Exhibit 10.1
 
 

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AMENDED AND RESTATED CREDIT AGREEMENT
 
dated as of
 
February 3, 2006,
 
among
 
METALDYNE CORPORATION,
 
METALDYNE COMPANY LLC,
 
The Foreign Subsidiary Borrowers Party Hereto,
 
The Lenders Party Hereto,
 
JPMORGAN CHASE BANK,
as Administrative Agent and Collateral Agent
 
CREDIT SUISSE FIRST BOSTON,
as Syndication Agent
 
COMERICA BANK,
as Documentation Agent
 
FIRST UNION NATIONAL BANK,
as Documentation Agent
 
NATIONAL CITY BANK,
as Documentation Agent
 
and
 
BANK ONE, NA,
as Documentation Agent
___________________________
 
J.P. MORGAN SECURITIES INC.,
 
and
 
CREDIT SUISSE
 
as
 
Joint Bookrunners and Joint Lead Arrangers
 
 

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TABLE OF CONTENTS
 
Page        

 
ARTICLE I
 
Definitions
 
SECTION 1.01.
Defined Terms
  1
SECTION 1.02.
Classification of Loans and Borrowings
44
SECTION 1.03.
Terms Generally
44
SECTION 1.04.
Accounting Terms; GAAP
44
SECTION 1.05.
Exchange Rates
45
SECTION 1.06.
Redenomination of Certain Foreign Currencies
45

 
ARTICLE II
 
The Credits
 
SECTION 2.01.
Commitments
46
SECTION 2.02.
Loans and Borrowings
46
SECTION 2.03.
Requests for Borrowings
47
SECTION 2.04.
Swingline Loans
48
SECTION 2.05.
Letters of Credit
49
SECTION 2.06.
Funding of Borrowings
55
SECTION 2.07.
Interest Elections
55
SECTION 2.08.
Termination and Reduction of Commitments
57
SECTION 2.09.
Repayment of Loans; Evidence of Debt
58
SECTION 2.10.
Amortization of Term Loans
59
SECTION 2.11.
Prepayment of Loans
60
SECTION 2.12.
Fees
62
SECTION 2.13.
Interest
63
SECTION 2.14.
Alternate Rate of Interest
64
SECTION 2.15.
Increased Costs
64
SECTION 2.16.
Break Funding Payments
65
SECTION 2.17.
Taxes
66
SECTION 2.18.
Payments Generally; Pro Rata Treatment; Sharing of Set-offs
68
SECTION 2.19.
Mitigation Obligations; Replacement of Lenders
70
SECTION 2.20.
Additional Reserve Costs
70
SECTION 2.21.
Designation of Foreign Subsidiary Borrowers
71
SECTION 2.22.
Foreign Subsidiary Borrower Costs
71

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ARTICLE III
 
Representations and Warranties
 
SECTION 3.01.
Organization; Powers
72
SECTION 3.02.
Authorization; Enforceability
72
SECTION 3.03.
Governmental Approvals; No Conflicts
73
SECTION 3.04.
Financial Condition; No Material Adverse Change
73
SECTION 3.05.
Properties
74
SECTION 3.06.
Litigation and Environmental Matters
74
SECTION 3.07.
Compliance with Laws and Agreements
75
SECTION 3.08.
Investment and Holding Company Status
75
SECTION 3.09.
Taxes
75
SECTION 3.10.
ERISA
75
SECTION 3.11.
Disclosure
75
SECTION 3.12.
Subsidiaries
76
SECTION 3.13.
Insurance
76
SECTION 3.14.
Labor Matters
76
SECTION 3.15.
Solvency
76
SECTION 3.16.
Senior Indebtedness
76
SECTION 3.17.
Security Documents
77
SECTION 3.18.
Federal Reserve Regulations
78

 
ARTICLE IV
 
Conditions
 
SECTION 4.01.
[intentionally omitted].
78
SECTION 4.02.
Each Credit Event
78
SECTION 4.03.
Credit Events Relating to Foreign Subsidiary Borrowers
79

 
ARTICLE V
 
Affirmative Covenants
 
SECTION 5.01.
Financial Statements and Other Information
79
SECTION 5.02.
Notices of Material Events
81
SECTION 5.03.
Information Regarding Collateral
82
SECTION 5.04.
Existence; Conduct of Business
83
SECTION 5.05.
Payment of Obligations
83
SECTION 5.06.
Maintenance of Properties
83
SECTION 5.07.
Insurance
83
SECTION 5.08.
Casualty and Condemnation
84
SECTION 5.09.
Books and Records; Inspection and Audit Rights
84
SECTION 5.10.
Compliance with Laws
84

-ii-
 

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SECTION 5.11.
Use of Proceeds and Letters of Credit
84
SECTION 5.12.
Additional Subsidiaries
85
SECTION 5.13.
Further Assurances
85
SECTION 5.14.
[intentionally omitted].
85
SECTION 5.15.
Available Funds; Additional Equity
85
SECTION 5.16.
North American Forging Sale
92

 
 
ARTICLE VI
 
Negative Covenants
 
SECTION 6.01.
Indebtedness; Certain Equity Securities
86
SECTION 6.02.
Liens
89
SECTION 6.03.
Fundamental Changes
90
SECTION 6.04.
Investments, Loans, Advances, Guarantees and Acquisitions
92
SECTION 6.05.
Asset Sales
93
SECTION 6.06.
Sale and Leaseback Transactions
95
SECTION 6.07.
Hedging Agreements
95
SECTION 6.08.
Restricted Payments; Certain Payments of Indebtedness
95
SECTION 6.09.
Transactions with Affiliates
97
SECTION 6.10.
Restrictive Agreements
98
SECTION 6.11.
Amendment of Material Documents
99
SECTION 6.12.
Convertible Debentures
99
SECTION 6.13.
Interest Expense Coverage Ratio
99
SECTION 6.14.
Leverage Ratio
100
SECTION 6.15.
Capital Expenditures
100
SECTION 6.16.
Consolidated Lease Expense
101

 
ARTICLE VII
 
Events of Default
 
 
ARTICLE VIII
 
The Administrative Agent
 
 
ARTICLE IX
 
Collection Allocation Mechanism
 
SECTION 9.01.
Implementation of CAM
106

-iii-

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SECTION 9.02.
Letters of Credit
107

 
ARTICLE X
 
Miscellaneous
 
SECTION 10.01.
Notices
109
SECTION 10.02.
Waivers; Amendments
109
SECTION 10.03.
Expenses; Indemnity; Damage Waiver
111
SECTION 10.04.
Successors and Assigns
113
SECTION 10.05.
Survival
116
SECTION 10.06.
Counterparts; Integration; Effectiveness
116
SECTION 10.07.
Severability
116
SECTION 10.08.
Right of Setoff
116
SECTION 10.09.
Governing Law; Jurisdiction; Consent to Service of Process
117
SECTION 10.10.
WAIVER OF JURY TRIAL
117
SECTION 10.11.
Headings
118
SECTION 10.12.
Confidentiality
118
SECTION 10.13.
Interest Rate Limitation
119
SECTION 10.14.
Judgment Currency
119
SECTION 10.15.
Effectiveness of the Amendment and Restatement; Original Credit Agreement
120

SCHEDULES:
 
Schedule 1.01(a)
-- Existing Letters of Credit
Schedule 2.01
-- Commitments
Schedule 3.12
-- Subsidiaries
Schedule 3.17(d)
 
-- Mortgage Filing Offices
 

EXHIBITS:
 
Exhibit A
--
Form of Assignment and Acceptance
Exhibit B
--
Form of Debenture Account
Exhibit C
--
Form of Foreign Subsidiary Borrowing
 
 
  Agreement
Exhibit D
--
Form of Guarantee Agreement
Exhibit E
--
Form of Indemnity, Subrogation and
 
 
  Contribution Agreement
Exhibit F
--
Form of Mortgage
Exhibit G
--
Form of Pledge Agreement
Exhibit H
--
Form of Security Agreement
Exhibit I
--
Mandatory Costs Rate

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AMENDED AND RESTATED CREDIT AGREEMENT dated as of February 3, 2006, among
METALDYNE CORPORATION, METALDYNE COMPANY LLC, the FOREIGN SUBSIDIARY BORROWERS
party hereto, the LENDERS party hereto, JPMORGAN CHASE BANK, as Administrative
Agent and Collateral Agent, FIRST UNION NATIONAL BANK, as Documentation Agent,
CREDIT SUISSE, as Syndication Agent, COMERICA BANK, as Documentation Agent,
NATIONAL CITY BANK, as Documentation Agent and BANK ONE, NA, as Documentation
Agent.
 
The Parent Borrower desires to amend and restate the terms and provisions of the
Credit Agreement dated as of November 28, 2000, as amended and restated as of
June 20, 2002 and as further amended as of July 15, 2003, May 26, 2004,
September 29, 2004, December 21, 2004 and May 16, 2005 (the "Original Credit
Agreement"), among Holdings, the Parent Borrower, the existing lenders
thereunder and JPMorgan Chase Bank, as the administrative agent in the form
hereof.
 
The Lenders are willing to amend and restate the Original Credit Agreement and
are willing to extend credit to the Parent Borrower and the Foreign Subsidiary
Borrowers, in each case upon the terms and subject to the conditions set forth
herein and in the Amendment and Restatement Agreement. Accordingly, the parties
hereto agree as follows:
 
 
ARTICLE I
 
Definitions
 
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:
 
"ABR", when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.
 
"Acquired Assets" means (a) with respect to any fiscal year, the consolidated
tangible assets acquired pursuant to a Permitted Acquisition during such fiscal
year determined in accordance with GAAP (the "Specified Amount"), provided that
if such Permitted Acquisition is not consummated during the first quarter of
such fiscal year, Acquired Assets shall be determined for purposes of this
clause (a) by multiplying the Specified Amount by (i) .75 if such Permitted
Acquisition is consummated during the second quarter of such fiscal year,
(ii) .50 if such Permitted Acquisition is consummated during the third quarter
of such fiscal year and (iii) .25 if such Permitted Acquisition is consummated
during the fourth quarter of such fiscal year and (b) with respect to any fiscal
year thereafter, the Specified Amount.
 

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2
 

"Acquisition Lease Financing" means any sale or transfer by the Parent Borrower
or any Subsidiary of any Specified Acquired Property that is rented or leased by
the Parent Borrower or such Subsidiary so long as (a) the proceeds from such
transaction consist solely of cash, (b) such transaction is consummated within
90 days after the completion of the applicable Permitted Acquisition and (c) the
proceeds from such transaction are applied as contemplated by Section 2.11(e).
 
"Adjusted LIBO Rate" means, with respect to any Eurocurrency Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
 
"Administrative Agent" means Chase, in its capacity as administrative agent for
the Lenders hereunder. With respect to Foreign Currency Borrowings, the
Administrative Agent may be an Affiliate of Chase for purposes of administering
such Borrowings, and all references herein to the term "Administrative Agent"
shall be deemed to refer to the Administrative Agent in respect of the
applicable Borrowing or to all Administrative Agents, as the context requires.
 
"Administrative Questionnaire" means an Administrative Questionnaire in a form
supplied by the Administrative Agent.
 
"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
 
"Alternate Base Rate" means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on such day
plus ½ of 1%. Any change in the Alternate Base Rate due to a change in the Prime
Rate, the Base CD Rate or the Federal Funds Effective Rate shall be effective
from and including the effective date of such change in the Prime Rate, the Base
CD Rate or the Federal Funds Effective Rate, respectively.
 
"Amendment and Restatement Agreement" means the Amendment and Restatement
Agreement dated as of February 3, 2006, among Holdings, the Parent Borrower, the
Foreign Subsidiary Borrowers party thereto, the Lenders party thereto and the
Administrative Agent.
 
"Amendment No. 1" means the Amendment No. 1 to this Agreement dated as of
July 15, 2003, among Holdings, the Borrowers listed on Schedule 1 thereto and
the Lenders party thereto.
 
"Amendment Date" means the Amendment Date as defined in Amendment No. 1.
 
"Applicable Percentage" means, with respect to any Revolving Lender, the
percentage of the total Revolving Commitments represented by such Lender's
Revolving
 

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3
 

Commitment. If the Revolving Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon the Revolving Commitments
most recently in effect, giving effect to any assignments.
 
"Applicable Rate" means, for any day (a) with respect to any Tranche D Term
Loan, (i) 3.75% per annum (or, if the Leverage Ratio is less than or equal to
4.25 to 1.00, 3.50% per annum) in the case of an ABR Loan, or (ii) 4.50% per
annum (or, if the Leverage Ratio is less than or equal to 4.25 to 1.00, 4.25%
per annum) in the case of a Eurocurrency Loan, and (b) with respect to any ABR
Loan or Eurocurrency Loan that is a Revolving Loan, or with respect to the
commitment fees payable hereunder, as the case may be, the applicable rate per
annum set forth below under the caption "ABR Spread", "Eurocurrency Spread" or
"Commitment Fee Rate", as the case may be, based upon the Leverage Ratio as of
the most recent determination date:
 

Leverage Ratio:
ABR
Spread
Eurocurrency
Spread
Commitment
Fee Rate
Category 1
Greater than 4.25 to 1.00
 
3.50%
 
4.50%
 
1.00%
 
Category 2
Less than or equal to 4.25 to 1.00 but greater than 3.75 to 1.00
 
3.25%
 
4.25%
 
1.00%
 
Category 3
Less than or equal to 3.75 to 1.00 but greater than 3.50 to 1.00
2.75%
 
3.75%
 
1.00%
 
Category 4
Less than or equal to 3.50 to 1.00 but greater than 3.00 to 1.00
 
2.25%
 
3.25%
 
1.00%
 
Category 5
Less than or equal to 3.00 to 1.00
 
2.00%
 
3.00%
 
1.00%
 

 
For purposes of the foregoing, (i) the Leverage Ratio shall be determined as of
the end of each fiscal quarter of the Parent Borrower's fiscal year based upon
Holdings' consolidated financial statements delivered pursuant to Section
5.01(a) or (b) and (ii) each change in the Applicable Rate resulting from a
change in the Leverage Ratio shall be effective during the period commencing on
and including the date of delivery to the Administrative Agent of such
consolidated financial statements indicating such change and ending on the date
immediately preceding the effective date of the next such change; provided that
the Leverage Ratio shall be deemed to be in Category 1 (A) at any time that an
Event of Default has occurred and is continuing or (B) if the Parent Borrower
 

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 4
 

fails to deliver the consolidated financial statements required to be delivered
by it pursuant to Section 5.01(a) or (b), during the period from the expiration
of the time for delivery thereof until such consolidated financial statements
are delivered.
 
"Assessment Rate" means, for any day, the annual assessment rate in effect on
such day that is payable by a member of the Bank Insurance Fund classified as
"well-capitalized" and within supervisory subgroup "B" (or a comparable
successor risk classification) within the meaning of 12 C.F.R. Part 327 (or any
successor provision) to the Federal Deposit Insurance Corporation for insurance
by such Corporation of time deposits made in dollars at the offices of such
member in the United States; provided that if, as a result of any change in any
law, rule or regulation, it is no longer possible to determine the Assessment
Rate as aforesaid, then the Assessment Rate shall be such annual rate as shall
be determined by the Administrative Agent to be representative of the cost of
such insurance to the Lenders.
 
"Asset Dropdown" means (a) the contribution by Holdings to the Parent Borrower
of all of its assets (other than Saturn, the Saturn Subsidiary, the Specified
Assets and the Specified Cash and other assets approved by the Administrative
Agent) and (b) immediately after completion of such contribution, the execution
of the Supplemental Indenture by the parties thereto.
 
"Assignment and Acceptance" means an assignment and acceptance entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 10.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.
 
"Assumed Preferred Stock" means any preferred stock or preferred equity
interests of any Person that becomes a Subsidiary after the date hereof;
provided that (a) such preferred stock or preferred equity interests exists at
the time such Person becomes a Subsidiary and is not created in contemplation of
or in connection with such Person becoming a Subsidiary and (b) the aggregate
liquidation value of all such outstanding preferred stock and preferred equity
interests shall not exceed $25,000,000 at any time outstanding, less the
aggregate principal amount of Indebtedness incurred pursuant to
Section 6.01(a)(xiii).
 
"Available Funds" means collectively, at any time, (a) the amount of unused
Revolving Commitments designated by the Parent Borrower at such time for
availability to repurchase, redeem, repay or otherwise retire Convertible
Debentures pursuant to Section 5.15(b) and (b) the amount of cash in the
Debenture Account at such time.
 
"Available Funds Reserve Amount" means, at any time, an amount equal to the
aggregate face amount of all Convertible Debentures outstanding at such time,
provided that the Available Funds Reserve Amount shall in no event exceed
$100,000,000.
 

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5
 

"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate multiplied
by the Statutory Reserve Rate plus (b) the Assessment Rate.
 
"Board" means the Board of Governors of the Federal Reserve System of the
United States of America.
 
"Borrowing" means (a) Loans of the same Class and Type, made, converted or
continued on the same date and, in the case of Eurocurrency Loans, as to which a
single Interest Period is in effect, or (b) a Swingline Loan.
 
"Borrowing Request" means a request by the Parent Borrower or a Foreign
Subsidiary Borrower, as the case may be, for a Borrowing in accordance with
Section 2.03.
 
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that (a) when used in connection with any Eurocurrency
Loan denominated in dollars or Sterling, the term "Business Day" shall also
exclude any day on which banks are not open for dealings in dollar deposits in
the London interbank market and (b) when used in connection with any Revolving
Loan denominated in Euro, the term "Business Day" shall also exclude any day on
which the TARGET payment system is not open for the settlement of payment in
Euro.
 
"Calculation Date" means (a) each date on which a Revolving Borrowing is made
and (b) the last Business Day of each calendar month.
 
"CAM" shall mean the mechanism for the allocation and exchange of interests in
the Credit Facilities and collections thereunder established under Article IX.
 
"CAM Exchange" shall mean the exchange of the Lender's interests provided for in
Section 9.01.
 
"CAM Exchange Date" shall mean the date on which (a) any event referred to in
paragraph (h) or (i) of Article VII shall occur in respect of Holdings, the
Parent Borrower or any Foreign Subsidiary Borrower or (b) an acceleration of the
maturity of the Loans pursuant to Article VII shall occur.
 
"CAM Percentage" shall mean, as to each Lender, a fraction, expressed as a
decimal, of which (a) the numerator shall be the aggregate Dollar Equivalent
(determined on the basis of Exchange Rates prevailing on the CAM Exchange Date)
of the Specified Obligations owed to such Lender and such Lender's participation
in undrawn amounts of Letters of Credit immediately prior to the CAM Exchange
Date and (b) the denominator shall be the aggregate Dollar Equivalent (as so
determined) of the Specified Obligations owed to all the Lenders and the
aggregate undrawn amount of outstanding Letters of Credit immediately prior to
such CAM Exchange Date.
 
"Capital Expenditures" means, for any period, without duplication, (a) the
additions to property, plant and equipment and other capital expenditures of
Holdings, the
 

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6
 

Parent Borrower and its consolidated Subsidiaries (including the Receivables
Subsidiary) that are (or would be) set forth in a consolidated statement of cash
flows of Holdings for such period prepared in accordance with GAAP (other than
payments made in connection with the termination of obligations in respect of
operating leases and acquiring related real property subject to such leases
contemplated by Section 5.16) and (b) Capital Lease Obligations incurred by
Holdings, the Parent Borrower and its consolidated Subsidiaries (including the
Receivables Subsidiary) during such period.
 
"Capital Lease Obligations" of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
 
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person other than Holdings of any
Equity Interest in the Parent Borrower; (b) prior to the date of an IPO, either
(i) Heartland, together with its Affiliates and the HIP Co-Investors (together
with such HIP Co-Investors' Permitted Transferees (as such terms are defined in
the Shareholder Agreement as in effect on the date hereof)), shall cease to
beneficially own, directly or indirectly, Equity Interests in Holdings
representing at least a majority of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests in Holdings,
(ii) Heartland and its Affiliates shall cease to beneficially own, directly or
indirectly, Equity Interests in Holdings representing at least 30% of each of
the aggregate ordinary voting power represented by the issued and outstanding
Equity Interests in Holdings or (iii) any Person or group (within the meaning of
the Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof) other than Heartland and
its Affiliates shall beneficially own at any time, directly or indirectly
(without giving effect, for avoidance of doubt, to shares owned by Heartland and
its Affiliates), a greater percentage of the aggregate ordinary voting power of
Holdings than the aggregate ordinary voting power of Holdings that is
beneficially owned at such time, directly or indirectly (without giving effect,
for avoidance of doubt, to shares owned by such Person), by Heartland and its
Affiliates; (c) on or after an IPO, the acquisition of beneficial ownership,
directly or indirectly, by any Person or group (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof) other than Heartland and
its Affiliates, of Equity Interests representing more than 25% of either the
aggregate ordinary voting power represented by the issued and outstanding Equity
Interests in Holdings and such Person or group beneficially owns at such time,
directly or indirectly (without giving effect, for avoidance of doubt, to shares
owned by Heartland and its Affiliates), a greater percentage of the aggregate
ordinary voting power of Holdings than the aggregate ordinary voting power of
Holdings that is beneficially owned at such time, directly or indirectly,
(without giving effect, for avoidance of doubt, to shares owned by such Person),
by Heartland and its Affiliates; (d) occupation of a majority of the seats on
the board of directors of Holdings by Persons who were not nominated by
Heartland and its Affiliates; or (e) the occurrence of any change in control (or
similar event, however denominated) with respect to Holdings or the Parent
Borrower under (i) any indenture or agreement in respect of Material
Indebtedness to which Holdings, the Parent Borrower or
 

 

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7
 

any Subsidiary is a party,(ii) any instrument governing any preferred stock of
Holdings, the Parent Borrower or any Subsidiary having a liquidation value or
redemption value in excess of $15,000,000 or (iii) the Permitted Receivables
Financing.
 
"Change in Law" means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender's or the Issuing Bank's holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
 
"Chase" means JPMorgan Chase Bank.
 
"Class", when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans, Tranche D
Term Loans or Swingline Loans and, when used in reference to any Commitment,
refers to whether such Commitment is a Revolving Commitment or Tranche D
Commitment.
 
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
 
"Collateral" means any and all "Collateral", as defined in any applicable
Security Document.
 
"Collateral Agent" means Chase, in its capacity as collateral agent for the
Lenders under the Security Documents. With respect to Foreign Currency
Borrowings, the Collateral Agent may be an Affiliate of Chase, for purposes of
administering the collateralization of such Borrowings, and all references
herein to the term "Collateral Agent" shall be deemed to refer to the Collateral
Agent in respect of the applicable Borrowing or to all Collateral Agents, as the
context requires.
 
"Collateral and Guarantee Requirement" means the requirement that:
 
(a) the Collateral Agent shall have received from each party thereto (other than
the Collateral Agent) either (i) a counterpart of (A) the Guarantee Agreement,
(B) the Indemnity, Subrogation and Contribution Agreement, (C) the Pledge
Agreement and (D) the Security Agreement, in each case duly executed and
delivered on behalf of such Loan Party or (ii) in the case of any Person that
becomes a Loan Party after the Effective Date, a supplement to each of the
Guarantee Agreement, the Indemnity, Subrogation and Contribution Agreement, the
Pledge Agreement and the Security Agreement, in each case in the form specified
therein, duly executed and delivered on behalf of such Loan Party;
 
(b) all outstanding Equity Interests of the Parent Borrower and each Subsidiary
(including the Receivables Subsidiary) owned by or on behalf of any
 

 

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8
 

Loan Party shall have been pledged pursuant to the Pledge Agreement (except that
the Loan Parties shall not be required to pledge more than 65% of the
outstanding voting Equity Interests of any Foreign Subsidiary, it being
understood that this exception shall not limit the application of the Foreign
Security Collateral and Guarantee Requirement) and the Collateral Agent shall
have received certificates or other instruments representing all such Equity
Interests, together with stock powers or other instruments of transfer with
respect thereto endorsed in blank;
 
(c) all Indebtedness of Holdings, the Parent Borrower and each Subsidiary in an
aggregate principal amount that exceeds $500,000 that is owing to any Loan Party
shall be evidenced by a promissory note and shall have been pledged pursuant to
the Pledge Agreement and the Collateral Agent shall have received all such
promissory notes, together with instruments of transfer with respect thereto
endorsed in blank;
 
(d) all documents and instruments, including Uniform Commercial Code financing
statements, required by law or reasonably requested by the Collateral Agent to
be filed, registered or recorded to create the Liens intended to be created by
the Security Agreement and the Pledge Agreement and perfect such Liens to the
extent required by, and with the priority required by, the Security Agreement
and the Pledge Agreement shall have been filed, registered or recorded or
delivered to the Collateral Agent for filing, registration or recording;
 
(e) the Collateral Agent shall have received (i) counterparts of a Mortgage with
respect to each Mortgaged Property duly executed and delivered by the record
owner of such Mortgaged Property, (ii) a policy or policies of title insurance
issued by a nationally recognized title insurance company insuring the Lien of
each such Mortgage as a valid first Lien on the Mortgaged Property described
therein, free of any other Liens except as expressly permitted by Section 6.02,
together with such endorsements, coinsurance and reinsurance as the
Administrative Agent or the Required Lenders may reasonably request, and (iii)
such surveys, abstracts, appraisals, legal opinions and other documents as the
Administrative Agent or the Required Lenders may reasonably request with respect
to any such Mortgage or Mortgaged Property; provided that with respect to any
Mortgaged Property as to which a Mortgage was recorded prior to the Effective
Date, the requirements of this paragraph shall be limited to such supplements,
amendments and bring-downs as the Collateral Agent shall reasonably request; and
 
(f) each Loan Party (other than the Foreign Subsidiary Borrowers) shall have
obtained all consents and approvals required to be obtained by it in connection
with the execution and delivery of all Security Documents to which it is a
party, the performance of its obligations thereunder and the granting by it of
the Liens thereunder.
 

 

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9
 

"Commitment" means a Revolving Commitment or Tranche D Commitment, or a
combination thereof (as the context requires).
 
"Compac Event" means the damage to any property owned by Compac Corporation and
its subsidiaries resulting from floods occurring in August, 2000.
 
"Consolidated Cash Interest Expense" means, for any period, the excess of
(a) the sum, without duplication, of (i) the interest expense (including imputed
interest expense in respect of Capital Lease Obligations) of Holdings, the
Parent Borrower and the Subsidiaries (including the Receivables Subsidiary) for
such period, determined on a consolidated basis in accordance with GAAP, (ii)
any interest accrued during such period in respect of Indebtedness of Holdings,
the Parent Borrower or any Subsidiary (including the Receivables Subsidiary)
that is required to be capitalized rather than included in consolidated interest
expense for such period in accordance with GAAP, plus (iii) any cash payments
made during such period in respect of obligations referred to in clause (b)(iii)
below that were amortized or accrued in a previous period, plus
(iv) interest-equivalent costs associated with any Permitted Receivables
Financing, whether accounted for as interest expense or loss on the sale of
receivables minus (b) the sum of, without duplication, (i) interest income of
Holdings, the Parent Borrower and the Subsidiaries (including the Receivables
Subsidiary) for such period, determined on a consolidated basis in accordance
with GAAP, (ii) to the extent included in such consolidated interest expense for
such period, noncash amounts attributable to amortization of financing costs
paid in a previous period, plus (iii) to the extent included in such
consolidated interest expense for such period, noncash amounts attributable to
amortization of debt discounts or accrued interest payable in kind for such
period, plus (iv) to the extent included in such consolidated interest expense
for such period, all financing fees incurred in connection with the
Transactions. For purposes of calculating Consolidated Cash Interest Expense for
each of the four-fiscal-quarter periods ending December 31, 2000, March 31, 2001
and June 30, 2001, Consolidated Cash Interest Expense for such
four-fiscal-quarter period shall equal Consolidated Cash Interest Expense for
the period commencing October 1, 2000 and ending on (a) December 31, 2000,
multiplied by 4, (b) March 31, 2001, multiplied by 2 and (c) June 30, 2001,
multiplied by 4/3. Notwithstanding the foregoing, the defined term "Consolidated
Cash Interest Expense" shall not include any interest expense in respect of
$205,000,000 aggregate principal amount of Convertible Debentures during the
90-day period following the consummation of the TriMas Transaction.
 
"Consolidated EBITDA" means, for any period, Consolidated Net Income for such
period plus (a) without duplication and to the extent deducted in determining
such Consolidated Net Income, the sum of (i) consolidated interest expense for
such period, (ii) consolidated income tax expense for such period (including all
single business tax expenses imposed by state law), (iii) all amounts
attributable to depreciation and amortization for such period, (iv) any
extraordinary noncash charges for such period, (v) all management fees and other
fees paid during such period to Heartland and/or its Affiliates pursuant to the
Heartland Management Agreement to the extent permitted by Section 6.09, (vi) all
payments made during and expenses recorded in such period in respect of the
Restricted Stock Obligation and all items expensed at the Recapitalization
 

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10
 

Date in respect of Restricted Stock Awards, (vii) any losses incurred during
such period in connection with the sale of receivables pursuant to the Permitted
Receivables Financing, (viii) all extraordinary losses during such period,
(ix) noncash expenses during such period resulting from the grant of Equity
Interests to management and employees of Holdings, the Parent Borrower or any of
the Subsidiaries, (x) the aggregate amount of deferred financing expenses for
such period, (xi) all other noncash expenses or losses of Holdings, the Parent
Borrower or any of the Subsidiaries for such period (excluding any such charge
that constitutes an accrual of or a reserve for cash charges for any future
period), (xii) any nonrecurring fees, expenses or charges realized by Holdings,
the Parent Borrower or any of the Subsidiaries for such period related to any
offering of Equity Interests or incurrence of Indebtedness, (xiii) with respect
to any four-fiscal-quarter period ending prior to or on December 31, 2001,
operating expense and other expense reductions and other synergistic benefits
relating to the Recapitalization Transactions, not to exceed the applicable
Excluded Amount for such period, (xiv) Excluded Severance Charges for such
period, (xv) fees and expenses in connection with the Transactions and fees and
expenses of Holdings, the Parent Borrower and its Subsidiaries (excluding TriMas
and the subsidiaries of TriMas) in connection with the TriMas Transaction,
(xvi) any nonrecurring costs and expenses arising from the integration of any
business acquired pursuant to any Permitted Acquisition (other than the New
Castle Acquisition), (xvii) solely for purposes of determining compliance with
Section 6.14, fees paid pursuant to Section 18 of Amendment No. 1 to the
Original Credit Agreement; provided that the aggregate amount of costs and
expenses that may be included in Consolidated EBITDA pursuant to this clause
(xvii) during the term of this Agreement shall not exceed $5,000,000, (xviii)
for all purposes hereunder, other than the defined term "Applicable Rate", the
New Castle Specified EBITDA, (xix) solely for purposes of determining compliance
with Section 6.14, fees paid pursuant to Section 14 of this Amendment No. 1,
(xx) solely for purposes of determining compliance with Section 6.13 and
Section 6.14 and the use of the defined term Senior Leverage Ratio, fees and
expenses paid in connection with the Internal Evaluation (as defined in the
Waiver and Amendment No. 2 to this Agreement dated as of May 26, 2004) and as a
consequence thereof, (xxi) nonrecurring charges and expenses in an aggregate
amount not to exceed $8,000,000 related primarily to headcount reductions during
the period from and including the first day of the first fiscal quarter of 2005
to and including the last day of the first fiscal quarter of 2006, (xxii)
charges not to exceed in the aggregate $2,500,000 (calculated by the Parent
Borrower in its reasonable judgment and good faith) incurred in connection with
the Parent Borrower's accelerated collection programs wound down and/or
terminated after June 30, 2004, to the extent such charges are not offset by
accounts receivable being included in, or such programs being replaced by,
another financing program of the Parent Borrower", (xxiii) any charges or losses
incurred in connection with the termination of leases and the purchase of
related lease property and (xxiv) any lease payments made during the last twelve
months with respect to operating leases terminated in accordance with
Section 5.16 or otherwise and minus (b) without duplication and to the extent
included in determining such Consolidated Net Income, any extraordinary gains
for such period, all determined on a consolidated basis in accordance with GAAP.
For purposes of determining the Leverage Ratio, Senior Leverage Ratio and Senior
Secured Leverage Ratio, if the Parent Borrower or any Subsidiary has made any
 

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11
 

Permitted Acquisition or any sale, transfer, lease or other disposition of
assets outside of the ordinary course of business permitted by Section 6.05
during the relevant period for determining the Leverage Ratio, Senior Leverage
Ratio and Senior Secured Leverage Ratio, Consolidated EBITDA for the relevant
period shall be calculated only for purposes of determining Leverage Ratio,
Senior Leverage Ratio and Senior Secured Leverage Ratio, after giving pro forma
effect thereto, as if such Permitted Acquisition or sale, transfer, lease or
other disposition of assets (and, in each case, any related incurrence,
repayment or assumption of Indebtedness, with any new Indebtedness being deemed
to be amortized over the relevant period in accordance with its terms, and
assuming that any Revolving Loans borrowed in connection with such acquisition
are repaid with excess cash balances when available) had occurred on the first
day of the relevant period for determining Consolidated EBITDA. Any such pro
forma calculations may include operating and other expense reductions and other
adjustments for such period resulting from any Permitted Acquisition (other than
the New Castle Acquisition, except to the extent of any calculation of the
Applicable Rate) that is being given pro forma effect to the extent that such
operating and other expense reductions and other adjustments (a) would be
permitted pursuant to Article XI of Regulation S-X under the Securities Act of
1933 or (b) are reasonably consistent with the purpose of Regulation S-X as
determined in good faith by the Parent Borrower in consultation with the
Administration Agent. For the purpose of calculating Consolidated EBITDA for the
four quarter periods ending December 31, 2004, March 31, 2005, June 30, 2005,
September 30, 2005 and December 31, 2005, Consolidated EBITDA shall be
additionally increased by $1,500,000, $2,700,000, $1,900,000, $1,300,000 and
$500,000, respectively.
 
