Exhibit 10.1
[EXECUTION COPY]
CREDIT AND SECURITY
AGREEMENT
NATIONAL CITY BUSINESS CREDIT, INC.
(AS LENDER AND AGENT)
and
NATIONAL CITY BANK
(AS ISSUER)
and
SUCH OTHER LENDERS WHICH ARE NOW OR HEREAFTER A PARTY HERETO
and
STONERIDGE, INC.,
(AS BORROWER),
SUCH OTHER BORROWERS WHICH ARE NOW OR HEREAFTER A PARTY HERETO
and
SUCH GUARANTORS WHICH ARE NOW OR HEREAFTER A PARTY HERETO
and
NATIONAL CITY BANK
(AS LEAD ARRANGER AND BOOK RUNNER)
Dated as of November 2, 2007

 

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TABLE OF CONTENTS

         
 
       
I. DEFINITIONS AND CONSTRUCTION
    1  
1.1 Accounting Terms
    1  
1.2 Uniform Commercial Code Terms
    1  
1.3 General Terms
    2  
1.4 Certain Matters of Construction
    35  
1.5 Currency Equivalents
    36  
1.6 Addition of Borrowers
    37  
1.7 Joinder Amendments
    37  
1.8 Liability of Borrowers
    37  
1.9 Agreement Regarding Permitted Secured Indebtedness and Liens
    37  
1.10 Time References
    39  
 
       
II. ADVANCES; PAYMENTS
    39  
2.1 Revolving Advances to Borrowers
    39  
2.2 Requests For Revolving Advances
    40  
2.3 Interest Elections; Conversions of Advances
    42  
2.4 Disbursement of Proceeds of Advances
    43  
2.5 Repayment of Advances
    43  
2.6 Increase in Revolving Commitments
    44  
2.7 Voluntary and Mandatory Prepayments; Reduction of Commitments
    45  
2.8 Statement of Account
    47  
2.9 Letters of Credit
    48  
2.10 Funding of Advances by Lenders; Sharing of Payments; Settlement
    50  
2.11 Defaulting Lender
    51  
2.12 Funding by Lending Installations
    52  
2.13 Use of Proceeds
    53  
 
       
III. INTEREST; FEES; YIELD PROTECTION
    53  
3.1 Interest
    53  
3.2 Applicable Margins
    53  
3.3 Default Rate
    54  
3.4 Letter of Credit Fees
    54  
3.5 Unused Facility Fees
    54  
3.6 Computation of Interest and Fees
    55  
3.7 Maximum Charges
    55  
3.8 Increased Costs
    55  
3.9 Non-Ascertainable Libor Rate; Unavailable Deposits
    56  
3.10 Libor Rate Loan Losses
    56  
3.11 Capital Adequacy
    57  
3.12 Illegality
    57  
3.13 Taxes; Withholding; Tax Indemnification
    58  
 
       
IV. COLLATERAL: GENERAL TERMS
    60  
4.1 Security Interest in the Collateral
    60  
4.2 Perfection of Security Interest
    61  
4.3 Disposition of Collateral
    61  
4.4 Preservation of Collateral
    61  
4.5 Ownership of Collateral
    62  
4.6 Defense of Agent’s and Lenders’ Interests
    62  
4.7 Books and Records
    62  

 

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4.8 Financial Disclosure
    63  
4.9 Compliance with Laws
    63  
4.10 Inspection of Premises
    63  
4.11 Insurance
    64  
4.12 Failure to Pay Insurance
    65  
4.13 Payment of Leasehold Obligations
    65  
4.14 Receivables; Investments, Cash Management
    65  
4.15 Maintenance of Equipment
    69  
4.16 Exculpation of Liability
    69  
4.17 Environmental Matters
    70  
4.18 Financing Statements
    71  
4.19 Material Recovery Event
    71  
4.20 Partial Release of Liens
    72  
 
       
V. REPRESENTATIONS AND WARRANTIES
    72  
5.1 Authority
    72  
5.2 Formation and Qualification/Subsidiaries
    72  
5.3 Officers, Directors, Shareholders, Capitalization
    73  
5.4 Survival of Representations and Warranties
    73  
5.5 FEINs/Tax Returns
    73  
5.6 Financial Statements
    73  
5.7 Corporate Names
    74  
5.8 O.S.H.A. and Environmental Compliance
    74  
5.9 Solvency; No Litigation, Violation of Laws
    75  
5.10 ERISA Compliance
    75  
5.11 Patents, Trademarks, Copyrights and Licenses
    76  
5.12 Licenses and Permits
    76  
5.13 No Burdensome Restrictions
    77  
5.14 No Default Under Indenture
    77  
5.15 No Labor Disputes
    77  
5.16 Margin Regulations
    77  
5.17 Investment Company Act
    77  
5.18 Disclosure
    77  
5.19 Hedging Contracts
    78  
5.20 Conflicting Agreements
    78  
5.21 Application of Certain Laws and Regulations; Bulk Sales
    78  
5.22 Business and Property
    78  
5.23 Locations
    78  
5.24 [Reserved.]
    79  
5.25 Disclosure of Material Business Agreements
    79  
5.26 Anti-Terrorism Laws
    79  
 
       
VI. AFFIRMATIVE COVENANTS
    80  
6.1 Taxes
    80  
6.2 Conduct of Business and Maintenance of Existence and Assets
    80  
6.3 Violations
    80  
6.4 Fixed Charge Coverage Ratio
    80  
6.5 Execution of Supplemental Instruments
    81  
6.6 Standards of Financial Statements
    81  
 
       
VII. NEGATIVE COVENANTS
    81  
7.1 Merger, Consolidation, Acquisition and Sale of Assets
    81  
7.2 Creation of Liens
    85  
7.3 Guarantees
    85  

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7.4 Investments
    86  
7.5 Extensions of Credit
    86  
7.6 Capital Expenditures
    86  
7.7 Dividends and Distributions; Grants
    87  
7.8 Indebtedness
    87  
7.9 Nature of Business
    88  
7.10 Transactions with Affiliates
    88  
7.11 Leases
    88  
7.12 Subsidiaries
    88  
7.13 Fiscal Year and Accounting Changes
    88  
7.14 Pledge of Credit
    88  
7.15 Amendment of Organizational Documents
    89  
7.16 Compliance with ERISA
    89  
7.17 Repayment or Prepayment of Indebtedness
    89  
7.18 Bailee Documents of Title
    89  
7.19 Modification of Material Business Agreements
    90  
7.20 Modification of Indenture
    90  
7.21 Anti-Terrorism Laws
    90  
 
       
VIII. CONDITIONS PRECEDENT
    90  
8.1 Conditions to Initial Advances
    90  
8.2 Conditions to Each Advance
    95  
8.3 Conditions to Initial Advances Based on Eligibility of Inventory and
Receivables of UK Borrowers
    95  
 
       
IX. NOTICE AND DISCLOSURE REQUIREMENTS
    96  
9.1 Disclosure of Material Matters
    96  
9.2 Schedules; Collateral Reporting Information; Borrowing Base Certificate
    96  
9.3 Environmental Reports
    97  
9.4 Litigation
    97  
9.5 Material Occurrences
    97  
9.6 Government Receivables
    98  
9.7 Annual Financial Statements
    98  
9.8 Quarterly Financial Statements
    98  
9.9 Securities Filings
    98  
9.10 Additional Information
    99  
9.11 Projected Operating Budget
    99  
9.12 Notice of Suits, Adverse Events
    99  
9.13 ERISA Notices and Requests
    99  
9.14 Notices Regarding Public Note Documents
    100  
9.15 Additional Documents
    100  
 
       
X. EVENTS OF DEFAULT
    101  
10.1 Payment of Obligations
    101  
10.2 Misrepresentations
    101  
10.3 Failure to Furnish Information
    101  
10.4 Liens Against Assets
    101  
10.5 Breach of Covenants
    101  
10.6 Judgment
    102  
10.7 Insolvency and Related Proceedings
    102  
10.8 Cessation of Operations
    102  
10.9 Material Adverse Effect
    102  
10.10 Loss of Priority Lien
    102  

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10.11 Breach of Material Agreements
    102  
10.12 Cross Default; Cross Acceleration
    103  
10.13 Default Under Indenture
    103  
10.14 Termination of Guaranty
    103  
10.15 Change of Control
    103  
10.16 Invalidity of Credit Agreement
    103  
10.17 Loss of Material Intellectual Property
    103  
10.18 Forfeiture of Assets
    104  
10.19 Business Interruption
    104  
10.20 ERISA Events
    104  
 
       
XI. LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT
    104  
11.1 Rights and Remedies
    104  
11.2 [Reserved]
    105  
11.3 Setoff
    105  
11.4 Letter of Credit Collateral Account
    105  
11.5 Appointment of Receiver
    105  
11.6 Rights and Remedies not Exclusive; Non-Waiver
    106  
11.7 Allocation of Payments After Event of Default
    106  
 
       
XII. EFFECTIVE DATE; TERMINATION
    107  
12.1 Effective Date
    107  
12.2 Termination
    107  
 
       
XIII. AGENCY PROVISIONS
    108  
13.1 Appointment
    108  
13.2 Nature of Duties
    108  
13.3 Lack of Reliance on Agent and Resignation
    109  
13.4 Certain Rights of Agent
    109  
13.5 Reliance
    109  
13.6 Notice of Default
    110  
13.7 Posting to an Approved Electronic Platform
    110  
13.8 Indemnification of Agent and Issuer
    111  
13.9 Agent in its Individual Capacity
    111  
13.10 Delivery of Documents
    111  
13.11 No Reliance on Agent’s Customer Identification Program
    111  
13.12 Agent May File Proofs of Claim
    111  
13.13 Collateral and Guaranty Matters
    112  
13.14 No Independent Action
    113  
 
       
XIV. BORROWING AGENCY; BORROWERS AND OTHER LOAN PARTIES JOINTLY AND SEVERALLY
LIABLE
    113  
14.1 Borrowing Agency Provisions
    113  
14.2 Cross-Obligations of Loan Parties
    113  
14.3 Rights of Subrogation
    115  
 
       
XV. MISCELLANEOUS
    116  
15.1 Governing Law
    116  
15.2 Entire Understanding
    116  
15.3 Amendments
    116  
15.4 Special and Protective Agent Advances
    117  
15.5 Transfers and Assignments; Replacement of Certain Lenders
    118  
15.6 Application of Payments
    121  
15.7 Indemnity
    121  

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15.8 Notice
    121  
15.9 Notice by Approved Electronic Communications
    123  
15.10 Survival
    123  
15.11 Severability
    124  
15.12 Expenses
    124  
15.13 Injunctive Relief
    124  
15.14 Consequential Damages
    124  
15.15 Captions
    124  
15.16 Counterparts; Telecopied Signatures
    124  
15.17 Construction
    125  
15.18 Confidentiality
    125  
15.19 No Sharing of Information Without Consent
    125  
15.20 USA Patriot Act
    125  
15.21 Publicity
    126  
15.22 Judgment Currency
    126  
15.23 Waiver of Jury Trial and Submission to Non-Exclusive Jurisdiction
    126  

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LIST OF SCHEDULES AND EXHIBITS

          All Schedules to the Credit and Security Agreement:
 
       
 
  Schedule 2.9   Existing Letters of Credit
 
  Schedule 4.1   Commercial Tort Claims
 
  Schedule 4.14(c)   Chief Executive Offices
 
  Schedule 4.14(g)   Lockboxes; Bank Accounts
 
  Schedule 4.14(j)   Securities Accounts
 
  Schedule 5.2   Incorporation/Organization/Qualification
 
  Schedule 5.3   Officers, Directors, Shareholders, Capitalization
 
  Schedule 5.5   FEINS/Tax Returns
 
  Schedule 5.7   Corporate Names
 
  Schedule 5.8   O.S.H.A. and Environmental Compliance
 
  Schedule 5.9(b)   Litigation
 
  Schedule 5.10   ERISA Plans
 
  Schedule 5.11   Patents, Trademarks, Copyrights and Licenses
 
  Schedule 5.15   Labor Contracts
 
  Schedule 5.22   Business Activities
 
  Schedule 5.23   Locations
 
  Schedule 5.25   Material Business Agreements
 
  Schedule 7.1   Sale of Assets
 
  Schedule 7.2   Permitted Encumbrances
 
  Schedule 7.3   Permitted Guarantees
 
  Schedule 7.4   Permitted Investments
 
  Schedule 7.5   Extensions of Credit
 
  Schedule 7.8   Permitted Indebtedness
 
        All Exhibits to the Credit and Security Agreement:
 
