the Bank Credit Agreement, except in
accordance with clause (viii) above. In no event shall any Lien on any
Restricted Asset be a Permitted Lien.

                                “Permitted Loans and Investments” shall mean (i)
subject to paragraph 6D(vi) hereof, investments, loans and advances by any
Credit Party and any of its Subsidiaries in and to Wholly-Owned Subsidiaries;
(ii) investments in commercial paper and loan participations maturing within 270
days from the date of acquisition thereof having, at such date of acquisition, a
rating of A-1 or P-1 or better from Standard & Poor’s Corporation, Moody’s
Investors Service, Inc. or by another nationally recognized credit rating
agency; (iii) direct obligations of, or obligations the principal of or interest
on which are unconditionally guaranteed by the United States of America (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 by any other foreign government
of equal or better credit quality), in each case maturing within one year from
the date of acquisition thereof; (iv) investments in certificates of deposit,
banker’s acceptances and time deposits maturing within one year 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 the United States of America or any State
thereof which has (x) a combined capital and surplus and undivided profits of
not less than $100,000,000 or (y) assets of not less than $1,000,000,000; (v)
fully collateralized repurchase agreements, having terms of less than 90 days,
for government obligations of the type specified in (iii) above with a
commercial bank or trust company meeting the requirements of (iv) above; and
(vi) investments in addition to those permitted by clauses (i) through (v),
including acquisitions of the assets or stock or other securities of any Person,
provided, however, that the amount paid for any acquisition of the assets or
stock or other securities of any one Person and its affiliates and subsidiaries
shall not exceed $30,000,000 and the aggregate amount paid for any such
acquisitions from all Persons on or after the Effective Date shall not exceed
$125,000,000, and any acquisitions not satisfying all of the requirements of
this proviso shall be deemed, in their entirety, not to be Permitted Loans and
Investments.

                                “Person” shall mean and include an individual, a
partnership, a joint venture, a corporation, a limited liability company, a
trust, an unincorporated organization and a government or any department or
agency thereof.

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                                “Plan” shall mean any employee pension benefit
plan (as such term is defined in section 3 of ERISA) which is or has been
established or maintained, or to which contributions are or have been made, by
the Co-Issuers or any ERISA Affiliate.

                                “Pledge Agreement” shall have the meaning
specified in paragraph 3A(1).

                                “Pledgors” shall mean, collectively, the
Obligors and each Subsidiary Guarantor.

                                “Preferred Stock” shall mean any class of
capital stock of a corporation that is preferred over any other class of capital
stock of such corporation as to the payment of dividends or the payment of any
amount upon liquidation or dissolution of such corporation.

                                “Priority Debt” means, as of any date, the sum
(without duplication) of:

 

                                   (i)           all outstanding unsecured
Indebtedness of any Subsidiary of the Parent, other than:  

                                   (a)           unsecured Indebtedness of such
Subsidiary owing solely to the Parent or any Wholly-Owned Subsidiary of the
Parent,  

                                  (b)           unsecured Indebtedness of the
Co-Issuers, and                                     (c)           unsecured
Indebtedness of any such Subsidiary in respect of Guarantees delivered pursuant
to the Bank Credit Agreement; provided that such Subsidiary has executed the
Subsidiary Guaranty on the Effective Date or in accordance with the terms of
paragraph 5K;                                     (d)           unsecured
Indebtedness of such Subsidiary under this Agreement, the Subsidiary Guaranty or
any other Transaction Document to which it is a party;  

                                   (ii)          all Indebtedness of the Parent
and its Subsidiaries secured by Liens, other than:  

                                   (a)           secured Indebtedness
outstanding under the Bank Credit Agreement or in respect of Guarantees
delivered pursuant to the Bank Credit Agreement, so long as (x) the Shelf Notes
are secured equally and ratably therewith by the same collateral securing such
other Indebtedness pursuant to such documents, instruments and agreements as
shall be required by the Required Holders (and such other Indebtedness shall not
be secured by any other collateral of any kind), (y) the Bank Lenders are
parties to the Intercreditor Agreement, which shall be in full force and effect
and shall have been amended, if necessary, to apply to such collateral pursuant
to an amendment reasonably satisfactory to the Required Holders, and (z) with
respect to any such Guarantee, the Person that provided such Guarantee shall
have also executed the Subsidiary Guaranty on the Effective Date or in
accordance with the terms of paragraph 5K, and