"Consolidated Lease Expense" shall mean, for any period, all rental expenses of
Holdings, the Parent Borrower and the Subsidiaries (including the Receivables
Subsidiary) during such period under operating leases for real or personal
property, excluding real estate taxes, insurance costs and common area
maintenance charges and net of sublease income, other than Capitalized Lease
Obligations, all as determined on a consolidated basis in accordance with GAAP.
 
"Consolidated Net Income" means, for any period, the net income or loss of
Holdings, the Parent Borrower and the Subsidiaries (including the Receivables
Subsidiary) for such period determined on a consolidated basis in accordance
with GAAP; provided that there shall be excluded (a) the income of any Person
(other than the Parent Borrower) in which any other Person (other than the
Parent Borrower or any Subsidiary or any director holding qualifying shares in
compliance with applicable law) owns an Equity Interest, except to the extent of
the amount of dividends or other distributions actually paid to the Parent
Borrower or any of the Subsidiaries during such period, and (b) the income or
loss of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with the Parent Borrower or any Subsidiary or the
date that such Person's assets are acquired by the Parent Borrower or any
Subsidiary.
 
"Control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through
 

--------------------------------------------------------------------------------

12
 

the ability to exercise voting power, by contract or otherwise. "Controlling"
and "Controlled" have meanings correlative thereto.
 
"Conversion Right" means the right of the Debenture Holders after the Merger to
convert their Convertible Debentures into the amount of cash that the Debenture
Holders would have received if such Convertible Debentures had been converted
into common stock of Holdings immediately prior to the Merger, as provided in
Section 3.06 of the Convertible Debentures Indenture.
 
"Convertible Debentures" means the 4½% Convertible Subordinated Debentures of
Holdings issued under the Convertible Debentures Indenture in an aggregate
principal amount not greater than $305,000,000, which after the Asset Dropdown
became joint and several obligations of the Parent Borrower and Holdings.
 
"Convertible Debentures Indenture" means the Indenture dated as of November 1,
1986, between Holdings and Morgan Guaranty Trust Company of New York, as amended
by the two Supplemental Indentures dated the Recapitalization Date.
 
"Credit Facility" means a category of Commitments and extensions of credit
thereunder.
 
"Debenture Account" means an account established with the Administrative Agent
in the name of the Administrative Agent and for the benefit of the Lenders
having the terms specified in Exhibit B, all proceeds in which will be used to
defease, redeem, repay or repurchase or otherwise retire Convertible Debentures
as specified in this Agreement.
 
"Debenture Holders" means the holders of record, from time to time, of the
Convertible Debentures.
 
"Debenture Maturity Date" means December 15, 2003.
 
"Default" means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.
 
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06 to the Original Credit
Agreement.
 
"dollars" or "$" refers to lawful money of the United States of America.
 
"Dollar Equivalent" means, on any date of determination, (a) with respect to any
amount in dollars, such amount, and (b) with respect to any amount in any
Foreign Currency, the equivalent in dollars of such amount, determined by the
Administrative Agent pursuant to Section 1.05(b) using the Exchange Rate with
respect to such Foreign Currency at the time in effect under the provisions of
such Section.
 

 

--------------------------------------------------------------------------------

13
 

"Domestic Loan Party" means any Loan Party, other than the Foreign Subsidiary
Borrowers.
 
"Effective Date" means June 20, 2002.
 
"EMU Legislation" means the legislative measures of the European Union for the
introduction of, changeover to or operation of the Euro in one or more member
states.
 
"Environmental Laws" means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, Release or threatened Release of any Hazardous Material or to health
and safety matters.
 
"Environmental Liability" means any liabilities, obligations, damages, losses,
claims, actions, suits, judgments, or orders, contingent or otherwise (including
any liability for damages, costs of environmental remediation, costs of
administrative oversight, fines, natural resource damages, penalties or
indemnities), of Holdings, the Parent Borrower or any Subsidiary (including the
Receivables Subsidiary) directly or indirectly resulting from or relating to
(a) compliance or non-compliance with any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) any actual or alleged exposure to any Hazardous Materials,
(d) the Release or threatened Release of any Hazardous Materials or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
 
"Equity Interests" means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person or any warrants, options
or other rights to acquire such interests.
 
"Equity Rollover" means the issuance of common stock of Holdings on the
Recapitalization Date to the Continuing Shareholders (as defined in the
Recapitalization Agreement) or their permitted transferees under the Exchange
and Voting Agreement (as defined in the Recapitalization Agreement), in each
case pursuant to and in accordance with Section 2.04(d) of the Recapitalization
Agreement.
 
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
 
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that, together with the Parent Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under Section
414 of the Code.
 

 

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14
 

"ERISA Event" means (a) 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 "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 the Parent Borrower 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 the Parent Borrower 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 the Parent Borrower 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 the Parent Borrower or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Parent Borrower or any ERISA Affiliate of any notice, concerning the imposition
of Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
 
"Euro" or "€" means the single currency of the European Union as constituted by
the Treaty on European Union and as referred to in the EMU Legislation.
 
"Eurocurrency", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
 
"Event of Default" has the meaning assigned to such term in Article VII.
 
"Excess Cash Flow" means, for any fiscal year, the sum (without duplication) of:
 
(a) the consolidated net income (or loss) of Holdings, the Parent Borrower and
its consolidated Subsidiaries (including the Receivables Subsidiary) for such
fiscal year, adjusted to exclude any gains or losses attributable to Prepayment
Events; plus
 
(b) the excess, if any, of the Net Proceeds received during such fiscal year by
Holdings, the Parent Borrower and its consolidated Subsidiaries (including the
Receivables Subsidiary) in respect of any Prepayment Events over the aggregate
principal amount of Term Loans prepaid pursuant to Section 2.11(d) (and, as
applicable to such fiscal year, Existing Term Loans prepaid pursuant to Section
2.11(d) of the Original Credit Agreement) in respect of such Net Proceeds; plus
 
(c) depreciation, amortization and other noncash charges or losses deducted in
determining such consolidated net income (or loss) for such fiscal year; plus
 

 

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15
 

(d) the sum of (i) the amount, if any, by which Net Working Capital (adjusted to
exclude changes arising from Permitted Acquisitions) decreased during such
fiscal year plus (ii) the net amount, if any, by which the consolidated deferred
revenues and other consolidated accrued long-term liability accounts of
Holdings, the Parent Borrower and its consolidated Subsidiaries (including the
Receivables Subsidiary) (adjusted to exclude changes arising from Permitted
Acquisitions) increased during such fiscal year plus (iii) the net amount, if
any, by which the consolidated accrued long-term asset accounts of Holdings,
Parent Borrower and its consolidated Subsidiaries (including the Receivables
Subsidiary) (adjusted to exclude changes arising from Permitted Acquisitions)
decreased during such fiscal year; minus
 
(e) the sum of (i) any noncash gains included in determining such consolidated
net income (or loss) for such fiscal year plus (ii) the amount, if any, by which
Net Working Capital (adjusted to exclude changes arising from Permitted
Acquisitions) increased during such fiscal year plus (iii) the net amount, if
any, by which the consolidated deferred revenues and other consolidated accrued
long-term liability accounts of Holdings, the Parent Borrower and its
consolidated Subsidiaries (including the Receivables Subsidiary) (adjusted to
exclude changes arising from Permitted Acquisitions) decreased during such
fiscal year plus (iv) the net amount, if any, by which the consolidated accrued
long-term asset accounts of Holdings, the Parent Borrower and its consolidated
Subsidiaries (including the Receivables Subsidiary) (adjusted to exclude changes
arising from Permitted Acquisitions) increased during such fiscal year; minus
 
(f) the sum of (i) Capital Expenditures for such fiscal year (except to the
extent attributable to the incurrence of Capital Lease Obligations or otherwise
financed by incurring Long-Term Indebtedness) plus (ii) cash consideration paid
during such fiscal year to make acquisitions or other capital investments
(except to the extent financed by incurring Long-Term Indebtedness); minus
 
(g) the aggregate principal amount of Long-Term Indebtedness repaid or prepaid
by Holdings, the Parent Borrower and its consolidated Subsidiaries (including
the Receivables Subsidiary) during such fiscal year, excluding (i) Indebtedness
in respect of Revolving Loans and Letters of Credit, (ii) Term Loans prepaid
pursuant to Section 2.11(d) or (f) (and, as applicable to such fiscal year,
Existing Term Loans prepaid pursuant to Section 2.11(d) or (f) of the Original
Credit Agreement) and (iii) repayments or prepayments of Long-Term Indebtedness
financed by incurring other Long-Term Indebtedness; minus
 
(h) [intentionally omitted];
 
(i) the noncash impact of currency translations and other adjustments to the
equity account, including adjustments to the carrying value of marketable
securities and to pension liabilities, in each case to the extent such items
would otherwise constitute Excess Cash Flow.
 

 

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16
 

"Exchange Rate" means on any day, with respect to any Foreign Currency, the rate
at which such Foreign Currency may be exchanged into dollars, as set forth at
approximately 11:00 a.m., London time, on such day on the Reuters World Currency
Page for such Foreign Currency. In the event that such rate does not appear on
any Reuters World Currency Page, the Exchange Rate shall be determined by
reference to such other publicly available service for displaying exchange rates
as may be agreed upon by the Administrative Agent and the Parent Borrower, or,
in the absence of such agreement, such Exchange Rate shall instead be the
arithmetic average of the spot rates of exchange of the Administrative Agent in
the market where its foreign currency exchange operations in respect of such
Foreign Currency are then being conducted, at or about 10:00 a.m., local time,
on such date for the purchase of dollars for delivery two Business Days later;
provided that if at the time of any such determination, for any reason, no such
spot rate is being quoted, the Administrative Agent, after consultation with the
Parent Borrower, may use any reasonable method it deems appropriate to determine
such rate, and such determination shall be conclusive absent manifest error.
 
"Excluded Amount" means, with respect to any fiscal period ending on the date
specified below, the amount set forth opposite such date:

Date
 
Amount
 
December 31, 2000
 
$15,000,000
 
March 31, 2001
 
$15,000,000
 
June 30, 2001
 
$12,500,000
 
September 20, 2001
 
$10,000,000
 
December 31, 2001
 
$ 7,500,000
 

"Excluded Severance Charges" means any nonrecurring severance or similar costs
relating to the termination of employment of any employees arising during any
four-fiscal-quarter period ending on or prior to December 31, 2003, not to
exceed in the aggregate for all such periods $12,500,000.
 
"Excluded Taxes" means, with respect to the Administrative Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Parent Borrower or any Foreign Subsidiary
Borrower hereunder, (a) income or franchise taxes imposed on (or measured by)
its net income by the United States of America, or by the jurisdiction under the
laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits Taxes imposed by the United States of America or
any similar Tax imposed by any other jurisdiction described in clause (a) above
and (c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Parent Borrower under Section 2.19(b)), (i) any United States
withholding Tax that is in effect and would apply to amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending
 

 

--------------------------------------------------------------------------------

17
 

office (or assignment), to receive additional amounts from the Parent Borrower
with respect to any United States withholding Tax pursuant to Section 2.17(a)
and (ii) any withholding Tax that is attributable to such Foreign Lenders'
failure to comply with Section 2.17(e).
 
"Existing Letters of Credit" means the letters of credit issued under the
Original Credit Agreement and outstanding as of the Effective Date, which are
listed on Schedule 1.01(a).
 
"Existing Subordinated Notes" means the 11% Subordinated Notes of Holdings due
2012 in the aggregate principal amount of $250,000,000 (including the Exchange
Notes issued in exchange for the initial Existing Subordinated Notes as
contemplated by the registration rights agreement related thereto) and the
Indebtedness represented thereby.
 
"Existing Subordinated Notes Documents" means the Existing Subordinated Notes,
the indenture under which the Existing Subordinated Notes are issued and all
other documents evidencing, guaranteeing or otherwise governing the terms of the
Existing Subordinated Notes.
 
"Federal Funds Effective Rate" means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
 
"Financial Officer" means the chief financial officer, principal accounting
officer, treasurer or controller of the Parent Borrower.
 
"Foreign Currencies" means Euro and Sterling.
 
"Foreign Currency Commitment" means, with respect to each Revolving Lender, the
commitment of such Revolving Lender to make Foreign Currency Loans and to
acquire participations in Foreign Currency Letters of Credit, expressed as an
amount representing the maximum aggregate amount of such Revolving Lender's
Foreign Currency Exposure hereunder, as such commitment may be reduced from time
to time pursuant to Section 2.08 and (b) reduced or increased from time to time
pursuant to assignments by or to such Revolving Lender pursuant to
Section 10.04. The initial amount of each Revolving Lender's Foreign Currency
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Revolving Lender shall have assumed its Foreign Currency
Commitment, as applicable. The initial aggregate amount of the Revolving
Lenders' Foreign Currency Commitments is the Dollar Equivalent of $75,000,000.
 

 

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18
 

"Foreign Currency Exposure" means, with respect to any Revolving Lender at any
time, the Dollar Equivalent of the sum of the outstanding principal amount of
such Lender's Foreign Currency Loans and its Foreign Currency LC Exposure at
such time.
 
"Foreign Currency LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Foreign Currency Letters of Credit at such
time plus (b) the aggregate amount of all LC Disbursements in respect of Foreign
Currency Letters of Credit that have not yet been reimbursed by or on behalf of
the Foreign Subsidiary Borrowers at such time. The Foreign Currency LC Exposure
of any Revolving Lender at any time shall be its Applicable Percentage of the
total Foreign Currency LC Exposure at such time.
 
"Foreign Currency Letter of Credit" means a Letter of Credit denominated in a
Foreign Currency.
 
"Foreign Currency Loan" means a Revolving Loan denominated in a Foreign
Currency.
 
"Foreign Factoring Arrangement" means any factoring arrangements entered into by
any Foreign Subsidiary with respect to accounts receivable of such entity that
are held in Europe, Mexico or Canada pursuant to customary terms, provided that
the aggregate recourse and exposure in respect thereof shall not at any time
exceed $15,000,000.
 
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Parent Borrower or any Foreign
Subsidiary Borrower, as the case may be, is located. For purposes of this
definition, the United States of America, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.
 
"Foreign Security Collateral and Guarantee Requirement" means the requirement
that:
 
(a) the Collateral Agent shall have received from the applicable Foreign
Subsidiary Borrower and its subsidiaries a counterpart of each Foreign Security
Document relating to the assets (including the capital stock of its
subsidiaries) of such Foreign Subsidiary Borrower, excluding assets as to which
the Collateral Agent shall determine in its reasonable discretion, after
consultation with the Parent Borrower, that the costs and burdens of obtaining a
security interest are excessive in relation to the value of the security
afforded thereby;
 
(b) all documents and instruments (including legal opinions) required by law or
reasonably requested by the Collateral Agent to be filed, registered or recorded
to create the Liens intended to be created over the assets specified in
clause (a) above and perfect such Liens to the extent required by, and with
priority required by, such Foreign Security Documents, shall have been filed,
 

 

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registered or recorded or delivered to the Collateral Agent for filing,
registration or recording;
 
(c) such Foreign Subsidiary Borrower and its subsidiaries shall become a
guarantor of the obligations under the Loan Documents of other Foreign
Subsidiary Borrowers, if any, under a guarantee agreement reasonably acceptable
to the Collateral Agent, in either case duly executed and delivered on behalf of
such Foreign Subsidiary Borrower and such subsidiaries, except that such
guarantee shall not be required if the Collateral Agent shall determine in its
reasonable discretion, after consultation with the Parent Borrower, that the
benefits of such a guarantee are limited and such limited benefits are not
justified in relation to the burdens imposed by such guarantee on the Parent
Borrower and its Subsidiaries; and
 
(d) such Foreign Subsidiary Borrower shall have obtained all consents and
approvals required to be obtained by it in connection with the execution of such
Foreign Security Documents, the performance and obligations thereunder and the
granting by it of the Liens thereunder.
 
"Foreign Security Documents" means any agreement or instrument entered into by
any Foreign Subsidiary Borrower that is reasonably requested by the Collateral
Agent providing for a Lien over the assets (including shares of other
Subsidiaries) of such Foreign Subsidiary Borrower.
 
"Foreign Subsidiary" means any Subsidiary that is organized under the laws of a
jurisdiction other than the United States of America or any State thereof or the
District of Columbia.
 
"Foreign Subsidiary Borrowers" means any wholly owned Foreign Subsidiary of the
Parent Borrower organized under the laws of England and Wales, any member nation
of the European Union or any other nation in Europe reasonably acceptable to the
Collateral Agent that becomes a party to this Agreement pursuant to
Section 2.21.
 
"Foreign Subsidiary Borrowing Agreement" means an agreement substantially in the
form of Exhibit C.
 
"GAAP" means generally accepted accounting principles in the United States of
America.
 
"Governmental Authority" means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
 
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of
 

 

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20
 

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.
 
"Guarantee Agreement" means the Guarantee Agreement, substantially in the form
of Exhibit D, made by Holdings, the Parent Borrower and the Subsidiary Loan
Parties party thereto in favor of the Collateral Agent for the benefit of the
Secured Parties.
 
"Hazardous Materials" means all explosive, radioactive, hazardous or toxic
substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon gas, infectious or medical wastes and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.
 
"Heartland" means Heartland Industrial Partners, L.P., a Delaware limited
partnership.
 
"Heartland Management Agreement" means the monitoring agreement dated as of the
Recapitalization Date between Heartland and Holdings.
 
"Hedging Agreement" means 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.
 
"HIP Co-Investor" means a shareholder of Holdings that is a limited partner, or
an Affiliate of a limited partner, in Heartland or in any other fund or
investment vehicle established or managed by Heartland or an Affiliate of
Heartland and shall in any event include those Persons constituting HIP
Co-Investors under the Shareholder Agreement on the Recapitalization Date.
 
"Holdings" means Metaldyne Corporation, formerly known as MascoTech, Inc., a
Delaware corporation.
 
"Holdings Preferred Dividends" means (a) dividend payments due in respect of the
Holdings Preferred Stock pursuant to Article 4(c)(2) of Holdings' Certificate of
Designation and (b) any cash dividend payments in respect of any Qualified
Holdings Preferred Stock.
 

 

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21
 

"Holdings Preferred Stock" means the Series A Preferred Stock issued by
Holdings, having an aggregate liquidation value of $36,100,100 and the other
terms specified in Holdings' Certificate of Incorporation.
 
"Indebtedness" of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to 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 current accounts payable incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed,
(g) all Guarantees by such Person of Indebtedness of others, (h) all Capital
Lease Obligations of such Person (other than lease obligations that are Capital
Lease Obligations solely because of a Guarantee), (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty 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. Notwithstanding
anything to the contrary in this paragraph, the term "Indebtedness" shall not
include (a) the Restricted Stock Obligation, (b) any obligation in respect of
the Saturn Proceeds Distribution, (c) any obligations in respect of options or
other Equity Interests held by the Pre-Merger Stockholders to the extent
surviving the Recapitalization Transactions, (d) agreements providing for
indemnification, purchase price adjustments or similar obligations incurred or
assumed in connection with the acquisition or disposition of assets or capital
stock and (e) trade payables and accrued expenses in each case arising in the
ordinary course of business.
 
"Indemnified Taxes" means Taxes other than Excluded Taxes.
 
"Indemnity, Subrogation and Contribution Agreement" means the Indemnity,
Subrogation and Contribution Agreement, substantially in the form of Exhibit E,
among the Parent Borrower, the Subsidiary Loan Parties party thereto and the
Collateral Agent.
 
"Information Memorandum" means the Confidential Information Memorandum dated
June, 2002, relating to the Parent Borrower and the Transactions.
 
"Intercompany Transfer" means the dividend or other intercompany distribution by
the Parent Borrower to Holdings, all of which was used by Holdings as payment,
in part, of the Merger Consideration.
 

 

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"Intercreditor Agreement" means an intercreditor agreement among Holdings, the
Parent Borrower, the Administrative Agent (or other agent acting on behalf of
the Lenders) and the trustee or agent on behalf of the holders of the applicable
Permitted Senior Notes, which such agreement shall (i) provide that the Liens in
respect of such Permitted Senior Notes are subordinated to the Liens under the
Collateral Documents, (ii) limit the ability of such trustee or agent and the
holders of the Permitted Senior Notes to take actions with respect to, or
enforce, such Liens and (iii) have such other terms as are satisfactory to the
Administrative Agent.
 
"Interest Election Request" means a request by the Parent Borrower or a Foreign
Subsidiary Borrower, as the case may be, to convert or continue a Revolving
Borrowing or Term Borrowing in accordance with Section 2.07.
 
"Interest Payment Date" means (a) with respect to any ABR Loan (other than a
Swingline Loan), the last day of each March, June, September and December,
(b) with respect to any Eurocurrency Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurocurrency Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.
 
"Interest Period" means, with respect to any Eurocurrency Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter (or nine or twelve months thereafter if, at the time of the relevant
Borrowing, all Lenders participating therein agree to make an interest period of
such duration available), as the Parent Borrower or a Foreign Subsidiary
Borrower, as the case may be, may elect; provided, that (a) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing.
 
"Investors" means Heartland, its Affiliates and the other entities identified by
Heartland as "Investors" to the Administrative Agent prior to the
Recapitalization Date.
 
"IPO" means an underwritten public offering by Holdings of Equity Interests of
Holdings pursuant to a registration statement filed with the Securities and
Exchange Commission in accordance with the Securities Act of 1933.
 

 

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"Issuing Bank" means Chase, in its capacity as the issuer of Letters of Credit
hereunder, and its successors in such capacity as provided in Section 2.05(i).
The Issuing Bank may, in its discretion, arrange for one or more Letters of
Credit to be issued by Affiliates of the Issuing Bank, including with respect to
Foreign Currency Letters of Credit, and in each such case the term "Issuing
Bank" shall include any such Affiliate with respect to Letters of Credit issued
by such Affiliate. In the event that there is more than one Issuing Bank at any
time, references herein and in the other Loan Documents to the Issuing Bank
shall be deemed to refer to the Issuing Bank in respect of the applicable Letter
of Credit or to all Issuing Banks, as the context requires. Notwithstanding the
foregoing, each institution listed in Schedule 1.01(a) shall be deemed to be an
Issuing Bank with respect to the Existing Letters of Credit issued by it.
 
"Judgment Currency" has the meaning set forth in Section 10.14.
 
"Judgment Currency Conversion Date" has the meaning set forth in Section 10.14.
 
"LC Disbursement" means a payment made by the Issuing Bank pursuant to a Letter
of Credit.
 
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Parent Borrower or the Foreign Subsidiary Borrowers, as the case may be, at such
time. The LC Exposure of any Revolving Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.
 
"LC Reserve Account" has the meaning set forth in Section 9.02(a).
 
"Lender Affiliate" means, (a) with respect to any Lender, (i) an Affiliate of
such Lender or (ii) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender and (b) with respect to any Lender that is a fund that invests in bank
loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
 
"Lenders" means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to an Assignment and Acceptance, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Acceptance. Unless the context otherwise requires, the term "Lenders"
includes the Swingline Lender.
 
"Letter of Credit" means any letter of credit issued pursuant to this Agreement.
Each Existing Letter of Credit shall be deemed to constitute a Letter of Credit
issued hereunder on the Effective Date for all purposes of the Loan Documents.
 

 

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"Leverage Ratio" means, on any date, the ratio of (a) Total Indebtedness as of
such date to (b) Consolidated EBITDA for the period of four consecutive fiscal
quarters of Holdings ended on such date (or, if such date is not the last day of
a fiscal quarter, ended on the last day of the fiscal quarter of Holdings most
recently ended prior to such date for which financial statements are available).
 
"LIBO Rate" means, with respect to any Eurocurrency Borrowing (other than such
Borrowings denominated in a Foreign Currency) for any Interest Period, the rate
appearing on Page 3750 of the Dow Jones Market Service (or on any successor or
substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. With respect to Eurocurrency Borrowings denominated in a
Foreign Currency, the LIBO Rate for any Interest Period shall be determined by
the Administrative Agent at approximately 11:00 a.m., London time, on the
Quotation Day for such Interest Period by reference to the British Bankers'
Association Interest Settlement Rates for deposits in the currency of such
Borrowing (as reflected on the applicable Telerate screen) for a period equal to
such Interest Period. In the event that such rate is not available at such time
for any reason, then the "LIBO Rate" with respect to such Eurocurrency Borrowing
for such Interest Period shall be the rate at which deposits in the applicable
currency for the Dollar Equivalent of $5,000,000 and for a maturity comparable
to such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
 
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
 
"Loan Documents" means this Agreement and the Security Documents.
 
"Loan Parties" means Holdings, the Parent Borrower, the Foreign Subsidiary
Borrowers and the other Subsidiary Loan Parties.
 
"Loans" means the loans made by the Lenders to the Parent Borrower and the
Foreign Subsidiary Borrowers pursuant to this Agreement.
 

 

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"Long-Term Indebtedness" means any Indebtedness that, in accordance with GAAP,
constitutes (or, when incurred, constituted) a long-term liability, including
the current portion of any Long-Term Indebtedness.
 
"Margin Stock" shall have the meaning assigned to such term in Regulation U.
 
"Masco" means Masco Corporation, a Delaware corporation, or any successor
thereto.
 
"Material Adverse Effect" means a material adverse effect on (a) the business,
operations, properties, assets, financial condition, contingent or otherwise, or
material agreements of Holdings, the Parent Borrower and the Subsidiaries
(including the Receivables Subsidiary), taken as a whole (it being understood
that any effect on the business, operations, properties, assets, financial
condition, contingent or otherwise or material agreements of Holdings, the
Parent Borrower and the Subsidiaries (including the Receivables Subsidiary)
resulting from the Asset Dropdown will not constitute a material adverse effect
for purposes of this clause (a)), (b) the ability of any Loan Party in any
material respect to perform any of its obligations under any Loan Document or
(c) the rights of or benefits available to the Lenders under any Loan Document.
 
"Material Agreements" means (a) any agreements or instruments relating to
Material Indebtedness and (b) the Heartland Management Agreement.
 
"Material Indebtedness" means (a) Indebtedness in respect of the Existing
Subordinated Notes, Convertible Debentures, the Permitted Subordinated Notes and
the Permitted Senior Notes, (b) obligations in respect of the Permitted
Receivables Financing and (c) any other Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of Holdings, the Parent Borrower and its Subsidiaries
evidencing an aggregate outstanding principal amount exceeding $15,000,000. For
purposes of determining Material Indebtedness, the "principal amount" of the
obligations of Holdings, the Parent Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that Holdings, the Parent Borrower or such
Subsidiary would be required to pay if such Hedging Agreement were terminated at
such time.
 
"Merger" means the merger of Merger Subsidiary with and into Holdings, with
respect to which Holdings was the surviving entity as contemplated by the
Recapitalization Agreement.
 
"Merger Consideration" means the cash payment to the Pre-Merger Stockholders in
accordance with the Recapitalization Agreement in an amount not exceeding
$609,200,000.
 
"Merger Subsidiary" means Riverside Acquisition Corporation, a Delaware
corporation, all the Equity Interests of which are owned by Heartland, its
Affiliate and the other Investors.
 

 

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26
 

"Moody's" means Moody's Investors Service, Inc.
 
"Mortgage" means a mortgage, deed of trust, assignment of leases and rents,
leasehold mortgage or other security document granting a Lien on any Mortgaged
Property to secure the Obligations. Each Mortgage shall be substantially in the
form of Exhibit F with such changes as are necessary under applicable local law.
 
"Mortgaged Property" means, initially, each parcel of real property and the
improvements thereto owned by a Loan Party as of the Effective Date, and
includes each other parcel of real property and improvements thereto with
respect to which a Mortgage is granted pursuant to Section 5.12 or 5.13 and any
property subject to an operating lease which is terminated in accordance with
Section 5.16.
 
"Multiemployer Plan" means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.
 
"Net Proceeds" means, with respect to any event (a) the cash proceeds received
in respect of such event including (i) any cash received in respect of any
noncash proceeds, but only as and when received, (ii) in the case of a casualty,
insurance proceeds in excess of $1,000,000 (excluding proceeds arising from the
Compac Event), and (iii) in the case of a condemnation or similar event,
condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses and premiums paid by Holdings, the
Parent Borrower and the Subsidiaries in connection with such event, (ii) in the
case of a sale, transfer or other disposition of an asset (including pursuant to
a sale and leaseback transaction or a casualty or a condemnation or similar
proceeding), the amount of all payments required to be made by Holdings, the
Parent Borrower and the Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) secured by such asset or otherwise subject to
mandatory prepayment as a result of such event, and (iii) the amount of all
Taxes paid (or reasonably estimated to be payable) by Holdings, the Parent
Borrower and the Subsidiaries, and the amount of any reserves established by
Holdings, the Parent Borrower and the Subsidiaries to fund contingent
liabilities reasonably estimated to be payable, in each case during the 24-month
period immediately following such event and that are directly attributable to
such event (as determined reasonably and in good faith by the chief financial
officer of Holdings or the Parent Borrower) to the extent such liabilities are
actually paid within such applicable time periods. Notwithstanding anything to
the contrary set forth above, (i) the proceeds of any sale, transfer or other
disposition of receivables (or any interest therein) pursuant to any Permitted
Receivables Financing shall not be deemed to constitute Net Proceeds and (ii)
the proceeds of any sale, transfer or other disposition of receivables (or any
interest therein) pursuant to any Foreign Factoring Arrangement shall constitute
Net Proceeds only to the extent such proceeds can be repatriated to the United
States without adverse tax consequences to the Parent Borrower or any
Subsidiary.
 
"Net Working Capital" means, at any date, (a) the consolidated current assets of
Holdings, the Parent Borrower and its consolidated Subsidiaries (including the
Receivables Subsidiary) as of such date (excluding cash and Permitted
Investments) minus (b) the consolidated current liabilities of Holdings, the
Parent Borrower and its
 

 

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consolidated Subsidiaries (including the Receivables Subsidiary) as of such date
(excluding current liabilities in respect of Indebtedness). Net Working Capital
at any date may be a positive or negative number. Net Working Capital increases
when it becomes more positive or less negative and decreases when it becomes
less positive or more negative.
 