       
 
  Exhibit A   Closing Agenda
 
  Exhibit B   Form of Revolving Note
 
  Exhibit C   Form of Revolving Advance Request for Libor Rate Loans
 
  Exhibit D   Form of Borrowing Base Certificate
 
  Exhibit E   Form of Compliance Certificate
 
  Exhibit F   Form of Financial Condition Certificate
 
  Exhibit G-1   Form of Landlord Waiver
 
  Exhibit G-2   Form of Processor/Bailee Waiver
 
  Exhibit G-3   Form of Mortgagee Waiver
 
  Exhibit G-4   Form of Consignee Waiver
 
  Exhibit H   Projections
 
  Exhibit I   Form of Assignment and Assumption
 
  Exhibit J   Form of Borrower Joinder Agreement
 
  Exhibit K   Form of Guarantor Joinder Agreement

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CREDIT AND SECURITY AGREEMENT
          This CREDIT AND SECURITY AGREEMENT (this “Agreement”), is dated as of
November      , 2007, by and among STONERIDGE, INC., an Ohio corporation (the
“Parent”), STONERIDGE ELECTRONICS, INC., a Texas corporation (“Electronics”),
STONERIDGE CONTROL DEVICES, INC., a Massachusetts corporation (“Controls”),
STONERIDGE-POLLAK LIMITED, an English corporation (the “English Borrower”),
STONERIDGE ELECTRONICS LIMITED., a Scottish corporation (the “Scottish Borrower”
and together with the English Borrower, the “UK Borrowers”) and such other
Persons as are from time to time parties hereto as Borrowers, STONERIDGE FAR
EAST LLC, a Delaware limited liability company (“Far East”), and such other
Persons as are from time to time parties hereto, as Guarantors, the financial
institutions which are now or which hereafter become a party to this Agreement
(the “Lenders”), NATIONAL CITY BANK, a national banking association (“National
City Bank”), as Lead Arranger and the Issuer (as hereinafter defined), and
NATIONAL CITY BUSINESS CREDIT, INC., an Ohio corporation (“NCBC”), as
administrative agent and collateral agent (the “Agent”).
          IN CONSIDERATION of the mutual covenants and undertakings herein
contained, the receipt and sufficiency of which are hereby acknowledged, the
Loan Parties (as hereinafter defined), the Lenders, the Issuer and the Agent
hereby agree as follows:
I. DEFINITIONS AND CONSTRUCTION.
     1.1 Accounting Terms.
          As used in this Agreement and the Other Loan Documents, accounting
terms not defined in Section 1.3 or elsewhere in this Agreement and accounting
terms partly defined in Section 1.3 to the extent not defined shall have the
respective meanings given to them under GAAP; provided, however, to the extent
accounting terms not defined or only partly defined herein are used for the
purposes of determining compliance with financial covenants in this Agreement,
such accounting terms shall be defined or partly defined in accordance with
GAAP. All financial computations to be made under this Agreement shall, unless
otherwise specifically provided herein, be made in accordance with GAAP applied
on a basis consistent in all material respects with the financial statements
delivered to the Agent and the Lenders on or prior to the Closing Date.
     1.2 Uniform Commercial Code Terms.
          To the extent used in this Agreement and the Other Loan Documents,
terms defined in the Uniform Commercial Code shall have the meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined) ascribed to such terms in the Uniform Commercial Code. Such terms
shall include: “Account”, “Account Debtor”, “Certificated Security”, “Chattel
Paper”, “Commercial Tort Claim”, “Commodities Account”, “Deposit Account”,
“Document”, “Equipment”, “Farm Products”, “Financial Asset”, “Fixture”, “General
Intangible”, “Instrument”, “Inventory”, “Investment Property”, “Lease”,
“Lessor”, “Letter-of-Credit Rights”, “money”, “Payment Intangibles”, “Proceeds”,
“Product”, “Record”, “Secured Party”, “Securities Account”, “Securities
Intermediary”, “Security”, “Security Entitlement”, “Security Interest” and
“Supporting Obligation”. To the extent the definition of any category or type of
Collateral is expanded by any amendment, modification or revision to the Uniform
Commercial Code, such expanded definition will apply automatically as of the
date of such amendment, modification or revision.

 

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     1.3 General Terms.
          As used in this Agreement or any Other Loan Document, the following
terms shall have the meanings (such meanings to be equally applicable to both
the singular and plural forms of the terms defined) set forth below:
          “Acquired Entity” shall mean any Person acquired pursuant to a
Permitted Acquisition or proposed to be acquired pursuant to a Proposed
Acquisition, as applicable.
          “Activation Notice” shall mean a notice in writing from the Agent to
the Borrowing Agent that either (i) an Event of Default has occurred and is
continuing or (ii) the Undrawn Availability is less than Twenty-Five Million
Dollars ($25,000,000).
          “Administrative Questionnaire” shall mean an Administrative
Questionnaire in a form supplied by the Agent to the Lenders and each assignee
thereof.
          “Advances” shall mean the Revolving Advances.
          “Advance Rates” shall have the meaning set forth in Section 2.1(a).
          “Affiliate” shall mean, with respect to a specified Person, any other
Person: (a) which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with such specified
Person, (b) which beneficially owns or holds with power to vote ten percent
(10%) or more of any class of the voting stock of such specified Person, (c) ten
percent (10%) or more of the voting stock of which other Person is beneficially
owned or held by such specified Person, or (d) who is an executive officer or
director of such specified Person. The term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
          “Agent” shall have the meaning set forth in the preamble.
          “Agent’s Fee Letter” shall mean the Agent’s fee letter dated as of
July 13, 2007, between Parent and the Agent.
          “Aggregate Formula Amount” shall have the meaning set forth in
Section 2.1(a).
          “Agreement” shall have the meaning set forth in the preamble.
          “Alternate Base Rate” shall mean, for any period, a fluctuating
interest rate per annum equal from time to time to the higher of: (a) the rate
of interest which is established from time to time by National City Bank at its
principal office in Cleveland, Ohio as its “prime rate” or “base rate” in
effect, such rate to be adjusted automatically, without notice, as of the
opening of business on the effective date of any change in such rate (it being
acknowledged that: (i) such rate is not necessarily the lowest rate of interest
then available from National City Bank on fluctuating rate loans and (ii) such
rate may be established by National City Bank by public announcement or
otherwise) and (b) the Federal Funds Effective Rate in effect on such day plus
0.50%.
          “Alternate Base Rate Loan” shall mean any Advance, in Dollars, during
any period in which such Advance bears interest based upon the Alternate Base
Rate.

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          “Alternative Currency” shall mean and include any lawful currency
other than Dollars which (i) is readily and freely transferable and convertible
into Dollars and (ii) is acceptable to the Lenders and the Issuer.
          “Alternative Currency Sublimit” shall mean Fifty Million Dollars
($50,000,000) (determined at the equivalent amount in Dollars for each Borrowing
denominated in Alternative Currency).
          “Anti-Terrorism Laws” shall mean any laws relating to terrorism or
money laundering, including Executive Order No. 13224, the USA Patriot Act, the
laws comprising or implementing the Bank Secrecy Act, and the laws administered
by the United States Treasury Department’s Office of Foreign Asset Control.
          “Applicable Base Rate Margin” shall be determined pursuant to
Section 3.2.
          “Applicable Letter of Credit Fee Percentage” shall be determined
pursuant to Section 3.2.
          “Applicable Libor Rate Margin” shall be determined pursuant to
Section 3.2.
          “Applicable Period” shall have the meaning set forth in Section 3.2.
          “Applicable Unused Facility Fee Percentage” shall be determined
pursuant to Section 3.2.
          “Approved Electronic Communication” shall mean each notice, demand,
communication, information, document and other material transmitted, posted or
otherwise made or communicated by e-mail, E-Fax, the StuckyNet System, any
Approved Electronic Platform or any other equivalent electronic service, whether
owned, operated or hosted the Agent, any Lender, any of their Affiliates or any
other Person, that any party is obligated to, or otherwise chooses to, provide
to the Agent pursuant to this Agreement or any Other Loan Document, including
any financial statement, financial and other report, notice, request,
certificate and other information material; provided that Approved Electronic
Communications shall not include any notice, demand, communication, information,
document or other material that the Agent specifically instructs a Person to
deliver in physical form.
          “Approved Electronic Platform” shall have the meaning specified in
Section 13.7.
          “Approved Fund” shall mean any Fund that is administered or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers or manages a Lender.
          “Approved Securities Intermediary” shall mean a Securities
Intermediary approved by the Agent in its Permitted Discretion and with respect
to which the Borrowing Agent has delivered to the Agent an executed Securities
Account Control Agreement.
          “Assignment and Assumption” shall mean an assignment and assumption
entered into by a Lender and an Eligible Assignee (with the consent of any party
whose consent is required by Section 15.3), and accepted by the Agent, in
substantially the form of Exhibit I or any other form approved by the Agent.
          “Assignment of Claims Act” shall mean the Assignment of Claims Act of
1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C.
Sub-Section 15 et seq.).

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          “Augmenting Revolving Lender” shall have the meaning specified in
Section 2.6(a)
          “Bank Services” shall mean each and any bank service provided to any
Loan Party by the Agent, any Lender or any direct or indirect Subsidiary or
Affiliate of the Agent or any Lender, including the following: (a) commercial
credit cards, (b) stored value cards, and (c) cash management or treasury
administration services (including controlled disbursement, automatic
clearinghouse transactions, electronic funds transfers, returned items,
overdrafts and interstate depositary network services).
          “Blocked Account Agreement” shall have the meaning set forth in
Section 4.14(g).
          “Blocked Person” shall have the meaning assigned to such term in
Section 5.26(b).
          “Borrower” and “Borrowers” shall mean the Persons executing this
Agreement as a Borrower and each other Person added to this Agreement as a
Borrower through a Borrower Joinder Agreement.
          “Borrower Joinder Agreement” shall mean a Borrower joinder agreement,
substantially in the form of Exhibit J.
          “Borrowing” shall mean a Revolving Borrowing.
          “Borrowing Agent” shall mean the Parent.
          “Borrowing Base Certificate” shall mean a certificate duly executed by
an officer (or other Person duly designated by the Board of Directors of the
Borrowing Agent) of the Borrowing Agent appropriately and separately completed
by the Domestic Borrowers and the UK Borrowers, as applicable, and in
substantially the form of Exhibit D hereto.
          “Business Day” shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which is,
in the city in which the Payment Office is located, a legal holiday or a day on
which banking institutions are authorized by law or other governmental actions
to close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Libor Rate Loans, any day which
is a Business Day described in clause (i) and which is also a day for trading by
and between banks in Dollar deposits or Alternative Currency in the interbank
Eurocurrency market.
          “Capital Expenditures” shall mean any expenditure made or liability
incurred which is, determined in accordance with GAAP, treated as a capital
expenditure and not as an expense item for the year in which it was made or
incurred, as the case may be, excluding (to the extent otherwise included)
expenditures made with respect to repair or replacement of property necessitated
by a Material Recovery Event for which the Borrowing Agent has notified the
Agent of the applicable Loan Party’s intent to invest the proceeds of such
Material Recovery Event and is otherwise in compliance with Section 4.19.
          “Capitalized Leases” means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.