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                                   (b)           secured Indebtedness
outstanding under any other document, instrument or agreement so long as (w) the
Shelf Notes are secured equally and ratably therewith by the same
collateral securing such other Indebtedness pursuant to such documents,
instruments and agreements as shall be required by the Required Holders (and
such other Indebtedness shall not be secured by any other collateral of any
kind), (x) the holder of such other Indebtedness shall have become a party to
the Intercreditor Agreement pursuant to a joinder agreement in form and
substance satisfactory to the Required Holders and the Intercreditor Agreement
shall have been amended, if necessary, to apply to such collateral pursuant to
an amendment reasonably satisfactory to the Required Holders, (y) the holders of
the Shelf Notes shall have received evidence reasonably satisfactory to each of
them that the Shelf Notes are so secured (which evidence may be an opinion from
counsel reasonably satisfactory to such holder or other evidence, so long as
such opinion or other evidence is reasonably satisfactory to each such holder),
and (z) no Default or Event of Default shall have occurred and be continuing at
the time such other document, instrument or agreement is entered into; and    
                                 (c)           secured Indebtedness of the
Parent under the Parent Guaranty or any other Transaction Document to which it
is a party, and secured Indebtedness of any Subsidiary of the Parent under this
Agreement, the Subsidiary Guaranty or any other Transaction Document to which it
is a party; and  

                                   (iii)         the greater of the liquidation
preference of, or the amount payable upon the mandatory redemption of, all
issued and outstanding Preferred Stock of Subsidiaries of the Parent.

 

Notwithstanding the foregoing, the undrawn amount of any letters of credit
issued pursuant to the terms of the Bank Credit Agreement shall not constitute
Indebtedness of the Parent or any of its Subsidiaries for purposes of
determining Priority Debt.

                                “Pro Forma Basis” shall mean, for the
determinations of “EBITDA”, “Consolidated Indebtedness”, “Capital Expenditures”
and “Interest Charges” for any period of four consecutive fiscal quarters of the
Parent for purposes of calculating the Leverage Ratio and the Minimum Debt
Service Ratio, that such determinations shall be made on the assumptions that
(a) each Wholly-Owned Subsidiary that was acquired by a Credit Party during such
period from a Person that was not an Affiliate of a Credit Party and each
disposition during such period of any Person that ceases to be a Wholly-Owned
Subsidiary upon such disposition, occurred on the first day of such period, and
(b) all Indebtedness incurred or paid (or to be incurred or paid) by all such
Persons in connection with all such transactions (x) was incurred or paid on the
first day of such period, as the case may be, and (y) if incurred, was
outstanding in full at all times during such period and had in effect at all
times during such period (or any portion of such period during which such Debt
was not actually outstanding) an interest rate equal to the interest rate in
effect on the date of the actual incurrence thereof (regardless of whether such
interest rate is a

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floating rate or would otherwise change over time by reference to a formula or
for any other reason).

                                “Prudential” shall have the meaning specified in
the introduction hereto.

                                “Prudential Affiliate” shall mean (i) any
corporation or other entity controlling, controlled by, or under common control
with, Prudential and (ii) any managed account or investment fund which is
managed by Prudential or a Prudential Affiliate described in clause (i) of this
definition. For purposes of this definition, the terms “control”, “controlling”
and “controlled” shall mean the ownership, directly or through subsidiaries, of
a majority of a corporation’s or other Person’s Voting Stock or equivalent
voting securities or interests.

 

                  “Purchasers” shall have the meaning specified in the
introduction hereto.

 

                                “PTE” shall have the meaning specified in
paragraph 9B(i).

                                “QPAM Exemption” shall have the meaning
specified in paragraph 9B(iv).

                                “Request for Purchase” shall have the meaning
specified in paragraph 2C.

                                “Required Holder(s)” shall mean the holder or
holders of at least 66 2/3% of the aggregate principal amount of the Shelf Notes
or of a Series of Shelf Notes, as the context may require, from time to time
outstanding and, if no Shelf Notes are outstanding, shall mean Prudential.