"New Castle Acquisition" means the acquisition by the Parent Borrower or a
Subsidiary of all the remaining Equity Interests of NC-M Chassis Systems, LLC
not then owned by the Parent Borrower or a Subsidiary or all, or substantially
all, of the assets of NC-M Chassis Systems, LLC so long as (a) the total
consideration (excluding fees, expenses and assumed liabilities) for such
remaining Equity Interests or assets shall not exceed $215,000,000, (b) such
acquisition shall be financed with (i) the issuance of Equity Interests by
Holdings of not less than $64,000,000, (ii) Permitted Senior Notes to the extent
contemplated by the defined term "Permitted Senior Notes", (iii) New Castle
Seller Debt, (iv) Revolving Loans, Permitted Receivables Financing or, subject
to Section 6.06, the New Castle Sale and Leaseback, or any combination thereof,
in an aggregate amount not to exceed $120,000,000, or (v) any combination of the
foregoing, (c) such acquisition is consummated within 180 days of the Amendment
Date, (d) after giving effect to such acquisition (and any related incurrence of
or repayment of Indebtedness), (i) the Senior Secured Leverage Ratio is less
than 2.75 to 1.00 and (ii) the Leverage Ratio is less than 4.75 to 1.00, and
(e) immediately after giving effect thereto, (i) no Default has occurred and is
continuing or would result therefrom, (ii) all transactions related thereto are
consummated in all material respects in accordance with applicable laws,
(iii) all the Equity Interests (other than Assumed Preferred Stock) of each
Subsidiary formed for the purpose of or resulting from such acquisition shall be
owned directly by the Parent Borrower or a Subsidiary and all actions required
to be taken under Sections 5.12 and 5.13 have been taken, (iv) Holdings, the
Parent Borrower and its Subsidiaries are in compliance, on a pro forma basis
after giving effect to such acquisition, with the covenants contained in
Sections 6.13 and 6.14 recomputed as at the last day of the most recently ended
fiscal quarter of Holdings for which financial statements are available, as if
such acquisition (and any related incurrence or repayment of Indebtedness) had
occurred on the first day of each relevant period for testing such compliance,
(v) any Indebtedness or any preferred stock that is incurred, acquired or
assumed in connection with such acquisition shall be in compliance with
Section 6.01 and (vi) the Parent Borrower has delivered to the Administrative
Agent an officers' certificate to the effect set forth in clauses (a), (b),
(c) and (d) (i) through (v) above, together with all relevant financial
information for the Person or assets to be acquired.
 
"New Castle Sale and Leaseback" shall mean any sale or transfer not later than
30 days of the New Castle Acquisition by the Parent Borrower or any Subsidiary
of fixed or capital assets acquired pursuant to the New Castle Acquisition that
is made for cash consideration in an aggregate amount not less than an amount
equal to 85% of the orderly liquidation value of such fixed or capital assets
not to exceed $120,000,000 in the aggregate during the term of this Agreement,
and promptly thereafter rented or leased by the Parent Borrower or such
Subsidiary; provided that, notwithstanding the foregoing, in connection with any
New Castle Sale and Leaseback, Parent Borrower or any Subsidiary may elect to
(1) retain ownership of any portion of the fixed or capital assets that could
 

 

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otherwise have been made the subject of the New Castle Sale and Leaseback and
(2) pledge such retained assets as collateral security for any obligations in
favor of the lessor(s) under any of the sale and leasing arrangements with
respect to the assets that were not so retained (with such security interests of
the lessor(s) being limited to the retained assets and the proceeds thereof), so
long as (A) the cash proceeds received by the Parent Borrower and any Subsidiary
from any such transaction exceeds 85% of the orderly liquidation value of all
fixed and capital assets that have been made the subject of a sale and leaseback
and the collateral security arrangements and (B) in the good faith judgment of
the Parent Borrower, the financial terms of any such transaction are no less
favorable to the Parent Borrower and any Subsidiary, taken as a whole, than
would have been the case had the election set forth in this proviso not been
utilized.
 
"New Castle Seller Debt" means subordinated notes issued by Holdings to the
seller in the New Castle Acquisition in an aggregate principal amount not less
than $31,000,000, which such notes shall rank pari passu and shall be subject to
the subordination and other terms that are no more favorable to the holders or
obligees thereof in any material respect than the subordination and other terms
of the Subordinated Debt.
 
"New Castle Specified EBITDA" means, if the New Castle Acquisition has been
consummated, the total of the amounts for any period prior to consummation of
the New Castle Acquisition identified below that is included within the period
for which Consolidated EBITDA is being calculated: (i) for the fiscal quarters
ended December 31, 2002 and December 31, 2003, $11,046,443, (ii) for the fiscal
quarters ended March 31, 2003 and March 31, 2004, $10,693,298, (iii) for the
fiscal quarter ended June 30, 2003, $12,030,358 and (iv) for the fiscal quarter
ending September 30, 2003, $13,729,901; provided, however, that (A) to the
extent the New Castle Acquisition has occurred during a particular quarter, the
amount to be included for such quarter shall be determined by taking a
proportionate amount of the quarter (based on actual days elapsed); and (B)
following the completion of the New Castle Sale and Leaseback, New Castle
Specified EBITDA for any fiscal period calculated thereafter shall be reduced by
the total pro forma lease expense for such fiscal period as if such expense had
occurred on the first day of the relevant period for determining New Castle
Specified EBITDA (it being understood that no earlier calculation of
Consolidated EBITDA shall be affected thereby).
 
"North American Forging Sale" means the sale by the Parent Borrower and certain
of its subsidiaries of certain assets comprising the Parent Borrower's North
American forging business, pursuant to the North American Forging Sale
Agreement.
 
"North American Forging Sale Agreement" means the Asset Purchase Agreement dated
as of January 7, 2006, among Holdings, the Parent Borrower, Metaldyne Precision
Forming—Fort Wayne Inc. and Forming Technologies, Inc., as the same may be
revised prior to the closing of the North American Forging Sale in a manner not
adverse to the Lenders.
 

 

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29
 

"Obligations" has the meaning assigned to such term in the Security Agreement.
 
"Other Taxes" means any and all present or future recording, stamp, documentary,
excise, transfer, sales, property or similar taxes, charges or levies imposed by
any Governmental Authority arising from any payment made under any Loan Document
or from the execution, delivery or enforcement of, or otherwise with respect to,
any Loan Document, other than Excluded Taxes.
 
"Parent Borrower" means Metaldyne Company LLC, formerly known as Metalync
Company LLC, a Delaware limited liability company.
 
"PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.
 
"Perfection Certificate" means a certificate in the form of Annex I to the
Security Agreement or any other form approved by the Collateral Agent.
 
"Permitted Acquisition" means (a) the New Castle Acquisition and (b) any
acquisition, whether by purchase, merger, consolidation or otherwise, by the
Parent Borrower or a Subsidiary of all or substantially all the assets of, or
all the Equity Interests in, a Person or a division, line of business or other
business unit of a Person so long as (i) such acquisition shall not have been
preceded by a tender offer that has not been approved or otherwise recommended
by the board of directors of such Person, (ii) such assets are to be used in, or
such Person so acquired is engaged in, as the case may be, a business of the
type conducted by the Parent Borrower and its Subsidiaries on the date of
execution of this Agreement or in a business reasonably related thereto,
(iii) such acquisition shall be financed with proceeds from (A) Revolving Loans
(subject to Section 6.01(a)(i)), the Permitted Subordinated Notes to the extent
the issuance thereof is permitted under the defined term "Permitted Subordinated
Notes" and/or Qualified Holdings Preferred Stock issued and outstanding pursuant
to clause (b) of the definition of Qualified Holdings Preferred Stock,
(B) Permitted Receivables Financing (subject to Section 6.01(a)(ii)), (C) any
lease financing permitted hereunder the proceeds of which are not required to
prepay Term Borrowings here-under, (D) the issuance of Equity Interests by
Holdings, (E) Excess Cash Flow not required to be used to prepay Term Loans
pursuant to Section 2.11(f), (F) proceeds from sales of assets permitted by
Section 6.05 that are not required to be applied toward the repayment of Term
Borrowings hereunder or (G) any combination thereof and (iv) immediately after
giving effect thereto, (A) no Default has occurred and is continuing or would
result there-from, (B) all transactions related thereto are consummated in all
material respects in accordance with applicable laws, (C) all the Equity
Interests (other than Assumed Preferred Stock) of each Subsidiary formed for the
purpose of or resulting from such acquisition shall be owned directly by the
Parent Borrower or a Subsidiary and all actions required to be taken under
Sections 5.12 and 5.13 have been taken, (D) Holdings, the Parent Borrower and
its Subsidiaries are in compliance, on a pro forma basis after giving effect to
such acquisition, with the covenants contained in Sections 6.13 and 6.14
recomputed as at the last day of the most recently ended fiscal quarter of
Holdings for which financial
 

 

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30
 

statements are available, as if such acquisition (and any related incurrence or
repayment of Indebtedness) had occurred on the first day of each relevant period
for testing such compliance (provided that any acquisition that occurs prior to
the first testing period under such Sections shall be deemed to have occurred
during such first testing period), (E) any Indebtedness or any preferred stock
that is incurred, acquired or assumed in connection with such acquisition shall
be in compliance with Section 6.01 and (F) the Parent Borrower has delivered to
the Administrative Agent an officers' certificate to the effect set forth in
clauses (i), (ii), (iii) and (iv) (A) through (F) above, together with all
relevant financial information for the Person or assets to be acquired.
 
"Permitted Capital Expenditure Amount" means the sum of (i) the Base Amount for
such fiscal year as specified below, (ii) 20% of Acquired Assets (the "Acquired
Assets Amount") and (iii) for each fiscal year after any Acquired Assets Amount
are initially included in clause (ii) above, 5% of such Acquired Assets Amount,
calculated on a cumulative basis.
 

Fiscal Year Ended
 
Base Amount
 
2001
 
$120,000,000
 
2002
 
$115,000,000
 
2003
 
$100,000,000
 
2004
 
$110,000,000
 
2005
 
$115,000,000
 
2006
 
$80,000,000
 
2007
 
$90,000,000
 
2008
 
2009
 
$95,000,000
 
$95,000,000
 

"Permitted Encumbrances" means:
 
(a) Liens imposed by law for taxes that are not yet due or are being contested
in compliance with Section 5.05;
 
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.05;
 
(c) pledges and deposits made in the ordinary course of business in compliance
with workers' compensation, unemployment insurance and other social security
laws or regulations;
 

 

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31
 

(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;
 
(e) judgment Liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Article VII;
 
(f) 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 the Parent Borrower or any Subsidiary;
 
(g) ground leases in respect of real property on which facilities owned or
leased by the Parent Borrower or any of the Subsidiaries are located, other than
any Mortgaged Property;
 
(h) Liens in favor or customs and revenue authorities arising as a matter of law
to secure payment of customs duties in connection with the importation of goods
in the ordinary course of business;
 
(i) Leases or subleases granted to other Persons and not interfering in any
material respect with the business of Holdings, the Parent Borrower and the
Subsidiaries, taken as a whole;
 
(j) banker's liens, rights of set-off or similar rights, in each case arising by
operation of law; and
 
(k) Liens in favor of a landlord on leasehold improvements in leased premises;
 
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
 
"Permitted Investments" means:
 
(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;
 
(b) investments in commercial paper maturing within one year from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody's;
 
(c) investments in certificates of deposit, banker's acceptances and time
deposits maturing within one year from the date of acquisition thereof issued or
 

 

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32
 

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 a combined
capital and surplus and undivided profits of not less than $500,000,000;
 
(d) fully collateralized repurchase agreements with a term of not more than
30 days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above;
 
(e) securities issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
having maturities of not more than six months from the date of acquisition
thereof and, at the time of acquisition, having the highest credit rating
obtainable from S&P or from Moody's;
 
(f) securities issued by any foreign government or any political subdivision of
any foreign government or any public instrumentality thereof having maturities
of not more than six months from the date of acquisition thereof and, at the
time of acquisition, having the highest credit rating obtainable from S&P or
from Moody's;
 
(g) investments of the quality as those identified on Schedule 6.04 to the
Original Credit Agreement as "Qualified Foreign Investments" made in the
ordinary course of business;
 
(h) cash; and
 
(i) investments in funds that invest solely in one or more types of securities
described in clauses (a), (e) and (f) above.
 
"Permitted Receivables Documents" means the Receivable Purchase Agreement, the
Receivables Transfer Agreement and all other documents and agreements relating
to the Permitted Receivables Financing.
 
"Permitted Receivables Financing" means the sale by the Parent Borrower and
certain Subsidiaries (other than Foreign Subsidiaries) of accounts receivables
(i)(a) to the Receivables Subsidiary pursuant to the Receivables Sale Agreement
and (b) the sale of such accounts receivable (or participation therein) by the
Receivables Subsidiary to certain purchasers pursuant to the Receivables
Transfer Agreement and (ii) directly (or indirectly through a special purpose
subsidiary) to third-parties pursuant to third-party financing agreements in
transactions constituting "true sales", provided that the aggregate net
investment of the purchasers under the Receivables Transfer Agreement and such
third-party financing agreements in such accounts receivable so sold by the
Parent Borrower and such Subsidiaries shall not exceed in the aggregate
$175,000,000 and, provided further that any such receivables financing described
in clause (ii) above shall be satisfactory to the Administrative Agent and the
administrative agent under the Receivables Transfer Agreement.
 

 

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33
 

"Permitted Senior Notes" means any Indebtedness of Holdings or the Parent
Borrower, provided that (a) to the extent such Indebtedness and any related
Guarantees are secured by any Lien, such Liens are second-priority Liens and the
trustee or agent thereunder shall have entered into the Intercreditor Agreement,
(b) the proceeds resulting from the initial $150,000,000 aggregate principal
amount of such Indebtedness shall be used (i) to prepay Term Borrowings pursuant
to Section 2.11(a), (ii) to repurchase, redeem or otherwise retire the
Convertible Debentures, (iii) if such Indebtedness is incurred contemporaneously
with the New Castle Acquisition in order to effect the New Castle Acquisition or
(iv) any combination of the foregoing, (c) any proceeds resulting from the
aggregate principal amount of such Indebtedness that exceeds $150,000,000 shall
be used to prepay Term Borrowings pursuant to Section 2.11(d)(1), (d) such
Indebtedness shall not have any principal payments due prior to the date that is
12 months after the Tranche D Maturity Date, whether at maturity or other-wise,
except upon the occurrence of a change of control or similar event (including
asset sales), in each case so long as the provisions relating to change of
control or similar events (including asset sales) included in the governing
instrument of such Indebtedness provide that the provisions of this Agreement
must be satisfied prior to the satisfaction of such provisions of such
Indebtedness and (d) such Indebtedness bears interest at a fixed rate, which
rate shall be, in the good faith judgment of the Parent Borrower's board of
directors, consistent with the market at the time of issuance for similar
Indebtedness for comparable issuers or borrowers. The Parent Borrower may
designate by notice to the Administrative Agent any Permitted Subordinated Notes
as Permitted Senior Notes so long as such notice is delivered immediately prior
to the issuance of such Notes, and following such designation such Permitted
Subordinated Notes shall be "Permitted Senior Notes" for purposes of this
Agreement.
 
"Permitted Subordinated Notes" means Indebtedness of Holdings or the Parent
Borrower, provided that (a) such Indebtedness and any related Guarantees shall
not be secured by any Lien, (b) such Indebtedness shall be subject to
subordination and inter-creditor provisions that are no more favorable to the
holders or obligees thereof than the subordination or inter-creditor provisions
of the Existing Subordinated Notes in any material respect, (c) the proceeds
from such Indebtedness shall be used (i) to repurchase, redeem, repay or
otherwise retire the Convertible Debentures, (ii) to repay (subject to
Section 6.01(a)(vii)) Revolving Borrowings or obligations arising in respect of
the Permitted Receivables Financing, (iii) to prepay Term Borrowings pursuant to
Section 2.11(a) or (iv) if after giving effect to the incurrence of such
Indebtedness, the Senior Leverage Ratio is less than 2.75 to 1.00, to effect
Permitted Acquisitions (provided that the aggregate principal amount of
Permitted Subordinated Notes that can be used for financing Permitted
Acquisitions pursuant to this clause (iv) shall not exceed $100,000,000,
(d) such Indebtedness shall not have any principal payments due prior to the
date that is 12 months after the Tranche D Maturity Date, whether at maturity or
otherwise, except upon the occurrence of a change of control or similar event
(including asset sales), in each case so long as the provisions relating to
change of control or similar events (including asset sales) included in the
governing instrument of such Indebtedness provide that the provisions of this
Agreement must be satisfied prior to the satisfaction of such provisions of such
Indebtedness and (e) such Indebtedness bears interest at a fixed rate, which
rate shall be, in the good faith judgment of the Parent Borrower's board of
 

 

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34
 

directors, consistent with the market at the time of issuance for similar
Indebtedness for comparable issuers or borrowers. Notwithstanding the foregoing,
for purposes of this Agreement, the Existing Subordinated Notes and the New
Castle Seller Debt shall be Permitted Subordinated Indebtedness.
 
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
 
"Plan" means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Parent Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
 
"Pledge Agreement" means the Pledge Agreement, substantially in the form of
Exhibit G, among Holdings, the Parent Borrower, the Subsidiary Loan Parties
party thereto and the Collateral Agent for the benefit of the Secured Parties.
 
"Pre-Merger Stockholders" means the common stockholders of Holdings and holders
of options to acquire common stock of Holdings immediately prior to the Merger.
 
"Prepayment Event" means:
 
(a) any sale, transfer or other disposition (including pursuant to a sale and
leaseback transaction) of any property or asset of Holdings, the Parent Borrower
or any Subsidiary for consideration that exceeds $10,000,000, other than
dispositions described in clauses (a), (b), (c), (d), (e), (f)(ii), (f)(iii),
(g), (h), (i), (k), (l) and (m) of Section 6.05; or
 
(b) any casualty or other insured damage to, or any taking under power of
eminent domain or by condemnation or similar proceeding of, any property or
asset of Holdings, the Parent Borrower or any Subsidiary having a book value or
fair market value in excess of $1,000,000 (other than damage arising from the
Compac Event), but only to the extent that the Net Proceeds therefrom have not
been applied to repair, restore or replace such property or asset within
365 days after such event; or
 
(c) the incurrence by Holdings, the Parent Borrower or any Subsidiary of any
Indebtedness, other than Indebtedness permitted by Section 6.01(a); or
 
(d) the incurrence of any Permitted Senior Notes (unless the Net Proceeds
thereof are used as permitted by clause (b) under the defined term "Permitted
Senior Notes");
 
notwithstanding anything to the contrary, the sale, transfer or other
disposition of the Saturn Subsidiary or the Saturn Sale shall not constitute a
Prepayment Event.
 

 

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35
 

"Prime Rate" means the rate of interest per annum publicly announced from time
to time by Chase as its prime rate in effect at its principal office in New York
City; each change in the Prime Rate shall be effective from and including the
date such change is publicly announced as being effective.
 
"Qualified Holdings Preferred Stock" means any preferred capital stock or
preferred equity interest of Holdings (a)(i) that does not provide for any cash
dividend payments or other cash distributions in respect thereof prior to the
Tranche D Term Loan Maturity Date and (ii) that by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable or
exercisable) or upon the happening of any event does not (A)(x) mature or become
mandatorily redeemable pursuant to a sinking fund obligation or otherwise;
(y) become convertible or exchangeable at the option of the holder thereof for
Indebtedness or preferred stock that is not Qualified Holdings Preferred Stock;
or (z) become redeemable at the option of the holder thereof (other than as a
result of a change of control event), in whole or in part, in each case on or
prior to the first anniversary of the Tranche D Term Loan Maturity Date and
(B) provide holders thereunder with any rights upon the occurrence of a "change
of control" event prior to the repayment of the Obligations under the Loan
Documents or (b) with respect to which Holdings has delivered a notice to the
Administrative Agent that it has issued preferred stock or preferred equity
interest in lieu of incurring Indebtedness otherwise permitted by clauses (vii)
or (xv) under Section 6.01(a) and, in the case of clause (vii), whether such
preferred stock or preferred equity interests relate to any Permitted
Subordinated Notes or any Permitted Senior Notes, with such notice specifying
the applicable clause; provided that (i) the aggregate liquidation value of all
such preferred stock or preferred equity interest issued pursuant to this
clause (b) shall not exceed at any time the dollar limitation specified in such
applicable clause, less the aggregate principal amount of Indebtedness
outstanding pursuant to such paragraph and (ii) the terms of such preferred
stock or preferred equity interests (x) shall provide that upon a default
thereof, the remedies of the holders thereof shall be limited to the right to
additional representation on the board of directors of Holdings and (y) shall
otherwise be no less favorable to the Lenders, in the aggregate, than the terms
of any Indebtedness that may be incurred pursuant to such paragraph.
 
"Quotation Day" means, with respect to any Eurocurrency Borrowing denominated in
a Foreign Currency and any Interest Period, the day on which it is market
practice in the relevant interbank market for prime banks to give quotations for
deposits in the currency of such Borrowing for delivery on the first day of such
Interest Period. If such quotations would normally be given by prime banks on
more than one day, the Quotation Day will be the last of such days.
 
"Ramos Sale and Leaseback" shall mean any sale or transfer by the Parent
Borrower or any Subsidiary of fixed or capital assets of the Ramos facility that
is made for cash consideration in the aggregate amount not less than an amount
equal to 85% of the orderly liquidation value of such fixed or capital assets
not to exceed $30,000,000 in the aggregate during the term of this Agreement,
and promptly thereafter rented or leased by the Parent Borrower or such
Subsidiary.
 

 

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36
 

"Recapitalization" means the recapitalization of Holdings effected pursuant to
the Merger as contemplated by the Recapitalization Agreement.
 
"Recapitalization Agreement" means the Recapitalization Agreement dated as of
August 1, 2000, between Holdings and Merger Subsidiary, as amended.
 
"Recapitalization Date" means November 28, 2000.
 
"Recapitalization Documents" means the Recapitalization Agreement and the other
agreements and documents relating to the Recapitalization Transactions.
 
"Recapitalization Transactions" means (a) the Recapitalization, (b) the
Specified Asset Sales, (c) the Saturn Sale, (d) the Asset Dropdown, (e) the
Restricted Stock Award and the performance of the Restricted Stock Obligation,
(f) the Intercompany Transfer, (g) the payment of the Merger Consideration and
the Saturn Proceeds Distribution, (h) the issuance of the Holdings Preferred
Stock to Masco, (i) the repayment of certain Indebtedness, (j) the Equity
Rollover, (k) the execution of the Subordinated Loan Agreement dated as of the
Recapitalization Date between Masco and Holdings, as amended, by the parties
thereto and (l) the other transactions contemplated by the Recapitalization
Agreement.
 
"Receivables Purchase Agreement" means (a) the Receivables Purchase Agreement
dated as of the Recapitalization Date among the Receivables Subsidiary,
Holdings, the Parent Borrower and the Subsidiaries party thereto, related to the
Permitted Receivables Financing, as may be amended, supplemented or otherwise
modified to the extent permitted by Section 6.11 and (b) any agreement replacing
such Receivables Purchase Agreement, provided that such replacing agreement
contains terms that are substantially similar to such Receivables Purchase
Agreement and that are otherwise no more adverse to the Lenders than the
applicable terms of such Receivables Purchase Agreement.
 
"Receivables Subsidiary" means MTSPC, Inc., a Delaware corporation, MRFC, Inc.,
a Delaware corporation, or any special purpose subsidiary referred to in
clause (ii) of the definition Permitted Receivables Financing.
 
"Receivables Transfer Agreement" means (a) the Receivables Transfer Agreement
dated as of the Recapitalization Date, among the Receivables Subsidiary,
Holdings and the purchasers party thereto, relating to the Permitted Receivables
Financing, as may be amended, supplemented or otherwise modified to the extent
permitted by Section 6.11 and (b) any agreement replacing such Receivables
Transfer Agreement, provided that such replacing agreement contains terms that
are substantially similar to such Receivables Transfer Agreement and that are
otherwise no more adverse to the Lenders than the applicable terms of such
Receivables Transfer Agreement.
 
"Register" has the meaning set forth in Section 10.04.
 
"Regulation U" shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
 

 

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37
 

"Regulation X" shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
 
"Related Parties" means, with respect to any specified Person, such Person's
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person's Affiliates.
 
"Release" means any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into or
through the environment (including ambient air, surface water, groundwater, land
surface or subsurface strata) or within any building, structure, facility or
fixture.
 
"Required Lenders" means, at any time, Lenders having Revolving Exposures, Term
Loans and unused Commitments representing more than 50% of the sum of the total
Revolving Exposures, outstanding Term Loans and unused Commitments at such time.
 
"Restatement Effective Date" shall have the meaning specified in the Amendment
and Restatement Agreement.
 
"Restricted Indebtedness" means Indebtedness of Holdings, the Parent Borrower or
any Subsidiary, the payment, prepayment, redemption, repurchase or defeasance of
which is restricted under Section 6.08(b).
 
"Restricted Payment" means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in Holdings,
the Parent Borrower or any Subsidiary (including the Receivables Subsidiary), or
any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of any Equity Interests in
Holdings, the Parent Borrower or any Subsidiary (including the Receivables
Subsidiary) or any option, warrant or other right to acquire any such Equity
Interests in Holdings, the Parent Borrower or any Subsidiary (including the
Receivables Subsidiary).
 
"Restricted Stock Award" means the grant of restricted stock awards (including
phantom restricted stock awards) of Holdings in connection with the
Recapitalization, having the terms set forth in the Recapitalization Agreement,
in substitution of restricted stock awards (including phantom restricted stock
awards) of Holdings existing immediately prior to the Recapitalization Date.
 
"Restricted Stock Obligation" means the obligation following the
Recapitalization Date of Holdings to make deferred cash payments in an aggregate
amount not to exceed $47,500,000 over a 38 month period, plus (i) any accretion
thereto and (ii) any deferred payments required to be made in connection with
the Saturn Sale, in each case in accordance with the Recapitalization Agreement
following the Recapitalization Date, pursuant to the terms of the new restricted
stock granted pursuant to the Restricted Stock Award.
 

 

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38
 

"Revolving Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Revolving Maturity Date and
the date of termination of the Revolving Commitments.
 
"Revolving Commitment" means, with respect to each Lender, the commitment, if
any, of such Lender to make Revolving Loans, including Foreign Currency Loans,
and to acquire participations in Letters of Credit, including Foreign Currency
Letters of Credit and Swingline Loans hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender's Revolving Exposure,
including Foreign Currency Exposure, hereunder, as such commitment may be
(a) reduced from time to time pursuant to Section 2.08 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The initial amount of each Lender's Revolving
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Revolving Commitment, as
applicable. The initial aggregate amount of the Lenders' Revolving Commitments
is $200,000,000.
 
"Revolving Exposure" means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender's Revolving Loans and its LC
Exposure and Swingline Exposure at such time.
 
"Revolving Lender" means a Lender with a Revolving Commitment or, if the
Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.
 
"Revolving Loan" means a Loan made pursuant to clause (iii) of Section 2.01(a).
 
"Revolving Maturity Date" means May 28, 2007, or, if such day is not a Business
Day, the first Business Day thereafter.
 
"S&P" means Standard & Poor's.
 
"Saturn" means Saturn Electronics and Engineering Inc. or any successor thereto
by merger or otherwise.
 
"Saturn Proceeds Distribution" means the cash payments to be made as a result of
any Saturn Sale in an amount based upon the net proceeds resulting from the
Saturn Sale and determined in accordance with and pursuant to the
Recapitalization Agreement.
 
"Saturn Sale" means one or more sales by the Saturn Subsidiary of any Equity
Interests (or other property received in respect thereof) in Saturn.
 
"Saturn Subsidiary" means a special purpose wholly owned subsidiary of Holdings
which will hold any Equity Interests (or other property received in respect
thereof) in Saturn pending the completion of the Saturn Sale and any other
special purpose wholly owned subsidiary of Holdings that holds any proceeds from
the Saturn
 

 

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39
 

Sale not required to be paid to Pre-Merger Stockholders or on account of taxes
from any Saturn Sale.
 
"Secured Parties" has the meaning assigned to such term in the Security
Agreement.
 
"Security Agreement" means the Security Agreement, substantially in the form of
Exhibit H, among Holdings, the Parent Borrower, the Subsidiary Loan Parties
party thereto and the Collateral Agent for the benefit of the Secured Parties.
 
"Security Documents" means the Security Agreement, the Pledge Agreement, the
Mortgages, the Guarantee Agreement, the Indemnity, Subrogation and Contribution
Agreement, each Foreign Security Document entered into pursuant to Section 2.21
and Section 4.03 and each other security agreement or other instrument or
document executed and delivered pursuant to Section 5.12 or 5.13 to secure any
of the Obligations.
 
"Senior Indebtedness" means (a) the sum of Total Indebtedness plus the
obligations outstanding under the Permitted Receivables Financing minus (b)
Subordinated Debt.
 
"Senior Leverage Ratio" means, on any date, the ratio of (a) Senior Indebtedness
as of such date to (b) Consolidated EBITDA for the period of four consecutive
fiscal quarters of Holdings ended on such date (or, if such date is not the last
day of a fiscal quarter, ended on the last day of the fiscal quarter of Holdings
most recently ended prior to such date for which financial statements are
available).
 
"Senior Secured Leverage Ratio" means, on any date, the ratio of (a) Senior
Indebtedness as of such date that is secured by any first-priority Lien to
(b) Consolidated EBITDA for the period of four consecutive fiscal quarters of
Holdings ended on such date (or, if such date is not the last day of a fiscal
quarter, ended on the last day of the fiscal quarter of Holdings most recently
ended prior to such date for which financial statements are available).
 
"Shareholder Agreement" means the Shareholders Agreement dated as of the
Recapitalization Date, among Holdings, Heartland and the other parties thereto,
as amended from time to time.
 
"Specified Acquired Property" means any property, real or personal, (a) that is
acquired pursuant to a Permitted Acquisition or (b) that is owned by the Parent
Borrower or any Subsidiary immediately prior to such Permitted Acquisition and
that is combined with any such acquired property for purposes of any Acquisition
Lease Financing, provided that the fair value of the property described in this
clause (b) shall not exceed in the aggregate during the term of this Agreement,
$25,000,000.
 
"Specified Asset Sales" means the sale by Holdings of its equity investments in
the Specified Assets.
 

 

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"Specified Assets" means Advanced Accessories Systems LLC, Titan International
Inc., Delco Remy International Inc., MSX International Inc., Innovative Coatings
Technology, Inc., Qualitor, Inc. and Tower Automotive Inc.
 
"Specified Cash" means the cash held by Holdings on the Recapitalization Date in
an amount equal to $3,700,000.
 
"Specified Obligations" means Obligations consisting of the principal and
interest on Loans, reimbursement obligations in respect of LC Disbursements and
fees.
 
"Specified Prepayment Event" means any sale, transfer or other disposition
constituting an Acquisition Lease Financing.
 
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board (or in the case of Foreign Currency Borrowings, the
applicable Governmental Authority) to which the Administrative Agent is subject
(a) with respect to the Base CD Rate, for new negotiable nonpersonal time
deposits in dollars of over $100,000 with maturities approximately equal to
three months and (b) with respect to the Adjusted LIBO Rate, for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board). Such reserve percentages shall include those imposed pursuant to
such Regulation D. Eurocurrency Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under any applicable law, rule or regulation. The Statutory
Reserve Rate shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.
 
"Sterling" or "£" means the lawful money of the United Kingdom.
 