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          “Cash Concentration Account” shall mean any of those certain
commercial deposit accounts maintained at National City Bank, in the name of the
Agent, (a) which shall be maintained by the Agent with National City Bank
pursuant to a Cash Concentration Account Agreement, without liability by the
Agent or National City Bank to pay interest thereon, (b) the funds within which
shall be the sole and exclusive property of the Agent for the pro rata benefit
of the Secured Creditors and (c) from which accounts the Agent shall have the
irrevocable and exclusive right to withdraw funds.
          “Cash Concentration Account Agreement” shall have the meaning set
forth in Section 4.14(h).
          “Cash Equivalents” shall mean (a) obligations issued or guaranteed by
the United States or any agency thereof, (b) commercial paper with maturities of
not more than one hundred and eighty (180) days and a published rating of not
less than A-1 by Standard & Poor’s or P-1 by Moody’s Investors Services, Inc.
(or the equivalent rating), (c) Dollar denominated time deposits with, or
insured certificates of deposit or bankers’ acceptances of, any commercial bank
that (i) (A) is a Lender or (B) is organized under the laws of the United States
of America, any state thereof or the District of Columbia or is the principal
banking subsidiary of a bank holding company organized under the laws of the
United States of America, any state thereof or the District of Columbia, and is
a member of the Federal Reserve System, (ii) issues (or the parent of which
issues) commercial paper rated as described in clause (b) above and (iii) has
combined capital and surplus of at least Five Hundred Thousand Dollars
($500,000), in each case with maturities of not more than one hundred and eighty
(180) days from the date of acquisition thereof, (d) repurchase agreements
maturing within one hundred and eighty (180) days from the date of issuance
thereof entered into with a commercial bank of the type described in clause
(c) above, (e) U.S. money market funds (i) rated AAA by Standard & Poor’s, Inc.
or with an equivalent rating from Moody’s Investors Service, Inc., or (ii) that
invest solely in obligations issued or guaranteed by the United States or an
agency thereof, or (f) short-term marketable securities.
          “CERCLA” shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601 et
seq.
          “Change of Control” shall mean and include any of the following:
          (a) during any period of two consecutive calendar years, individuals
who at the beginning of such period constituted the Parent’s Board of Directors
(together with any new directors whose (x) election by the Parent’s Board of
Directors or (y) nomination for election by the Parent’s shareholders was (prior
to the date of the proxy or consent solicitation relating to such nomination)
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of such period or whose election or
nomination for election was previously so approved), cease for any reason to
constitute a majority of the directors then in office;
          (b) any person or group (as such term is defined in section 13(d)(3)
of the 1934 Act), other than the Parent, any trustee or other fiduciary holding
securities under an employee benefit plan of the Parent or any members of the
Current Holder Group, acquires, directly or indirectly, beneficial ownership
(within the meaning of Rule 13d-3 and 13d-5 of the 1934 Act) of 50% or more, on
a fully diluted basis, of the economic or voting interest in the Parent’s
capital stock;
          (c) the shareholders of the Parent approve a merger or consolidation
of the Parent with any other Person, other than a merger or consolidation which
would result in the voting securities of the Parent outstanding immediately
prior thereto continuing to

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represent (either by remaining outstanding or by being converted or exchanged
for voting securities of the surviving or resulting entity) more than 75% of the
combined voting power of the voting securities of the Parent or such surviving
or resulting entity outstanding after such merger or consolidation;
          (d) the shareholders of the Parent approve a plan of complete
liquidation of the Parent or an agreement or agreements for the sale or
disposition by the Parent of all or substantially all of the Parent’s assets;
          (e) any “change in control” or any similar term as defined in (a) the
Public Note Documents or (b) any of the indentures, credit agreements or other
instruments governing any Indebtedness of the Parent or any of its Subsidiaries
with an outstanding principal amount, or providing for commitments to lend in an
outstanding principal amount, of at least Ten Million Dollars ($10,000,000) (or
the equivalent amount in any other currency); or
          (f) any merger or consolidation of or with the Parent in which the
Parent is not the surviving party or sale of all or substantially all of the
property or assets of any of the Parent or any first-tier Subsidiary of the
Parent.
As used in this definition, the term “Current Holder Group” shall mean
(i) members of the Draime family, (ii) those other persons who are officers or
directors of the Parent at the Closing Date, (iii) the spouses, heirs, legatees,
descendants and blood relatives to the third degree of consanguinity of any such
person, (iv) the executors and administrators of the estate of any such person,
and any court appointed guardian of any such person, and (v) any trust, family
partnership or similar investment entity for the benefit of any such person
referred to in the foregoing clauses (i), (ii) or (iii) or any other persons
(including for charitable purposes), so long as one or more members of the
Current Holder Group has the exclusive or a joint right to control the voting
and disposition of securities held by such trust, family partnership or other
investment entity.
          “Charges” shall mean all taxes, charges, fees, imposts, levies or
other assessments, including all net income, gross income, gross receipts,
sales, use, ad valorem, value added, transfer, franchise, profits, inventory,
capital stock, license, withholding, payroll, employment, social security,
unemployment, excise, severance, stamp, occupation and property taxes, custom
duties, fees, assessments, liens, claims and charges, together with any interest
and any penalties, additions to tax or additional amounts, imposed by any taxing
or other similar Governmental Body, domestic or foreign (including the Pension
Benefit Guaranty Corporation or any environmental agency or superfund), upon the
Collateral, any Loan Party or any of its Subsidiaries.
          “CIP Regulations” shall have the meaning set forth in Section 13.11.
          “Closing Agenda” shall mean the closing agenda attached hereto as
Exhibit A.
          “Closing Date” shall mean November 2, 2007.
          “Code” shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder.
          “Collateral” shall mean and include, with respect to a Person granting
a security interest in existing or hereafter acquired assets or property to the
Agent pursuant to this Agreement or any Other Loan Document to secure the
Obligations, such Person’s:

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     (a) Accounts;
     (b) Inventory;
     (c) all Goods other than Equipment and Fixtures;
     (d) General Intangibles, Payment Intangibles and Intellectual Property;
     (e) Investment Property and Security Entitlements other than equity
interests in any Subsidiaries or joint ventures;
     (f) Deposit Accounts, Securities Accounts, and all cash, checks, and other
property held therein or credited thereto, and any and all monies credited by or
due from any financial institution or any other depository to the extent
relating to any of the foregoing or following items;
     (g) rights as a consignor, a consignee, an unpaid vendor, mechanic,
artisan, or other lienor, including stoppage in transit, setoff, detinue,
replevin, reclamation and repurchase;
     (h) Instruments, Letter of Credit Rights, Supporting Obligations,
Documents, Documents of Title, policies and certificates of insurance (other
than with respect to insurance covering Specified Fixed Assets), choses in
action and Chattel Paper;
     (i) Commercial Tort Claims, to the extent described on Schedule 4.1 and all
future Commercial Tort Claims in which a security interest is granted to the
Agent pursuant to Section 4.1;
     (j) accessions to, substitutions for, and all replacements, Products and
Proceeds of the herein above-referenced property including proceeds of insurance
policies insuring such property, and proceeds of any insurance, indemnity,
warranty or guaranty other than with respect to insurance covering Specified
Fixed Assets;
     (k) books, records, and other property (including credit files, programs,
printouts, computer software (owned by such Person or in which it has an
interest), and disks, magnetic tape and other magnetic media, and other
materials and records) pertaining to any such above-referenced property; and
     (l) to the extent not otherwise included above, all other tangible and
intangible personal property of such Person other than Specified Fixed Asset
Collateral;
in each case, other than Excluded Property of such Person, provided, however,
that, if and when the prohibition which prevents the granting by such Person to
the Agent of a security interest in such Excluded Property is removed or
otherwise terminated, the Agent shall, to the extent permitted by applicable
law, be deemed to have, and at all times from and after the date hereof to have
had, a security interest in and pledge of such Excluded Property.
          “Collection Account” shall have the meaning set forth in
Section 4.14(g).
          “Commitment” shall mean, with respect to any Lender, such Lender’s
Revolving Commitment.
          “Compliance Certificate” shall mean the certificate executed by the
any officer of the Borrowing Agent authorized by the Board of Directors of the
Borrowing Agent to so

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execute on the basis of and in connection with the financial statements
delivered pursuant to Section 9.7 or 9.8 substantially in the form of Exhibit E
and otherwise satisfactory to the Agent.
          “Consents” shall mean all filings and all licenses, permits, consents,
approvals, authorizations, qualifications and orders of Governmental Bodies and
other third parties, domestic or foreign, necessary to carry on any Person’s
business, including any Consents required under all applicable federal, state or
other applicable law.
          “Consolidated EBITDA” shall mean, 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, (iii) all amounts attributable to depreciation and amortization for such
period and (iv) any non-cash charges (other than the write-down of current
assets) for such period (provided that to the extent that all or any portion of
the income of any person is excluded from Consolidated Net Income pursuant to
the definition thereof for all or any portion of such period any amounts set
forth in the preceding clauses (i) through (iv) that are attributable to such
person shall not be included for purposes of this definition for such period or
portion thereof), and minus (b) without duplication (i) all cash payments made
during such period on account of reserves, restructuring charges and other
non-recurring non-cash charges added to Consolidated Net Income pursuant to
clause (a)(iv) above in a previous period and (ii) to the extent included in
determining such Consolidated Net Income, any non-cash extraordinary gains and
all non-recurring non-cash items of income for such period, all determined on a
consolidated basis in accordance with GAAP; provided that for purposes of
calculating Consolidated EBITDA for any period (A) the Consolidated EBITDA of
any Acquired Entity acquired by Parent or any Subsidiary of Parent pursuant to a
Permitted Acquisition during such period shall be included on a pro forma basis
for such period (assuming the consummation of such acquisition and the
incurrence or assumption of any Indebtedness in connection therewith occurred as
of the first day of such period) and (B) the Consolidated EBITDA of any person
or line of business sold or otherwise disposed of by Parent or any Subsidiary of
any Loan Party during such period shall be excluded for such period (assuming
the consummation of such sale or other disposition and the repayment of any
Indebtedness in connection therewith occurred as of the first day of such
period).
          “Consolidated Equity” shall mean, with respect to any date, the net
equity of the Parent and its Subsidiaries as of such date determined on a
consolidated basis in accordance with GAAP.
          “Consolidated Fixed Charges” shall mean, with respect to any fiscal
period, the sum of: (a) Consolidated Interest Expense paid in cash of the Parent
and its Subsidiaries determined on a consolidated basis with respect to such
period and (b) scheduled principal payments on the Advances and other
Indebtedness of the Parent and its Subsidiaries determined on a consolidated
basis with respect to such period.
          “Consolidated Interest Expense” shall mean, for any period, the sum of
(a) the interest expense (including imputed interest expense in respect of
Capital Lease Obligations and Synthetic Lease Obligations) of the Parent and its
Subsidiaries for such period (including all commissions, discounts and other
fees and charges owed by the Borrower and the Subsidiaries with respect to
letters of credit and bankers’ acceptance financing), net of interest income, in
each case determined on a consolidated basis in accordance with GAAP, plus
(b) any interest accrued during such period in respect of Indebtedness of the
Parent or any Subsidiary that is required to be capitalized rather than included
in consolidated interest expense for such period in accordance with GAAP. For
purposes of the foregoing, interest expense shall be determined after giving
effect to any net payments made or received by the Parent or any Subsidiary with
respect to interest rate Hedging Contracts.