                                “Rescheduled Closing Day” shall have the meaning
specified in paragraph 2G.

                                “Responsible Officer” shall mean the chief
executive officer, chief operating officer, chief financial officer or chief
accounting officer of any Co-Issuer or the Parent, general counsel of any
Co-Issuer or the Parent or any other officer of any Co-Issuer or the Parent, as
the context requires, involved principally in its financial administration or
its controllership function.

                                “Restricted Assets” shall mean “inventory” or
“accounts” or any “proceeds” thereof, as such terms are defined in Section 9-102
of the Uniform Commercial Code as in effect in the State of New York from time
to time.

                                “Restricted Payment” shall mean: (i) any
Distribution in respect of a Credit Party or any Subsidiary of a Credit Party
(other than on account of capital stock or other equity interests of a
Subsidiary of a Credit Party owned legally and beneficially by such Credit Party
or another Subsidiary of such Credit Party), including any Distribution
resulting in the acquisition by a Credit Party of securities which would
constitute treasury stock, and (ii) any payment, repayment, redemption,
retirement, repurchase or other acquisition, direct, or indirect, by a Credit
Party or any Subsidiary thereof, on account of, or in respect of, the principal
of any Subordinated Debt (or any installment thereof) prior to the regularly
scheduled maturity date thereof (as in

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effect on the date such Subordinated Debt was originally incurred) other than in
respect of Subordinated Debt of one Credit Party to another Credit Party
provided that no Event of Default exists or would exist after such prepayment.

                                For purposes of this Agreement, the amount of
any Restricted Payment made in property shall be the greater of (x) the Fair
Market Value of such property (as determined in good faith by the board of
directors (or equivalent governing body) of the Person making such Restricted
Payment) and (y) the net book value thereof on the books of such Person, in each
case determined as of the date on which such Restricted Payment is made.

                                “Securities Act” shall mean the Securities Act
of 1933, as amended.

                                “Security Trustee” shall mean JPMorgan Chase
Bank, N.A., in its capacity as security trustee for the holders of the Shelf
Notes.

                                “Series” shall have the meaning specified in
paragraph 1A.

                                “Shelf Note(s)” shall have the meaning specified
in paragraph 1A.

                                “Significant Holder” shall mean (i) Prudential,
so long as Prudential or any Prudential Affiliate shall hold (or be committed
under this Agreement to purchase) any Shelf Note, or (ii) any other holder of at
least 10% of the aggregate principal amount of the Shelf Notes of any Series
from time to time outstanding.

                                “Source” shall have the meaning specified in
paragraph 9B.

                                “Subordinated Debt” shall mean any Indebtedness
that is in any manner subordinated in right of payment or security in any
respect to the Shelf Notes.

                                “Subordination Agreement” shall have the meaning
specified in paragraph 3A(1).

                                “Subsidiary” shall mean, with respect to any
Person (the “parent entity”) 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 entity in the parent entity’s 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 by the parent entity, or (b) that is, as of such date, otherwise controlled
by the parent entity or one or more subsidiaries of the parent entity or by the
parent entity and one or more subsidiaries of the parent entity. Unless the
context otherwise clearly requires, any reference to a “Subsidiary” is a
reference to a Subsidiary of the Parent.

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                                “Subsidiary Guaranty” shall have the meaning
specified in paragraph 3A(1).

                                “Subsidiary Guarantor” shall mean (a) each of
the Subsidiaries of the Obligors listed on Schedule 3A(1), and (b) each Person
that hereafter becomes a party to the Subsidiary Guaranty pursuant to the
requirements of paragraph 5K.

                                “Succession Plan” shall have the meaning
specified in paragraph 5O.

                                “Successor Corporation” shall have the meaning
specified in paragraph 6B.

                                “Taxes” shall mean any and all present or future
taxes, levies, imposts, duties, deductions, charges or withholdings imposed by
any Governmental Authority.

                                “Transaction Documents” shall mean,
collectively, this Agreement, the Shelf Notes, the Pledge Agreement, the
Subordination Agreement, the Subsidiary Guaranty and the Intercreditor
Agreement, and any and all other agreements, documents, certificates and
instruments from time to time executed or delivered in connection therewith or
related thereto.