"Subordinated Debt" means, without duplication, (a) the Convertible Debentures,
(b) the Existing Subordinated Notes and (c) any other subordinated Indebtedness
of Holdings, the Parent Borrower or any Subsidiary (including the Permitted
Subordinated Notes).
 
"Subordinated Debt Documents" means (a) the Convertible Debentures Indenture,
(b) the Existing Subordinated Notes Documents and (c) any indenture or other
instruments under which any other Subordinated Debt is issued or incurred.
 
"subsidiary" means, with respect to any Person (the "parent") at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent'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 ordinary voting power or, in the
 

 

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case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
 
"Subsidiary" means any subsidiary of the Parent Borrower or Holdings, as the
context requires, including the Foreign Subsidiary Borrowers. Unless expressly
otherwise provided, the term "Subsidiary" shall not include (a) the Receivables
Subsidiary, (b) the Saturn Subsidiary, (c) for so long as Acme Office Group,
Inc. ("Acme") is inactive, holds no assets and conducts no business, Acme and
(d) TriMas.
 
"Subsidiary Loan Party" means (a) any Subsidiary that is not a Foreign
Subsidiary (other than the Foreign Subsidiary Borrowers) and (b) any Foreign
Subsidiary Borrower and any other Foreign Subsidiary that executes a guarantee
agreement pursuant to paragraph (c) of the Collateral and Guarantee Requirement.
 
"Supplemental Indenture" means the supplement to the Convertible Debenture
Indenture among the Parent Borrower, Holdings and Morgan Guaranty Trust Company
of New York, as trustee, pursuant to which the Parent Borrower will become a
co-obligor (together with Holdings) under Convertible Debenture Indenture.
 
"Swingline Exposure" means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender
at any time shall be its Applicable Percentage of the total Swingline Exposure
at such time.
 
"Swingline Lender" means Chase, in its capacity as lender of Swingline Loans
hereunder , and Comerica Bank, in its capacity as lender of Swingline Loans
hereunder. References herein and in the other Loan Documents to the Swingline
Lender shall be deemed to refer to the Swingline Lender in respect of the
applicable Swingline Loan or to all Swingline Lenders, as the context requires.
 
"Swingline Loan" means a Loan made pursuant to Section 2.04.
 
"Synthetic Purchase Agreement" means any swap, derivative or other agreement or
combination of agreements pursuant to which Holdings, the Parent Borrower or a
Subsidiary is or may become obligated to make (i) any payment (other than in the
form of Equity Interests of Holdings) in connection with a purchase by a third
party from a Person other than Holdings, the Parent Borrower or a Subsidiary of
any Equity Interest or Restricted Indebtedness or (ii) any payment (other than
on account of a permitted purchase by it of any Equity Interest or any
Restricted Indebtedness) the amount of which is determined by reference to the
price or value at any time of any Equity Interest or Restricted Indebtedness;
provided that no Restricted Stock Award and no phantom stock or similar plan
providing for payments only to current or former directors, officers,
consultants, advisors or employees of Holdings, the Parent Borrower or the
Subsidiaries (or to their heirs or estates) shall be deemed to be Synthetic
Purchase Agreement.
 

 

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"Taxes" means any and all present or future taxes (of any nature whatsoever),
levies, imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
 
"Term Loans" means Tranche D-1 Term Loans and Tranche D-2 Term Loans.
 
"Three-Month Secondary CD Rate" means, for any day, the secondary market rate
for three-month certificates of deposit reported as being in effect on such day
(or, if such day is not a Business Day, the next preceding Business Day) by the
Board through the public information telephone line of the Federal Reserve Bank
of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day) or, if such rate is not so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
 
"Total Indebtedness" means, as of any date, the sum of, without duplication, (a)
the aggregate principal amount of Indebtedness of Holdings, the Parent Borrower
and the Subsidiaries outstanding as of such date, in the amount that would be
reflected on a balance sheet prepared as of such date on a consolidated basis in
accordance with GAAP, plus (b) the aggregate principal amount of Indebtedness of
Holdings, the Parent Borrower and the Subsidiaries outstanding as of such date
that is not required to be reflected on a balance sheet in accordance with GAAP,
determined on a consolidated basis, plus (c) obligations arising in respect of
the Permitted Receivables Financing; provided that, for purposes of clause (b)
above, the term "Indebtedness" shall not include (i) contingent obligations of
Holdings, the Parent Borrower or any Subsidiary as an account party in respect
of any letter of credit or letter of guaranty unless, without duplication, such
letter of credit or letter of guaranty supports an obligation that constitutes
Indebtedness and (ii) Indebtedness described in Section 6.01(a)(xiv); and
provided further that "Total Indebtedness" shall not include (i) the Convertible
Debentures to the extent that a redemption notice has been delivered in respect
thereof and proceeds sufficient to effect such redemption have deposited with
the trustee or agent thereof and (ii) the TriMas Notes.
 
"Tranche D Commitment" means, with respect to each Lender, the commitment, if
any, of such Lender to (a) make a Tranche D-1 Term Loan hereunder on the
Effective Date or (b) make a Tranche D-2 Term Loan on the Restatement Effective
Date, in each case expressed as an amount representing the maximum principal
amount of the Tranche D Term Loan to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08 and
(b) reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 10.04. The initial amount of each Lender's Tranche D
Commitment is set forth
 

 

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on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such
Lender shall have assumed its Tranche D Commitment, as applicable.
 
"Tranche D Lender" means a Tranche D-1 Lender or a Tranche D-2 Lender.
 
"Tranche D Maturity Date" means December 31, 2009, or if such day is not a
Business Day, the first Business Day thereafter.
 
"Tranche D Term Loan" means a Tranche D-1 Term Loan or a Tranche D-2 Term Loan.
 
"Tranche D-1 Term Loan" means a Loan made on the Effective Date pursuant to
clause (i) of Section 2.01(a).
 
"Tranche D-1 Lender" means a Lender with a Tranche D-1 Commitment or an
outstanding Tranche D-1 Term Loan.
 
"Tranche D-2 Term Loan" means a Loan made on the Restatement Effective Date
pursuant to clause (ii) of Section 2.01(a).
 
"Tranche D-2 Lender" means a Lender with a Tranche D-2 Commitment or an
outstanding Tranche D-2 Term Loan.
 
"Transactions" means (a) the execution, delivery and performance by each Loan
Party of the Loan Documents to which it is to be a party, the borrowing of
Loans, the use of the proceeds thereof and the issuance of Letters of Credit
hereunder and (b) the other transactions contemplated hereby.
 
"TriMas" means TriMas Corporation, a Delaware corporation.
 
"TriMas Affiliate Agreements" means the Stock Purchase Agreement, the Corporate
Services Agreement, the Warrant, the Shareholders Agreement and each agreement
and transaction contemplated by any of the foregoing and entered into in
connection with the TriMas Transactions.
 
"TriMas Available Proceeds" means the Net Proceeds received by the Parent
Borrower from the TriMas Transaction, less the TriMas Specified Proceeds.
 
"TriMas Interest" means, at any time, the Equity Interest of TriMas held by the
Parent Borrower or any Subsidiary.
 
"TriMas Notes" means the senior subordinated notes of TriMas issued in
contemplation of the TriMas Transaction.
 
"TriMas Specified Proceeds" means the Net Proceeds received by the Parent
Borrower from the TriMas Transaction in an amount equal to the sum of
(x) $255,000,000 and (y) the amount by which obligations under the Permitted
 

 

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Receivables Financing are required to be repaid in connection with the reduction
of borrowing base capacity thereunder as a result of the TriMas Transaction.
 
"TriMas Transaction" means the transactions contemplated by the Stock Purchase
Agreement dated as of May 17, 2002 among Holdings, the Parent Borrower and
Heartland Industrial Partners, L.P. and the related documentation.
 
"Type", when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
 
"Withdrawal Liability" means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
 
SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a "Revolving
Loan") or by Type (e.g., a "Eurocurrency Loan") or by Class and Type (e.g., a
"Eurocurrency Revolving Loan"). Borrowings also may be classified and referred
to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a "Eurocurrency
Borrowing") or by Class and Type (e.g., a "Eurocurrency Revolving Borrowing").
 
SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
 
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Parent Borrower notifies the Administrative Agent that the Parent Borrower
requests 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
 

 

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(or if the Administrative Agent notifies the Parent Borrower that the Required
Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.
 
SECTION 1.05. Exchange Rates. (a)  Not later than 1:00 p.m., New York City time,
on each Calculation Date beginning with the date on which the initial Foreign
Currency Borrowing is made or the initial Foreign Currency Letter of Credit is
issued, the Administrative Agent shall (i) determine the Exchange Rate as of
such Calculation Date with respect to each Foreign Currency and (ii) give notice
thereof to the Revolving Lenders and the Parent Borrower (on behalf of itself
and the Foreign Subsidiary Borrowers). The Exchange Rates so determined shall
become effective on the first Business Day immediately following the relevant
Calculation Date (a "Recalculation Date"), shall remain effective until the next
succeeding Recalculation Date, and shall for all purposes of this Agreement
(other than Section 9.01, Section 10.14 or any other provision expressly
requiring the use of a current Exchange Rate) be the Exchange Rates employed in
converting any amounts between dollars and Foreign Currencies.
 
(b) Not later than 5:00 p.m., New York City time, on each Recalculation Date and
each date on which Revolving Loans denominated in any Foreign Currency are made,
the Administrative Agent shall (i) determine the aggregate amount of the Dollar
Equivalents of (A) the principal amounts of the Foreign Currency Loans then
outstanding (after giving effect to any Foreign Currency Loans made or repaid on
such date) (B) the face value of outstanding Foreign Currency Letters of Credit
and (C) unreimbursed drawings in respect of Foreign Currency Letters of Credit
and (ii) notify the Revolving Lenders and the Parent Borrower (on behalf of
itself and the Foreign Subsidiary Borrowers) of the results of such
determination.
 
SECTION 1.06. Redenomination of Certain Foreign Currencies. (a)  Each obligation
of any party to this Agreement to make a payment denominated in the national
currency unit of any member state of the European Union that adopts the Euro as
its lawful currency after the date hereof shall be redenominated into Euro at
the time of such adoption (in accordance with the EMU Legislation). If, in
relation to the currency of any such member state, the basis of accrual of
interest expressed in this Agreement in respect of that currency shall be
inconsistent with any convention or practice in the London Interbank Market for
the basis of accrual of interest in respect of the Euro, such expressed basis
shall be replaced by such convention or practice with effect from the date on
which such member state adopts the Euro as its lawful currency; provided that if
any Foreign Currency Borrowing in the currency of such member state is
outstanding immediately prior to such date, such replacement shall take effect,
with respect to such Foreign Currency Borrowing, at the end of the then current
Interest Period.
 
(b) Each provision of this Agreement shall be subject to such reasonable changes
of construction as the Administrative Agent may from time to time
 

 

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specify to be appropriate to reflect the adoption of the Euro by any member
state of the European Union and any relevant market conventions or practices
relating to the Euro.
 
 
ARTICLE II
 
The Credits
 
SECTION 2.01. Commitments. (a)  (i) Each Tranche D-1 Lender made a Tranche D-1
Term Loan to the Parent Borrower on the Effective Date in a principal amount not
exceeding its Tranche D-1 Commitment, (ii) subject to the terms and conditions
set forth herein and in the Amendment and Restatement Agreement, each Tranche
D-2 Lender agrees to make a Tranche D-2 Term Loan to the Parent Borrower on the
Restatement Effective Date in a principal amount not exceeding its Tranche D-2
Commitment and (iii) each Lender agrees to make Revolving Loans to the Parent
Borrower and the Foreign Subsidiary Borrowers, as the case may be, from time to
time during the Revolving Availability Period in an aggregate principal amount
that will not result in such Lender's (A) Revolving Exposure exceeding such
Lender's Revolving Commitment or (B) Foreign Currency Exposure exceeding such
Lender's Foreign Currency Commitment.
 
(b) Within the foregoing limits and subject to the terms and conditions set
forth herein, the Parent Borrower and the Foreign Subsidiary Borrowers, as the
case may be, may borrow, prepay and reborrow Revolving Loans. Amounts repaid in
respect of Term Loans may not be reborrowed.
 
SECTION 2.02. Loans and Borrowings. (a)  Each Loan (other than a Swingline Loan)
shall be made as part of a Borrowing consisting of Loans of the same Class and
Type made by the Lenders ratably in accordance with their respective Commitments
of the applicable Class. The failure of any Lender to make any Loan required to
be made by it shall not relieve any other Lender of its obligations hereunder;
provided that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
 
(b) Subject to Section 2.14, each Revolving Borrowing (other than Foreign
Currency Borrowings) and Term Borrowing shall be comprised entirely of ABR Loans
or Eurocurrency Loans as the Parent Borrower may request in accordance herewith;
provided that all Borrowings made on the Effective Date must be made as ABR
Borrowings. All Foreign Currency Borrowings shall be comprised entirely of
Eurocurrency Loans. Each Swingline Loan shall be an ABR Loan. Each Lender at its
option may make any Eurocurrency Loan by causing any domestic or foreign branch
or Affiliate of such Lender to make such Loan; provided that any exercise of
such option shall not affect the obligation of any Borrower to repay such Loan
in accordance with the terms of this Agreement.
 
(c) At the commencement of each Interest Period for any Eurocurrency Borrowing,
such Borrowing shall be in an aggregate amount that is an
 

 

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integral multiple of $1,000,000 (or 1,000,000 units of the applicable Foreign
Currency) and not less than $5,000,000 (or 5,000,000 units in the applicable
Foreign Currency. At the time that each ABR Revolving Borrowing is made, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $5,000,000; provided that (i) an ABR Revolving
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Revolving Commitments and (ii) an ABR Revolving Borrowing
or a Eurocurrency Revolving Borrowing, in the case of Foreign Currency Letters
of Credit, may be in an aggregate amount that is equal to the amount that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.05(e). Each Swingline Loan shall be in an amount that is an integral
multiple of $100,000 and not less than $500,000. Borrowings of more than one
Type and Class may be outstanding at the same time; provided that there shall
not at any time be more than a total of 12 Eurocurrency Borrowings outstanding.
 
(d) Notwithstanding any other provision of this Agreement, none of the Parent
Borrower or any Foreign Subsidiary Borrower shall be entitled to request, or to
elect to convert or continue, any Borrowing if the Interest Period requested
with respect thereto would end after the Revolving Maturity Date or the Tranche
D Maturity Date, as applicable.
 
SECTION 2.03. Requests for Borrowings. To request a Revolving Borrowing or Term
Borrowing, the Parent Borrower or, in the case of a Foreign Currency Borrowing,
the applicable Foreign Subsidiary Borrower, shall notify the Administrative
Agent of such request by telephone (a) in the case of a Eurocurrency Borrowing,
not later than 12:00 noon, New York City time, three Business Days before the
date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later
than 12:00 noon, New York City time, one Business Day before the date of the
proposed Borrowing; provided that any such notice of an ABR Revolving Borrowing
to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.05(e) may be given not later than 10:00 a.m., New York City time, on
the date of the proposed Borrowing. Each such telephonic Borrowing Request shall
be irrevocable and shall be confirmed promptly by hand delivery or telecopy to
the Administrative Agent of a written Borrowing Request in a form approved by
the Administrative Agent and signed by the Parent Borrower and, in the case of a
Foreign Currency Borrowing, the applicable Foreign Subsidiary Borrower. Each
such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:
 
(i) whether the requested Borrowing is to be a Revolving Borrowing or a Tranche
D Term Borrowing;
 
(ii) the aggregate amount of such Borrowing;
 
(iii) the date of such Borrowing, which shall be a Business Day;
 
(iv) whether such Borrowing is to be an ABR Borrowing or a Eurocurrency
Borrowing, unless such Borrowing is a Foreign Currency Borrowing;
 

 

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(v) if such Borrowing is a Foreign Currency Borrowing, the relevant Foreign
Currency;
 
(vi) in the case of a Eurocurrency Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term "Interest Period"; and
 
(vii) the location and number of the Parent Borrower's or the applicable Foreign
Subsidiary Borrower's, as the case may be, account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.06.
 
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing, unless such Borrowing is a Foreign Currency
Borrowing, in which case such Borrowing shall be a Eurocurrency Borrowing. If no
Interest Period is specified with respect to any requested Eurocurrency
Revolving Borrowing, then the Parent Borrower shall be deemed to have selected
an Interest Period of one month's duration. Promptly following receipt of a
Borrowing Request in accordance with this Section, the Administrative Agent
shall advise each Lender of the details thereof and of the amount of such
Lender's Loan to be made as part of the requested Borrowing.
 
SECTION 2.04. Swingline Loans. (a)  Subject to the terms and conditions set
forth herein, the Swingline Lender agrees to make Swingline Loans to the Parent
Borrower from time to time during the Revolving Availability Period, in an
aggregate principal amount at any time outstanding that will not result in
(i) the aggregate principal amount of outstanding Swingline Loans exceeding
$50,000,000 or (ii) the sum of the total Revolving Exposures exceeding the total
Revolving Commitments; provided that the Swingline Lender shall not be required
to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Parent Borrower may borrow, prepay and reborrow Swingline Loans.
 
(b) To request a Swingline Loan, the Parent Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 12:00 noon, New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Parent Borrower. The Swingline Lender shall make each
Swingline Loan available to the Parent Borrower by means of a credit to the
general deposit account of the Parent Borrower with the Swingline Lender (or, in
the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e), by remittance to the Issuing Bank)
by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.
 
(c) The Swingline Lender may by written notice given to the Administrative Agent
not later than 12:00 noon, New York City time, on any Business Day require the
Revolving Lenders to acquire participations on such Business Day in all
 

 

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or a portion of the Swingline Loans outstanding. Such notice shall specify the
aggregate amount of Swingline Loans in which Revolving Lenders will participate.
Promptly upon receipt of such notice, the Administrative Agent will give notice
thereof to each Revolving Lender, specifying in such notice such Lender's
Applicable Percentage of such Swingline Loan or Loans. Each Revolving Lender
hereby absolutely and unconditionally agrees, upon receipt of notice as provided
above, to pay to the Administrative Agent, for the account of the Swingline
Lender, such Lender's Applicable Percentage of such Swingline Loan or Loans.
Each Revolving Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever (provided that such
payment shall not cause such Lender's Revolving Exposure to exceed such Lender's
Revolving Commitment). Each Revolving Lender shall comply with its obligation
under this paragraph by wire transfer of immediately available funds, in the
same manner as provided in Section 2.06 with respect to Loans made by such
Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the Swingline Lender the amounts so received by it from the
Revolving Lenders. The Administrative Agent shall notify the Parent Borrower of
any participations in any Swingline Loan acquired pursuant to this paragraph,
and thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts received by
the Swingline Lender from the Parent Borrower (or other party on behalf of the
Parent Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear. The
purchase of participations in a Swingline Loan pursuant to this paragraph shall
not relieve the Parent Borrower of any default in the payment thereof.
 
SECTION 2.05. Letters of Credit. (a)  General. Subject to the terms and
conditions set forth herein, the Parent Borrower may request the issuance of
Letters of Credit for its own account or the account of a Subsidiary and any
Foreign Subsidiary Borrower may request the issuance of Foreign Currency Letters
of Credit for its own account or the account of a Subsidiary of such Foreign
Subsidiary Borrower, in each case in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
during the Revolving Availability Period (provided that the Parent Borrower or a
Foreign Subsidiary Borrower, as the case may be, shall be a co-applicant with
respect to each Letter of Credit issued for the account of or in favor of a
Subsidiary that is not a Foreign Subsidiary Borrower). In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Parent Borrower or any Foreign Subsidiary Borrower, as the case
may be, to, or entered into by the Parent Borrower or any Foreign Subsidiary
Borrower, as the case may be, with, the Issuing
 

 

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Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.
 
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Parent Borrower or the
applicable Foreign Subsidiary Borrower, as the case may be, shall hand deliver
or telecopy (or transmit by electronic communication, if arrangements for doing
so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended,
and specifying the date of issuance, amendment, renewal or extension (which
shall be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Parent Borrower or the
applicable Foreign Subsidiary Borrower, as the case may be, also shall submit a
letter of credit application on the Issuing Bank's standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Parent Borrower or the applicable Foreign
Subsidiary Borrower, as the case may be, shall be deemed to represent and
warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) the LC Exposure shall not exceed $95,000,000 (provided that no
more than $20,000,000 of LC Exposure may be used to support Indebtedness
incurred outside of the United States), (ii) the total Revolving Exposures shall
not exceed the total Revolving Commitments and (iii) the total Foreign Currency
Exposures shall not exceed the total Foreign Currency Commitments.
 
(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close
of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Revolving Maturity Date.
 
(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants
to each Revolving Lender, and each Revolving Lender hereby acquires from the
Issuing Bank, a participation in such Letter of Credit equal to such Lender's
Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Revolving Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the Issuing Bank, such Lender's
Applicable Percentage of each LC Disbursement made by the Issuing Bank and not
reimbursed by the Parent Borrower or the applicable Foreign Subsidiary Borrower,
as the case may be, on the date due as provided in paragraph (e) of this
Section, or of any reimbursement payment required to be refunded to the Parent
 

 

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Borrower or the applicable Foreign Subsidiary Borrower, as the case may be, for
any reason. Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
 
(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect
of a Letter of Credit, the Parent Borrower or the applicable Foreign Subsidiary
Borrower, as the case may be, shall reimburse such LC Disbursement by paying to
the Administrative Agent an amount equal to such LC Disbursement not later than
12:00 noon, New York City time, on the date that such LC Disbursement is made,
if the Parent Borrower or the applicable Foreign Subsidiary Borrower, as the
case may be, shall have received notice of such LC Disbursement prior to
10:00 a.m., New York City time or London time (in the case of Foreign Currency
Letters of Credit), on such date, or, if such notice has not been received by
the Parent Borrower or the applicable Foreign Subsidiary Borrower, as the case
may be, prior to such time on such date, then not later than 12:00 noon,
New York City time or London time (in the case of Foreign Currency Letters of
Credit), on (i) the Business Day that the Parent Borrower or the applicable
Foreign Subsidiary Borrower, as the case may be, receives such notice, if such
notice is received prior to 10:00 a.m., New York City time or London time (in
the case of Foreign Currency Letters of Credit), on the day of receipt, or (ii)
the Business Day immediately following the day that the Parent Borrower or the
applicable Foreign Subsidiary Borrower, as the case may be, receives such
notice, if such notice is not received prior to such time on the day of receipt;
provided that (i) the Parent Borrower may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.03 or 2.04 that
such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an
equivalent amount and, to the extent so financed, the Parent Borrower's
obligation to make such payment shall be discharged and replaced by the
resulting ABR Revolving Borrowing or Swingline Loan and (ii) such Foreign
Subsidiary Borrower may, subject to the conditions to borrowing set forth
herein, request in accordance with Section 2.03 that such payment be financed
with a Eurocurrency Revolving Borrowing in an equivalent amount in the
applicable Foreign Currency and, to the extent so financed, such Foreign
Subsidiary Borrower's obligation to make such payment shall be discharged and
replaced by the resulting Eurocurrency Revolving Borrowing. If the Parent
Borrower or the applicable Foreign Subsidiary Borrower, as the case may be,
fails to make such payment when due, the Administrative Agent shall notify each
Revolving Lender of the applicable LC Disbursement, the payment then due from
the Parent Borrower or the applicable Foreign Subsidiary Borrower, as the case
may be, in respect thereof and such Lender's Applicable Percentage thereof.
Promptly following receipt of such notice, each Revolving Lender shall pay to
the Administrative Agent its Applicable Percentage of the unreimbursed LC
Disbursement in the same manner as provided in Section 2.06 with respect to
Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to
the payment obligations of the Revolving Lenders), and the Administrative Agent
shall promptly pay to the Issuing Bank the amounts so received
 

 

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by it from the Revolving Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Parent Borrower or any applicable
Foreign Subsidiary Borrower, as the case may be, pursuant to this paragraph, the
Administrative Agent shall distribute such payment to the Issuing Bank or, to
the extent that Revolving Lenders have made payments pursuant to this paragraph
to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as
their interests may appear. Any payment made by a Revolving Lender pursuant to
this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than
the funding of ABR Revolving Loans or a Swingline Loan as contemplated above)
shall not constitute a Loan and shall not relieve the Parent Borrower or any
applicable Foreign Subsidiary Borrower, as the case may be, of its obligation to
reimburse such LC Disbursement.

(f) Obligations Absolute. The obligation of the Parent Borrower or any Foreign
Subsidiary Borrower to reimburse LC Disbursements as provided in paragraph (e)
of this Section shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement under any and
all circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit or this Agreement, or any term or
provision therein, (ii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment by
the Issuing Bank under a Letter of Credit against presentation of a draft or
other document that does not comply with the terms of such Letter of Credit, or
(iv) any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section, constitute
a legal or equitable discharge of, or provide a right of setoff against, the
obligations of the Parent Borrower or any Foreign Subsidiary Borrower hereunder.
Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Parent Borrower or any applicable Foreign
Subsidiary Borrower, as the case may be, to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived
by the Parent Borrower or any applicable Foreign Subsidiary Borrower, as the
case may be, to the extent permitted by applicable law) suffered by the Parent
Borrower or any applicable Foreign Subsidiary Borrower, as the case may be, that
are caused by the Issuing Bank's failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or wilful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their
 

 

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face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
 
(g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Parent Borrower or any applicable Foreign
Subsidiary Borrower, as the case may be, by telephone (confirmed by telecopy) of
such demand for payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Parent Borrower or any applicable Foreign
Subsidiary Borrower, as the case may be, of its obligation to reimburse the
Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement
(other than with respect to the timing of such reimbursement obligation set
forth in Section 2.05(e)).
 
(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless the Parent Borrower or any applicable Foreign Subsidiary Borrower, as the
case may be, shall reimburse such LC Disbursement in full on the date such LC
Disbursement is made, the unpaid amount thereof shall bear interest, for each
day from and including the date such LC Disbursement is made to but excluding
the date that the Parent Borrower or any applicable Foreign Subsidiary Borrower,
as the case may be, reimburses such LC Disbursement, at the rate per annum then
applicable to ABR Revolving Loans; provided that, if the Parent Borrower or any
applicable Foreign Subsidiary Borrower, as the case may be, fails to reimburse
such LC Disbursement when due pursuant to paragraph (e) of this Section, then
Section 2.13(c) shall apply. Interest accrued pursuant to this paragraph shall
be for the account of the Issuing Bank, except that interest accrued on and
after the date of payment by any Revolving Lender pursuant to paragraph (e) of
this Section to reimburse the Issuing Bank shall be for the account of such
Lender to the extent of such payment.
 
(i) Replacement of the Issuing Bank; Additional Issuing Banks. The Issuing Bank
may be replaced at any time by written agreement among the Parent Borrower (on
behalf of itself and the Foreign Subsidiary Borrowers), the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. One or more
Lenders may be appointed as additional Issuing Banks by written agreement among
the Parent Borrower (on behalf of itself and the Foreign Subsidiary Borrowers),
the Administrative Agent (whose consent will not be unreasonably withheld) and
the Lender that is to be so appointed. The Administrative Agent shall notify the
Lenders of any such replacement of the Issuing Bank or any such additional
Issuing Bank. At the time any such replacement shall become effective, the
Parent Borrower (on behalf of itself and the Foreign Subsidiary Borrowers) shall
pay all unpaid fees accrued for the account of the replaced Issuing Bank
pursuant to Section 2.12(b). From and after the effective date of any such
replacement or addition, as applicable, (i) the successor or additional Issuing
Bank shall have all the rights and obligations of the Issuing Bank under this
Agreement with respect
 

 

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to Letters of Credit to be issued thereafter and (ii) references herein to the
term "Issuing Bank" shall be deemed to refer to such successor or such addition
or to any previous Issuing Bank, or to such successor or such addition and all
previous Issuing Banks, as the context shall require. After the replacement of
an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement with respect to Letters of Credit issued by it prior to
such replacement, but shall not be required to issue additional Letters of
Credit. If at any time there is more than one Issuing Bank hereunder, the Parent
Borrower (on behalf of itself and the Foreign Subsidiary Borrowers) may, in its
discretion, select which Issuing Bank is to issue any particular Letter of
Credit.
 
(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Parent Borrower or any Foreign
Subsidiary Borrower receives notice from the Administrative Agent or the
Required Lenders (or, if the maturity of the Loans has been accelerated,
Revolving Lenders with LC Exposure representing greater than 50% of the total LC
Exposure) demanding the deposit of cash collateral pursuant to this paragraph,
the Parent Borrower and the Foreign Subsidiary Borrowers, as the case may be,
shall deposit in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Lenders, an amount in cash in
the applicable currency equal to the LC Exposure as of such date plus any
accrued and unpaid interest thereon; provided that the obligation to deposit
such cash collateral shall become effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of any kind,
upon the occurrence of any Event of Default with respect to the Parent Borrower
or any Foreign Subsidiary Borrower described in clause (h) or (i) of
Article VII. Each such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the obligations of the Parent
Borrower and the Foreign Subsidiary Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the risk and
expense of the Parent Borrower and the Foreign Subsidiary Borrower, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Parent Borrower and the Foreign Subsidiary Borrower for the LC Exposure at
such time or, if the maturity of the Loans has been accelerated (but subject to
the consent of Revolving Lenders with LC Exposure representing greater than 50%
of the total LC Exposure), be applied to satisfy other obligations of the Parent
Borrower and the Foreign Subsidiary Borrower under this Agreement. If the Parent
Borrower or any Foreign Subsidiary Borrower is required to provide an amount of
cash collateral hereunder as a result of the occurrence of an Event of Default,
such amount plus any accrued interest or realized profits of such amounts (to
the extent not applied as aforesaid) shall be returned to the Parent Borrower or
such Foreign Subsidiary Borrower within three Business Days after all Events of
Default have been cured or waived. If the Parent Borrower is required to provide
an amount of such collateral hereunder pursuant to Section 2.11(b), such amount
plus any accrued interest or
 

 

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realized profits on account of such amount (to the extent not applied as
aforesaid) shall be returned to the Parent Borrower as and to the extent that,
after giving effect to such return, the Parent Borrower would remain in
compliance with Section 2.11(b) and no Default or Event of Default shall have
occurred and be continuing.
 
SECTION 2.06. Funding of Borrowings. (a)  Each Lender shall make each Loan to be
made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, or in the case of
Foreign Currency Borrowings, London time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders;
provided that Swingline Loans shall be made as provided in Section 2.04. The
Administrative Agent will make such Loans available to the Parent Borrower or
the applicable Foreign Subsidiary Borrower, as the case may be, by promptly
crediting the amounts so received, in like funds, to an account of the Parent
Borrower or such Foreign Subsidiary Borrower, as the case may be, maintained
with the Administrative Agent in New York City, or in the case of Foreign
Currency Borrowings, London, and designated by the Parent Borrower or such
Foreign Subsidiary Borrower, in the applicable Borrowing Request; provided that
ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as
provided in Section 2.05(e) shall be remitted by the Administrative Agent to the
Issuing Bank.
 
(b) Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Parent Borrower or the
applicable Foreign Subsidiary Borrower, as the case may be, a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the applicable
Lender and the Parent Borrower or the applicable Foreign Subsidiary Borrower, as
the case may be, severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Parent Borrower or the
applicable Foreign Subsidiary Borrower, as the case may be, to but excluding the
date of payment to the Administrative Agent, at (i) in the case of such Lender,
the greater of (x) the Federal Funds Effective Rate and (y) a rate determined by
the Administrative Agent in accordance with banking industry rules on interbank
compensation, except with respect to Foreign Currency Borrowings, the applicable
rate shall be determined as specified in clause (y) above, or (ii) in the case
of the Parent Borrower or any Foreign Subsidiary Borrower, the interest rate
applicable to ABR Loans. If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender's Loan included in such
Borrowing.
 