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          “Consolidated Net Income” shall mean, for any period, the net income
or loss of the Parent and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP.
          “Controlled Group” shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any Person, are treated as a single employer
under Section 414 of the Code.
          “Copyright Security Agreement” shall mean a copyright security
agreement, executed and delivered by a Loan Party in connection with this
Agreement, in form and substance satisfactory to the Agent.
          “Customs” shall have the meaning set forth in Section 2.9(j).
          “Deemed Credit Request” shall have the meaning set forth in
Section 2.2(d).
          “Default” shall mean an event which, with the giving of notice or
passage of time or both, would constitute an Event of Default.
          “Default Rate” shall have the meaning set forth in Section 3.3.
          “Defaulting Lender” shall have the meaning set forth in Section 2.11.
          “Deposit Account Agreement” shall have the meaning set forth in
Section 4.14(g).
          “Dollar” and the sign “$” shall mean lawful money of the United States
of America.
          “Domestic Borrower” and “Domestic Borrowers” shall mean the Parent,
Controls and Electronics, and each other Domestic Subsidiary of the Parent added
to this Agreement as a Borrower through a Borrower Joinder Agreement.
          “Domestic Collateral” shall mean the respective Collateral of each of
the Domestic Obligors.
          “Domestic Obligor” shall mean, singularly or collectively, as the
context may require, each Domestic Borrower and each Guarantor which is a
Domestic Subsidiary of a Domestic Borrower.
          “Domestic Subsidiary” shall mean any direct or indirect Subsidiary of
a Person that is organized under the laws of the United States, any state
thereof or the District of Columbia (other than an indirect Subsidiary of a
Person which is a direct or indirect Subsidiary of another Subsidiary which is
not organized under such laws).
          “E-Fax” shall mean any system used to receive or transmit faxes
electronically.
          “E-Signature” shall mean the process of attaching to or logically
associating with an Approved Electronic Communication an electronic symbol,
encryption, digital signature or process (including the name or an abbreviation
of the name of the party transmitting the Approved Electronic Communication)
with the intent to sign, authenticate or accept such Approved Electronic
Communication.

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          “Eligible Assignee” shall mean any of the following Persons: (a) a
Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other
Person (other than a natural person) approved by (i) the Agent, (ii) in the case
of any assignment of a commitment to make Revolving Advances hereunder, the
Issuer, and (iii) unless an Event of Default has occurred and is continuing, the
Borrowing Agent (each such approval not to be unreasonably withheld or delayed);
provided, however, that, notwithstanding the foregoing, “Eligible Assignee”
shall not include any Loan Party or any Loan Party’s Affiliates or Subsidiaries
and; provided, further, that, notwithstanding the foregoing, a Person shall only
be an “Eligible Assignee” if (i) such Person shall have complied with the
requirements of Section 3.13 regarding delivery of Withholding Certificates and
(ii) the assignment to or participation of such Person shall not constitute a
“prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of
the Code).
          “Eligible Domestic Inventory” shall mean, with respect to each
Domestic Borrower, Inventory of such Borrower which the Agent, in the exercise
of its Permitted Discretion, shall deem to be Eligible Domestic Inventory, based
on such considerations as the Agent may from time to time deem appropriate in
its Permitted Discretion. No Inventory of such Borrower shall be Eligible
Domestic Inventory if such Inventory:
          (a) is excess, obsolete, unsalable, shopworn, unmerchantable or unfit
for sale, or is slow-moving (other than with respect to replacement parts
constituting finished goods held for sale to customers in the ordinary course of
the business),
          (b) is not subject to an enforceable perfected, first priority
security interest in favor of the Agent,
          (c) is not owned by such Borrower free and clear of all Liens and
rights of any other Person (including the rights of a purchaser that has made
progress payments and the rights of a surety that has issued a bond to assure
such Borrower’s performance with respect to that Inventory), except the Liens in
favor of the Agent, on behalf of itself and the Lenders, and other Permitted
Encumbrances (subject to reserves for such other Permitted Encumbrances
established by the Agent in accordance with the terms of this Agreement);
          (d) is work-in-process or any other Inventory which is not raw
material or finished goods held for resale;
          (e) except for Inventory which is described pursuant to subclauses
(i) or (ii) of clause (f) below and which is otherwise Eligible Domestic
Inventory hereunder, is: (i) not located in the United States or Mexico, and, if
located in Mexico, not located on premises with respect to which a Person in
charge or control of such premises has taken constructive possession acting as a
depository of the Inventory on the premises for the benefit of the Agent for
purposes of perfecting a pledge of such Inventory satisfactory to the Agent, in
its Permitted Discretion, or (ii) not located on premises owned by such Borrower
and disclosed on Schedule 5.23 unless such Inventory is described in subclauses
(iii) or (iv) of this clause (e), or (iii) located on premises leased by such
Borrower, unless such location is disclosed on Schedule 5.23 (or such other
location appearing on any subsequent amendments to Schedule 5.23 consented to by
the Agent in accordance with Section 15.3) and (A) a landlord waiver
substantially in the form of Exhibit G-1 (or such other form reasonably
satisfactory to the Agent) has been received by the Agent or (B) reserves
reasonably satisfactory to the Agent have been established by the Agent with
respect thereto, or (iv) stored with a warehouseman, processor or other bailee
by such Borrower, unless such location is disclosed on Schedule 5.23 (or such
other location appearing on any subsequent amendments to Schedule 5.23 consented
to by the Agent in accordance with Section 15.3) and (A) a bailee waiver
substantially in the form of Exhibit G-2 (or such other form reasonably
satisfactory to the Agent) has been received by the Agent or (B) reserves
reasonably satisfactory to the Agent have been established by the Agent with
respect thereto, or

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(v) located at a location owned by such Borrower that is subject to a mortgage
in favor of a Person other than the Agent unless such location is disclosed on
Schedule 5.23 (or such other location appearing on any subsequent amendments to
Schedule 5.23 consented to by the Agent in accordance with Section 15.3) and
(A) a mortgagee waiver substantially in the form of Exhibit G-3 (or such other
form reasonably satisfactory to the Agent) has been received by the Agent or
(B) reserves reasonably satisfactory to the Agent have been established by the
Agent with respect thereto;
          (f) is in transit, unless such Inventory is otherwise Eligible
Domestic Inventory and is: (i) in transit from a domestic location owned by such
Borrower or a domestic location otherwise identified on Schedule 5.23 (or such
other location appearing on any subsequent amendments to Schedule 5.23 consented
to by the Agent in accordance with Section 15.3) to another domestic location
identified on Schedule 5.23 (or such other location appearing on any subsequent
amendments to Schedule 5.23 consented to by the Agent in accordance with Section
15.3) or (ii) Inventory for which title has passed to such Borrower, which is
insured to the full value thereof and with respect to which (A) all negotiable
bills of lading shall be properly endorsed and in the Agent’s possession,
(B) all non-negotiable bills of lading shall be issued in the Agent’s name, in
each case, free and clear of all Liens except those in favor of the Agent and
(C) the value of which, to the extent in transit on water, does not exceed Ten
Million Dollars ($10,000,000);
          (g) is: (i) evidenced by a negotiable document of title, unless such
Document has been delivered to the Agent with all necessary endorsements, free
and clear of all Liens except those in favor of the Agent or (ii) subject to a
non-negotiable warehouse receipt or other non-negotiable document of title
unless such non-negotiable Document is issued to or for the account of the Agent
and such Document is delivered to the Agent;
          (h) is placed on consignment (or is being held pursuant to a
consignment agreement);
          (i) consists of goods which have been returned by the customer,
excluding goods returned for reprocessing in the ordinary course of business;
          (j) consists of display items or packing or shipping materials,
manufacturing supplies or replacement parts (other than replacement parts
constituting finished goods held for sale to customers in the ordinary course of
business);
          (k) is not of a type held for sale in the ordinary course of such
Borrower’s business;
          (l) breaches any of the representations or warranties pertaining to
Inventory of such Borrower set forth in this Agreement or in any of the Other
Loan Documents;
          (m) consists of any costs associated with “freight-in” charges;
          (n) consists of any gross profit mark-up in connection with the sale
and distribution thereof to any division of such Borrower or to any Affiliate of
such Borrower;
          (o) consists of Hazardous Substances or goods that can be transported
or sold only with licenses that are not readily available;
          (p) is not covered by casualty insurance reasonably acceptable to the
Agent as required by the terms of this Agreement;

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          (q) was produced in violation of the Fair Labor Standards Act and
subject to the “hot goods” provision contained in Title 29 U.S.C.
Section 215(a)(1);
          (r) failed to conform in all material respects to all standards
imposed by any Governmental Body, division or department thereof which has
regulatory authority over such Inventory or the use or sale thereof;
          (s) contains or bears any Intellectual Property rights licensed to
such Borrower by any Person unless the Agent is reasonably satisfied that it may
sell or otherwise dispose of such Inventory without (i) infringing the rights of
such licensor, (ii) violating any contract with such licensor, or
(iii) incurring any liability with respect to payment of royalties other than
royalties incurred pursuant to sale of such Inventory under the current
licensing agreement relating thereto; or
          (t) is not otherwise satisfactory to the Agent as determined in the
exercise of its Permitted Discretion.
          “Eligible Domestic Receivables” shall mean, with respect to each
Domestic Borrower, each Receivable of such Borrower which the Agent, in the
exercise of its Permitted Discretion, shall deem to be an Eligible Domestic
Receivable, based on such considerations as the Agent may from time to time deem
appropriate in its Permitted Discretion. No Receivable of such Borrower shall be
an Eligible Domestic Receivable if:
          (a) such Receivable is not subject to the Agent’s enforceable first
priority perfected security interest or is subject to any other Lien except the
Liens in favor of the Agent, on behalf of itself and the Lenders and other
Permitted Encumbrances (subject to reserves for such other Permitted
Encumbrances established by the Agent in accordance with the terms of this
Agreement);
          (b) such Receivable arises out of a sale made by such Borrower to an
Affiliate of such Borrower or to a Person controlled by an Affiliate of such
Borrower;
          (c) such Receivable is due and unpaid more than ninety (90) days after
its original due date or is due more than one hundred fifty (150) days after the
original invoice date;
          (d) fifty percent (50%) or more of the aggregate Receivables owing
from the applicable Account Debtor to a Domestic Borrower or a UK Borrower are
not deemed Eligible Domestic Receivables or Eligible UK Receivables, as the case
may be, hereunder;
          (e) such Receivable does not arise in the ordinary course of such
Borrower’s business;
          (f) any covenant, representation or warranty contained in this
Agreement with respect to such Receivable has been breached;
          (g) other than with respect to (i) Receivables owing from Delphi Corp.
in an aggregate amount not to exceed Three Million Dollars ($3,000,000) at any
time with respect to all of the Borrowers collectively, and (ii) Receivables
owing from any other Account Debtor which is a debtor-in-possession deemed
acceptable to the Agent, in its Permitted Discretion, the Account Debtor with
respect to such Receivable shall: (A) apply for, suffer, or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its property or call
a meeting of its creditors, (B) admit in writing its inability, or be generally
unable, to pay its debts as they become due or cease operations of its present
business, (C) make a general assignment for the benefit of creditors,
(D) commence a

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voluntary case under any state or federal bankruptcy laws (as now or hereafter
in effect), (E) be adjudicated a bankrupt or insolvent, (F) file a petition
seeking to take advantage of any other law providing for the relief of debtors,
(G) acquiesce to, or fail to have dismissed, any petition which is filed against
it in any involuntary case under such bankruptcy laws, or (H) take any action
for the purpose of effecting any of the foregoing;
          (h) the sale giving rise to such Receivable is to an Account Debtor
domiciled outside the United States unless (i) such Receivable is owed by an
Account Debtor domiciled in Canada or the United Kingdom and the Agent has an
enforceable first priority perfected Lien in such Receivable satisfactory to the
Agent in its Permitted Discretion or (ii) such Receivable is guaranteed by a
letter of credit, guaranty or acceptance terms, in each case acceptable to the
Agent in its Permitted Discretion;
          (i) the sale giving rise to such Receivable is to an Account Debtor on
a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment
or any other repurchase or return basis;
          (j) the sale giving rise to such Receivable is to an Account Debtor on
a cash on delivery (i.e. COD) basis or the Account Debtor with respect to such
Receivable is an employee of any Loan Party or any Subsidiary thereof;
          (k) the Agent believes, in the exercise of its Permitted Discretion,
that collection of such Receivable is insecure or that such Receivable may not
be paid by reason of the applicable Account Debtor’s financial inability to pay;
          (l) the Account Debtor with respect to such Receivable is the United
States or any state, or any department, agency or instrumentality of any of
them, unless such Borrower: (i) has assigned its right to payment of such
Receivable to the Agent pursuant to the Assignment of Claims Act or has
otherwise complied with other applicable state or local statutes or ordinances
and (ii) has taken all steps reasonably necessary to protect the Agent’s
interest in such Collateral under the Assignment of Claims Act or other
applicable state or local statutes or ordinances;
          (m) the goods giving rise to such Receivable have not been shipped to
or at the direction of the applicable Account Debtor or the services giving rise
to such Receivable have not been performed by such Borrower or the Receivable
otherwise does not represent a final sale;
          (n) such Receivable, together with the aggregate Receivables of
(i) the Account Debtor other than Navistar International Inc. with respect to
Receivables owing to the Borrowers exceeds twenty percent (20%) of the aggregate
amount of all Receivables of the Borrowers, and (ii) Navistar International Inc.
with respect to Receivables owing the Borrowers exceeds thirty-five percent
(35%) of the aggregate amount of all Receivables of the Borrowers; provided
however, in each case, that only that portion of the Receivables of such Account
Debtor exceeding such applicable percentage shall be excluded from Eligible
Domestic Receivables on account of this clause (n);
          (o) such Receivable is subject to any offset, deduction, defense,
dispute, or counterclaim, or is owed by an Account Debtor that is also a
creditor or supplier of such Borrower (but only to the extent of such Borrower’s
obligations to such Account Debtor from time to time) or such Receivable is
contingent in any respect or for any reason;
          (p) such Borrower has made any agreement with the applicable Account
Debtor with respect to such Receivable for any discount, allowance or other
deduction from the amount owing on such Receivable, except for discounts or
allowances made in the ordinary