                                “Transfer” shall have the meaning specified in
paragraph 6H.

                                “Transferee” shall mean any direct or indirect
transferee of all or any part of any Shelf Note purchased by any Purchaser under
this Agreement.

                                “Trust Agreement” shall have the meaning
specified in paragraph 3A(1).

                                “USA Patriot Act” shall mean United States
Public Law 107-56, Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of
2001, as may be amended from time to time.

                                “Voting Stock” shall mean, with respect to any
Person, any shares of stock (or similar equity interests) of such Person whose
holders are entitled under ordinary circumstances to vote for the election of
directors (or members of a similar body that has management authority of such
Person) of such Person (irrespective of whether at the time stock (or similar
equity interests) of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).

                                “Wholly-Owned Subsidiary” shall mean, at any
time, any Subsidiary one hundred percent (100%) of all of the equity interests
(except directors’ qualifying shares) and voting interests of which are owned by
any one or more of the Obligors and the Obligors’ other Wholly-Owned
Subsidiaries at such time.

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                                “Withdrawal Liability” shall mean 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.

                                10C.        Accounting Principles, Terms and
Determinations.  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 Co-Issuers notify Prudential
that the Co-Issuers 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 Prudential
notifies the Co-Issuers that the Required Holders 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.

                11.           PARENT GUARANTY.

                The Parent acknowledges its unconditional and irrevocable
guarantee, made as of the Effective Date, in favor of Prudential and each holder
of any Shelf Notes at any time outstanding, of the due and punctual payment of
the principal of, Yield-Maintenance Amount (if any) and interest on said Shelf
Notes and any other amounts owing by the Co-Issuers hereunder, all as more
particularly set forth in the Parent Guaranty.

                12.           CONFIDENTIALITY.

                For the purposes of this paragraph 12, “Confidential
Information” means information delivered to Prudential or any Purchaser by or on
behalf of any Credit Party or any of its Subsidiaries in connection with the
transactions contemplated by or otherwise pursuant to this Agreement that is
proprietary in nature and that was clearly marked or labeled or otherwise
adequately identified when received by Prudential or such Purchaser as being
confidential information of such Credit Party or such Subsidiary, provided that
such term does not include information that (a) was publicly known or otherwise
known to Prudential or such Purchaser, as the case may be, prior to the time of
such disclosure, (b) subsequently becomes publicly known through no act or
omission by Prudential or such Purchaser or any person acting on their behalf,
(c) otherwise becomes known to Prudential or such Purchaser other than through
disclosure by any Credit Party or any of its Subsidiaries or (d) constitutes
financial statements delivered to Prudential or such Purchaser under paragraph
5A that are otherwise publicly available. Prudential and each Purchaser will
maintain the confidentiality of such Confidential Information received by it in
accordance with procedures adopted by Prudential or such Purchaser, as the case
may be, in good faith to protect confidential information of third parties
delivered to it, provided that Prudential or such Purchaser, as the case may be,
may deliver or disclose Confidential Information to (i) its directors, officers,
employees, agents, attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment represented by its
Shelf

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Notes or this Agreement), (ii) its financial advisors and other professional
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this paragraph 12, (iii) any other
holder of any Shelf Note, (iv) any Institutional Investor to which it sells or
offers to sell such Shelf Note or any part thereof or any participation therein
(if such Institutional Investor has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this paragraph
12), (v) any Person from which it offers to purchase any security of the Parent
or of any Co-Issuer (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this paragraph
12), (vi) any federal or state regulatory authority having jurisdiction over
Prudential or such Purchaser, as the case may be, (vii) the National Association
of Insurance Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information about Prudential’s
or such Purchaser’s investment portfolio, or (viii) any other Person to which
such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to Prudential or
such Purchaser, (x) in response to any subpoena or other legal process, (y) in
connection with any litigation to which Prudential or such Purchaser is a party,
or (z) if an Event of Default has occurred and is continuing, to the extent
Prudential or such Purchaser may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of its rights and remedies under the Shelf Notes and this Agreement.
Each holder of a Shelf Note, by its acceptance of a Shelf Note, will be deemed
to have agreed to be bound by and to be entitled to the benefits of this
paragraph 12 as though it were a party to this Agreement. On reasonable request
by the Co-Issuers in connection with the delivery to any holder of a Shelf Note
of information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Co-Issuers
embodying the provisions of this paragraph 12.