SECTION 2.07. Interest Elections. (a)  Each Revolving Borrowing and Term
Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurocurrency Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, the Parent
Borrower or the
 

 

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applicable Foreign Subsidiary Borrower, as the case may be, may elect to convert
such Borrowing to a different Type or to continue such Borrowing and, in the
case of a Eurocurrency Borrowing, may elect Interest Periods therefor, all as
provided in this Section. The Parent Borrower or the applicable Foreign
Subsidiary Borrower, as the case may be, may elect different options with
respect to different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing. This Section shall not apply to Swingline
Borrowings, which may not be converted or continued.
 
(b) To make an election pursuant to this Section, the Parent Borrower or the
applicable Foreign Subsidiary Borrower, as the case may be, shall notify the
Administrative Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.03 if the Parent Borrower or the
applicable Foreign Subsidiary Borrower, as the case may be, were requesting a
Revolving Borrowing or Term Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the Parent
Borrower or the applicable Foreign Subsidiary Borrower, as the case may be.
 
(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:
 
(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);
 
(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;
 
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurocurrency Borrowing; and
 
(iv) if the resulting Borrowing is a Eurocurrency Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term "Interest Period".
 
If any such Interest Election Request requests a Eurocurrency Borrowing but does
not specify an Interest Period, then the Parent Borrower or the applicable
Foreign Subsidiary Borrower, as the case may be, shall be deemed to have
selected an Interest Period of one month's duration.
 

 

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(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
 
(e) If an Interest Election Request with respect to a Eurocurrency Borrowing is
not timely delivered prior to the end of the Interest Period applicable thereto,
then, unless such Borrowing is repaid as provided herein, at the end of such
Interest Period such Borrowing shall be converted to an ABR Borrowing (unless
such Borrowing is a Foreign Currency Borrowing, in which case such Borrowing
shall become due and payable on the last day of such Interest Period).
Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing and the Administrative Agent, at the request of the
Required Lenders, so notifies the Parent Borrower (on behalf of itself and the
Foreign Subsidiary Borrowers), then, so long as an Event of Default is
continuing (i) no outstanding Borrowing (other than a Foreign Currency
Borrowing) may be converted to or continued as a Eurocurrency Borrowing and (ii)
unless repaid, each Eurocurrency Borrowing (other than a Foreign Currency
Borrowing) shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
 
SECTION 2.08. Termination and Reduction of Commitments. (a)  Unless previously
terminated, (i) the Tranche D-1 Commitments shall terminate at 5:00 p.m., New
York City time, on the Effective Date, (ii) the Tranche D-2 Commitments shall
terminate at 5:00 p.m., New York City time, on the Restatement Effective Date
and (iii) the Revolving Commitments shall terminate on the Revolving Maturity
Date.
 
(b) The Parent Borrower (on behalf of itself and the Foreign Subsidiary
Borrowers) may at any time terminate, or from time to time reduce, the
Commitments of any Class (it being understood that reductions of Revolving
Commitments will automatically reduce Foreign Currency Commitments on a pro rata
basis); provided that (i) each reduction of the Commitments of any Class shall
be in an amount that is an integral multiple of $1,000,000 and not less than
$5,000,000 and (ii) the Revolving Commitments shall not be terminated or reduced
if, after giving effect to any concurrent prepayment of the Revolving Loans in
accordance with Section 2.11, the sum of the Revolving Exposures would exceed
the total Revolving Commitments. In addition, in the event the proceeds from
Permitted Senior Notes issued after the Amendment Date are used to repurchase,
redeem or otherwise retire then outstanding Convertible Debentures, immediately
following such repurchase, redemption or retirement (i) the Parent Borrower
shall make any prepayment required pursuant to Section 2.11 as a result of such
reduction and (ii) the total Revolving Commitments shall be automatically
reduced in an amount equal to the amount used to effect such repurchase,
redemption or retirement (together with a pro rata reduction of Foreign Currency
Commitments) without any action on the part of any party, provided that, the
total reduction to the Revolving Commitments under this clause (ii) shall not
exceed $50,000,000.
 
(c) The Parent Borrower (on behalf of itself and the Foreign Subsidiary
Borrowers) shall notify the Administrative Agent of any election to terminate
 

 

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or reduce the Commitments under paragraph (b) of this Section at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Parent Borrower (on behalf of
itself and the Foreign Subsidiary Borrowers) pursuant to this Section shall be
irrevocable; provided that a notice of termination of the Revolving Commitments
delivered by the Parent Borrower (on behalf of itself and the Foreign Subsidiary
Borrowers) may state that such notice is conditioned upon the effectiveness of
other credit facilities or the occurrence of another transaction, in which case
such notice may be revoked by the Parent Borrower (on behalf of itself and the
Foreign Subsidiary Borrowers) (by notice to the Administrative Agent on or prior
to the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments of any Class shall be permanent.
Each reduction of the Commitments of any Class shall be made ratably among the
Lenders in accordance with their respective Commitments of such Class.
 
SECTION 2.09. Repayment of Loans; Evidence of Debt. (a)  The Parent Borrower and
each Foreign Subsidiary Borrower (with respect to Foreign Currency Loans made to
such Foreign Subsidiary Borrower) hereby unconditionally promises to pay (i) to
the Administrative Agent for the account of each Lender the then unpaid
principal amount of each Revolving Loan of such Lender on the Revolving Maturity
Date, (ii) to the Administrative Agent for the account of each Lender the then
unpaid principal amount of each Term Loan of such Lender as provided in Section
2.10 and (iii) to the Swingline Lender the then unpaid principal amount of each
Swingline Loan on the earlier of the Revolving Maturity Date and the first date
after such Swingline Loan is made that is the 15th or last day of a calendar
month and is at least two Business Days after such Swingline Loan is made;
provided that on each date that a Revolving Borrowing (other than a Foreign
Currency Borrowing) is made, the Parent Borrower shall repay all Swingline Loans
that were outstanding on the date such Borrowing was requested.
 
(b) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Parent Borrower and the Foreign
Subsidiary Borrowers to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such
Lender from time to time hereunder.
 
(c) The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Class and Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Parent Borrower and the
Foreign Subsidiary Borrowers to each Lender hereunder and (iii) the amount of
any sum received by the Administrative Agent hereunder for the account of the
Lenders and each Lender's share thereof.
 
(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c)
of this Section shall be prima facie evidence of the existence and
 

 

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amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Parent Borrower and
the Foreign Subsidiary Borrowers to repay the Loans in accordance with the terms
of this Agreement.
 
(e) Any Lender may request that Loans of any Class made by it be evidenced by a
promissory note. In such event, the Parent Borrower or the applicable Foreign
Subsidiary Borrower, as the case may be, shall prepare, execute and deliver to
such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
 
SECTION 2.10. Amortization of Term Loans. 
 
(a)  Subject to adjustment pursuant to paragraph (c) of this Section, the Parent
Borrower shall repay Tranche D Term Borrowings on each date set forth below in
the aggregate principal amount set forth opposite such date:
 

Date
 
Amount
 
December 31, 2002
 
$500,000
 
June 30, 2003
 
$500,000
 
December 31, 2003
 
$500,000
 
June 30, 2004
 
$500,000
 
December 31, 2004
 
$500,000
 
June 30, 2005
 
$500,000
 
December 31, 2005
 
$500,000
 
June 30, 2006
 
$525,000
 
December 31, 2006
 
$525,000
 
June 30, 2007
 
$525,000
 
December 31, 2007
 
$525,000
 
June 30, 2008
 
$525,000
 
December 31, 2008
 
$525,000
 
June 30, 2009
 
$525,000
 
Tranche D Maturity Date
 
$442,825,000
 

(b) To the extent not previously paid, all Tranche D Term Loans shall be due and
payable on the Tranche D Maturity Date.
 

 

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(c) Any prepayment of a Term Borrowing shall be applied to reduce the subsequent
scheduled repayments of the Term Borrowings to be made pursuant to this Section
ratably. Notwithstanding the foregoing, any prepayment of Eurocurrency Term
Borrowings made pursuant to Section 2.11(a) on a date that is (x) the last day
of an Interest Period and (y) no more than five days prior to a scheduled
amortization payment pursuant to this Section shall be applied, first, to reduce
such scheduled payment, and any excess shall be applied as required by the first
sentence of this Section 2.10(c).
 
(d) Prior to any repayment of any Term Borrowings hereunder, the Parent Borrower
shall select the Borrowing or Borrowings to be repaid and shall notify the
Administrative Agent by telephone (confirmed by telecopy) of such selection not
later than 11:00 a.m., New York City time, three Business Days before the
scheduled date of such repayment. Each repayment of a Borrowing shall be applied
ratably to the Loans included in the repaid Borrowing. Repayments of Term
Borrowings shall be accompanied by accrued interest on the amount repaid.
 
SECTION 2.11. Prepayment of Loans. (a)  The Parent Borrower and the Foreign
Subsidiary Borrowers, as the case may be, shall have the right at any time and
from time to time to prepay any Borrowing in whole or in part, subject to the
requirements of this Section.
 
(b) In the event and on such occasion that the sum of the Revolving Exposures
exceeds the total Revolving Commitments, the Parent Borrower and the Foreign
Subsidiary Borrowers, as the case may be, shall prepay Revolving Borrowings or
Swingline Borrowings (or, if no such Borrowings are outstanding, deposit cash
collateral in an account with the Administrative Agent pursuant to
Section 2.05(j)) in an aggregate amount equal to such excess.
 
(c) In the event that the sum of the Foreign Currency Exposures exceeds (i) 105%
of the total Foreign Currency Commitments solely as a result of currency
fluctuations or (ii) the total Foreign Currency Commitments (other than as a
result of currency fluctuations), the Foreign Subsidiary Borrowers shall prepay
Foreign Currency Borrowings (or if no such Borrowings are outstanding, deposit
cash collateral in an account with the Administrative Agent pursuant to
Section 2.05(j)) in an amount equal to the amount by which the sum of Foreign
Currency Exposures exceed the total Foreign Currency Commitments no later than
in the case of clause (i) above the next Interest Payment Date and in the case
of clause (ii), the first Business Day that such excess exists.
 
(d) (1) In the event and on each occasion that any Net Proceeds are received by
or on behalf of Holdings, the Parent Borrower or any Subsidiary in respect of
any Prepayment Event (other than TriMas Available Proceeds and TriMas Specified
Proceeds), the Parent Borrower shall, within three Business Days after such Net
Proceeds are received, prepay Term Borrowings in an aggregate amount equal to
such Net Proceeds.
 

 

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(2) In the event that $205,000,000 of the TriMas Specified Proceeds are not
applied to repurchase, redeem, repay or otherwise retire the Convertible
Debentures or an irrevocable notice of redemption and deposit of such proceeds
has not been delivered to the trustee thereunder within 90 days of the date that
the TriMas Transaction is consummated, the Parent Borrower shall promptly
thereafter apply the amount of TriMas Specified Proceeds not so used to prepay
Term Borrowings.
 
(e) In the event and on each occasion that any Net Proceeds are received by or
on behalf of Holdings, the Parent Borrower or any Subsidiary in respect of any
Specified Prepayment Event, the Parent Borrower shall, within three Business
Days after such Net Proceeds are received, prepay Term Borrowings in an
aggregate amount equal to such Net Proceeds.
 
(f) Following the end of each fiscal year of the Parent Borrower, commencing
with the fiscal year ending December 31, 2001, the Parent Borrower shall prepay
Term Borrowings in an aggregate amount equal to 75% of Excess Cash Flow for such
fiscal year; provided that such percentage shall be reduced from 75% to 50% with
respect to the prepayment under this paragraph (f), if the Parent Borrower's
Leverage Ratio as of the last fiscal quarter preceding the applicable prepayment
date is less than 3.00 to 1.00. Each prepayment pursuant to this paragraph shall
be made on or before the date on which financial statements are delivered
pursuant to Section 5.01 with respect to the fiscal year for which Excess Cash
Flow is being calculated (and in any event within 95 days after the end of such
fiscal year).
 
(g) Prior to any optional or mandatory prepayment of Borrowings hereunder, the
Parent Borrower (on behalf of itself and the Foreign Subsidiary Borrowers) shall
select the Borrowing or Borrowings to be prepaid and shall specify such
selection in the notice of such prepayment pursuant to paragraph (h) of this
Section.
 
(h) The Parent Borrower (on behalf of itself and the Foreign Subsidiary
Borrowers) shall notify the Administrative Agent (and, in the case of prepayment
of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy)
of any prepayment hereunder (i) in the case of prepayment of a Eurocurrency
Borrowing, not later than 12:00 noon, New York City time, three Business Days
before the date of prepayment, (ii) in the case of prepayment of an ABR
Borrowing, not later than 12:00 noon, New York City time, one Business Day
before the date of prepayment or (iii) in the case of prepayment of a Swingline
Loan, not later than 12:00 noon, New York City time, on the date of prepayment.
Each such notice shall be irrevocable and shall specify the prepayment date, the
principal amount of each Borrowing or portion thereof to be prepaid and, in the
case of a mandatory prepayment, a reasonably detailed calculation of the amount
of such prepayment; provided that, if a notice of optional prepayment is given
in connection with a conditional notice of termination of the Revolving
Commitments as contemplated by Section 2.08, then such notice of prepayment may
be revoked if such notice of termination is revoked in accordance with
Section 2.08. Promptly following receipt of any such notice (other than a notice
relating solely to Swingline Loans), the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Borrowing shall
be in an amount that
 
 
 

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would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02, except as necessary to apply fully the required amount
of a mandatory prepayment. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.13.
 
SECTION 2.12. Fees. (a)  The Parent Borrower (on behalf of itself and the
Foreign Subsidiary Borrowers) agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee, which shall accrue at the Applicable
Rate on the average daily unused amount of each Commitment of such Lender during
the period from and including the Effective Date to but excluding the date on
which such Commitment terminates. Accrued commitment fees shall be payable in
arrears (i) in the case of commitment fees in respect of the Revolving
Commitments, on the last day of March, June, September and December of each year
and on the date on which the Revolving Commitments terminate, commencing on the
first such date to occur after the date hereof and (ii) in the case of
commitment fees in respect of the Tranche D Term Commitments, on the Effective
Date or any earlier date on which such Commitments terminate. All commitment
fees shall be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day). For purposes of computing commitment fees with respect to Revolving
Commitments, a Revolving Commitment of a Lender shall be deemed to be used to
the extent of the outstanding Revolving Loans and LC Exposure of such Lender
(and the Swingline Exposure of such Lender shall be disregarded for such
purpose).
 
(b) The Parent Borrower (on behalf of itself and the Foreign Subsidiary
Borrowers) agrees to pay (i) to the Administrative Agent for the account of each
Revolving Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at the same Applicable Rate as interest on
Eurocurrency Revolving Loans on the average daily amount of such Lender's LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Lender's Revolving Commitment
terminates and the date on which such Lender ceases to have any LC Exposure, and
(ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of 0.25%
per annum on the average daily amount of the LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the later of the date of
termination of the Revolving Commitments and the date on which there ceases to
be any LC Exposure, as well as the Issuing Bank's standard fees with respect to
the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees accrued
through and including the last day of March, June, September and December of
each year shall be payable on the third Business Day following such last day,
commencing on the first such date to occur after the Effective Date; provided
that all such fees shall be payable on the date on which the Revolving
Commitments terminate and any such fees accruing after the date on which the
Revolving Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
10 days after demand. All participation fees and fronting fees shall be computed
on the basis of a
 

 

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year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
 
(c) The Parent Borrower (on behalf of itself and the Foreign Subsidiary
Borrowers) agrees to pay to the Administrative Agent, for its own account, fees
payable in the amounts and at the times separately agreed upon between the
Parent Borrower and the Administrative Agent.
 
(d) All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent (or to the Issuing Bank, in the
case of fees payable to it) for distribution, in the case of commitment fees and
participation fees, to the Lenders entitled thereto. Fees paid shall not be
refundable under any circumstances.
 
SECTION 2.13. Interest. (a)  The Loans comprising each ABR Borrowing (including
each Swingline Loan) shall bear interest at the Alternate Base Rate plus the
Applicable Rate.
 
(b) The Loans comprising each Eurocurrency Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.
 
(c) Notwithstanding the foregoing, if any principal of or interest on any Loan
or any fee or other amount payable by the Parent Borrower or the Foreign
Subsidiary Borrowers, as the case may be, hereunder is not paid when due,
whether at stated maturity, upon acceleration or otherwise, such overdue amount
shall bear interest, after as well as before judgment, at a rate per annum equal
to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise
applicable to such Loan as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount, 2% plus the rate applicable to ABR
Revolving Loans as provided in paragraph (a) of this Section.
 
(d) Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan and, in the case of Revolving Loans, upon termination
of the Revolving Commitments; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Revolving Availability Period), accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion of any
Eurocurrency Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
 
(e) All interest hereunder shall be computed on the basis of a year of 360 days,
except that (i) interest on a Foreign Currency Borrowing denominated in Sterling
and (ii) interest computed by reference to the Alternate Base Rate at times when
the Alternate Base Rate is based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in each case shall
be payable for the
 

 

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actual number of days elapsed (including the first day but excluding the last
day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
 
SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurocurrency Borrowing denominated in any currency:
 
(a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate for such Interest Period; or
 
(b) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Loans included
in such Borrowing for such Interest Period;
 
then the Administrative Agent shall give notice thereof to the Parent Borrower
(on behalf of itself and the Foreign Subsidiary Borrowers) and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the
Administrative Agent notifies the Parent Borrower (on behalf of itself and the
Foreign Subsidiary Borrowers) and the Lenders that the circumstances giving rise
to such notice no longer exist, (i) any Interest Election Request that requests
the conversion of any Borrowing denominated in such currency to, or continuation
of any Borrowing denominated in such currency as, a Eurocurrency Borrowing shall
be ineffective, and any Eurocurrency Borrowing denominated in such currency that
is requested to be continued (A) if such currency is the dollar, shall be
converted to an ABR Borrowing on the last day of the Interest Period applicable
thereto and (B) if such currency is a Foreign Currency, shall be repaid on the
last day of the Interest Period applicable thereto and (ii) if any Borrowing
Request requests a Eurocurrency Borrowing denominated in such currency (A) if
such currency is the dollar, such Borrowing shall be made as an ABR Borrowing
and (B) if such currency is a Foreign Currency, such Borrowing Request shall be
ineffective.
 
SECTION 2.15. Increased Costs. (a)  If any Change in Law shall:
 
(i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate) or the Issuing Bank; or
 
(ii) impose on any Lender or the Issuing Bank or the London interbank market any
other condition affecting this Agreement or Eurocurrency Loans made by such
Lender or any Letter of Credit or participation therein;
 
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum
 

 

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received or receivable by such Lender or the Issuing Bank hereunder (whether of
principal, interest or otherwise), then the Parent Borrower or the applicable
Foreign Subsidiary Borrowers, as the case may be, will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.
 
(b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the Issuing Bank's capital or on the capital of
such Lender's or the Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Parent Borrower or the applicable Foreign
Subsidiary Borrowers, as the case may be, will pay to such Lender or the Issuing
Bank, as the case may be, such additional amount or amounts as will compensate
such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding
company for any such reduction suffered.
 
(c) A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Parent Borrower (on behalf of itself and the
Foreign Subsidiary Borrowers) and shall be conclusive absent manifest error. The
Parent Borrower or the applicable Foreign Subsidiary Borrowers, as the case may
be, shall pay such Lender or the Issuing Bank, as the case may be, the amount
shown as due on any such certificate within 10 days after receipt thereof.
 
(d) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's or the Issuing Bank's right to demand such compensation; provided that
neither the Parent Borrower nor any Foreign Subsidiary Borrower shall be
required to compensate a Lender or the Issuing Bank pursuant to this Section for
any increased costs or reductions incurred more than 270 days prior to the date
that such Lender or the Issuing Bank, as the case may be, notifies the Parent
Borrower (on behalf of itself and the Foreign Subsidiary Borrowers) of the
Change in Law giving rise to such increased costs or reductions and of such
Lender's or the Issuing Bank's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the 270-day period referred to above shall be
extended to include the period of retroactive effect thereof.
 
SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurocurrency Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the
 

 

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conversion of any Eurocurrency Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Revolving Loan or Term Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.11(h) and is revoked in accordance therewith) or (d) the
assignment of any Eurocurrency Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Parent Borrower or any
Foreign Subsidiary Borrower pursuant to Section 2.19, then, in any such event,
the Parent Borrower or the applicable Foreign Subsidiary Borrower, as the case
may be, shall compensate each Lender for the loss, cost and expense attributable
to such event. In the case of a Eurocurrency Loan, such loss, cost or expense to
any Lender shall be deemed to include an amount determined by such Lender to be
the excess, if any, of (i) the amount of interest which would have accrued on
the principal amount of such Loan had such event not occurred, at the Adjusted
LIBO Rate that would have been applicable to such Loan, for the period from the
date of such event to the last day of the then current Interest Period therefor
(or, in the case of a failure to borrow, convert or continue, for the period
that would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for deposits in the applicable currency of a comparable amount and
period from other banks in the Eurocurrency market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Parent Borrower (on behalf of
itself and the Foreign Subsidiary Borrowers) and shall be conclusive absent
manifest error. The Parent Borrower or the applicable Foreign Subsidiary
Borrower, as the case may be, shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
 
SECTION 2.17. Taxes. (a)  Any and all payments by or on account of any
obligation of the Parent Borrower or any Foreign Subsidiary Borrower hereunder
or under any other Loan Document shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the Parent
Borrower or any Foreign Subsidiary Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender or Issuing Bank (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Parent Borrower or such Foreign Subsidiary Borrower, as the case
may be, shall make such deductions and (iii) the Parent Borrower or such Foreign
Subsidiary Borrower, as the case may be, shall pay the full amount deducted to
the relevant Governmental Authority in accordance with applicable law.
 
(b) In addition, the Parent Borrower and each Foreign Subsidiary Borrower shall
pay any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.
 
(c) The Parent Borrower and each Foreign Subsidiary Borrower, as the case may
be, shall indemnify the Administrative Agent, each Lender and the Issuing Bank,
within 10 Business Days after written demand therefor, for the full amount of
any
 

 

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Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender
or the Issuing Bank, as the case may be, on or with respect to any payment by or
on account of any obligation of the Parent Borrower and each Foreign Subsidiary
Borrower, as the case may be, hereunder or under any other Loan Document
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Parent Borrower or any Foreign
Subsidiary Borrower, as the case may be, by a Lender or the Issuing Bank, or by
the Administrative Agent on its own behalf or on behalf of a Lender or the
Issuing Bank, shall be conclusive absent manifest error.
 
(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by the Parent Borrower or any Foreign Subsidiary Borrower to a Governmental
Authority, the Parent Borrower or such Foreign Subsidiary Borrower, as the case
may be, shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
 
(e) Any Lender that is entitled to an exemption from or reduction of withholding
tax under the law of the jurisdiction in which the Parent Borrower or any
Foreign Subsidiary Borrower, as the case may be, is located, or any treaty to
which such jurisdiction is a party, with respect to payments under this
Agreement shall deliver to the Parent Borrower (on behalf of itself and the
Foreign Subsidiary Borrowers) (with a copy to the Administrative Agent), at the
time or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the Parent
Borrower (on behalf of itself and the Foreign Subsidiary Borrowers) as will
permit such payments to be made without withholding or at a reduced rate.
 
(f) If the Administrative Agent or a Lender (or a transferee) determines, in its
sole discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Parent Borrower or any Foreign Subsidiary
Borrower or with respect to which the Parent Borrower (on behalf of itself and
the Foreign Subsidiary Borrowers) has paid additional amounts pursuant to this
Section 2.17, it shall pay over such refund to the Parent Borrower (but only to
the extent of indemnity payments made, or additional amounts paid, by the Parent
Borrower or any Foreign Subsidiary Borrower under this Section 2.17 with respect
to the Taxes or the Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender (or
Transferee) and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund); provided, however, that the
Parent Borrower or any Foreign Subsidiary Borrower, upon the request of the
Administrative Agent or such Lender (or Transferee), agrees to repay the amount
paid over to the Parent Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent or
such
 

 

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Lender (or Transferee) in the event the Administrative Agent or such Lender (or
Transferee) is required to repay such refund to such Governmental Authority.
Nothing contained in this Section 2.17(f) shall require the Administrative Agent
or any Lender to make available its tax returns or any other information
relating to its taxes which it deems confidential to the Parent Borrower or any
other person.
 
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a)  The Parent Borrower (on behalf of itself and the Foreign Subsidiary
Borrowers) shall make each payment required to be made by it hereunder or under
any other Loan Document (whether of principal, interest, fees or reimbursement
of LC Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or
otherwise) on or before the time expressly required hereunder or under such
other Loan Document for such payment (or, if no such time is expressly required,
prior to 12:00 noon, New York City time, or if the applicable Loan is a Foreign
Currency Loan, London time), on the date when due, in immediately available
funds, without set-off or counterclaim. Any amounts received after such time on
any date may, in the discretion of the Administrative Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its offices at 270 Park Avenue, New York, New York (unless otherwise instructed
in the case of Foreign Currency Loans), except payments to be made directly to
the Issuing Bank or Swingline Lender as expressly provided herein and except
that payments pursuant to Sections 2.15, 2.16, 2.17 and 10.03 shall be made
directly to the Persons entitled thereto and payments pursuant to other Loan
Documents shall be made to the Persons specified therein. The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof. If
any payment under any Loan Document shall be due on a day that is not a Business
Day, the date for payment shall be extended to the next succeeding Business Day,
and, in the case of any payment accruing interest, interest thereon shall be
payable for the period of such extension. Subject to Section 9.01, all payments
under each Loan Document of principal or interest in respect of any Loan or
LC Disbursement shall be made in the currency of such Loan or LC Disbursement;
all other payments hereunder and under each other Loan Document shall be made in
dollars.
 
(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
 
(c) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Revolving Loans, Term Loans or participations in LC Disbursements or
 

 

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Swingline Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans, Term Loans and
participations in LC Disbursements and Swingline Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Parent Borrower or any Foreign Subsidiary Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Parent Borrower or any Subsidiary or Affiliate
thereof (as to which the provisions of this paragraph shall apply). The Parent
Borrower and each Foreign Subsidiary Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Parent Borrower or any Foreign Subsidiary Borrower, as the
case may be, rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Parent
Borrower or such Foreign Subsidiary Borrower in the amount of such
participation.
 
(d) Unless the Administrative Agent shall have received notice from the Parent
Borrower (on behalf of itself and the Foreign Subsidiary Borrowers) prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders or the Issuing Bank hereunder that the Parent Borrower or any
Foreign Subsidiary Borrower, as the case may be, will not make such payment, the
Administrative Agent may assume that the Parent Borrower or such Foreign
Subsidiary Borrower, as the case may be, has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing Bank, as the case may be, the amount due. In such event,
if the Parent Borrower or such Foreign Subsidiary Borrower, as the case may be,
has not in fact made such payment, then each of the Lenders or the Issuing Bank,
as the case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or Issuing Bank
with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation.
 
(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.18(d) or 10.03(c), then
the Administrative Agent may, in its discretion (notwithstanding any contrary
provision
 

 

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hereof), apply any amounts thereafter received by the Administrative Agent for
the account of such Lender to satisfy such Lender's obligations under such
Sections until all such unsatisfied obligations are fully paid.
 
SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a)  If any Lender
requests compensation under Section 2.15, or if the Parent Borrower or any
Foreign Subsidiary Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.17, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17,
as the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Parent Borrower (on behalf of itself and the Foreign Subsidiary
Borrowers) hereby agrees to pay all reasonable costs and expenses incurred by
any Lender in connection with any such designation or assignment.
 
(b) If any Lender requests compensation under Section 2.15, or if the Parent
Borrower or any Foreign Subsidiary Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.17, or if any Lender defaults in its obligation to fund
Loans hereunder, then the Parent Borrower (on behalf of itself and the Foreign
Subsidiary Borrowers) may, at its sole expense and effort, upon notice to such
Lender and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 10.04), all its interests, rights and obligations under this
Agreement to an assignee selected by the Parent Borrower that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Parent Borrower (on behalf of itself and the
Foreign Subsidiary Borrowers) shall have received the prior written consent of
the Administrative Agent (and, if a Revolving Commitment is being assigned, the
Issuing Bank and Swingline Lender), which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements and
Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Parent Borrower and the Foreign
Subsidiary Borrowers (in the case of all other amounts) and (iii) in the case of
any such assignment resulting from a claim for compensation under Section 2.15
or payments required to be made pursuant to Section 2.17, such assignment will
result in a material reduction in such compensation or payments. A Lender shall
not be required to make any such assignment and delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling
the Parent Borrower or any Foreign Subsidiary Borrower to require such
assignment and delegation cease to apply.
 
SECTION 2.20. Additional Reserve Costs. (a)  If and so long as any Revolving
Lender is required to make special deposits with the Bank of England, to
 

 

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maintain reserve asset ratios or to pay fees, in each case in respect of such
Revolving Lender's Foreign Currency Loans, such Revolving Lender may require the
relevant Foreign Subsidiary Borrower to pay, contemporaneously with each payment
of interest on each of such Foreign Currency Loans, additional interest on such
Foreign Currency Loan at a rate per annum equal to the Mandatory Costs Rate
calculated in accordance with the formula and in the manner set forth in
Exhibit I hereto.
 
(b) If and so long as any Revolving Lender is required to comply with reserve
assets, liquidity, cash margin or other requirements of any monetary or other
authority (including any such requirement imposed by the European Central Bank
or the European System of Central Banks, but excluding requirements reflected in
the Statutory Reserve Rate or the Mandatory Costs Rate) in respect of any of
such Revolving Lender's Foreign Currency Loans, such Revolving Lender may
require the relevant Foreign Subsidiary Borrower to pay, contemporaneously with
each payment of interest on each of such Revolving Lender's Foreign Currency
Loans subject to such requirements, additional interest on such Foreign Currency
Loan at a rate per annum specified by such Revolving Lender to be the cost to
such Revolving Lender of complying with such requirements in relation to such
Foreign Currency Loan.
 
(c) Any additional interest owed pursuant to paragraph (a) or (b) above shall be
determined by the relevant Revolving Lender, which determination shall be
conclusive absent manifest error, and notified to the Parent Borrower (on behalf
of the relevant Foreign Subsidiary Borrower) (with a copy to the Administrative
Agent)) at least five Business Days before each date on which interest is
payable for the relevant Foreign Currency Loan, and such additional interest so
notified by such Revolving Lender shall be payable to the Administrative Agent
for the account of such Revolving Lender on each date on which interest is
payable for such Foreign Currency Loan.
 
SECTION 2.21. Designation of Foreign Subsidiary Borrowers. The Parent Borrower
may at any time and from time to time designate any Foreign Subsidiary as a
Foreign Subsidiary Borrower, by delivery to the Administrative Agent of a
Foreign Subsidiary Borrowing Agreement executed by such Foreign Subsidiary and
the Parent Borrower, and upon such delivery such Foreign Subsidiary shall for
all purposes of this Agreement and the other Loan Documents be a Foreign
Subsidiary Borrower until the Parent Borrower shall terminate such designation
pursuant to a termination agreement satisfactory to the Administrative Agent,
whereupon such Foreign Subsidiary shall cease to be a Foreign Subsidiary
Borrower and a party to this Agreement and any other applicable Loan Documents.
Notwithstanding the preceding sentence, no such termination will become
effective as to any Foreign Subsidiary Borrower at a time when any principal of
or interest on any Loan to such Foreign Subsidiary Borrower is outstanding. As
soon as practicable upon receipt of a Foreign Subsidiary Borrowing Agreement,
the Administrative Agent shall send a copy thereof to each Lender.
 
SECTION 2.22. Foreign Subsidiary Borrower Costs. (a)  If the cost to any
Revolving Lender of making or maintaining any Foreign Currency Loan to a Foreign
Subsidiary Borrower is increased (or the amount of any sum received or
receivable by any Revolving Lender (or its applicable lending office) is
reduced) by an
 

 

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amount deemed in good faith by such Revolving Lender to be material, by reason
of the fact that such Foreign Subsidiary Borrower is incorporated in, or
conducts business in, a jurisdiction outside the United States, such Foreign
Subsidiary Borrower shall indemnify such Revolving Lender for such increased
cost or reduction within 15 days after demand by such Revolving Lender (with a
copy to the Administrative Agent). A certificate of such Revolving Lender
claiming compensation under this paragraph and setting forth the additional
amount or amounts to be paid to it hereunder (and the basis for the calculation
of such amount or amounts) shall be conclusive in the absence of manifest error.
 