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course of business for prompt payment, all of which discounts or allowances are
reflected in the calculation of the face value of each respective invoice
related thereto;
          (q) any return, rejection or repossession of the merchandise sold has
occurred or the rendition of services has been disputed;
          (r) such Receivable is not evidenced by an invoice or other
documentary evidence satisfactory to the Agent, in its Permitted Discretion;
          (s) such Receivable is not payable to such Borrower;
          (t) the applicable Account Debtor with respect to such Receivable is
located in New Jersey, Minnesota, or any other state denying creditors access to
its courts in the absence of a Notice of Business Activities Report or other
similar filing, unless such Borrower is incorporated under the laws of such
state or has either qualified as a foreign corporation authorized to transact
business in such state or has filed a Notice of Business Activities Report or
similar filing with the applicable state agency for the then current year; or
          (u) such Receivable is not otherwise satisfactory to the Agent as
determined in the exercise of its Permitted Discretion.
          “Eligible UK Inventory” shall mean, with respect to each UK Borrower,
Inventory of such Borrower which the Agent, in the exercise of its Permitted
Discretion, shall deem to be Eligible UK Inventory, based on such considerations
as the Agent may from time to time deem appropriate in its Permitted Discretion.
No Inventory of such Borrower shall be Eligible UK Inventory if such Inventory:
          (a) is excess, obsolete, unsalable, shopworn, unmerchantable or unfit
for sale, or is slow-moving (other than with respect to replacement parts
constituting finished goods held for sale to customers in the ordinary course of
the business);
          (b) is not subject to an enforceable perfected, first priority
security interest in favor of the Agent other than certain prior claims arising
under the laws of the United Kingdom with respect to which reserves have been
taken in amounts satisfactory to the Agent, in its Permitted Discretion;
          (c) is not owned by such Borrower free and clear of all Liens and
rights of any other Person (including the rights of a purchaser that has made
progress payments and the rights of a surety that has issued a bond to assure
such Borrower’s performance with respect to that Inventory), except the Liens in
favor of the Agent, on behalf of itself and the Lenders, and other Permitted
Encumbrances (subject to reserves for such other Permitted Encumbrances
established by the Agent in accordance with the terms of this Agreement);
          (d) is work-in-process or any other Inventory which is not raw
material or finished goods held for resale;
          (e) except for Inventory which is described pursuant to subclauses
(i) or (ii) of clause (f) below and which is otherwise Eligible UK Inventory
hereunder, is: (i) not located in England or Scotland, or (ii) not located on
premises owned by such Borrower and disclosed on Schedule 5.23 unless such
Inventory is described in subclauses (iii) or (iv) of this clause (e), or
(iii) located on premises leased by such Borrower, unless such location is
disclosed on Schedule 5.23 (or such other location appearing on any subsequent
amendments to Schedule 5.23 consented to by the Agent in accordance with
Section 15.3) and (A) a landlord waiver substantially in the form of Exhibit G-1
(or such other form reasonably satisfactory to the

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Agent) has been received by the Agent or (B) reserves reasonably satisfactory to
the Agent have been established by the Agent with respect thereto, or
(iv) stored with a warehouseman, processor or other bailee by such Borrower,
unless such location is disclosed on Schedule 5.23 (or such other location
appearing on any subsequent amendments to Schedule 5.23 consented to by the
Agent in accordance with Section 15.3) and (A) a bailee waiver or form of
attornment substantially in the form of Exhibit G-2 (or such other form
reasonably satisfactory to the Agent) has been received by the Agent or
(B) reserves reasonably satisfactory to the Agent have been established by the
Agent with respect thereto, or (v) located at a location owned by such Borrower
that is subject to a mortgage in favor of a Person other than the Agent unless
such location is disclosed on Schedule 5.23 (or such other location appearing on
any subsequent amendments to Schedule 5.23 consented to by the Agent in
accordance with Section 15.3) and (A) a mortgagee waiver substantially in the
form of Exhibit G-3 (or such other form reasonably satisfactory to the Agent)
has been received by the Agent or (B) reserves reasonably satisfactory to the
Agent have been established by the Agent with respect thereto;
          (f) is in transit, unless such Inventory is otherwise Eligible UK
Inventory and is: (i) in transit from a location in England or Scotland owned by
such Borrower or a location in England or Scotland otherwise identified on
Schedule 5.23 (or such other location appearing on any subsequent amendments to
Schedule 5.23 consented to by the Agent in accordance with Section 15.3) to
another location in England or Scotland identified on Schedule 5.23 (or such
other location appearing on any subsequent amendments to Schedule 5.23 consented
to by the Agent in accordance with Section 15.3) or (ii) Inventory for which
title has passed to such Borrower, which is insured to the full value thereof
and with respect to which (A) all negotiable bills of lading shall be properly
endorsed and in the Agent’s possession, (B) all non-negotiable bills of lading
shall be issued in the Agent’s name, in each case, free and clear of all Liens
except those in favor of the Agent and (C) the value of which, to the extent in
transit on water, does not exceed Ten Million Dollars ($10,000,000);
          (g) is: (i) evidenced by a negotiable document of title, unless such
Document has been delivered to the Agent with all necessary endorsements, free
and clear of all Liens except those in favor of the Agent or (ii) subject to a
non-negotiable warehouse receipt or other non-negotiable document of title
unless such non-negotiable Document is issued to or for the account of the Agent
and such Document is delivered to the Agent;
          (h) is placed on consignment (or is being held pursuant to a
consignment agreement);
          (i) consists of goods which have been returned by the customer,
excluding goods returned for reprocessing in the ordinary course of business;
          (j) consists of display items or packing or shipping materials,
manufacturing supplies or replacement parts (other than replacement parts
constituting finished goods held for sale to customers in the ordinary course of
business);
          (k) is not of a type held for sale in the ordinary course of such
Borrower’s business;
          (l) breaches any of the representations or warranties pertaining to
Inventory of such Borrower set forth in this Agreement or in any of the Other
Loan Documents;
          (m) consists of any costs associated with “freight-in” charges;
          (n) consists of any gross profit mark-up in connection with the sale
and distribution thereof to any division of such Borrower or to any Affiliate of
such Borrower;

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          (o) consists of Hazardous Substances or goods that can be transported
or sold only with licenses that are not readily available;
          (p) is not covered by casualty insurance as required by terms of this
Agreement reasonably acceptable to the Agent;
          (q) failed to conform in all material respects to all standards
imposed by any Governmental Body, division or department thereof which has
regulatory authority over such Inventory or the use or sale thereof;
          (r) contains or bears any Intellectual Property rights licensed to
such Borrower by any Person unless the Agent is reasonably satisfied that it may
sell or otherwise dispose of such Inventory without (i) infringing the rights of
such licensor, (ii) violating any contract with such licensor, or
(iii) incurring any liability with respect to payment of royalties other than
royalties incurred pursuant to sale of such Inventory under the current
licensing agreement relating thereto; or
          (s) is not otherwise satisfactory to the Agent as determined in the
exercise of its Permitted Discretion.
          “Eligible UK Receivables” shall mean, with respect to each UK
Borrower, each Receivable of such Borrower which the Agent, in the exercise of
its Permitted Discretion, shall deem to be an Eligible UK Receivable, based on
such considerations as the Agent may from time to time deem appropriate in its
Permitted Discretion. No Receivable of such Borrower shall be an Eligible
Receivable if:
          (a) such Receivable is not subject to the Agent’s enforceable first
priority perfected security interest (other than certain prior claims arising
under the laws of the United Kingdom with respect to which reserves have been
taken in amounts satisfactory to the Agent, in its Permitted Discretion) or is
subject to any other Lien other than Permitted Encumbrances except the Liens in
favor of the Agent, on behalf of itself and the Lenders, and other Permitted
Encumbrances (subject to reserves for such other Permitted Encumbrances
established by the Agent in accordance with the terms of this Agreement) (such
Permitted Encumbrances to be subject to reserves established by the Agent in
accordance with the terms of this Agreement);
          (b) such Receivable arises out of a sale made by such Borrower to an
Affiliate of such Borrower or to a Person controlled by an Affiliate of such
Borrower;
          (c) such Receivable is due and unpaid more than ninety (90) days after
its original due date or is due more than one hundred fifty (150) days after the
original invoice date;
          (d) fifty percent (50%) or more of the aggregate Receivables owing
from the applicable Account Debtor to a Domestic Borrower or a UK Borrower are
not deemed Eligible Domestic Receivables or Eligible UK Receivables, as the case
may be, hereunder;
          (e) such Receivable does not arise in the ordinary course of such
Borrower’s business;
          (f) any covenant, representation or warranty contained in this
Agreement with respect to such Receivable has been breached;
          (g) other than with respect to (i) Receivables owing from Delphi Corp.
in an aggregate amount not to exceed Five Hundred Thousand Dollars ($500,000) at
any time with respect to all of the Borrowers collectively, and (ii) Receivables
owing from any other Account

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Debtor which is a debtor-in-possession deemed acceptable to the Agent, in its
Permitted Discretion, the Account Debtor with respect to such Receivable shall:
(A) apply for, suffer, or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property or call a meeting of its creditors,
(B) admit in writing its inability, or be generally unable, to pay its debts as
they become due or cease operations of its present business, (C) make a general
assignment for the benefit of creditors, (D) commence a voluntary case under any
state or federal bankruptcy laws (as now or hereafter in effect), (E) be
adjudicated a bankrupt or insolvent, (F) file a petition seeking to take
advantage of any other law providing for the relief of debtors, (G) acquiesce
to, or fail to have dismissed, any petition which is filed against it in any
involuntary case under such bankruptcy laws, or (H) take any action for the
purpose of effecting any of the foregoing;
          (h) the sale giving rise to such Receivable is to an Account Debtor
domiciled outside the United States or the United Kingdom unless (i) with
respect to account debtors domiciled in countries that are members of the
European Union, the Agent has obtained an enforceable, first priority perfected
Lien in such Receivable (subject to the exceptions set forth in clause (a)
above): (A) in the case of a receivable owing to the English Borrower, under
English law due to the fact that English law governs the terms and conditions
applicable to such sale; or (B) in the case of a receivable owing to the
Scottish Borrower, under Scots law due to the fact that Scots law governs the
terms and conditions applicable to such sale; and, in either case, the Agent is
satisfied that the judgment of an English or Scottish court, as applicable, will
be enforced against such Account Debtor by the courts in the member state of the
European Union in which such Account Debtor is domiciled or (ii) such Receivable
is guaranteed by a letter of credit, guaranty or acceptance terms, in each case
acceptable to the Agent in its Permitted Discretion;
          (i) the sale giving rise to such Receivable is to an Account Debtor on
a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment
or any other repurchase or return basis;
          (j) the sale giving rise to such Receivable is to an Account Debtor on
a cash on delivery (i.e. COD) basis or the Account Debtor with respect to such
Receivable is an employee of any Loan Party or any Subsidiary thereof;
          (k) the Agent believes, in the exercise of its Permitted Discretion,
that collection of such Receivable is insecure or that such Receivable may not
be paid by reason of the applicable Account Debtor’s financial inability to pay;
          (l) the Account Debtor with respect to such Receivable is the United
States, the United Kingdom, Canada, or any state, province, any department,
agency or instrumentality of any of them, or any other Governmental Body or (if
the Account Debtor is the United Kingdom, or any department, agency or
instrumentality of the United Kingdom) is subject to crown set-off, unless such
Borrower: (i) has assigned its right to payment of such Receivable to the Agent
pursuant to the Assignment of Claims Act or has otherwise complied with other
applicable state or local statutes or ordinances of any such Governmental Entity
and (ii) has taken all steps reasonably necessary to protect the Agent’s
interest in such Collateral under the Assignment of Claims Act or other
applicable state or local statutes or ordinances of any such Governmental
Entity;
          (m) the goods giving rise to such Receivable have not been shipped to
the applicable Account Debtor or the services giving rise to such Receivable
have not been performed by such Borrower or the Receivable otherwise does not
represent a final sale;