                13.           MISCELLANEOUS.

                                13A.        Shelf Note Payments.   The
Co-Issuers agree that, so long as any Purchaser shall hold any Shelf Note, they
will make payments of principal of, interest on, and any Yield-Maintenance
Amount payable with respect to, such Shelf Note, which comply with the terms of
this Agreement, by wire transfer of immediately available funds for credit (not
later than 2:00 p.m., New York City local time, on the date due) to (i) the
account or accounts of such Purchaser specified in the Confirmation of
Acceptance with respect to such Shelf Note in the case of any Shelf Note or (ii)
such other account or accounts in the United States as such Purchaser may from
time to time designate in writing, notwithstanding any contrary provision herein
or in any Shelf Note with respect to the place of payment. Each Purchaser agrees
that, before disposing of any Shelf Note, it will make a notation thereon (or on
a schedule attached thereto) of all principal payments previously made thereon
and of the date to which interest thereon has been paid. The Co-Issuers agree to
afford the benefits of this paragraph 13A to any Transferee which shall have
made the same agreement as the Purchasers have made in this paragraph 13A.

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                                13B.        Expenses.  The Co-Issuers agree,
whether or not the transactions contemplated hereby shall be consummated, to
pay, and save Prudential, each Purchaser and any Transferee harmless against
liability for the payment of, all out-of-pocket expenses arising in connection
with such transactions, including (i) all document production and duplication
charges and the fees and expenses of any special counsel engaged by Prudential
or any Purchaser or any Transferee in connection with this Agreement and the
other Transaction Documents, the transactions contemplated hereby and any
subsequent proposed modification of, or proposed consent under, this Agreement
or the other Transaction Documents, whether or not such proposed modification
shall be effected or proposed consent granted, and (ii) the costs and expenses,
including attorneys’ fees, incurred by Prudential or any Purchaser or any
Transferee in enforcing (or determining whether or how to enforce) any rights
under this Agreement, the Shelf Notes or the other Transaction Documents or in
responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement or the other Transaction
Documents or the transactions contemplated hereby or thereby or by reason of
Prudential, any Purchaser or any Transferee having acquired any Shelf Note,
including, without limitation, costs and expenses incurred in any workout,
restructuring or bankruptcy case. The obligations of the Co-Issuers under this
paragraph 13B shall survive the transfer of any Shelf Note or portion thereof or
interest therein by Prudential, any Purchaser or any Transferee and the payment
of any Shelf Note.

                                13C.        Consent to Amendments.  This
Agreement may be amended, and any Credit Party or Subsidiary thereof may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, if the Co-Issuers shall obtain the written consent to such
amendment, action or omission to act, of the Required Holder(s) of all Shelf
Notes except that, (i) with the written consent of the holders of all Shelf
Notes of a particular Series, and if an Event of Default shall have occurred and
be continuing, of the holders of all Shelf Notes of all Series, at the time
outstanding (and not without such written consents), the Shelf Notes of such
Series may be amended or the provisions thereof waived to change the maturity
thereof, to change or affect the principal thereof, or to change or affect the
rate or time of payment of interest on or any Yield-Maintenance Amount payable
with respect to the Shelf Notes of such Series, (ii) without the written consent
of the holder or holders of all Shelf Notes at the time outstanding, no
amendment to or waiver of the provisions of this Agreement shall change or
affect the provisions of paragraph 7A or this paragraph 13C insofar as such
provisions relate to proportions of the principal amount of the Shelf Notes of
any Series, or the rights of any individual holder of Shelf Notes, required with
respect to any declaration of Shelf Notes to be due and payable or with respect
to any consent, amendment, waiver or declaration which would affect such
provisions in the manner described in this clause (ii), (iii) with the written
consent of Prudential (and not without the written consent of Prudential) the
provisions of paragraph 2B may be amended or waived (except insofar as any such
amendment or waiver would affect any rights or obligations with respect to the
purchase and sale of Shelf Notes which shall have become Accepted Notes prior to
such amendment or waiver), and (iv) with the written consent of all of the
Purchasers which shall have become obligated to purchase Accepted Notes of any
Series (and not without the written consent of all such Purchasers), any of the
provisions of paragraphs 2B and 3 may be amended or waived insofar as such
amendment or waiver would affect only rights or obligations with respect to the
purchase and sale of the Accepted Notes of