(b) Each Revolving Lender will promptly notify the Parent Borrower (on behalf of
the relevant Foreign Subsidiary Borrower) and the Administrative Agent of any
event of which it has knowledge that will entitle such Revolving Lender to
additional interest or payments pursuant to paragraph (a) above, but in any
event within 45 days after such Revolving Lender obtains actual knowledge
thereof; provided that (i) if any Revolving Lender fails to give such notice
within 45 days after it obtains actual knowledge of such an event, such
Revolving Lender shall, with respect to compensation payable pursuant to this
Section 2.21 in respect of any costs resulting from such event, only be entitled
to payment under this Section 2.21 for costs incurred from and after the date
45 days prior to the date that such Revolving Lender does give such notice and
(ii) each Revolving Lender will designate a different applicable lending office,
if, in the judgment of such Revolving Lender, such designation will avoid the
need for, or reduce the amount of, such compensation and will not be otherwise
disadvantageous to such Revolving Lender.
 

ARTICLE III
 
Representations and Warranties
 
Each of Holdings, the Parent Borrower and each Foreign Subsidiary Borrower (as
to itself only) represents and warrants to the Lenders that:
 
SECTION 3.01. Organization; Powers. Each of Holdings, the Parent Borrower and
its Subsidiaries (including the Receivables Subsidiary) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
 
SECTION 3.02. Authorization; Enforceability. The Transactions to be entered into
by each Loan Party are within such Loan Party's powers and have been duly
authorized by all necessary action. This Agreement has been duly executed and
delivered by each of Holdings and the Parent Borrower and constitutes, and each
other Loan Document to which any Loan Party is to be a party, when executed and
delivered
 

 

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by such Loan Party, will constitute, a legal, valid and binding obligation of
Holdings, the Parent Borrower or such Loan Party (as the case may be),
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
 
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except (x) such as have been obtained or
made and are in full force and effect, (y) filings necessary to perfect Liens
created under the Loan Documents and (z) consents, approvals, registrations,
filings or actions the failure of which to obtain or perform could not
reasonably be expected to result in a Material Adverse Effect, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of Holdings, the Parent Borrower or any of its
Subsidiaries (including the Receivables Subsidiary) or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon Holdings, the Parent
Borrower or any of its Subsidiaries (including the Receivables Subsidiary) or
its assets, or give rise to a right thereunder to require any payment to be made
by Holdings, the Parent Borrower or any of its Subsidiaries (including the
Receivables Subsidiary), except for violations, defaults or the creation of such
rights that could not reasonably be expected to result in a Material Adverse
Effect, and (d) will not result in the creation or imposition of any Lien on any
asset of Holdings, the Parent Borrower or any of its Subsidiaries (including the
Receivables Subsidiary), except Liens created under the Loan Documents and Liens
permitted by Section 6.02.
 
SECTION 3.04. Financial Condition; No Material Adverse Change. (a)  Holdings has
heretofore furnished to the Lenders its consolidated balance sheet and
statements of income, stockholders equity and cash flows (i) as of and for the
fiscal year ended January 2, 2005, reported on by KPMG LLP, independent public
accountants, and (ii) as of and for the fiscal quarter and the portion of the
fiscal year ended September 30, 2005, certified by its chief financial officer.
Such financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of Holdings and its
consolidated Subsidiaries as of such dates and for such periods in accordance
with GAAP, subject to year-end audit adjustments and the absence of footnotes in
the case of the statements referred to in clause (ii) above.
 
(b) Except as disclosed in the financial statements referred to above or the
notes thereto or in the Information Memorandum, except for the Disclosed Matters
and except for liabilities arising as a result of the Transactions, after giving
effect to the Transactions, none of Holdings, the Parent Borrower or the
Subsidiaries (including the Receivables Subsidiary and the Saturn Subsidiary)
has, as of the Restatement Effective Date, any contingent liabilities that would
be material to Holdings, the Parent Borrower and the Subsidiaries (including the
Receivables Subsidiary and the Saturn Subsidiary), taken as a whole.
 

 

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(c) Since December 31, 2004, there has been no event, change or occurrence that,
individually or in the aggregate, has had or could reasonably be expected to
result in a Material Adverse Effect.
 
SECTION 3.05. Properties. (a)  Each of Holdings, the Parent Borrower and its
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business (including its Mortgaged
Properties), 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.
 
(b) Each of Holdings, the Parent Borrower and its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by Holdings,
the Parent Borrower 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.
 
(c) As of the Restatement Effective Date, neither Holdings, the Parent Borrower
nor any of its Subsidiaries has received written notice of any pending or
contemplated condemnation proceeding affecting any Mortgaged Property or any
sale or disposition thereof in lieu of condemnation. Neither any Mortgaged
Property nor any interest therein is subject to any right of first refusal,
option or other contractual right to purchase such Mortgaged Property or
interest therein.
 
SECTION 3.06. Litigation and Environmental Matters. (a)  There are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of Holdings or the Parent Borrower,
threatened against or affecting Holdings, the Parent Borrower or any of its
Subsidiaries (including the Receivables Subsidiary) (i) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect (other than the Disclosed Matters) or
(ii) that involve any of the Loan Documents or the Transactions.
 
(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, neither Holdings, the Parent Borrower
nor any of its Subsidiaries (including the Receivables Subsidiary) (i) has
failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.
 
(c) Since the date of the Original Credit Agreement, there has been no change in
the status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
 
 

 

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SECTION 3.07. Compliance with Laws and Agreements. Each of Holdings, the Parent
Borrower and its Subsidiaries (including the Receivables Subsidiary) is in
compliance with all laws, regulations and orders of any Governmental Authority
applicable to it or its property and all indentures, agreements and other
instruments binding upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. No Default has occurred and is continuing.
 
SECTION 3.08. Investment and Holding Company Status. Neither Holdings, the
Parent Borrower nor any of its Subsidiaries (including the Receivables
Subsidiary) is (a) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b) a "holding company"
as defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935.
 
SECTION 3.09. Taxes. Each of Holdings, the Parent Borrower and its Subsidiaries
(including the Receivables Subsidiary) 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 (a) any Taxes that
are being contested in good faith by appropriate proceedings and for which
Holdings, the Parent Borrower or such Subsidiary (including the Receivables
Subsidiaries), as applicable, has set aside on its books adequate reserves or
(b) to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
 
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. As of the Recapitalization Date, the
present value of all accumulated benefit obligations under any one Plan (based
on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $23,000,000 the fair
market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $40,000,000 the fair market value
of the assets of all such underfunded Plans.
 
SECTION 3.11. Disclosure. Each of Holdings and the Parent Borrower has disclosed
to the Lenders all agreements, instruments and corporate or other restrictions
to which Holdings, the Parent Borrower or any of its Subsidiaries (including the
Receivables Subsidiary) is subject, and all other matters known to any of them,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. Neither the Information Memorandum nor any of the
other reports, financial statements, certificates or other information furnished
by or on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or any other Loan Document or
delivered hereunder or thereunder (as modified or supplemented by other
information so furnished) contained as of its date any material misstatement of
fact or omits to state any material fact necessary to make the
 

 

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statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, Holdings and the Parent Borrower represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time such projections were prepared.
 
SECTION 3.12. Subsidiaries. Holdings does not have any subsidiaries other than
the Parent Borrower, the Saturn Subsidiary and the Parent Borrower's
Subsidiaries. Schedule 3.12 sets forth the name of, and the ownership interest
of the Parent Borrower in, each Subsidiary of the Parent Borrower and identifies
each Subsidiary that is a Subsidiary Loan Party, in each case as of the
Effective Date.
 
SECTION 3.13. Insurance. As of the Effective Date, all premiums due in respect
of material insurance policies maintained by or on behalf of Holdings, the
Parent Borrower and the Subsidiaries as of the Effective Date have been paid.
 
SECTION 3.14. Labor Matters. As of the Effective Date, there are no strikes,
lockouts or slowdowns against Holdings, the Parent Borrower or any Subsidiary
pending or, to the knowledge of Holdings or the Parent Borrower, threatened that
could reasonably be expected to have a Material Adverse Effect. All payments due
from Holdings, the Parent Borrower or any Subsidiary, or for which any claim may
be made against Holdings, the Parent Borrower or any Subsidiary, on account of
wages and employee health and welfare insurance and other benefits, have been
paid or accrued as a liability on the books of Holdings, the Parent Borrower or
such Subsidiary. The consummation of the Transactions will not give rise to any
right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which Holdings, the Parent Borrower or
any Subsidiary is bound.
 
SECTION 3.15. Solvency. Immediately after the consummation of the Transactions
to occur on the Effective Date and immediately following the making of each Loan
made on the Effective Date and after giving effect to the application of the
proceeds of such Loans, (a) the fair value of the assets of each Loan Party, at
a fair valuation, will exceed its debts and liabilities, subordinated,
contingent or otherwise; (b) the present fair saleable value of the property of
each Loan Party will be greater than the amount that will be required to pay the
probable liability of its debts and other liabilities, subordinated, contingent
or otherwise, as such debts and other liabilities become absolute and matured;
(c) each Loan Party will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) the Loan Parties, on a consolidated basis, will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Effective Date.
 
SECTION 3.16. Senior Indebtedness. To the extent any Subordinated Debt is
outstanding, the Obligations constitute "Senior Indebtedness" under and as
defined in the Subordinated Debt Documents.
 
 

 

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SECTION 3.17. Security Documents. (a)  The Pledge Agreement is effective to
create in favor of the Collateral Agent, for the benefit of the Secured Parties,
a legal, valid and enforceable security interest in the Collateral (as defined
in the Pledge Agreement) and, when such Collateral is delivered to the
Collateral Agent and for so long as the Collateral Agent remains in possession
of such Collateral, the security interest created by the Pledge Agreement shall
constitute a perfected first priority security interest in all right, title and
interest of the pledgor thereunder in such Collateral, in each case prior and
superior in right to any other Person.
 
(b) The Security Agreement is effective to create in favor of the Collateral
Agent, for the benefit of the Secured Parties, a legal, valid and enforceable
security interest in the Collateral (as defined in the Security Agreement) and,
when financing statements in appropriate form are filed in the offices specified
on Schedule 6 to the Perfection Certificate, the security interest created by
the Security Agreement shall constitute a perfected security interest in all
right, title and interest of the grantors thereunder in such Collateral (other
than the Intellectual Property (as defined in the Security Agreement)), in each
case prior and superior in right to any other Person, other than with respect to
Liens permitted by Section 6.02.
 
(c) When the Security Agreement (or a summary thereof) is filed in the
United States Patent and Trademark Office and the United States Copyright Office
and the financing statements referred to in Section 3.17(b) above are
appropriately filed, the security interest created by the Security Agreement
shall constitute a perfected security interest in all right, title and interest
of the grantors thereunder in the Intellectual Property (as defined in the
Security Agreement) in which a security interest may be perfected by filing,
recording or registering a security agreement, financing statement or analogous
document in the United States Patent and Trademark Office or the United States
Copyright Office, as applicable, in each case prior and superior in right to any
other Person (it being understood that subsequent recordings in the
United States Patent and Trademark Office and the United States Copyright Office
and subsequent UCC filings may be necessary to perfect a lien on registered
trademarks, trademark applications and copyrights acquired by the Loan Parties
after the Effective Date), other than with respect to Liens permitted by
Section 6.02.
 
(d) The Mortgages are effective to create, subject to the exceptions listed in
each title insurance policy covering such Mortgage, in favor of the Collateral
Agent, for the benefit of the Secured Parties, a legal, valid and enforceable
Lien on all of the applicable mortgagor's right, title and interest in and to
the Mortgaged Properties thereunder and the proceeds thereof, and when the
Mortgages are filed in the offices specified on Schedule 3.17(d), the Lien
created by each Mortgage shall constitute a perfected Lien on all right, title
and interest of the applicable mortgagor in such Mortgaged Properties and the
proceeds thereof, in each case prior and superior in right to any other Person,
other than with respect to the rights of Persons pursuant to Liens permitted by
Section 6.02.
 
(e) Following the execution of any Foreign Security Document pursuant to
Section 4.03, each Foreign Security Document shall be effective to create in
 

 

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favor of the Collateral Agent, for the benefit of the Secured Parties, a legal,
valid and enforceable security interest in the applicable collateral covered by
such Foreign Security Document, and when the actions specified in such Foreign
Security Document, if any, are completed, the security interest created by such
Foreign Security Document shall constitute a perfected security interest in all
right, title and interest of the grantors thereunder in such collateral to the
full extent possible under the laws of the applicable foreign jurisdiction, in
each case prior and superior in right to any other Person, other than with
respect to Liens permitted by Section 6.02.
 
SECTION 3.18. Federal Reserve Regulations. (a)  None of Holdings, the Parent
Borrower or any of the Subsidiaries (including the Receivables Subsidiary) is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of buying or carrying Margin Stock.
 
(b) No part of the proceeds of any Loan or any Letter of Credit will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of the provisions of the
Regulations of the Board, including Regulation U or X.
 
 
ARTICLE IV
 
Conditions
 
SECTION 4.01. [intentionally omitted].
 
SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing (other than (i) any Revolving Borrowing made
pursuant to Section 2.05(d) and (ii) any continuation or conversion of a
Borrowing pursuant to the terms hereof that does not result in the increase of
the aggregate principal amount of the Borrowings then outstanding), and of the
Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject
to receipt of the request therefor in accordance herewith and to the
satisfaction of the following conditions:
 
(a) The representations and warranties of each Loan Party set forth in the Loan
Documents shall be true and correct on and as of the date of such Borrowing or
the date of issuance, amendment, renewal or extension of such Letter of Credit,
as applicable.
 
(b) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.
 
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by Holdings
and the Parent Borrower on the date thereof as to the matters specified in
paragraphs (a) and (b) of this Section.
 
 

 

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SECTION 4.03. Credit Events Relating to Foreign Subsidiary Borrowers. The
obligation of each Lender to make Loans to any Foreign Subsidiary Borrower is
subject to the satisfaction of the following conditions:
 
(a) With respect to the initial Credit Event relating to such Foreign Subsidiary
Borrower;
 
(i) the Administrative Agent (or its counsel) shall have received such Foreign
Subsidiary Borrower's Foreign Subsidiary Borrowing Agreement duly executed by
all parties thereto; and
 
(ii) the Administrative Agent shall have received such documents (including
legal opinions) and certificates as the Administrative Agent or its counsel may
reasonably request relating to the formation, existence and good standing of
such Foreign Subsidiary Borrower, the authorization of the Foreign Currency
Borrowings as they relate to such Foreign Subsidiary Borrower and any other
legal matters relating to such Foreign Subsidiary Borrower or its Foreign
Subsidiary Borrowing Agreement, all in form and substance satisfactory to the
Administrative Agent and its counsel.
 
(b) With respect to any Credit Event following which (x) such Foreign Subsidiary
Borrower will have borrowed more than the Dollar Equivalent of $5,000,000 of
Foreign Currency Borrowings or (y) the aggregate amount of outstanding Foreign
Currency Borrowings exceeds the Dollar Equivalent of $15,000,000, the
Administrative Agent shall be satisfied that the Foreign Security Collateral and
Guarantee Agreement shall be satisfied with respect to such Foreign Subsidiary
Borrower in the case of clause (x) and all Foreign Subsidiary Borrowers in the
case of clause (y).
 
 
ARTICLE V
 
Affirmative Covenants
 
Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, each of Holdings, the Parent Borrower
and each Foreign Subsidiary Borrower (as to itself only) covenants and agrees
with the Lenders that:
 
SECTION 5.01. Financial Statements and Other Information. Holdings or the Parent
Borrower will furnish to the Administrative Agent and each Lender:
 
(a) within 95 days after the end of each fiscal year of Holdings, its audited
consolidated and unaudited consolidating balance sheet and related statements of
 
 

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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 PriceWaterhouseCoopers LLP or other
independent public accountants of recognized national standing (without a "going
concern" or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of Holdings and its consolidated
subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, other than any change in the application of GAAP due solely to
Holdings', the Parent Borrower's and the Subsidiaries' transition from
"recapitalization accounting" to "purchase accounting" (it is understood that
such financial statements shall also present separately financial information
with respect to the Receivables Subsidiary and the Saturn Subsidiary);
 
(b) within 50 days after the end of each of the first three fiscal quarters of
each fiscal year of Holdings, its consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows as of the end of
and for such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of)
the previous fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of Holdings and its consolidated subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes (it is understood that such
financial statements shall also present separately financial information with
respect to the Receivables Subsidiary and the Saturn Subsidiary);
 
(c) concurrently with any delivery of financial statements under clause (a) or
(b) above, a certificate of a Financial Officer of Holdings or the Parent
Borrower (i) certifying as to whether a Default has occurred and, if a Default
has occurred, specifying the details thereof and any action taken or proposed to
be taken with respect thereto, (ii) setting forth reasonably detailed
calculations demonstrating compliance with Sections 6.13, 6.14 and 6.15,
(iii) stating whether any change in GAAP or in the application thereof has
occurred since the date of Holdings' audited financial statements referred to in
Section 3.04 and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate and (iv)
identifying all Subsidiaries existing on the date of such certificate and
indicating, for each such Subsidiary, whether such Subsidiary is a Subsidiary
Loan Party or a Foreign Subsidiary and whether such Subsidiary was formed or
acquired since the end of the previous fiscal quarter;
 
(d) concurrently with any delivery of financial statements under clause
(a) above, (i) a certificate of the accounting firm that reported on such
financial statements stating whether they obtained knowledge during the course
of their
 

 

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examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines) and (ii) a
certificate of a Financial Officer of Holdings or the Parent Borrower
(A) identifying any parcels of real property or improvements thereto with a
value exceeding $750,000 that have been acquired by any Loan Party since the end
of the previous fiscal year, (B) identifying any changes of the type described
in Section 5.03(a) that have not been previously reported by the Parent
Borrower, (C) identifying any Permitted Acquisitions that have been consummated
since the end of the previous fiscal year, including the date on which each such
Permitted Acquisition was consummated and the consideration therefor,
(D) identifying any Intellectual Property (as defined in the Security Agreement)
with respect to which a notice is required to be delivered under the Security
Agreement and has not been previously delivered and (E) identifying any
Prepayment Events that have occurred since the end of the previous fiscal year
and setting forth a reasonably detailed calculation of the Net Proceeds received
from Prepayment Events since the end of such previous fiscal year;
 
(e) within 30 days from the commencement of each fiscal year of Holdings
(commencing with the fiscal year ending December 31, 2002), a detailed
consolidated budget for such fiscal year (including a projected consolidated
balance sheet and related statements of projected operations and cash flow as of
the end of and for such fiscal year and setting forth the assumptions used for
purposes of preparing such budget) and, promptly when available, any material
revisions of such budget that have been approved by senior management of
Holdings;
 
(f) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by Holdings, the
Parent Borrower or any Subsidiary with the Securities and Exchange Commission,
or any Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, as the case may be; and
 
(g) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of Holdings, the Parent
Borrower or any Subsidiary, or compliance with the terms of any Loan Document,
as the Administrative Agent or any Lender may reasonably request.
 
SECTION 5.02. Notices of Material Events. Holdings and the Parent Borrower will
furnish to the Administrative Agent and each Lender prompt written notice of the
following:
 
(a) the occurrence of any Default;
 
(b) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting Holdings,
 

 

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the Parent Borrower or any Affiliate thereof that, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect;
 
(c) 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 Holdings, the Parent Borrower and its Subsidiaries in an aggregate
amount exceeding $10,000,000; and
 
(d) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.
 
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Parent Borrower setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.
 
SECTION 5.03. Information Regarding Collateral. (a)  The Parent Borrower will
furnish to the Administrative Agent prompt written notice of any change (i) in
any Loan Party's legal name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (ii) in the
location of any Loan Party's chief executive office, its principal place of
business, any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral owned by it
is located (including the establishment of any such new office or facility),
(iii) in any Loan Party's identity or structure or (iv) in any Loan Party's
Federal Taxpayer Identification Number. The Parent Borrower agrees not to effect
or permit any change referred to in the preceding sentence unless written notice
has been delivered to the Collateral Agent, together with all applicable
information to enable the Administrative Agent to make all filings under the
Uniform Commercial Code or otherwise that are required in order for the
Collateral Agent (on behalf of the Secured Parties) to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral.
 
(b) Each year, at the time of delivery of annual financial statements with
respect to the preceding fiscal year pursuant to clause (a) of Section 5.01,
Holdings (on behalf of itself and the other Loan Parties) shall deliver to the
Administrative Agent a certificate of a Financial Officer of Holdings (i)
setting forth the information required pursuant to the Perfection Certificate or
confirming that there has been no change in such information since the date of
the Perfection Certificate delivered on the Effective Date or the date of the
most recent certificate delivered pursuant to this Section and (ii) certifying
that all Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations, including all refilings, rerecordings and reregistrations,
containing a description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (i) above to the extent necessary to protect and
perfect the security interests under the Collateral Agreement for a period of
not less than 18 months after the date of such certificate (except as noted
therein with respect to any continuation statements to be filed within such
period).
 
 
 

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SECTION 5.04. Existence; Conduct of Business. Each of Holdings, the Parent
Borrower and the Foreign Subsidiary Borrowers will, and will cause each of the
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, franchises, patents, copyrights, trademarks and trade names
the loss of which would have a Material Adverse Effect; provided that the
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03 or disposition by Section 6.05.
Holdings and the Parent Borrower will cause all the Equity Interests of the
Foreign Subsidiary Borrowers to be owned, directly or indirectly, by the Parent
Borrower or any Subsidiary.
 
SECTION 5.05. Payment of Obligations. Each of Holdings, the Parent Borrower and
the Foreign Subsidiary Borrowers will, and will cause each of the Subsidiaries
(including the Receivables Subsidiary and the Saturn Subsidiary) to, pay its
Indebtedness and other obligations, including Tax liabilities, 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) Holdings, the Parent Borrower the Foreign Subsidiary Borrowers or such
Subsidiary has set aside on its books adequate reserves with respect thereto in
accordance with GAAP, (c) such contest effectively suspends collection of the
contested obligation and the enforcement of any Lien securing such obligation
and (d) the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
 
SECTION 5.06. Maintenance of Properties. Each of Holdings, the Parent Borrower
and the Foreign Subsidiary Borrowers will, and will cause each of the
Subsidiaries to, keep and maintain all property material to the conduct of their
business, taken as a whole, in good working order and condition, ordinary wear
and tear excepted; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.03 or
disposition by Section 6.05.
 
SECTION 5.07. Insurance. Each of Holdings, the Parent Borrower and the Foreign
Subsidiary Borrowers will, and will cause each of the Subsidiaries to, maintain
insurance in such amounts (with no greater risk retention) and against such
risks as are customarily maintained by companies of established repute engaged
in the same or similar businesses operating in the same or similar locations,
except where the failure to do so could not reasonably be expected to result in
a Material Adverse Effect. Such insurance shall be maintained with financially
sound and reputable insurance companies, except that a portion of such insurance
program (not to exceed that which is customary in the case of companies engaged
in the same or similar business or having similar properties similarly situated)
may be effected through self-insurance, provided adequate reserves therefor, in
accordance with GAAP, are maintained. In addition, each of Holdings, the Parent
Borrower and the Foreign Subsidiary Borrowers will, and will cause each of its
Subsidiaries to, maintain all insurance required to be maintained pursuant to
the Security Documents. The Parent Borrower will furnish to the Lenders, upon
request of the Administrative Agent, information in reasonable detail as to the
insurance so maintained. All insurance policies or certificates (or certified
copies thereof) with respect to such insurance shall be endorsed to the
Collateral Agent's reasonable satisfaction for
 

 

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the benefit of the Lenders (including, without limitation, by naming the
Collateral Agent as loss payee or additional insured, as appropriate).
 
SECTION 5.08. Casualty and Condemnation. The Parent Borrower (a) will furnish to
the Administrative Agent and the Lenders prompt written notice of casualty or
other insured damage to any material portion of any Collateral having a book
value or fair market value of $1,000,000 or more or the commencement of any
action or proceeding for the taking of any Collateral having a book value or
fair market value of $1,000,000 or more or any part thereof or interest therein
under power of eminent domain or by condemnation or similar proceeding and
(b) will ensure that the Net Proceeds of any such event (whether in the form of
insurance proceeds, condemnation awards or otherwise) are collected and applied
in accordance with the applicable provisions of this Agreement and the Security
Documents.
 
SECTION 5.09. Books and Records; Inspection and Audit Rights. Each of Holdings,
the Parent Borrower and the Foreign Subsidiary Borrowers will, and will cause
each of the 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 of Holdings, the Parent Borrower
and the Foreign Subsidiary Borrowers will, and will cause each of the
Subsidiaries to, permit any representatives designated by the Administrative
Agent or any Lender, 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, all at such reasonable times and as often as reasonably requested.
 
SECTION 5.10. Compliance with Laws. Each of Holdings, the Parent Borrower and
the Foreign Subsidiary Borrowers will, and will cause each of the Subsidiaries
to, comply with all laws, rules, regulations and orders of any Governmental
Authority applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
 
SECTION 5.11. Use of Proceeds and Letters of Credit. The Parent Borrower will
use on the Restatement Effective Date the proceeds from the Tranche D-2 Term
Loans to repay not less than $25,000,000 of Tranche D-1 Term Loans. The Parent
Borrower may use any remaining available proceeds from the Tranche D-2 Term
Loans to reduce Revolving Borrowings or otherwise to replace liquidity under the
Permitted Receivables Documents reduced by reason of the North American Forging
Sale in accordance with past practices or, to the extent that the North American
Forging Sale has not occurred, for general corporate purposes. The proceeds of
the Revolving Loans and Swingline Loans will be used, subject to Sections 5.15
and 6.12, only for general corporate purposes and to the extent permitted by
Section 6.01(a)(i), Permitted Acquisitions. No part of the proceeds of any Loan
will be used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations T, U and
X.
 
 

 

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SECTION 5.12. Additional Subsidiaries. If any additional Subsidiary is formed or
acquired after the Effective Date, the Parent Borrower will, within five
Business Days after such Subsidiary is formed or acquired, notify the
Administrative Agent and the Lenders thereof and, within five Business Days
after such Subsidiary is formed or acquired, cause the Collateral and Guarantee
Requirement to be satisfied with respect to any Equity Interest in or
Indebtedness of such Subsidiary owned by or on behalf of any Loan Party.
 
SECTION 5.13. Further Assurances. (a)  Each of Holdings, the Parent Borrower and
the Foreign Subsidiary Borrowers will, and will cause each Subsidiary Loan Party
to, execute any and all further documents, financing statements, agreements and
instruments, and take all such further actions (including the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust,
landlord waivers and other documents), which may be required under any
applicable law, or which the Administrative Agent or the Required Lenders may
reasonably request, to cause the Collateral and Guarantee Requirement to be and
remain satisfied, all at the expense of the Loan Parties. Holdings, the Parent
Borrower and the Foreign Subsidiary Borrowers also agree to provide to the
Administrative Agent, from time to time upon request, evidence reasonably
satisfactory to the Administrative Agent as to the perfection and priority of
the Liens created or intended to be created by the Security Documents.
 
(b) If any assets (including any real property or improvements thereto or any
interest therein) having a book value or fair market value of $1,000,000 or more
in the aggregate are acquired by the Parent Borrower or any Subsidiary Loan
Party after the Effective Date or through the acquisition of a Subsidiary Loan
Party under Section 5.12 (other than, in each case, assets constituting
Collateral under the Security Agreement or the Pledge Agreement that become
subject to the Lien of the Security Agreement or the Pledge Agreement upon
acquisition thereof), the Parent Borrower or, if applicable, the relevant
Foreign Subsidiary Borrower will notify the Administrative Agent and the Lenders
thereof, and, if reasonably requested by the Administrative Agent or the
Required Lenders, the Parent Borrower will cause such assets to be subjected to
a Lien securing the Obligations and will take, and cause the Subsidiary Loan
Parties to take, such actions as shall be necessary or reasonably requested by
the Administrative Agent to grant and perfect such Liens, including actions
described in paragraph (a) of this Section, all at the expense of the Loan
Parties.
 
SECTION 5.14. [intentionally omitted].
 
SECTION 5.15. Available Funds; Additional Equity. (a)  Promptly following the
consummation of the TriMas Transaction, the Parent Borrower shall deposit
$205,000,000 of the TriMas Specified Proceeds in an interest bearing money
market account with the Administrative Agent. The proceeds of such account shall
be distributed to the Parent Borrower in order to enable the Parent Borrower to
(i) repurchase, redeem, repay, or otherwise retire the Convertible Debentures
within 90 days of the consummation of the TriMas Transaction or deliver an
irrevocable notice of redemption and deposit such proceeds to the trustee
thereunder within such 90-day
 

 

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period or (ii) thereafter, to satisfy its obligations under the last sentence of
Section 2.11(d)(2).
 
(b) Until the date that the Convertible Debentures have been irrevocably
repurchased, redeemed, repaid or otherwise retired in full, the Parent Borrower
will designate as available for the repurchase, redemption, repayment or
retirement of Convertible Debentures an amount of unused Revolving Commitments
equal to the Available Funds Reserve Amount, less the amount of cash in the
Debenture Account.
 
SECTION 5.16. North American Forging Sale. Within 60 days following the
completion of the North American Forging Sale, the Parent Borrower shall use the
Net Proceeds from the North American Forging Sale to terminate obligations in
respect of operating leases and acquire related real property subject to such
leases using an aggregate amount of not less than $45,000,000; provided, that
(a) the Parent Borrower shall satisfy the Collateral and Guarantee Requirement
with respect to the property subject to operating leases terminated in
accordance with this Section 5.16 within 60 days of such termination, (b) if the
Parent Borrower is unable to use the Net Proceeds from the North American
Forging Sale to terminate obligations in respect of operating leases and acquire
related real property subject to such leases using an aggregate amount of
$45,000,000 within 60 days following the completion of the North American
Forging Sale, any shortfall of application of the Net Proceeds from the North
American Forging Sale may be cured by using the Net Proceeds from the North
American Forging Sale to prepay Tranche D Term Loan Borrowings pursuant to
Section 2.11(a) in an aggregate principal amount equal to such shortfall on or
before the 60th day following the completion of the North American Forging Sale
and (c) any Net Proceeds of the North American Forging Sale not applied in
accordance with clauses (a) and (b) above shall be used to reduce Revolving
Borrowings and/or otherwise replace liquidity under the Permitted Receivables
Financing reduced by reason of the North American Forging Sale in accordance
with past practices.
 