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          (n) such Receivable, together with the aggregate Receivables of
(i) the Account Debtor other than Navistar International Inc. with respect to
Receivables owing to the Borrowers exceeds twenty percent (20%) of the aggregate
amount of all Receivables of the Borrowers, and (ii) Navistar International Inc.
with respect to Receivables owing the Borrowers exceeds thirty-five percent
(35%) of the aggregate amount of all Receivables of the Borrowers; provided
however, in each case, that only that portion of the Receivables of such Account
Debtor exceeding such applicable percentage shall be excluded from Eligible
Domestic Receivables on account of this clause (n);
          (o) such Receivable is subject to any offset, deduction, defense,
dispute, or counterclaim, or is owed by an Account Debtor that is also a
creditor or supplier of such Borrower (but only to the extent of such Borrower’s
obligations to such Account Debtor from time to time) or such Receivable is
contingent in any respect or for any reason;
          (p) such Borrower has made any agreement with the applicable Account
Debtor with respect to such Receivable for any discount, allowance or other
deduction from the amount owing on such Receivable, except for discounts or
allowances made in the ordinary course of business for prompt payment, all of
which discounts or allowances are reflected in the calculation of the face value
of each respective invoice related thereto;
          (q) any return, rejection or repossession of the merchandise sold has
occurred or the rendition of services has been disputed;
          (r) such Receivable is not evidenced by an invoice or other
documentary evidence satisfactory to the Agent in its Permitted Discretion;
          (s) such Receivable is not payable to such Borrower;
          (t) the applicable Account Debtor with respect to such Receivable is
located in New Jersey, Minnesota or any other state denying creditors access to
its courts in the absence of a Notice of Business Activities Report or other
similar filing, unless such Borrower is incorporated under the laws of such
state or has either qualified as a foreign corporation authorized to transact
business in such state or has filed a Notice of Business Activities Report or
similar filing with the applicable state agency for the then current year; or
          (u) such Receivable is not otherwise satisfactory to the Agent as
determined in the exercise of its Permitted Discretion.
          “Environmental Laws” shall mean all federal, state and local
environmental, land use, zoning, occupational health, chemical use, safety and
sanitation laws, statutes, ordinances and codes relating to the protection of
the environment or governing the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous
Substances and the rules, regulations, policies, decisions, orders and
directives of federal, state and local Governmental Bodies.
          “Environmental Permits” shall mean all permits, approvals,
certificates, notifications, identification numbers, licenses and other
authorizations required under any applicable Environmental Laws or necessary for
the conduct of business.
          “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time and the rules and regulations promulgated
thereunder.
          “Eurocurrency Reserve Percentage” shall mean, for any Interest Period
in respect of any Libor Rate Loan, as of any date of determination, the
aggregate of the then stated

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maximum reserve percentages (including any marginal, special, emergency or
supplemental reserves), expressed as a decimal, applicable to such Interest
Period (if more than one such percentage is applicable, the daily average of
such percentages for those days in such Interest Period during which any such
percentages shall be so applicable) by the Board of Governors of the Federal
Reserve System, any successor thereto, or any other banking authority, domestic
or foreign, to which any Lender may be subject in respect to euro-currency
funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of
the Federal Reserve Board) or in respect of any other category of liabilities
including deposits by reference to which the interest rate on Libor Rate Loans
is determined or any category of extension of credit or other assets that
include the Libor Rate Loans. For purposes hereof, such reserve requirements
shall include those imposed under Regulation D of the Federal Reserve Board and
the Libor Rate Loans shall be deemed to constitute Eurocurrency Liabilities
subject to such reserve requirements without benefit of credits for pro-ration,
exceptions or offsets which may be available from time to time to the Agent
under said Regulation D.
          “Event of Default” shall have the meaning specified in Article X.
          “Excluded Property” shall mean:
     (a) any permit, lease or license held by any Person or any Loan Party (in
each case as otherwise permitted by this Agreement) that validly prohibits the
creation by such Person or such Loan Party of a security interest therein;
     (b) any contract or agreement to which any Person or any Loan Party is a
party or any of such Person’s or Loan Party’s rights or interests thereunder if
and only for so long as the grant by such Person or Loan Party of a security
interest pursuant to this Agreement in its right, title and interest in such
contract, agreement, right or interest thereunder shall result in an effective
default thereunder pursuant to effective and enforceable contractual provisions
entered into by such Person or Loan Party in the ordinary course of business and
existing on the date hereof (other than to the extent that any such term would
be rendered ineffective pursuant to applicable law or Sections 9-406, 9-407,
9-408 or 9-409 of the UCC (or any successor provision or provisions));
          but in the case of clauses (a) and (b) above, only to the extent, and
for so long as, such permit, lease, license, contract or other agreement,
validly prohibits the creation of a Lien in such property in favor of the Agent
or for so long as the consequences specified in clause (b) above shall exist,
and all of such property shall automatically become collateral and become
subject to the Liens granted under this Agreement or the Other Loan Documents at
such time as such valid prohibition or consequences exist.
          “Executive Order No. 13224” shall mean the Executive Order No. 13224
on Terrorist Financing, effective September 24, 2001, as the same has been, or
shall hereafter be, renewed, extended, amended or replaced.
          “Existing Letters of Credit” shall mean trade or standby letters of
credit issued by National City Bank prior to the Closing Date and listed on
Schedule 2.9 which will continue in effect after the Closing Date.
          “Facility Termination Date” shall mean November 1, 2011, or such later
date fixed in accordance with Section 1.9(b) or earlier if pursuant to the terms
of this Agreement, as applicable, the obligations of the Lenders to make
Revolving Advances are terminated or if the obligation of the Borrowers to repay
the Advances is accelerated.

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          “Federal Funds Effective Rate” shall mean, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest one hundredth of one
percent (1/100th of 1%) equal to the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers on such day, as published by the Federal Reserve Bank
of New York on the Business Day next succeeding such day; provided, however,
that: (a) if the day for which such rate is to be determined is not a Business
Day, the Federal Funds Effective Rate for such day shall be such a rate on such
transactions on the immediately preceding Business Day as so published on the
next succeeding Business Day and (b) if such rate is not so published for any
Business Day, the Federal Funds Effective Rate for such Business Day shall be
the average of quotations for such day on such transactions received by the
Agent from three federal funds brokers of recognized standing selected by the
Agent.
          “Fixed Charge Coverage Ratio” shall mean, with respect to any fiscal
period, the ratio of: (a) Consolidated EBITDA minus the sum of (i) Capital
Expenditures not specifically financed by Indebtedness (other than Revolving
Advances) of the Parent and its Subsidiaries on a consolidated basis with
respect to such period, (ii) cash payments of taxes of the Parent and its
Subsidiaries on a consolidated basis with respect to such period and
(iii) dividends and distributions made in cash of the Parent and its
Subsidiaries on a consolidated basis with respect to such period to
(b) Consolidated Fixed Charges.
          “Foreign Borrower” shall mean each UK Borrower and any other Foreign
Subsidiary of the Parent added to this Agreement as a Borrower through a
Borrower Joinder Agreement.
          “Foreign Borrower Sublimit” shall mean an amount equal to Thirty
Million Dollars ($30,000,000) (determined in an equivalent amount in Dollars for
each Loan denominated in Alternative Currency).
          “Foreign Lender” shall mean any Lender that is organized under the
laws of a jurisdiction other than that in which a Borrower is resident for tax
purposes. For purposes of this definition, the United States, each state thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
          “Foreign Subsidiary” shall mean any direct or indirect Subsidiary of
the Parent that is organized under the laws of a jurisdiction other than the
United States, any state thereof or the District of Columbia.
          “Fund” shall mean any Person (other than a natural person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business.
          “GAAP” shall mean generally accepted accounting principles in the
United States in effect from time to time.
          “Governmental Body” shall mean any nation or government, any state or
other political subdivision thereof or any entity exercising the legislative,
judicial, regulatory or administrative functions of or pertaining to a
government.
          “Guarantor” shall mean, as of the Closing Date, Far East and any other
Domestic Subsidiary which is not a Borrower as of the Closing Date, and
thereafter any Person who may guarantee payment or performance of the whole or
any part of the Obligations, whether pursuant to this Agreement through the
execution of a Guarantor Joinder Agreement or in a separate Guaranty.

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          “Guarantor Joinder Agreement” shall mean a Guarantor joinder
agreement, substantially in the form of Exhibit K.
          “Guaranty” shall mean any guaranty of the Obligations of any Borrower,
executed by a Guarantor.
          “Hazardous Substance” shall mean, without limitation, any flammable
explosives, radon, radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum and petroleum products,
methane, hazardous materials, hazardous wastes, waste materials, hazardous or
Toxic Substances or related materials as defined in CERCLA, the Hazardous
Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.), the
Toxic Substances Control Act, as amended (15 U.S.C. Sections 2601, et seq.),
RCRA or any other applicable Environmental Law and in the regulations adopted
pursuant thereto.
          “Hedging Contracts” shall mean any foreign exchange contract, currency
swap agreement, futures contract, commodities hedge agreement, interest rate
protection agreement, interest rate futures agreement, interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, option
agreement, or any similar hedging agreement or arrangement, in each case, to the
extent entered into by a Person in the ordinary course of business and not for
speculative purposes.
          “Hedging Obligations” shall mean all net obligations of a Person on a
marked-to-market basis under any Hedging Contracts.
          “Incentive Pricing Effective Date” shall be each December 1, March 1,
June 1 and September 1, commencing with December 1, 2007.
          “Increasing Revolving Lender” shall have the meaning specified in
Section 2.6(a)
          “Incremental Revolving Advance Amount” shall mean, at any time, the
excess, if any, of (a) Fifty Million Dollars ($50,000,000) over (b) the
aggregate increase in Revolving Commitments established prior to such time
pursuant to Section 2.6.
          “Indebtedness” shall mean, with respect to a Person at any date of
determination, any and all indebtedness, obligations or liabilities (whether
matured or unmatured, liquidated or unliquidated, direct or indirect, absolute
or contingent, or joint or several) of such Person for or in respect of:
(a) borrowed money, (b) amounts raised under or liabilities in respect of any
note purchase or acceptance credit facility, (c) reimbursement obligations
(contingent or otherwise) under any letter of credit, (d) Hedging Obligations,
(e) any other transaction (including forward sale or purchase agreements,
capitalized leases and conditional sales agreements) having the commercial
effect of a borrowing of money entered into by such Person to finance its
operations or capital requirements (but not including trade payables and accrued
expenses incurred in the ordinary course of business which are not represented
by a promissory note or other evidence of indebtedness and which are not more
than ninety (90) days past due), (f) any guaranty of Indebtedness for borrowed
money, and (g) all indebtedness secured by a Lien on assets owned by such
Person, whether or not such indebtedness actually shall have been created,
assumed or incurred by such Person.
          “Indenture” shall mean that certain Indenture, dated as of May 1,
2002, among Parent, as Issuer, Electronics and Controls, as guarantors
thereunder, and Fifth Third Bank, as Trustee pursuant to which the Public Notes
were issued, as the same may be from time to time