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such Series or the terms and provisions of such Accepted Notes. Each holder of
any Shelf Note at the time or thereafter outstanding shall be bound by any
consent authorized by this paragraph 13C, whether or not such Shelf Note shall
have been marked to indicate such consent, but any Shelf Notes issued thereafter
may bear a notation referring to any such consent. No course of dealing between
any of the Credit Parties and the holder of any Shelf Note nor any delay in
exercising any rights hereunder or under any Shelf Note shall operate as a
waiver of any rights of any holder of such Shelf Note. As used herein and in the
Shelf Notes, the term “this Agreement” and references thereto shall mean this
Agreement (including, without limitation, all Schedules and Exhibits attached
hereto) as it may from time to time be amended or supplemented.

                                13D.        Form, Registration, Transfer and
Exchange of Shelf Notes; Lost Shelf Notes.  The Shelf Notes are issuable as
registered notes without coupons in denominations of at least $1,000,000, except
as may be necessary to reflect any principal amount not evenly divisible by
$1,000,000. The Co-Issuers shall keep at their principal offices a register in
which the Co-Issuers shall provide for the registration of Shelf Notes and of
transfers of Shelf Notes. Upon surrender for registration of transfer of any
Shelf Note at the principal offices of the Co-Issuers, the Co-Issuers shall, at
their expense, execute and deliver one or more new Shelf Notes of like tenor and
of a like aggregate principal amount, registered in the name of such transferee
or transferees. At the option of the holder of any Shelf Note, such Shelf Note
may be exchanged for other Shelf Notes of like tenor and of any authorized
denominations, of a like aggregate principal amount, upon surrender of the Shelf
Note to be exchanged at the principal offices of the Co-Issuers. Whenever any
Shelf Notes are so surrendered for exchange, the Co-Issuers shall, at their
expense, execute and deliver the Shelf Notes which the holder making the
exchange is entitled to receive. Each installment of principal payable on each
installment date upon each new Shelf Note issued upon any such transfer or
exchange shall be in the same proportion to the unpaid principal amount of such
new Shelf Note as the installment of principal payable on such date on the Shelf
Note surrendered for registration of transfer or exchange bore to the unpaid
principal amount of such Shelf Note. No reference need be made in any such new
Shelf Note to any installment or installments of principal previously due and
paid upon the Shelf Note surrendered for registration of transfer or exchange.
Every Shelf Note surrendered for registration of transfer or exchange shall be
duly endorsed, or be accompanied by a written instrument of transfer duly
executed, by the holder of such Shelf Note or such holder’s attorney duly
authorized in writing. Any Shelf Note or Shelf Notes issued in exchange for any
Shelf Note or upon transfer thereof shall carry the rights to unpaid interest
and interest to accrue which were carried by the Shelf Note so exchanged or
transferred, so that neither gain nor loss of interest shall result from any
such transfer or exchange. Upon receipt of written notice from the holder of any
Shelf Note of the loss, theft, destruction or mutilation of such Shelf Note and,
in the case of any such loss, theft or destruction, upon receipt of such
holder’s unsecured indemnity agreement, or in the case of any such mutilation
upon surrender and cancellation of such Shelf Note, the Co-Issuers will make and
deliver a new Shelf Note, of like tenor, in lieu of the lost, stolen, destroyed
or mutilated Shelf Note.

                                13E.        Persons Deemed Owners;
Participations.  Prior to due presentment for registration of transfer, the
Co-Issuers may treat the Person in whose name any Shelf Note is

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registered as the owner and holder of such Shelf Note for the purpose of
receiving payment of principal of and interest on, and any Yield-Maintenance
Amount payable with respect to, such Shelf Note and for all other purposes
whatsoever, whether or not such Shelf Note shall be overdue, and the Co-Issuers
shall not be affected by notice to the contrary. Subject to the preceding
sentence, the holder of any Shelf Note may from time to time grant
participations in all or any part of such Shelf Note to any Person on such terms
and conditions as may be determined by such holder in its sole and absolute
discretion.