 
ARTICLE VI
 
Negative Covenants
 
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, each of Holdings, the Parent Borrower and each Foreign
Subsidiary Borrower (as to itself only) covenants and agrees with the Lenders
that:
 
SECTION 6.01. Indebtedness; Certain Equity Securities. (a)  None of Holdings,
the Parent Borrower or any Foreign Subsidiary Borrower will, nor will they
permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:
 

 

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(i)  Indebtedness created under the Loan Documents and Indebtedness not
exceeding $20,000,000 incurred outside the United States that are supported by
Letters of Credit; provided that (x)(A) Revolving Loans may only be used to
(1) finance a Permitted Acquisition (other than the New Castle Acquisition) if,
in addition to the satisfaction of all other requirements necessary to effect
such Permitted Acquisition set forth herein, after giving effect to such
Permitted Acquisition (and any related incurrence or repayment of Indebtedness),
the Senior Leverage Ratio is less than 2.00 to 1.00 and the amount of Revolving
Commitments available for general corporate purposes (other than Permitted
Acquisitions) at such time shall be at least $100,000,000 and (2) finance the
New Castle Acquisition to the extent permitted under the defined term "New
Castle Acquisition" and (B) the amount of Revolving Loans used to finance
Permitted Acquisitions (other than the New Castle Acquisition) outstanding at
any time shall not exceed $50,000,000 less the amount of Permitted Receivables
Financing outstanding under Section 6.01(a)(ii) to finance Permitted
Acquisitions and (y) until the Convertible Debentures have been irrevocably
repurchased, redeemed, repaid or otherwise retired in full, Revolving Loans
outstanding may not exceed the aggregate Revolving Commitments less the amount
designated as available for the repurchase, redemption, repayment or retirement
of Convertible Debentures pursuant to Section 5.15(b);
 
(ii)  the Permitted Receivables Financing; provided that (x) the Permitted
Receivables Financing may only be used to finance a Permitted Acquisition (other
than the New Castle Acquisition) if, in addition to the satisfaction of all
other requirements necessary to effect such Permitted Acquisition set forth
herein, after giving effect to such Permitted Acquisition (and any related
incurrence or repayment of Indebtedness), the Senior Leverage Ratio is less than
2.00 to 1.00 and the amount of Revolving Commitments available for general
corporate purposes (other than Permitted Acquisitions) at such time shall be at
least $100,000,000 and (y) the amount of Permitted Receivables Financing used to
finance Permitted Acquisitions (other than the New Castle Acquisition)
outstanding at any one time shall not exceed $50,000,000 less the amount of
Revolving Loans outstanding under Section 6.01(a)(i) to finance Permitted
Acquisitions;
 
(iii)  [intentionally omitted];
 
(iv)  Indebtedness existing on the date hereof and set forth in Schedule 6.01 to
the Original Credit Agreement and extensions, renewals and replacements of any
such Indebtedness that do not increase the outstanding principal amount as
specified on such Schedule 6.01 or result in an earlier maturity date or
decreased weighted average life thereof;
 
(v)  the Convertible Debentures;
 
(vi)  the Existing Subordinated Notes;
 

 

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(vii)  the Permitted Subordinated Notes and the Permitted Senior Notes; provided
that (x) Permitted Subordinated Notes may only be used for the repayment of
Revolving Borrowings and obligations arising in respect of the Permitted
Receivables Financing if, after giving effect to the incurrence of such
Permitted Subordinated Notes, the Senior Leverage Ratio is less than 2.75 to
1.00 and (y) the aggregate amount of proceeds of Permitted Subordinated Notes
used for the repayment of Revolving Borrowings and obligations arising in
respect of the Permitted Receivables Financing may not exceed $100,000,000;
 
(viii)  Indebtedness of the Parent Borrower to any Subsidiary and of any
Subsidiary to the Parent Borrower or any other Subsidiary; provided that
Indebtedness of any Subsidiary that is not a Domestic Loan Party to the Parent
Borrower or any Subsidiary Loan Party shall be subject to Section 6.04;
 
(ix)  Guarantees by the Parent Borrower of Indebtedness of any Subsidiary and by
any Subsidiary of Indebtedness of the Parent Borrower or any other Subsidiary;
provided that (a) Guarantees by the Parent Borrower or any Subsidiary Loan Party
of Indebtedness of any Subsidiary that is not a Domestic Loan Party shall be
subject to Section 6.04 and (b) this clause (ix) shall not apply to Guarantees
of the Existing Subordinated Notes, Permitted Subordinated Notes, the Permitted
Senior Notes or the TriMas Notes;
 
(x)  Guarantees by Holdings, the Parent Borrower or any Subsidiary, as the case
may be, in respect of the Existing Subordinated Notes, Permitted Subordinated
Notes and the Permitted Senior Notes; provided that none of Holdings, the Parent
Borrower or any Subsidiary, as the case may be, shall Guarantee the Existing
Subordinated Notes, the Permitted Subordinated Notes or the Permitted Senior
Notes unless (A) it also has Guaranteed the Obligations pursuant to the
Guarantee Agreement and (B) such Guarantee of the Existing Subordinated Notes or
the Permitted Subordinated Notes is subordinated to such Guarantee of the
Obligations on terms no less favorable to the Lenders than the subordination
provisions of the Existing Subordinated Notes;
 
(xi)  Indebtedness of the Parent Borrower or any Subsidiary incurred to finance
the acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and replacements of
any such Indebtedness that do not increase the outstanding principal amount
thereof or result in an earlier maturity date or decreased weighted average life
thereof; provided that (A) such Indebtedness is incurred prior to or within
180 days after such acquisition or the completion of such construction or
improvement and (B) the aggregate principal amount of Indebtedness permitted by
this clause (xi) shall not exceed $50,000,000 at any time outstanding;
 
(xii)  Indebtedness arising as a result of an Acquisition Lease Financing;
 
 
 

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(xiii) Indebtedness of any Person that becomes a Subsidiary after the date
hereof; provided that (A) such Indebtedness exists at the time such Person
becomes a Subsidiary and is not created in contemplation of or in connection
with such Person becoming a Subsidiary and (B) the aggregate principal amount of
Indebtedness permitted by this clause (xiii) shall not exceed $25,000,000 at any
time outstanding, less the liquidation value of any outstanding Assumed
Preferred Stock;
 
(xiv) Indebtedness of Holdings, the Parent Borrower or any Subsidiary in respect
of workers' compensation claims, self-insurance obligations, performance bonds,
surety appeal or similar bonds and completion guarantees provided by Holdings,
the Parent Borrower and the Subsidiaries in the ordinary course of their
business; and
 
(xv) other unsecured Indebtedness of Holdings, the Parent Borrower or any
Subsidiary in an aggregate principal amount not exceeding $20,000,000 at any
time outstanding, less the liquidation value of any applicable Qualified
Holdings Preferred Stock issued and outstanding pursuant to clause (b) of the
definition of Qualified Holdings Preferred Stock.
 
(b) None of Holdings, the Parent Borrower or any Foreign Subsidiary Borrower
will, nor will they permit any Subsidiary to, issue any preferred stock or other
preferred Equity Interests, except (i) Holdings Preferred Stock, (ii) Qualified
Holdings Preferred Stock, (iii) Assumed Preferred Stock and (iv) preferred stock
or preferred Equity Interests held by Holdings, the Parent Borrower or any
Subsidiary.
 
SECTION 6.02. Liens. None of Holdings, the Parent Borrower or any Foreign
Subsidiary Borrower will, nor will they permit any Subsidiary to, create, incur,
assume or permit to exist any Lien on any property or asset now owned or
hereafter acquired by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except:
 
(a) Liens created under the Loan Documents;
 
(b) Permitted Encumbrances;
 
(c) (i) Liens in respect of the Permitted Receivables Financing and the Foreign
Factoring Arrangement, (ii) second priority Liens in respect of the Permitted
Senior Notes, so long as the trustee or agent thereunder has entered into the
Intercreditor Agreement and (iii) Liens in respect of the New Castle Sale and
Leaseback as contemplated in the definition of "New Castle Sale and Leaseback";
 
(d) any Lien on any property or asset of the Parent Borrower or any Subsidiary
existing on the date hereof and set forth in Schedule 6.02 to the Original
Credit Agreement; provided that (i) such Lien shall not apply to any other
property or asset of the Parent Borrower or any Subsidiary and (ii) such Lien
shall secure only those obligations which it secures on the date hereof and
 

 

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extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;
 
(e) any Lien existing on any property or asset prior to the acquisition thereof
by the Parent Borrower or any Subsidiary or existing on any property or asset of
any Person that becomes a Subsidiary after the date hereof prior to the time
such Person becomes a Subsidiary; provided that (A) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Subsidiary , as the case may be, (B) such Lien shall not apply to any other
property or assets of the Parent Borrower or any Subsidiary and (C) such Lien
shall secure only those obligations which it secures on the date of such
acquisition or the date such Person becomes a Subsidiary, as the case may be;
 
(f) Liens on fixed or capital assets acquired, constructed or improved by, or in
respect of Capital Lease Obligations of, the Parent Borrower or any Subsidiary;
provided that (A) such security interests secure Indebtedness permitted by
clause (xi) of Section 6.01(a), (B) such security interests and the Indebtedness
secured thereby are incurred prior to or within 180 days after such acquisition
or the completion of such construction or improvement, (C) the Indebtedness
secured thereby does not exceed the cost of acquiring, constructing or improving
such fixed or capital assets and (D) such security interests shall not apply to
any other property or assets of the Parent Borrower or any Subsidiary;
 
(g) Liens, with respect to any Mortgaged Property, described in Schedule B-2 of
the title policy covering such Mortgaged Property;
 
(h) other Liens securing liabilities permitted hereunder in an aggregate amount
not exceeding (i) in respect of consensual Liens, $15,000,000 and (ii) in
respect of all such Liens, $20,000,000, in each case at any time outstanding;
and
 
(i) Liens on equipment with an orderly liquidation value of not more than
$13,000,000 securing obligations under leases expressly permitted under Section
6.06(b)(ii); provided that, with respect to each such lease, such equipment and
its aggregate orderly liquidation value shall be specified on a schedule
delivered to the Administrative Agent by the Parent Borrower no later than three
Business Days prior to the Parent Borrower's or any Subsidiary's entering into
such lease.
 
SECTION 6.03. Fundamental Changes. (a)  None of Holdings, the Parent Borrower or
any Foreign Subsidiary Borrower will, nor will they permit any Subsidiary to,
merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or liquidate or dissolve, except that, if at
the time thereof and immediately after giving effect thereto no Default shall
have occurred and be continuing (i) any Subsidiary may merge into the Parent
Borrower in a transaction in which the Parent Borrower is the surviving
corporation, (ii) any Subsidiary may merge into any Subsidiary in a transaction
in which the surviving entity is a Subsidiary and (if any party to such merger
is a Subsidiary Loan Party) is a Subsidiary Loan Party (provided that, with
respect to any such mergers involving the Foreign Subsidiary
 

 

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Borrower, the surviving entity of such mergers shall be a Subsidiary Borrower or
a Foreign Subsidiary Borrower, as the case may be) and (iii) any Subsidiary
(other than a Subsidiary Loan Party) may liquidate or dissolve if the Parent
Borrower determines in good faith that such liquidation or dissolution is in the
best interests of the Parent Borrower and is not materially disadvantageous to
the Lenders; provided that any such merger involving a Person that is not a
wholly owned Subsidiary immediately prior to such merger shall not be permitted
unless also permitted by Section 6.04.
 
(b) The Parent Borrower will not, and will not permit any of its Subsidiaries
to, engage to any material extent in any business other than businesses of the
type conducted by the Parent Borrower and its Subsidiaries on the date of
execution of this Agreement and businesses reasonably related thereto.
 
(c) Holdings will not engage in any business or activity other than (i) the
ownership of all the outstanding shares of capital stock of the Parent Borrower
and the Saturn Subsidiary, (ii) performing its obligations in respect of the
Restricted Stock Award, (iii) performing its obligations (A) under the Loan
Documents, (B) as co-obligor with the Parent Borrower in respect of the
Convertible Debentures and (C) under the Permitted Receivables Financing,
(iv) activities incidental thereto and to Holdings' existence, (v) activities
related to the performance of all its obligations under the Recapitalization
Agreement and in respect of the Transactions, (vi) performing its obligations
under guarantees in respect of sale and leaseback transactions permitted by
Section 6.06 and (vii) other activities (including the incurrence of
Indebtedness and the issuance of its Equity Interests) that are permitted by
this Agreement. Holdings will not own or acquire any assets (other than shares
of capital stock of the Parent Borrower and the Saturn Subsidiary, any
immaterial assets not subject to the Asset Dropdown, cash and Permitted
Investments) or incur any liabilities (other than liabilities imposed by law,
including tax liabilities, liabilities related to its existence and permitted
business and activities specified in the immediately preceding sentence).
 
(d) The Saturn Subsidiary will not engage in any business or business activity
other than (i) holding Equity Interests in Saturn held on the date of the
execution of this Agreement and any property received in respect thereof,
(ii) performing its obligations in respect of the Saturn Sale and the Saturn
Proceeds Distribution, (iii) activities permitted by its certificate of
incorporation and (iv) activities incidental thereto and to the Saturn
Subsidiary's existence. The Saturn Subsidiary will not own or acquire any assets
(other than such equity investments in Saturn) or incur any liabilities (other
than liabilities imposed by law, including tax liabilities, and other
liabilities related to its existence and permitted business and activities
specified in the immediately preceding sentence).
 
(e) The Receivables Subsidiary will not engage in any business or business
activity other than the activities related to the Permitted Receivables
Financing and its existence. The Receivables Subsidiary will not own or acquire
any assets (other than the receivables subject to the Permitted Receivables
Financing) or incur any liabilities (other than the liabilities imposed by law
including tax liabilities, and other liabilities related to its existence and
permitted business and activities specified in the
 

 

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immediately preceding sentence, including liabilities arising under the
Permitted Receivables Financing).
 
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. None of
the Parent Borrower, any Subsidiary Loan Party or any Foreign Subsidiary
Borrower will, nor will they permit any Subsidiary to, purchase, hold or acquire
(including pursuant to any merger with any Person that was not a wholly owned
Subsidiary prior to such merger) any Equity Interests in or evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person constituting a business unit, except:
 
(a) Permitted Investments;
 
(b) investments existing on the date hereof and set forth on Schedule 6.04 to
the Original Credit Agreement and investments in TriMas and its subsidiaries
existing immediately after the consummation of the TriMas Transaction;
 
(c) Permitted Acquisitions;
 
(d) investments by the Parent Borrower and the Subsidiaries in Equity Interests
in their respective Subsidiaries that exist immediately prior to any applicable
transaction; provided that (i) any such Equity Interests held by a Loan Party
shall be pledged pursuant to the Pledge Agreement or any applicable Foreign
Security Documents, as the case may be, to the extent required by this Agreement
and (ii) the aggregate amount of investments (excluding any such investments,
loans, advances and Guaranties to such Subsidiaries that are assumed and exist
on the date any Permitted Acquisition is consummated and that are not made,
incurred or created in contemplation of or in connection with such Permitted
Acquisition) by Loan Parties in, and loans and advances by Loan Parties to, and
Guarantees by Loan Parties of Indebtedness of, Subsidiaries that are not
Domestic Loan Parties made after the Effective Date shall not exceed 5% of
Holdings' consolidated total assets determined in accordance with GAAP at any
time outstanding;
 
(e) loans or advances made by the Parent Borrower to any Subsidiary and made by
any Subsidiary to the Parent Borrower or any other Subsidiary; provided that (i)
any such loans and advances made by a Loan Party shall be evidenced by a
promissory note pledged pursuant to the Pledge Agreement and (ii) the amount of
such loans and advances made by Loan Parties to Subsidiaries that are not Loan
Parties shall be subject to the limitation set forth in clause (d) above;
 
(f) Guarantees permitted by Section 6.01(a)(x);
 
(g) investments arising as a result of the Permitted Receivables Financing;
 

 

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(h) investments constituting permitted Capital Expenditures under Section 6.15;
 
(i) investments received in connection with the bankruptcy or reorganization of,
or settlement of delinquent accounts and disputes with, customers and suppliers,
in each case in the ordinary course of business;
 
(j) any investments in or loans to any other Person received as noncash
consideration for sales, transfers, leases and other dispositions permitted by
Section 6.05;
 
(k) Guarantees by the Parent Borrower and the Subsidiaries of leases entered
into by any Subsidiary as lessee; provided that the amount of such Guarantees
made by Loan Parties to Subsidiaries that are not Loan Parties shall be subject
to the limitation set forth in clause (d) above;
 
(l) extensions of credit in the nature of accounts receivable or notes
receivable in the ordinary course of business;
 
(m) loans or advances to employees made in the ordinary course of business
consistent with prudent business practice and not exceeding $5,000,000 in the
aggregate outstanding at any one time;
 
(n) investments in the form of Hedging Agreements permitted under Section 6.07;
 
(o) investments by the Parent Borrower or any Subsidiary in (i) the capital
stock of a Receivables Subsidiary and (ii) other interests in a Receivables
Subsidiary, in each case to the extent required by the terms of the Permitted
Receivables Financing;
 
(p) payroll, travel and similar advances to cover matters that are expected at
the time of such advances ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of business; and
 
(q) investments, loans or advances in addition to those permitted by clauses (a)
through (p) above not exceeding in the aggregate $25,000,000 at any time
outstanding.
 
SECTION 6.05. Asset Sales. None of Holdings, the Parent Borrower or any Foreign
Subsidiary Borrower will, nor will they permit any Subsidiary to, sell,
transfer, lease or otherwise dispose of any asset, including any Equity Interest
owned by it, nor will they permit any Subsidiary to issue any additional Equity
Interest in such Subsidiary, except:
 
(a) sales, transfers, leases and other dispositions of inventory, used or
surplus equipment, Permitted Investments and Investments referred to in Section
6.04(i) in the ordinary course of business;
 

 

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(b) sales, transfers and dispositions to the Parent Borrower or a Subsidiary;
provided that any such sales, transfers or dispositions involving a Subsidiary
that is not a Domestic Loan Party shall be made in compliance with Section 6.09;
 
(c) the Saturn Sale or the disposition of Equity Interests in the Saturn
Subsidiary in lieu thereof;
 
(d) sales of accounts receivables and related assets pursuant to the Permitted
Receivables Financing;
 
(e) the creation of Liens permitted by Section 6.02 and dispositions as a result
thereof;
 
(f) (i) sales or transfers that are permitted sale and leaseback transactions
pursuant to Section 6.06(a) and (b), (ii) sales and transfers pursuant to the
New Castle Sale and Leaseback and Ramos Sale and Leaseback, and (iii) sales and
transfers of the TriMas Interest;
 
(g) sales and transfers that constitute part of an Acquisition Lease Financing;
 
(h) Restricted Payments permitted by Section 6.08;
 
(i) transfers and dispositions constituting investments permitted under Section
6.04;
 
(j) sales, transfers and other dispositions of property identified on Schedule
6.05 to the Original Credit Agreement;
 
(k) sales, transfers and other dispositions of assets (other than Equity
Interests in a Subsidiary) that are not permitted by any other clause of this
Section; provided that the aggregate fair market value of all assets sold,
transferred or otherwise disposed of in reliance upon this clause (k) shall not
exceed $15,000,000 during any fiscal year of the Parent Borrower; provided that
such amount shall be increased, in respect of the fiscal year ending on
December 31, 2002, and each fiscal year thereafter by an amount equal to the
total unused amount of such permitted sales, transfers and other dispositions
for the immediately preceding fiscal year (without giving effect to the amount
of any unused permitted sales, transfers and other dispositions that were
carried forward to such preceding fiscal year);
 
(l) sales of accounts receivable and related assets pursuant to a Foreign
Factoring Arrangement; and
 
(m) the North American Forging Sale.

 

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provided that (x) all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clause (b) above) shall be made for fair
value and (y) all sales, transfers, leases and other dispositions permitted by
clauses (j) and (k) above shall be for at least 85% cash consideration.
 
SECTION 6.06. Sale and Leaseback Transactions. From and after the Restatement
Effective Date, none of the Parent Borrower or any Foreign Subsidiary Borrower
will, nor will they permit any Subsidiary to, enter into any arrangement,
directly or indirectly, whereby it shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereinafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property
sold or transferred, except for, solely with respect to property not owned as of
the Restatement Effective Date (other than property which becomes or is required
to become Collateral as a result of the termination of operating leases pursuant
to Section 5.16), any such sale of any fixed or capital assets that is made for
cash consideration in an amount not less than the cost of such fixed or capital
asset and is consummated within 180 days after the Parent Borrower, such Foreign
Subsidiary Borrower or such Subsidiary acquires or completes the construction of
such fixed or capital asset, so long as the Capital Lease Obligations associated
therewith are permitted by Section 6.01(a)(xi).
 
SECTION 6.07. Hedging Agreements. None of the Parent Borrower or any Foreign
Subsidiary Borrower will, nor will they permit any Subsidiary to, enter into any
Hedging Agreement, other than Hedging Agreements entered into in the ordinary
course of business and which are not speculative in nature to hedge or mitigate
risks to which the Parent Borrower or any Subsidiary is exposed in the conduct
of its business or the management of its assets or liabilities.
 
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness. (a)  None
of Holdings, the Parent Borrower or any Foreign Subsidiary Borrower will, nor
will they permit any Subsidiary to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, or incur any obligation
(contingent or otherwise) to do so, except:
 
(i) Holdings may (x) declare and pay dividends with respect to its Equity
Interests payable solely in additional Equity Interests of Holdings,
(y) repurchase Equity Interests not to exceed $10,000,000 from former
shareholders of its existing or former Subsidiaries that received such Equity
Interests of Holdings prior to the date hereof and (z) repurchase the preferred
stock of Holdings in an aggregate amount not to exceed $20,000,000, provided
that, at the time of such repurchase and after giving effect thereto, no Default
or Event of Default shall have occurred and be continuing and Holdings and the
Parent Borrower are in compliance with Sections 6.13 and 6.14;
 
(ii) Subsidiaries may declare and pay dividends ratably with respect to their
capital stock;
 

 

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(iii) the Parent Borrower may make payments to Holdings to permit it to make,
and Holdings may make, Restricted Payments, not exceeding $2,000,000 during any
fiscal year (provided that such amount shall be increased, in respect of the
fiscal year ending on December 31, 2002, and each fiscal year thereafter by an
amount equal to the total unused amount of such Restricted Payments for the
immediately preceding fiscal year (without giving effect to the amount of any
unused amounts that were carried forward to such preceding fiscal year) not to
exceed in the aggregate $16,000,000), in each case pursuant to and in accordance
with stock option plans, equity purchase programs or agreements or other benefit
plans, in each case for management or employees or former employees of the
Parent Borrower and the Subsidiaries;
 
(iv) the Parent Borrower may pay dividends to Holdings at such times and in such
amounts (A) as shall be necessary to enable Holdings to make payments permitted
by clause (z) of Section 6.08(a)(i) and Sections 6.08(a)(v) and (vi) and (B) as
shall be necessary to permit Holdings to discharge its other permitted
liabilities;
 
(v) Holdings may pay Holdings Preferred Dividends and interest in respect of its
Indebtedness permitted hereunder, provided that, at the time of such payment and
after giving effect thereto, no Default or Event of Default shall have occurred
and be continuing and Holdings and the Parent Borrower are in compliance with
Sections 6.13 and 6.14;
 
(vi) Holdings may make payments to the extent contemplated by the
Recapitalization Agreement, including payments in respect of the restricted
stock granted pursuant to the Restricted Stock Obligation (including payments in
respect of the Restricted Stock Obligation after the date such payments were
scheduled to have been made), provided that, at the time of such payment in
respect of the Restricted Stock Obligation and after giving effect thereto, no
Event of Default shall have occurred and be continuing;
 
(vii) Holdings may (x) pay the Saturn Proceeds Distribution and (y) repurchase,
redeem, repay or otherwise retire the Convertible Debentures with Available
Funds, proceeds from Permitted Senior Notes (to the extent permitted by such
defined term), Permitted Subordinated Notes or issuances or sales of capital
stock of Holdings; and
 
(viii) Parent Borrower may make payments to Holdings to permit it to make, and
Holdings may make payments permitted by Sections 6.09(f), (g), (h) and (i);
provided that, at the time of such payment and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing and Holdings
and the Parent Borrower are in compliance with Sections 6.13 and 6.14; provided,
further that any payments that are prohibited because of the immediately
preceding proviso shall accrue and may be made as so accrued upon the curing or
waiver of such Default, Event of Default or noncompliance.
 

 

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(b) None of Holdings, the Parent Borrower or any Foreign Subsidiary Borrower
will, nor will they permit any Subsidiary to, make or agree to pay or make,
directly or indirectly, any payment or other distribution (whether in cash,
securities or other property) of or in respect of principal of or interest on
any Indebtedness, or any payment or other distribution (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Indebtedness, except:
 
(i) payment of Indebtedness created under the Loan Documents;
 
(ii) the repurchase, redemption, repayment or other retirement of the
Convertible Debentures as permitted by Section 6.08(a)(vii);
 
(iii) payment of regularly scheduled interest and principal payments as and when
due in respect of any Indebtedness, other than payments in respect of the
subordinated Indebtedness prohibited by the subordination provisions thereof;
 
(iv) refinancings of Indebtedness to the extent permitted by Section 6.01;
 
(v) payment of secured Indebtedness out of the proceeds of any sale or transfer
of the property or assets securing such Indebtedness; and
 
(vi) payment of Indebtedness or other obligations made pursuant to Section 5.16.
 
(c) None of Holdings, the Parent Borrower or any Foreign Subsidiary Borrower
will, nor will they permit any Subsidiary to, enter into or be party to, or make
any payment under, any Synthetic Purchase Agreement unless (i) in the case of
any Synthetic Purchase Agreement related to any Equity Interest of Holdings, the
payments required to be made by Holdings are limited to amounts permitted to be
paid under Section 6.08(a), (ii) in the case of any Synthetic Purchase Agreement
related to any Restricted Indebtedness, the payments required to be made by
Holdings, the Parent Borrower or the Subsidiaries thereunder are limited to the
amount permitted under Section 6.08(b) and (iii) in the case of any Synthetic
Purchase Agreement, the obligations of Holdings, the Parent Borrower and the
Subsidiaries thereunder are subordinated to the Obligations on terms
satisfactory to the Required Lenders.
 
SECTION 6.09. Transactions with Affiliates. None of Holdings, the Parent
Borrower or any Foreign Subsidiary Borrower will, nor will they permit any
Subsidiary to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except:
 
(a) transactions that do not involve Holdings and are at prices and on terms and
conditions not less favorable to the Parent Borrower or such Subsidiary than
could be obtained on an arm's-length basis from unrelated third parties;
 

 

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(b) transactions between or among the Parent Borrower and the Subsidiaries not
involving any other Affiliate (to the extent not otherwise prohibited by other
provisions of this Agreement);
 
(c) any Restricted Payment permitted by Section 6.08;
 
(d) transactions pursuant to agreements in effect on the Effective Date and
listed on Schedule 6.09 to the Original Credit Agreement (provided that this
clause (d) shall not apply to any extension, or renewal of, or any amendment or
modification of such agreements that is less favorable to the Parent Borrower or
the applicable Subsidiaries, as the case may be);
 
(e) (i) the Transactions and (ii) the TriMas Transactions and the TriMas
Affiliate Agreements (provided that this clause (e)(ii) shall not apply to any
extension, or renewal of, or any amendment or modification of such agreements
that is less favorable in any material respect, taken as a whole, to the Parent
Borrower or the applicable Subsidiaries, as the case may be);
 
(f) the payment, on a quarterly basis, of management fees to Heartland and/or
its Affiliates in accordance with the Heartland Management Agreement, provided
that the annual amount of such management fees shall not exceed $4,000,000;
 
(g) the reimbursement of Heartland and/or its Affiliates for their reasonable
out-of-pocket expenses incurred by them in connection with the Transactions and
performing management services to Holdings, the Parent Borrower and the
Subsidiaries, pursuant to the Heartland Management Agreement;
 
(h) the payment of one time fees to Heartland and/or its Affiliates in
connection with any Permitted Acquisition, such fees to be payable at the time
of each such acquisition and not to exceed the percentage of the aggregate
consideration paid by Holdings, the Parent Borrower and its Subsidiaries for any
such acquisition as specified in the Heartland Management Agreement; and
 
(i) payments to Heartland and/or its Affiliates for any financial advisor,
underwriter or placement services or other investment banking activities
rendered to Holdings, the Parent Borrower or the Subsidiaries, pursuant to the
Heartland Management Agreement.
 
SECTION 6.10. Restrictive Agreements. None of Holdings, the Parent Borrower or
any Foreign Subsidiary Borrower will, nor will they permit any Subsidiary to,
directly or indirectly, enter into, incur or permit to exist any agreement or
other arrangement that prohibits, restricts or imposes any condition upon
(a) the ability of Holdings, the Parent Borrower or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets, or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any shares of its capital stock or to make or repay loans or advances to the
Parent Borrower or any other Subsidiary or to
 

 

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Guarantee Indebtedness of the Parent Borrower or any other Subsidiary; provided
that (i) the foregoing shall not apply to restrictions and conditions imposed by
law or by any (A) Loan Document or Permitted Receivables Document or (B) any
Existing Subordinated Notes, Permitted Subordinated Notes and Permitted Senior
Notes that are customary, in the reasonable judgment of the board of directors
thereof, for the market in which such Indebtedness is issued so long as such
restrictions do not prevent, impede or impair (x) the creation of Liens and
Guarantees in favor of the Lenders under the Loan Documents or (y) the
satisfaction of the obligations of the Loan Parties under the Loan Documents,
(ii) the foregoing shall not apply to restrictions and conditions existing on
the date hereof identified on Schedule 6.10 to the Original Credit Agreement
(but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition),
(iii) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided, further, that such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness and (v) clause (a) of the foregoing shall not
apply to customary provisions in leases and other agreements restricting the
assignment thereof.
 
SECTION 6.11. Amendment of Material Documents. None of Holdings, the Parent
Borrower or any Foreign Subsidiary Borrower will, nor will they permit any
Subsidiary (including the Receivables Subsidiary and the Saturn Subsidiary) to,
amend, modify or waive any of its rights under (a) its certificate of
incorporation, by-laws or other organizational documents, (b) the
Recapitalization Documents and (c) any Material Agreement, in each case to the
extent such amendment, modification or waiver is adverse to the Lenders.
 
SECTION 6.12. Convertible Debentures.  Holdings shall not repurchase, redeem,
repay or otherwise retire any Convertible Debentures except as permitted by
Section 6.08(a)(vii).
 
SECTION 6.13. Interest Expense Coverage Ratio. Neither Holdings nor the Parent
Borrower will permit the ratio of (a) Consolidated EBITDA to (b) the sum of
(i) Consolidated Cash Interest Expense and (ii) Holdings Preferred Dividends, in
each case for any period of four consecutive fiscal quarters ending on the last
date of any fiscal quarter set forth below, to be less than the ratio set forth
below opposite such period:
 

Period
 
Ratio
 
First Fiscal Quarter of 2005
 
2.10 to 1.00
 
Second Fiscal Quarter of 2005
 
2.15 to 1.00
 
Third Fiscal Quarter of 2005
 
2.20 to 1.00
 
Fourth Fiscal Quarter of 2005
 
2.20 to 1.00
 

 

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Period
 
Ratio
 
First Fiscal Quarter of 2006
to the Fourth Fiscal Quarter of 2006
 
1.75 to 1.00
 
First Fiscal Quarter of 2007
to the Fourth Fiscal Quarter of 2007
 
2.00 to 1.00
 
First Fiscal Quarter of 2008
to the Fourth Fiscal Quarter of 2008
 
2.25 to 1.00
 
First Fiscal Quarter of 2009
and thereafter
 
2.50 to 1.00
 

SECTION 6.14. Leverage Ratio. Neither Holdings nor the Parent Borrower will
permit the Leverage Ratio as of the last date of any fiscal quarter set forth
below to exceed the ratio set forth opposite such period:
 
Period
 
Ratio
 
First and Second Fiscal Quarters of 2005
 
5.25 to 1.00
 
Third Fiscal Quarter of 2005
 
5.00 to 1.00
 
Fourth Fiscal Quarter of 2005
 
4.75 to 1.00
 
First Fiscal Quarter of 2006
to the Fourth Fiscal Quarter of 2006
 
5.25 to 1.00
 
First Fiscal Quarter of 2007
to the Fourth Fiscal Quarter of 2007
 
5.00 to 1.00
 
First Fiscal Quarter of 2008
to the Fourth Fiscal Quarter of 2008
 
4.50 to 1.00
 
First Fiscal Quarter of 2009 and each
fiscal quarter thereafter
 
4.00 to 1.00
 

SECTION 6.15. Capital Expenditures. (a)  Neither Holdings nor the Parent
Borrower will permit the aggregate amount of Capital Expenditures for any period
to exceed the applicable Permitted Capital Expenditure Amount for such period,
provided that for any fiscal year during which the North American forging
business is owned by the Parent Borrower, the Parent Borrower shall be entitled
to spend an additional $15,000,000 per fiscal year, pro rated for ownership for
a portion of the fiscal year.
 