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amended, restated or otherwise modified in accordance with the provisions
hereof, and includes any successor thereto in connection with a Permitted Public
Notes Refinancing.
          “Intellectual Property” shall mean (a) all utility and design patents
of any Person, together with any extensions, reexaminations and reissues of such
patents, patents of addition, patent applications, divisions, continuations,
continuations-in-part, (b) all trademarks, service marks, trade names, trade
dress or other indicia of trade origin of such Person, whether registered or
unregistered, trademark and service mark registrations and applications for
trademark or service mark registrations and any extension, modification or
renewal thereof, whether now existing or hereinafter acquired, and (c) all
original works of authorship fixed in a tangible medium, published or
unpublished, and any copyrights, and registrations thereof and applications
therefor, including all renewals and extensions thereof, of such Person, in each
case, whether now existing or hereafter acquired.
          “Interest Election Request” shall have the meaning set forth in
Section 2.3.
          “Interest Period” shall mean, for each Advance comprising a single
Borrowing of Libor Rate Loans, the period commencing on the date of such Libor
Rate Loans or the date of the conversion or continuation of any Advance into
such Libor Rate Loans and ending on the numerically corresponding day of the
period selected by the Borrowing Agent pursuant to the provisions hereof and
each subsequent period commencing on the last day of the immediately preceding
Interest Period in respect of such Libor Rate Loans and ending on the last day
of the period selected by the Borrowing Agent pursuant to the provisions hereof;
provided, however, that the duration of each such Interest Period shall be one
(1), two (2), three (3) or six (6) months, in each case as the Borrowing Agent
may select by delivery to the Agent of a Revolving Advance Request therefor in
accordance with Section 2.2(a), an Interest Election Request in accordance with
Section 2.3(a) or, in each case, any other notice acceptable to the Agent;
provided, further, that:

  (i)   the Interest Period for each Borrowing of Libor Rate Loans shall be of
the same duration;     (ii)   whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business Day;
provided, however, that, if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last day of
such Interest Period shall occur on the immediately preceding Business Day;    
(iii)   if the Interest Period commences on a Business Day for which there is no
numerical equivalent in the calendar month in which the Interest Period is to
end, such Interest Period shall end on the last Business Day of that calendar
month; and     (iv)   with respect to Revolving Advances consisting of Libor
Rate Loans, no Interest Period with respect to such Libor Rate Loans may end on
a date later than the Facility Termination Date.

          “Inventory Sublimit” shall have the meaning set forth in
Section 2.1(a)(ii).
          “IP Rights” shall have the meaning set forth in Section 5.11.
          “IP Security Agreement” shall mean a Copyright Security Agreement,
Patent Security Agreement or Trademark Security Agreement, as applicable.

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          “ISP” shall have the meaning set forth in Section 2.9(d).
          “Issuer” shall mean, with respect to any Letter of Credit, the issuer
of such Letter of Credit and shall be, with respect to any Letter of Credit
hereunder, National City Bank, or each other Lender (or Affiliate of a Lender)
that is requested by the Agent to act as an Issuer, and each of their successors
and assigns (and which may be replaced at the sole discretion of the Agent).
          “Joinder Amendment” shall have the meaning set forth in Section 1.7.
          “Lead Arranger” shall mean National City Bank.
          “Lender” shall have the meaning ascribed to such term in the preamble.
          “Lender Default” shall have the meaning set forth in Section 2.11(a).
          “Lending Installation” shall mean, with respect to a Lender, the
branch, Subsidiary or Affiliate of such Lender specified under the name of such
Lender on the signature pages hereto or as otherwise selected by such Lender
pursuant to Section 2.12, or such other branch, Subsidiary or Affiliate as such
Lender may from time to time specify in writing to the Borrowing Agent, the
Agent and the Lenders as its Lending Installation. With respect to Revolving
Advances denominated in any Alternative Currency, any Lender may, by written
notice to the Agent, designate a branch, affiliate or correspondent office as
its applicable branch, Subsidiary or Affiliate with respect to Revolving
Advances denominated in that Alternative Currency.
          “Letter of Credit” shall mean (i) the trade or standby letters of
credit to be issued pursuant to Section 2.9 and (ii) the Existing Letters of
Credit.
          “Letter of Credit Application” shall have the meaning set forth in
Section 2.9(c).
          “Letter of Credit Collateral Account” shall have the meaning specified
in Section 11.4.
          “Letter of Credit Domestic Exposure” shall mean, at any time of
determination, the sum of: (a) the aggregate undrawn amount of all Letters of
Credit outstanding at such time issued on behalf of any Borrower other than the
UK Borrowers, and (b) the aggregate amount that has been drawn under such
Letters of Credit issued on behalf of any Borrower other than the UK Borrowers
for which the Issuer has not at such time been reimbursed by the Borrowers.
          “Letter of Credit Exposure” shall mean, at any time of determination,
the sum of: (a) the aggregate undrawn amount of all Letters of Credit
outstanding at such time, and (b) the aggregate amount that has been drawn under
such Letters of Credit for which the Issuer has not at such time been reimbursed
by the Borrowers.
          “Letter of Credit Fees” shall have the meaning set forth in
Section 3.4.
          “Letter of Credit UK Exposure” shall mean, at any time of
determination, the sum of: (a) the aggregate undrawn amount of all Letters of
Credit outstanding at such time issued on behalf of any UK Borrower, and (b) the
aggregate amount that has been drawn under such Letters of Credit issued on
behalf of any UK Borrower for which the Issuer has not at such time been
reimbursed by the Borrowers.

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          “Libor Rate” shall mean, for any Interest Period with respect to a
Libor Rate Loan, the quotient (rounded upwards, if necessary, to the nearest one
sixteenth of one percent (1/16th of 1%) of: (x) the per annum rate of interest,
determined by the Agent in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) as of approximately
12:00 noon (London time) two (2) Business Days prior to the beginning of such
Interest Period pertaining to such Libor Rate Loan, as provided by Bloomberg’s
or Reuters (or any other similar company or service that provides rate
quotations comparable to those currently provided by such companies as the rate
in the London interbank market), as determined by the Agent from time to time
for purposes of providing quotations of interest rates applicable to deposits in
Dollars or in an Alternative Currency in the London interbank market) as the
rate in the London interbank market for deposits in Dollars or in an Alternative
Currency in immediately available funds with a maturity comparable to such
Interest Period divided by (y) a number equal to 1.00 minus the Eurocurrency
Reserve Percentage. In the event that such rate quotation is not available for
any reason, then the rate (for purposes of clause (x) hereof) shall be the rate,
determined by the Agent as of approximately 12:00 noon (London time) two
(2) Business Days prior to the beginning of such Interest Period pertaining to
such Libor Rate Loan, to be the average (rounded upwards, if necessary, to the
nearest one sixteenth of one percent (1/16th of 1%)) of the per annum rates at
which deposits in Dollars or in an Alternative Currency in immediately available
funds in an amount comparable to such Libor borrowing and with a maturity
comparable to such Interest Period are offered to the prime banks by leading
banks in the London interbank market. The Libor Rate shall be adjusted
automatically on and as of the effective date of any change in the Eurocurrency
Reserve Percentage.
          “Libor Rate Loan” shall mean an Advance during any period in which
such Advance bears interest based on the Libor Rate.
          “Lien” shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, lien (whether statutory or otherwise), Charge,
claim or encumbrance, or preference, priority or other security agreement or
preferential arrangement held or asserted in respect of any asset of any kind or
nature whatsoever including any conditional sale or other title retention
agreement, any lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
under the Uniform Commercial Code or comparable law of any jurisdiction claiming
to reflect an interest in any of the foregoing.
          “Loan Account” shall have the meaning set forth in Section 2.8.
          “Loan Party” or “Loan Parties” shall mean, singularly or collectively,
as the context may require, each Borrower and each Guarantor.
          “Lockbox” shall mean a post office box rented by and in the name of
the Borrowing Agent (or any other Borrower acceptable to the Agent) as required
by this Agreement and as to which only the applicable Lockbox Bank and the Agent
have access pursuant to the requirements of this Agreement and which cannot be
closed by the applicable Lockbox Bank without the consent of the Agent pursuant
to the applicable Blocked Account Agreement.
          “Lockbox Agreement” shall have the meaning set forth in
Section 4.14(g).
          “Lockbox Bank” shall mean National City Bank, any other Lender, and
any other financial institution acceptable to the Agent, in its sole discretion.
          “Material Adverse Effect” shall mean a material adverse effect on
(a) the financial condition, results of operations or business of any Loan
Party, (b) the financial condition, results of operations or business of the
Loan Parties and their respective Subsidiaries,

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taken as a whole, (c) the value of the assets or property of any Loan Party or
the Collateral, or the Agent’s Liens on the Collateral or, subject to Permitted
Encumbrances, the priority of any such Lien or (d) the practical realization of
the benefits of the Agent’s and each Lender’s rights and remedies under this
Agreement and the Other Loan Documents; provided, however, with respect to
clauses (a), (b) and (c), such material adverse effect, calculated as of any
date, must result in or be reasonably expected to result in a reduction in
Consolidated Net Income or Consolidated Net Equity in an amount greater than or
equal to ten percent (10%) of the Aggregate Formula Amount as of such date.
          “Material Business Agreement” shall mean (a) each contract not made in
the ordinary course of business which is material to the Parent and its
Subsidiaries, on a consolidated basis, and to which the Parent or any of its
Subsidiaries is a party which is a contract to which directors, officers,
promoters, voting trustees, security holders of the Parent named in any
registration statement or report, underwriters with respect to the Parent or any
of its Subsidiaries are parties other than contracts involving only the purchase
or sale of current assets having a determinable market price and are purchased
or sold at such market price, (b) each contract which is material to the Parent
and its Subsidiaries, on a consolidated basis, and to which the Parent or any of
its Subsidiaries is a party which (i) is a contract upon which the business of
the Parent and its Subsidiaries, on a consolidated basis, is substantially
dependent, as in the case of continuing contracts to sell the major part of the
products or services of the Parent and its Subsidiaries, on a consolidated
basis, or to purchase the major part of the requirements of goods, services or
raw materials of the Parent and its Subsidiaries, on a consolidated basis, or
any franchise or license or other agreement to use a patent, formula, trade
secret, process or trade name upon which the business of the Parent and its
Subsidiaries, on a consolidated basis, depends to a material extent, (ii) is a
contract calling for the acquisition or sale of any property, plant or equipment
for a consideration exceeding fifteen percent (15%) of the fixed assets of the
Parent and its Subsidiaries, on a consolidated basis, (iii) is a material lease
under which a part of any property of the Parent or any of its Subsidiaries
which is described in any filing or registration statement with the Securities
and Exchange Commission is held, (iv) is a management contract or any
compensatory plan, contract or arrangement, including but not limited to plans
relating to options, warrants or rights, pension, retirement or deferred
compensation or bonus, incentive or profit sharing in which any director or any
of the named executive officers of the Parent or any of its Subsidiaries,
participates, (v) is a management contract or any other compensatory plan,
contract, or arrangement in which any other executive officer of the Parent or
any of its Subsidiaries participates which is not immaterial in amount or
significance, (vi) is a compensatory plan, contract or arrangement adopted
without the approval of security holders of the Parent pursuant to which equity
may be awarded, including, but not limited to, options, warrants or rights, to
which any employee participates which is not immaterial in amount or
significance; provided however, none of the preceding management contracts or
any other compensatory plans, contracts or arrangements shall be considered a
Material Business Agreement: (A) ordinary purchase and sales agency agreements,
(B) agreements with managers of stores in a chain organization or similar
organization, (C) contracts providing for labor or salesmen’s bonuses or
payments to a class of security holders of the Parent, as such, (D) any
compensatory plan, contract or arrangement which pursuant to its terms is
available to employees, officers or directors generally and which in operation
provides for the same method of allocation of benefits between management and
non-management participants, and (E) any compensatory plan, contract or
arrangement if the registrant is a foreign private issuer, (vii) is a contract
for Indebtedness of the Parent or any of its Subsidiaries equal to or in excess
of Five Million Dollars ($5,000,000), (viii) is a Plan of the Parent or any of
its Subsidiaries, or (ix) is a collective bargaining agreement of the Parent or
any of its Subsidiaries.
          “Material IP Rights” shall have the meaning set forth in Section 5.11.