                                13F.        Survival of Representations and
Warranties; Entire Agreement.  All representations and warranties contained
herein or made in writing by or on behalf of any Obligor in connection herewith
shall survive the execution and delivery of this Agreement, the Shelf Notes, the
other Transaction Documents and each Confirmation of Acceptance, the transfer by
any Purchaser of any Shelf Note or portion thereof or interest therein and the
payment of any Shelf Note, and may be relied upon by any Transferee, regardless
of any investigation made at any time by or on behalf of any Purchaser or any
Transferee. Subject to the preceding sentence, this Agreement, the Shelf Notes
and the other Transaction Documents embody the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to such
subject matter.

                                13G.        Successors and Assigns.  All
covenants and other agreements in this Agreement contained by or on behalf of
any of the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto (including any Transferee) whether
so expressed or not.

                                13H.       Independence of Covenants. All
covenants hereunder shall be given independent effect so that if a particular
action or condition is prohibited by any one of such covenants, the fact that it
would be permitted by an exception to, or otherwise be in compliance within the
limitations of, another covenant shall not avoid the occurrence of a Default or
Event of Default if such action is taken or such condition exists.

                                13I.         Notices.  All written
communications provided for hereunder (other than communications provided for
under paragraph 2) shall be sent by first class mail or nationwide overnight
delivery service (with charges prepaid) and (i) if to any Purchaser of any Shelf
Note, addressed to it at such address as it shall have specified for such
communications in the Purchaser Schedule attached to the applicable Confirmation
of Acceptance or at such other address as any such Purchaser shall have
specified to the Co-Issuers in writing, (ii) if to any other holder of any Shelf
Note, addressed to it at such address as it shall have specified in writing to
the Co-Issuers or, if any such holder shall not have so specified an address,
then addressed to such holder in care of the last holder of such Shelf Note
which shall have so specified an address to the Co-Issuers and (iii) if to any
Obligor, addressed to it at 200 Mamaroneck Avenue, White Plains, New York 10601,
Fax number (914) 428-4581, Attention: Leigh J. Abrams, provided, however, that
any such communication to any Obligor may also, at the option of the Person
sending such communication, be delivered by any other means either to such
Obligor at their addressed specified above or to any Authorized Officer of such
Obligor. Any communication pursuant to paragraph 2 shall be made by the method
specified for such communication in

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paragraph 2, and shall be effective to create any rights or obligations under
this Agreement only if, in the case of a telephone communication, an Authorized
Officer of the party conveying the information and of the party receiving the
information are parties to the telephone call, and in the case of a facsimile
communication, the communication is signed by an Authorized Officer of the party
conveying the information, addressed to the attention of an Authorized Officer
of the party receiving the information, and in fact received at the facsimile
terminal the number of which is listed for the party receiving the communication
in the Information Schedule or at such other facsimile terminal as the party
receiving the information shall have specified in writing to the party sending
such information.

                                13J.        Payments Due on Non-Business Days.
 Anything in this Agreement, the Shelf Notes or the other Transaction Documents
to the contrary notwithstanding, any payment of principal of or interest on, or
Yield-Maintenance Amount payable with respect to, any Shelf Note that is due on
a date other than a Business Day shall be made on the next succeeding Business
Day. If the date for any payment is extended to the next succeeding Business Day
by reason of the preceding sentence, the period of such extension shall not be
included in the computation of the interest payable on such Business Day.

                                13K.       Severability.  Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

                                13L.        Descriptive Headings.  The
descriptive headings of the several paragraphs of this Agreement are inserted
for convenience only and do not constitute a part of this Agreement.

                                13M.      Satisfaction Requirement.  If any
agreement, certificate or other writing, or any action taken or to be taken, is
by the terms of this Agreement required to be satisfactory to Prudential, any
Purchaser, to any holder of Shelf Notes or to the Required Holder(s), the
determination of such satisfaction shall be made by Prudential, such Purchaser,
such holder or the Required Holder(s), as the case may be, in the sole and
exclusive judgment (exercised in good faith) of the Person or Persons making
such determination.