(b) Notwithstanding the foregoing, the Parent Borrower may in respect of the
fiscal year ending on December 31, 2007, and each fiscal year thereafter,
increase the amount of Capital Expenditures permitted to be made during such
fiscal year pursuant to Section 6.15(a) by an amount equal to the total unused
amount of permitted Capital Expenditures for the immediately preceding fiscal
year (without giving effect to the amount of any unused permitted Capital
Expenditures that were carried forward to such preceding fiscal year).
 
 

 

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SECTION 6.16. Consolidated Lease Expense. Neither Holdings nor the Parent
Borrower will permit Consolidated Lease Expense associated with Capital
Expenditures to exceed 30% of Capital Expenditures for such fiscal year.
 
 
ARTICLE VII
 
Events of Default
 
If any of the following events ("Events of Default") shall occur:
 
(a) the Parent Borrower or any Foreign Subsidiary Borrower shall fail to pay any
principal of any Loan or any reimbursement obligation in respect of any LC
Disbursement when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or otherwise;
 
(b) the Parent Borrower or any Foreign Subsidiary Borrower shall fail to pay any
interest on any Loan or any fee or any other amount (other than an amount
referred to in clause (a) of this Article) payable under this Agreement or any
other Loan Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of five Business Days;
 
(c) any representation or warranty made or deemed made by or on behalf of
Holdings, the Parent Borrower, any Foreign Subsidiary Borrower or any Subsidiary
in or in connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, or in any report, certificate, financial statement
or other document furnished pursuant to or in connection with any Loan Document
or any amendment or modification thereof or waiver thereunder, shall prove to
have been incorrect in any material respect when made or deemed made;
 
(d) Holdings, the Parent Borrower or any Foreign Subsidiary Borrower shall fail
to observe or perform any covenant, condition or agreement contained in
Section 5.02, 5.04 (with respect to the existence of Holdings, the Parent
Borrower or any Foreign Subsidiary Borrower and ownership of the Foreign
Subsidiary Borrowers), 5.11, 5.15 or 5.16 or in Article VI;
 
(e) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in any Loan Document (other than those specified in
clause (a), (b) or (d) of this Article), and such failure shall continue
unremedied for a period of 30 days after notice thereof from the Administrative
Agent to the Parent Borrower (which notice will be given at the request of any
Lender);
 
(f) Holdings, the Parent Borrower or any Subsidiary shall fail to make any
payment of principal or interest in respect of any Material Indebtedness, when
and as the same shall become due and payable after giving effect to any
applicable grace period with respect thereto;
 

 

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(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness;
 
(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of Holdings, the Parent Borrower or any Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for Holdings, the Parent Borrower or any Subsidiary or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;
 
(i) Holdings, the Parent Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Article, (iii) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings, the Parent Borrower or any
Subsidiary or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors or
(vi) take any action for the purpose of effecting any of the foregoing;
 
(j) Holdings, the Parent Borrower or any Subsidiary shall become unable, admit
in writing in a court proceeding its inability or fail generally to pay its
debts as they become due;
 
(k) one or more judgments for the payment of money in an aggregate amount in
excess of $15,000,000 shall be rendered against Holdings, the Parent Borrower,
any Subsidiary or any combination thereof and the same shall remain undischarged
for a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any assets of Holdings, the Parent Borrower or any
Subsidiary to enforce any such judgment;
 
(l) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have
 

 
 

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occurred, could reasonably be expected to result in a Material Adverse Effect on
Holdings, the Parent Borrower and its Subsidiaries;
 
(m) any Lien covering property having a book value or fair market value of
$1,000,000 or more purported to be created under any Security Document shall
cease to be, or shall be asserted by any Loan Party not to be, a valid and
perfected Lien on any Collateral, except (i) as a result of the sale or other
disposition of the applicable Collateral in a transaction permitted under the
Loan Documents or (ii) as a result of the Administrative Agent's failure to
maintain possession of any stock certificates, promissory notes or other
instruments delivered to it under the Collateral Agreement;
 
(n) the Guarantee Agreement shall cease to be, or shall have been asserted not
to be, in full force and effect;
 
(o) the Parent Borrower, Holdings or any Subsidiary shall challenge the
subordination provisions of the Subordinated Debt or assert that such provisions
are invalid or unenforceable or that the Obligations of the Parent Borrower or
any Foreign Subsidiary Borrower, or the Obligations of Holdings or any
Subsidiary under the Guarantee Agreement, are not senior indebtedness under the
subordination provisions of the Subordinated Debt, or any court, tribunal or
government authority of competent jurisdiction shall judge the subordination
provisions of the Subordinated Debt to be invalid or unenforceable or such
Obligations to be not senior indebtedness under such subordination provisions or
otherwise cease to be, or shall be asserted not to be, legal, valid and binding
obligations of the parties thereto, enforceable in accordance with their terms;
or
 
(p) a Change in Control shall occur;
 
then, and in every such event (other than an event with respect to the Parent
Borrower described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Parent
Borrower, take either or both of the following actions, at the same or different
times:  (i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and (ii) declare the Loans then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Parent
Borrower or any Foreign Subsidiary Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Parent Borrower and the Foreign
Subsidiary Borrowers; and in case of any event with respect to the Parent
Borrower or any Foreign Subsidiary Borrower described in clause (h) or (i) of
this Article, the Commitments shall automatically terminate and the principal of
the Loans then outstanding, together with accrued interest thereon and all fees
and other obligations of the Parent Borrower or any Foreign Subsidiary Borrower
accrued hereunder, shall automatically become due and
 

 

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payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Parent Borrower and the Foreign Subsidiary
Borrowers.
 
 
ARTICLE VIII
 
The Administrative Agent
 
Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent (it being understood that reference in this Article VIII to
the Administrative Agent shall be deemed to include the Collateral Agent) as its
agent and authorizes the Administrative Agent to take such actions on its behalf
and to exercise such powers as are delegated to the Administrative Agent by the
terms of the Loan Documents, together with such actions and powers as are
reasonably incidental thereto.
 
The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with Holdings, the Parent Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.
 
The Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) the Administrative Agent shall not have any duty to take
any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 10.02), and (c) except as
expressly set forth in the Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to Holdings, the Parent Borrower or any of its
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.02) or in the absence of its own gross negligence or
wilful misconduct. The Administrative Agent shall not be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by Holdings, the Parent Borrower, a Foreign Subsidiary
Borrower or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered thereunder or in
connection therewith, (iii) the performance or observance of any of the
covenants,
 

 

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agreements or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
 
The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Parent Borrower or any Foreign Subsidiary Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.
 
The Administrative Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of each
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
 
Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders, the Issuing Bank and the Parent Borrower (on behalf of
itself and the Foreign Subsidiary Borrowers). Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Parent Borrower
and, if applicable, the relevant Foreign Subsidiary Borrower, to appoint a
successor from among the Lenders. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Parent Borrower (on behalf of itself and the
Foreign Subsidiary Borrowers) to a successor Administrative Agent shall be the
same as those payable to its predecessor unless otherwise agreed between the
Parent Borrower (on behalf of itself and the Foreign Subsidiary Borrowers) and
such successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 10.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related
 

 

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Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Administrative Agent.
 
Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or
related agreement or any document furnished hereunder or thereunder.
 
The Lenders identified in this Agreement as the Syndication Agent and the
Documentation Agents shall not have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders. Without limiting the foregoing, none of the Syndication Agent or the
Documentation Agents shall have or be deemed to have a fiduciary relationship
with any Lender. Each Lender hereby makes the same acknowledgments with respect
to the Syndication Agent and the Documentation Agents as it makes with respect
to the Administrative Agent or any other Lender in this Article VIII.
 
 
ARTICLE IX
 
Collection Allocation Mechanism
 
SECTION 9.01. Implementation of CAM.  (a)  On the CAM Exchange Date, (i) the
Commitments shall automatically and without further act be terminated as
provided in Article VII, (ii) all Foreign Currency Borrowings and the
Commitments to make Foreign Currency Loans shall be converted into, and all such
amounts due thereunder shall accrue and be payable in, dollars at the Exchange
Rate on such date and (iii) the Lenders shall automatically and without further
act (and without regard to the provisions of Section 10.04) be deemed to have
exchanged interests in the Credit Facilities such that in lieu of the interest
of each Lender in each Credit Facility in which it shall participate as of such
date (including such Lender's interest in the Specified Obligations of each Loan
Party in respect of each such Credit Facility), such Lender shall hold an
interest in every one of the Credit Facilities (including the Specified
Obligations of each Loan Party in respect of each such Credit Facility and each
LC Reserve Account established pursuant to Section 9.02 below), whether or not
such Lender shall previously have participated therein, equal to such Lender's
CAM Percentage thereof. Each Lender and each Loan Party hereby consents and
agrees to the CAM Exchange, and each Lender agrees that the CAM Exchange shall
be binding upon its successors and assigns and any person that acquires a
participation in its interests in any Credit Facility. Each Loan Party agrees
from time to time to execute and deliver to the Administrative Agent all
promissory notes and other instruments and documents as the Administrative Agent
shall
 

 

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reasonably request to evidence and confirm the respective interests of the
Lenders after giving effect to the CAM Exchange, and each Lender agrees to
surrender any promissory notes originally received by it in connection with its
Loans hereunder to the Administrative Agent against delivery of new promissory
notes evidencing its interests in the Credit Facilities; provided, however, that
the failure of any Loan Party to execute or deliver or of any Lender to accept
any such promissory note, instrument or document shall not affect the validity
or effectiveness of the CAM Exchange.
 
(b) As a result of the CAM Exchange, upon and after the CAM Exchange Date, each
payment received by the Administrative Agent or the Collateral Agent pursuant to
any Loan Document in respect of the Specified Obligations, and each distribution
made by the Collateral Agent pursuant to any Security Documents in respect of
the Specified Obligations, shall be distributed to the Lenders pro rata in
accordance with their respective CAM Percentages. Any direct payment received by
a Lender upon or after the CAM Exchange Date, including by way of setoff, in
respect of a Specified Obligation shall be paid over to the Administrative Agent
for distribution to the Lenders in accordance herewith.
 
SECTION 9.02. Letters of Credit.  (a)  In the event that on the CAM Exchange
Date any Letter of Credit shall be outstanding and undrawn in whole or in part,
or any amount drawn under a Letter of Credit shall not have been reimbursed
either by the Parent Borrower or any Foreign Subsidiary Borrower, as the case
may be, or with the proceeds of a Revolving Borrowing, each Revolving Lender
shall promptly pay over to the Administrative Agent, in immediately available
funds and in the currency that such Letters of Credit are denominated, an amount
equal to such Revolving Lender's Applicable Percentage (as notified to such
Lender by the Administrative Agent) of such Letter of Credit's undrawn face
amount or (to the extent it has not already done so) such Letter of Credit's
unreimbursed drawing, together with interest thereon from the CAM Exchange Date
to the date on which such amount shall be paid to the Administrative Agent at
the rate that would be applicable at the time to an ABR Revolving Loan in a
principal amount equal to such amount, as the case may be. The Administrative
Agent shall establish a separate account or accounts for each Lender (each, an
"LC Reserve Account") for the amounts received with respect to each such Letter
of Credit pursuant to the preceding sentence. The Administrative Agent shall
deposit in each Lender's LC Reserve Account such Lender's CAM Percentage of the
amounts received from the Revolving Lenders as provided above. The
Administrative Agent shall have sole dominion and control over each LC Reserve
Account, and the amounts deposited in each LC Reserve Account shall be held in
such LC Reserve Account until withdrawn as provided in paragraph (b), (c),
(d) or (e) below. The Administrative Agent shall maintain records enabling it to
determine the amounts paid over to it and deposited in the LC Reserve Accounts
in respect of each Letter of Credit and the amounts on deposit in respect of
each Letter of Credit attributable to each Lender's CAM Percentage. The amounts
held in each Lender's LC Reserve Account shall be held as a reserve against the
LC Exposure, shall be the property of such Lender, shall not constitute Loans to
or give rise to any claim of or against any Loan Party and shall not give rise
to any obligation on the part of the Parent Borrower or the Foreign Subsidiary
Borrowers to pay interest to such Lender, it being agreed that the reimbursement
obligations in respect of Letters of
 
 
 

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Credit shall arise only at such times as drawings are made thereunder, as
provided in Section 2.05.
 
(b) In the event that after the CAM Exchange Date any drawing shall be made in
respect of a Letter of Credit, the Administrative Agent shall, at the request of
the Issuing Bank withdraw from the LC Reserve Account of each Lender any
amounts, up to the amount of such Lender's CAM Percentage of such drawing,
deposited in respect of such Letter of Credit and remaining on deposit and
deliver such amounts to the Issuing Bank in satisfaction of the reimbursement
obligations of the Revolving Lenders under Section 2.05(e) (but not of the
Parent Borrower and the Foreign Subsidiary Borrowers under Section 2.05(f),
respectively). In the event any Revolving Lender shall default on its obligation
to pay over any amount to the Administrative Agent in respect of any Letter of
Credit as provided in this Section 9.02, the Issuing Bank shall, in the event of
a drawing thereunder, have a claim against such Revolving Lender to the same
extent as if such Lender had defaulted on its obligations under Section 2.05(e),
but shall have no claim against any other Lender in respect of such defaulted
amount, notwithstanding the exchange of interests in the reimbursement
obligations pursuant to Section 9.01. Each other Lender shall have a claim
against such defaulting Revolving Lender for any damages sustained by it as a
result of such default, including, in the event such Letter of Credit shall
expire undrawn, its CAM Percentage of the defaulted amount.
 
(c) In the event that after the CAM Exchange Date any Letter of Credit shall
expire undrawn, the Administrative Agent shall withdraw from the LC Reserve
Account of each Lender the amount remaining on deposit therein in respect of
such Letter of Credit and distribute such amount to such Lender.
 
(d) With the prior written approval of the Administrative Agent and the Issuing
Bank, any Lender may withdraw the amount held in its LC Reserve Account in
respect of the undrawn amount of any Letter of Credit. Any Lender making such a
withdrawal shall be unconditionally obligated, in the event there shall
subsequently be a drawing under such Letter of Credit, to pay over to the
Administrative Agent, for the account of the Issuing Bank on demand, its CAM
Percentage of such drawing.
 
(e) Pending the withdrawal by any Lender of any amounts from its LC Reserve
Account as contemplated by the above paragraphs, the Administrative Agent will,
at the direction of such Lender and subject to such rules as the Administrative
Agent may prescribe for the avoidance of inconvenience, invest such amounts in
Permitted Investments. Each Lender that has not withdrawn its CAM Percentage of
amounts in its LC Reserve Account as provided in paragraph (d) above shall have
the right, at intervals reasonably specified by the Administrative Agent, to
withdraw the earnings on investments so made by the Administrative Agent with
amounts in its LC Reserve Account and to retain such earnings for its own
account.
 

 

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ARTICLE X
 
Miscellaneous
 
SECTION 10.01. Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:
 
(a) if to Holdings, the Parent Borrower or any Foreign Subsidiary Borrower, to
the Parent Borrower (on behalf of itself, Holdings and any Foreign Subsidiary
Borrower) at Metaldyne Corporation, 21001 Van Born Road, Taylor, Michigan 48180,
Attention of David Liner, Esq. (Telecopy No. (313) 792-6136),
 
with a copy to
 
Jonathan A. Schaffzin, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, New York
(Telecopy No. (212) 269-5420);
 
(b) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., Loan and
Agency Services Group, 1111 Fannin Street, 10th Floor, Houston, Texas 77002,
Attention of Alice Telles (Telecopy No. (713) 750-2938), with a copy to JPMorgan
Chase Bank, 270 Park Avenue, New York, New York 10017, Attention of
Richard Duker (Telecopy No. 212-270-5127);
 
(c) if to the Issuing Bank, to it at 10420 Highland Mn Dr-BL2, Tampa, Florida
33610, Attention of James Alonzo (Telecopy No. (813) 432-5161), and in the event
that there is more than one Issuing Bank, to such other Issuing Bank at its
address (or telecopy number) set forth in its Administrative Questionnaire;
 
(d) if to the Swingline Lender, to it at 1111 Fannin Street, 10th Floor,
Houston, Texas 77002, Attention of Alice Telles (Telecopy No. (713) 750-2938);
and
 
(e) if to any other Lender, to it at its address (or telecopy number) set forth
in its Administrative Questionnaire.
 
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
 
SECTION 10.02. Waivers; Amendments. (a)  No failure or delay by the
Administrative Agent, the Issuing Bank or any Lender in exercising any right or
 

 

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power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Issuing
Bank and the Lenders hereunder and under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of any Loan Document or consent to any departure by
any Loan Party therefrom shall in any event be effective unless the same shall
be permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time.
 
(b) Neither this Agreement nor any other Loan Document nor any provision hereof
or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by
Holdings, the Parent Borrower, each Foreign Subsidiary Borrower (but only to the
extent such waiver, amendment or modification relates to such Foreign Subsidiary
Borrower) and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and the Loan Party or Loan Parties that are parties
thereto, in each case with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the maturity of any Loan, or any scheduled date of payment of the
principal amount of any Term Loan under Section 2.10, or the required date of
reimbursement of any LC Disbursement, or any date for the payment of any
interest or fees payable hereunder, or reduce the amount of, waive or excuse any
such payment, or postpone the scheduled date of expiration of any Commitment or
postpone the scheduled date of expiration of any Letter of Credit beyond the
Revolving Maturity Date, without the written consent of each Lender affected
thereby, (iv) change Section 2.18(b) or (c) in a manner that would alter the
pro rata sharing of payments required thereby, without the written consent of
each Lender, (v) change the percentage set forth in the definition of "Required
Lenders" or any other provision of any Loan Document (including this Section)
specifying the number or percentage of Lenders (or Lenders of any Class)
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), (vi) release
Holdings or any Subsidiary Loan Party from its Guarantee under the Guarantee
Agreement (except as expressly provided in the Guarantee Agreement), or limit
its liability in respect of such Guarantee, without the written consent of each
Lender, (vii) release all or substantially all of the Collateral from the Liens
of the Security Documents, without the written consent of each Lender or (viii)
change any provisions of any Loan Document in a manner that by its terms
adversely affects the rights in respect of payments due to Lenders holding Loans
of any Class
 

 

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differently than those holding Loans of any other Class, without the written
consent of Lenders holding a majority in interest of the outstanding Loans and
unused Commitments of each affected Class; provided further that (A) no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Issuing Bank or the Swingline Lender without the prior
written consent of the Administrative Agent, the Issuing Bank or the Swingline
Lender, as the case may be, and (B) any waiver, amendment or modification of
this Agreement that by its terms affects the rights or duties under this
Agreement of the Revolving Lenders (but not the Tranche D Lenders) or the
Tranche D Lenders (but not the Revolving Lenders), may be effected by an
agreement or agreements in writing entered into by Holdings, the Parent
Borrower, each Foreign Subsidiary Parent Borrower (but only to the extent such
waiver, amendment or modification relates to such Foreign Subsidiary Borrower)
and requisite percentage in interest of the affected Class of Lenders that would
be required to consent thereto under this Section if such Class of Lenders were
the only Class of Lenders hereunder at the time. Notwithstanding the foregoing,
any provision of this Agreement may be amended by an agreement in writing
entered into by Holdings, the Parent Borrower, each Foreign Subsidiary Borrower
(but only to the extent such waiver, amendment or modification relates to such
Foreign Subsidiary Borrower), the Required Lenders and the Administrative Agent
(and, if their rights or obligations are affected thereby, the Issuing Bank and
the Swingline Lender) if (i) by the terms of such agreement the Commitment of
each Lender not consenting to the amendment provided for therein shall terminate
upon the effectiveness of such amendment and (ii) at the time such amendment
becomes effective, each Lender not consenting thereto receives payment in full
of the principal of and interest accrued on each Loan made by it and all other
amounts owing to it or accrued for its account under this Agreement.
 
SECTION 10.03. Expenses; Indemnity; Damage Waiver. (a)  Holdings, the Parent
Borrower and each Foreign Subsidiary Borrower, jointly and severally, shall pay
(i) all reasonable out-of-pocket expenses incurred by the Administrative Agent
and its Affiliates, including the reasonable fees, charges and disbursements of
one counsel in each applicable jurisdiction for the Administrative Agent, in
connection with the syndication of the credit facilities provided for herein,
due diligence investigation, the preparation and administration of the Loan
Documents or any amendments, modifications or waivers of the provisions thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or
any Lender, including the fees, charges and disbursements of any counsel for the
Administrative Agent, the Issuing Bank or any Lender, in connection with the
enforcement or protection of its rights in connection with the Loan Documents,
including its rights under this Section, or in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.
 
(b) Holdings, the Parent Borrower and each Foreign Subsidiary Borrower, jointly
and severally, shall indemnify the Administrative Agent, the Issuing
 

 

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Bank and each Lender, and each Related Party of any of the foregoing Persons
(each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of any
Loan Document or any other agreement or instrument contemplated hereby, the
performance by the parties to the Loan Documents of their respective obligations
thereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials
on or from any Mortgaged Property or any other property currently or formerly
owned or operated by the Parent Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Parent Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.
 
(c) To the extent that Holdings, the Parent Borrower and the Foreign Subsidiary
Borrowers fail to pay any amount required to be paid by it to the Administrative
Agent, the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of
this Section, each Lender severally agrees to pay to the Administrative Agent,
the Issuing Bank or the Swingline Lender, as the case may be, such Lender's pro
rata share (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity
as such. For purposes hereof, a Lender's "pro rata share" shall be determined
based upon its share of the sum of the total Revolving Exposures, outstanding
Term Loans and unused Commitments at the time.
 
(d) To the extent permitted by applicable law, none of Holdings, the Parent
Borrower or any Foreign Subsidiary Borrower shall assert, and each hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.
 
(e) All amounts due under this Section shall be payable promptly after written
demand therefor.
 

 

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(f) Neither Heartland nor any director, officer, employee, stockholder or
member, as such, of any Loan Party or Heartland shall have any liability for the
Obligations or for any claim based on, in respect of or by reason of the
Obligations or their creation; provided that the foregoing shall not be
construed to relieve any Loan Party of its Obligations under any Loan Document.
 
SECTION 10.04. Successors and Assigns. (a)  The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that none of
Holdings, the Parent Borrower or any Foreign Subsidiary Borrower may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the
Parent Borrower or any Foreign Subsidiary Borrower without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
 
(b) Any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it); provided that (i) except in
the case of an assignment to a Lender or a Lender Affiliate, each of the Parent
Borrower, each Foreign Subsidiary Borrower (but only to the extent such
assignment relates to Foreign Currency Commitments or Foreign Currency Loans
relating to such Foreign Subsidiary Borrower) and the Administrative Agent (and,
in the case of an assignment of all or a portion of a Revolving Commitment or
any Lender's obligations in respect of its LC Exposure or Swingline Exposure,
the Issuing Bank and the Swingline Lender) must give their prior written consent
to such assignment (which consent shall not be unreasonably withheld or
delayed), (ii) except in the case of an assignment to a Lender or a Lender
Affiliate or an assignment of the entire remaining amount of the assigning
Lender's Commitment or Loans, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than (x) in the case of Revolving
Commitments and Revolving Loans, $5,000,000, and (y) in the case of Tranche D
Commitments and Tranche D Loans, $1,000,000 unless each of the Parent Borrower,
each Foreign Subsidiary Borrower (but only to the extent such assignment relates
to Foreign Currency Commitments or Foreign Currency Loans relating to such
Foreign Subsidiary Borrower) and the Administrative Agent otherwise consent,
(iii) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender's rights and obligations under this Agreement,
except that this clause (iii) shall not be construed to prohibit the assignment
of a proportionate part of all the assigning Lender's rights and obligations in
respect of one Class of Commitments or Loans, (iv) notwithstanding anything to
the contrary, assignments by any Revolving Lender of any portion of its
Revolving Commitments or
 

 

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any portion of Revolving Loans must include a ratable portion of its Foreign
Currency Commitments and ratable portion of its Foreign Currency Loans and visa
versa, (v) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500, and (vi) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; and provided further that any consent of the Parent Borrower or
any Foreign Subsidiary Borrower otherwise required under this paragraph shall
not be required if an Event of Default under Article VII has occurred and is
continuing. Subject to acceptance and recording thereof pursuant to
paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement (provided that
any liability of the Parent Borrower or any Foreign Subsidiary Borrower to such
assignee under Section 2.15, 2.16 or 2.17 shall be limited to the amount, if
any, that would have been payable thereunder by the Parent Borrower or any
Foreign Subsidiary Borrower in the absence of such assignment), and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.15, 2.16, 2.17 and 10.03). Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
 
(c) The Administrative Agent, acting for this purpose as an agent of the Parent
Borrower and the Foreign Subsidiary Borrowers, shall maintain at one of its
offices in The City of New York a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and principal amount of the Loans and LC
Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the "Register"). The entries in the Register shall be conclusive, and
Holdings, the Parent Borrower, the Foreign Subsidiary Borrowers, the
Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Parent Borrower,
the Foreign Subsidiary Borrowers, the Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
 
(d) Upon its receipt of a duly completed Assignment and Acceptance executed by
an assigning Lender and an assignee, the assignee's completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Acceptance
and record the information contained therein in the Register. No assignment
shall be effective for
 

 

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purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
 
(e) Any Lender may, without the consent of the Parent Borrower or any Foreign
Subsidiary Borrower, the Administrative Agent, the Issuing Bank or the Swingline
Lender, sell participations to one or more banks or other entities (a
"Participant") in all or a portion of such Lender's rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans owing
to it); provided that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) Holdings, the
Parent Borrower, the Foreign Subsidiary Borrowers, the Administrative Agent, the
Issuing Bank and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce the Loan Documents and to approve any amendment, modification or
waiver of any provision of the Loan Documents; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 10.02(b) that affects such Participant. Subject to
paragraph (f) of this Section, the Parent Borrower and the Foreign Subsidiary
Borrowers agree that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.18(c) as though it were a Lender.
 
(f) A Participant shall not be entitled to receive any greater payment under
Section 2.15 or 2.17 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the prior written
consent of the Parent Borrower and, to the extent applicable, each relevant
Foreign Subsidiary Borrower. A Participant that would be a Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 2.17 unless the
Parent Borrower and, to the extent applicable, each relevant Foreign Subsidiary
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Parent Borrower and, to the extent
applicable, each relevant Foreign Subsidiary Borrower, to comply with Section
2.17(e) as though it were a Lender.
 
(g) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
 
 

 

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SECTION 10.05. Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.15, 2.16, 2.17 and 10.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
 
SECTION 10.06. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
 
SECTION 10.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
 
SECTION 10.08. Right of Setoff. If an Event of Default shall have occurred and
be continuing, each Lender and each of its Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of the Parent
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any of and all the obligations of the Parent Borrower or any Foreign Subsidiary
Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
 
SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a)  This Agreement shall be construed in accordance with and governed by the
law of the State of New York.
 
(b) Each of Holdings, the Parent Borrower and each Foreign Subsidiary Borrower
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of the
Southern District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to any Loan Document, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Administrative Agent, the Issuing Bank
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement or any other Loan Document against Holdings, the Parent Borrower,
any of the Foreign Subsidiary Borrowers or their properties in the courts of any
jurisdiction.
 
(c) Each of Holdings, the Parent Borrower and each Foreign Subsidiary Borrower
hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have
to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any other Loan Document in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
 
(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 10.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
 
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
 

 

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TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.
 
SECTION 10.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
 
SECTION 10.12. Confidentiality. Each of the Administrative Agent, the Issuing
Bank and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Lender Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information confidential
pursuant to the terms hereof), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Parent Borrower, any Foreign Subsidiary Borrower and
their respective obligations or (iii) any direct or indirect contractual
counterparty (or its advisors) to any swap transaction relating to a Lender's
obligations hereunder, (g) with the consent of the Parent Borrower or (h) to the
extent such Information (i) is publicly available at the time of disclosure or
becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent, the Issuing Bank or any
Lender on a nonconfidential basis from a source other than Holdings, the Parent
Borrower or any Subsidiary (including the Receivables Subsidiary and the Saturn
Subsidiary). For the purposes of this Section, "Information" means all
information received from Holdings, the Parent Borrower or any Subsidiary
(including the Receivables Subsidiary and the Saturn Subsidiary) relating to
Holdings, the Parent Borrower or any Subsidiary (including the Receivables
Subsidiary and the Saturn Subsidiary) or its business, other than any such
information that is available to the Administrative Agent, the Issuing Bank or
any Lender on a nonconfidential basis prior to disclosure by Holdings, the
Parent Borrower or any Subsidiary (including the Receivables Subsidiary and the
Saturn Subsidiary); provided that, in the case of information received from
Holdings, the Parent Borrower or any
 

 

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Subsidiary (including the Receivables Subsidiary and the Saturn Subsidiary)
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
 
SECTION 10.13. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the "Charges"), shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
 
SECTION 10.14. Judgment Currency. (a)  The obligations hereunder of the Parent
Borrower and the Foreign Subsidiary Borrowers and under the other Loan Documents
to make payments in Dollars or in the Foreign Currencies, as the case may be,
(the "Obligation Currency") shall not be discharged or satisfied by any tender
or recovery pursuant to any judgment expressed in or converted into any currency
other than the Obligation Currency, except to the extent that such tender or
recovery results in the effective receipt by the Administrative Agent, the
Collateral Agent or a Lender of the full amount of the Obligation Currency
expressed to be payable to the Administrative Agent, Collateral Agent or Lender
under this Agreement or the other Loan Documents. If, for the purpose of
obtaining or enforcing judgment against the Parent Borrower, any Foreign
Subsidiary Borrower or any other Loan Party in any court or in any jurisdiction,
it becomes necessary to convert into or from any currency other than the
Obligation Currency (such other currency being hereinafter referred to as the
"Judgment Currency") an amount due in the Obligation Currency, the conversion
shall be made, at the Dollar Equivalent of such amount, in each case, as of the
date immediately preceding the day on which the judgment is given (such Business
Day being hereinafter referred to as the "Judgment Currency Conversion Date").
 
(b) If there is a change in the rate of exchange prevailing between the Judgment
Currency Conversion Date and the date of actual payment of the amount due, the
Parent Borrower and each Foreign Subsidiary Borrower, as the case may be,
covenants and agrees to pay, or cause to be paid, such additional amounts, if
any (but in any event not a lesser amount), as may be necessary to ensure that
the amount paid in the Judgment Currency, when converted at the rate of exchange
prevailing on the date of payment, will produce the amount of the Obligation
Currency which could have been
 

 

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purchased with the amount of Judgment Currency stipulated in the judgment or
judicial award at the rate of exchange prevailing on the Judgment Currency
Conversion Date.
 
(c) For purposes of determining the Dollar Equivalent, such amounts shall
include any premium and costs payable in connection with the purchase of the
Obligation Currency.
 
SECTION 10.15. Effectiveness of the Amendment and Restatement; Original Credit
Agreement. This Agreement shall become effective on the Restatement Effective
Date, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and the parties to the Original Credit Agreement and their
respective successors and assigns. Until this Agreement becomes effective, the
Original Credit Agreement shall remain in full force and effect and shall not be
affected hereby. After the Restatement Effective Date, all obligations of
Holdings, the Parent Borrower and the Foreign Subsidiary Borrowers under the
Original Credit Agreement shall become obligations of Holdings, the Parent
Borrower and the Foreign Subsidiary Borrowers hereunder, secured by the Liens
granted under the Security Documents, and the provisions of the Original Credit
Agreement shall be superseded by the provisions hereof. Except as otherwise
expressly stated hereunder, the term of this Agreement is for all purposes
deemed to have commenced on the Restatement Effective Date.