                                13N.        Governing Law.   IN ACCORDANCE WITH
THE PROVISIONS OF §5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THIS
AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF
THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAW OF THE STATE OF NEW YORK,
EXCLUDING CHOICE OF LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.

                                13O.       Severalty of Obligations. The sales
of Shelf Notes to the Purchasers are to be several sales, and the obligations of
Prudential and the Purchasers under this Agreement are

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several obligations.  No failure by Prudential or any Purchaser to perform its
obligations under this Agreement shall relieve any other Purchaser or the
Co-Issuers of any of its obligations hereunder, and neither Prudential nor any
Purchaser shall be responsible for the obligations of, or any action taken or
omitted by, any other such Person hereunder.

                                13P.        Counterparts.  This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument.

                                13Q.       Binding Agreement.  When this
Agreement is executed and delivered by the Obligors and Prudential, it shall
become a binding agreement between the Obligors and Prudential. This Agreement
shall also inure to the benefit of each Purchaser which shall have executed and
delivered a Confirmation of Acceptance, and each such Purchaser shall be bound
by this Agreement to the extent provided in such Confirmation of Acceptance.

                                13R.        Jury Waiver. THE OBLIGORS,
PRUDENTIAL AND THE OTHER HOLDERS FROM TIME TO TIME OF THE SHELF NOTES AGREE TO
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR
ANY DEALINGS BETWEEN OR AMONG THEM RELATING TO THE SUBJECT MATTER OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY AND THE LENDER/BORROWER RELATIONSHIP
THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS. THE OBLIGORS, PRUDENTIAL, THE PURCHASERS AND EACH OF THE
OTHER HOLDERS OF SHELF NOTES FROM TIME TO TIME EACH ACKNOWLEDGE THAT THIS WAIVER
IS A MATERIAL INDUCEMENT TO ENTER INTO THIS BUSINESS RELATIONSHIP, THAT EACH HAS
ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS, AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN
THEIR RELATED FUTURE DEALINGS. THE OBLIGORS, PRUDENTIAL, THE PURCHASERS AND EACH
OF THE OTHER HOLDERS OF SHELF NOTES FROM TIME TO TIME FURTHER WARRANT AND
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

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                                13S.        Personal Jurisdiction. To the
fullest extent permitted by law, each of the Obligors irrevocably agrees that
any legal action or proceeding with respect to this Agreement, the Shelf Notes,
the other Transaction Documents or any of the agreements, documents or
instruments delivered in connection herewith may be brought in the courts of the
State of New York or the United States of America for the Southern District of
New York as Prudential and the other holders from time to time of Shelf Notes
(as applicable) may elect, and, by its execution and delivery hereof, each
Obligor accepts and consents to, for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts and, to
the fullest extent permitted by law, agrees that such jurisdiction shall be
exclusive, unless waived by Prudential and the other holders from time to time
of Shelf Notes (as applicable) in writing, with respect to any action or
proceeding brought by the Obligors against Prudential, any Purchaser or any
holder of Shelf Notes. Each of the Obligors hereby waives, to the full extent
permitted by law, any right to stay or to dismiss any action or proceeding
brought before said courts on the basis of forum non conveniens.

[Remainder of page intentionally left blank. Next page is signature page.]

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Very truly yours,

KINRO, INC.

          By:  /s/ Fredric M. Zinn     ———————————————————     Name: Fredric M.
Zinn
Title:   Vice President

          LIPPERT COMPONENTS, INC.           By:  /s/ Fredric M. Zinn    
———————————————————     Name: Fredric M. Zinn
Title:   Vice President

          DREW INDUSTRIES INCORPORATED           By:  /s/ Fredric M. Zinn    
———————————————————     Name: Fredric M. Zinn
Title:   Executive Vice President and
            Chief Financial Officer

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The foregoing Agreement is
hereby accepted as of the
date first above written.

PRUDENTIAL INVESTMENT MANAGEMENT, INC.

By:  /s/ Christopher Carey 
        —————————————————— 
              Name: Christopher Carey
              Title:   Vice President

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