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          “Material Recovery Event” shall mean: (a) any casualty loss in respect
of assets of a Loan Party covered by casualty insurance, (b) any compulsory
transfer or taking under threat of compulsory transfer of any asset of a Loan
Party by any agency, department, authority, commission, board, instrumentality
or political subdivision of the United States, any state or municipal government
and (c) any recovery in good funds by a Loan Party by reason of a nonappealable
judgment against any other Person to the full extent thereof; provided, however
that no such loss, transfer or recovery will constitute a Material Recovery
Event unless the proceeds therefrom exceed One Million Dollars $1,000,000 in the
aggregate for any calendar year.
          “Material Recovery Prepayment Date” shall mean, with respect to any
Material Recovery Event that results in Net Proceeds, the earlier of: (a) the
date occurring ninety (90) days after the occurrence of such Material Recovery
Event and (b) the date that is five Business Days after the date on which the
Borrowing Agent shall have notified the Agent of the applicable Loan Party’s
determination not to acquire replacement assets useful in such Loan Party’s
business (or, in the case of property loss, not to effect repairs) with all or
any portion of such Net Proceeds.
          “Material Subsidiary” shall mean, at any time, with reference to any
Loan Party, any Subsidiary of such Loan Party (i) that has assets at such time
comprising five percent (5%) or more of the consolidated Assets of the Parent
and its Subsidiaries, or (ii) whose operations in the current fiscal year are
expected to, or whose operations in the most recent fiscal year did (or would
have if such person had been a Subsidiary for such entire fiscal year),
represent five percent (5%) or more of the Consolidated EBITDA of the Parent and
its Subsidiaries for such fiscal year.
          “Maximum Revolving Advance Amount” shall mean One Hundred Million
Dollars ($100,000,000) as such amount may be adjusted from time to time in
accordance with this Agreement.
          “Mexican Security Documents” shall mean the pledges on Inventory
located in Mexico to be entered into among each Domestic Borrower, respectively,
the Agent and the party acting as the respective depositary with respect to
certain identified inventory, for the benefit of the Agent.
          “Multiemployer Plan” shall mean a “multiemployer plan” as defined in
Sections 3(37) and 4001(a)(3) of ERISA.
          “National City Bank” shall have the meaning set forth in the preamble.
          “NCBC” shall have the meaning set forth in the preamble.
          “Net Orderly Liquidation Value” shall mean, the orderly liquidation
value (net of costs and expenses estimated to be incurred in connection with
such liquidation) of the Borrowers’ Inventory that is estimated to be
recoverable in an orderly liquidation of such Inventory expressed as a
percentage of the net book value thereof, such percentage to be as determined
from time to time by reference to the most recent Inventory appraisal completed
by a qualified third-party appraisal company (approved by the Agent in its
Permitted Discretion) delivered to the Agent.
          “Net Proceeds” shall mean: (a) the cash proceeds (including cash
proceeds subsequently received in respect of non-cash consideration initially
received) from any sale, lease, transfer, dissolution or other disposition of
assets of a Loan Party to a Person (other than collections in respect of
Receivables) received by such Loan Party, including cash payments in

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respect of Inventory sales or leases (other than sales or leases of Inventory in
the ordinary course of business), payments in respect of other dispositions of
Collateral and any other assets or property of any Loan Party (net of
(x) selling expenses including any reasonable broker’s fees or commissions,
costs of discontinuing operations associated with such assets and sales,
transfer and similar taxes and (y) the repayment of any Indebtedness secured by
a purchase money Lien on such assets that is permitted under this Agreement),
(b) the cash proceeds of any tax refund, (c) the cash proceeds from the issuance
or sale of equity securities or debt securities of a Loan Party pursuant to any
public offering or private placement, net of transaction costs (in each case,
net of customary fees, costs and expenses including underwriters’ or placement
agents’ discounts and commissions and transfer and similar taxes and legal and
accounting fees and expenses) and (d) the cash proceeds from any Material
Recovery Event.
          “Non-Consenting Lender” shall have the meaning set forth in
Section 15.5(h).
          “Non-Excluded Taxes” shall have the meaning specified in
Section 3.13(a).
          “Non-Increasing Revolving Lender” shall have the meaning specified in
Section 2.6(a).
          “Note” shall mean each Revolving Note and “Notes” shall collectively
mean all of the Revolving Notes.
          “Obligated Lender” shall have the meaning set forth in Section 2.12.
          “Obligations” shall mean the present and future loans, advances,
debts, liabilities and other obligations of any Loan Party to the Agent, the
Lenders and the Issuer (or any of their respective Affiliates) under this
Agreement and the Other Loan Documents (whether absolute, contingent, matured or
unmatured) including: (a) the outstanding principal and accrued interest
(including interest accruing after a petition for relief under the federal
bankruptcy laws has been filed, whether or not allowed) in respect of any
Revolving Advances to any Borrower by the Lenders plus the Letter of Credit
Exposure and other amounts owing by any Borrower to the Agent or the Lenders
under this Agreement, the Notes or any Other Loan Document, (b) all fees owing
to the Lenders or the Agent under this Agreement and the Other Loan Documents,
(c) any costs and expenses reimbursable to the Lenders or the Agent pursuant to
Section 15.12, (d) Other Taxes, (e) compensation and indemnification obligations
under this Agreement or any Other Loan Document, (f) reimbursement obligations
owing to the Issuer, (g) the Unpaid Reimbursement Obligation, (h) the Hedging
Obligations owing to a Qualified Counterparty and (i) any fees or charges owing
with respect to Bank Services. It is understood and agreed that any amount owing
to a Person which was an Affiliate of the Agent which was the Agent at the time
such hedge exposure of any Loan Party was incurred, or which was an Affiliate of
the Agent which was the Agent at the time the charge for Bank Services was
incurred, or which was the Issuer at the time the applicable Letter of Credit
was issued, shall continue to be considered as an Obligation for all purposes
hereunder and secured hereby even after such Person is no longer an Affiliate of
the Agent or the Issuer, unless such Obligation has been terminated or such
Person otherwise waives such Obligation.
          “Obligor” shall mean, singularly or collectively, as the context may
require, each Domestic Borrower, each UK Borrower and each Guarantor.
          “Other Loan Documents” shall mean the Notes, the Security
Questionnaires, the Letters of Credit, any Blocked Account Agreement, any
Guaranty, any IP Security Agreement, the Mexican Security Documents, the UK
Security Documents, any Waiver, any Compliance Certificate, the Agent’s Fee
Letter, the Post-Closing Waiver Letter, any Hedging Contract executed by any
Qualified Counterparty and any other note, mortgage, deed of trust, security

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agreement, pledge, guaranty, insurance assignment or other lien instrument, fee
letter, reimbursement agreement, environmental or other indemnity agreement,
financial statement, audit report, environmental audit, notice, credit request,
cash management agreement, officer’s certificate or other writing of any kind
which is now or hereafter required to be delivered by or on behalf of any Loan
Party to the Agent, the Issuer or any Lender (or any of their respective
Affiliates) in connection with this Agreement.
          “Other Taxes” shall have the meaning set forth in Section 3.13.
          “Parent” shall mean Stoneridge, Inc., an Ohio corporation.
          “Participant” shall have the meaning set forth in Section 15.5(d).
          “Patent Security Agreement” shall mean a patent and patent application
security agreement, executed and delivered by a Loan Party in connection with
this Agreement, in form and substance satisfactory to the Agent.
          “Payment Office” shall mean initially 1965 East Sixth Street, 4th
Floor, Cleveland, Ohio 44114; thereafter, such other office of the Agent, if
any, which it may designate by notice to the Borrowing Agent and to each Lender
to be the Payment Office.
          “PBGC” shall mean the Pension Benefit Guaranty Corporation.
          “Percentage” means, as the context may require, any Lender’s Revolving
Percentage.
          “Permitted Acquisition” shall have the meaning set forth in
Section 7.1(b).
          “Permitted Acquisition Assumed Indebtedness” shall have the meaning
set forth in Section 7.1(b).
          “Permitted Discretion” shall mean, as to any Person, a determination
made in good faith and in the exercise of its reasonable (from a perspective of
a secured asset-based lender) business judgment.
          “Permitted Encumbrances” shall mean (a) Liens in favor of the Agent
for the benefit of the Secured Creditors; (b) Liens for taxes, assessments or
other governmental charges that (i) are not delinquent or (ii) which are being
contested in good faith by appropriate proceedings which stay the enforcement of
any Lien and with respect to which proper reserves have been taken in accordance
with GAAP; provided, however that such Liens shall have no effect on the
priority of the Liens in favor of the Agent (and the existence of such Liens
shall not violate Section 6.1); (c) deposits or pledges of cash to secure
obligations under worker’s compensation, social security or similar laws, or
under unemployment insurance or general liability or product liability
insurance; (d) deposits or pledges of cash to secure bids, tenders, contracts
(other than contracts for the payment of money), leases, statutory obligations,
performance bonds, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of business; (e) mechanics’, workers’,
materialmens’, warehousemens’, common carriers’, landlords’ or other like Liens
arising in the ordinary course of business with respect to obligations which are
not due or which are being contested in good faith by a Loan Party or its
Subsidiaries; (f) Liens (including Liens in connection with capital leases)
placed upon equipment and real estate assets acquired to secure a portion of the
purchase price thereof; provided that (x) any such Lien shall not encumber any
other property of a Loan Party or any Subsidiary thereof (other than insurance
and other proceeds of such equipment and real estate) and (y) the aggregate
amount of Indebtedness secured by such Liens incurred as a result of such
purchases during any

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fiscal year shall not exceed the amount provided for in Section 7.6; (g) zoning
restrictions, easements, encroachments, rights of way, restrictions, leases,
licenses, restrictive covenants and other similar title exceptions affecting
Real Property, none of which materially impairs the use of such Real Property or
the value thereof, and none of which is violated in any material respect by
existing or supporting structures or land use; (h) attachment and judgment Liens
which do not constitute an Event of Default under Section 10.6; (i) any Lien
existing on any property or asset prior to the acquisition thereof by the Parent
or any Subsidiary of the Parent; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition, (ii) such Lien does not
apply to Receivables or Inventory, (iii) such Lien does not apply to any other
property or assets of the Borrower or any Subsidiary and (iv) such Lien does not
(A) materially interfere with the use, occupancy and operation of any Real
Property, (B) materially reduce the fair market value of such Real Property but
for such Lien or (C) result in any material increase in the cost of operating,
occupying or owning or leasing such Real Property; and (j) the Liens listed on
Schedule 7.2 to this Agreement so long as the principal amount secured thereby
is not hereafter increased, and no additional assets become subject to such
Liens.
          “Permitted Period” shall mean, for purposes of making any guarantee
of, investment in, or loan, advance or other extension of credit to, any Foreign
Subsidiary (other than the UK Borrowers) or joint venture pursuant to
Sections 7.3(e), 7.4(e) and 7.5(e), or for purposes of paying any dividend or
distribution pursuant to Section 7.7, or for purposes of repaying or prepaying
certain Indebtedness under Section 7.17, any time at which:
     (a) after giving effect to any such guarantee, investment, loan, advance or
other extension of credit, or any dividend or distribution, or any repayment or
prepayment of Indebtedness (any of the foregoing being a “Proposed
Transaction”), the aggregate outstanding Revolving Advances plus the Letter of
Credit Exposure at such time is not greater than or equal to Twenty Million
Dollars ($20,000,000);
     (b) the Borrowing Agent shall have delivered to the Agent, in form and
substance satisfactory to the Agent:
     (i) within fifteen days of the consummation of such Proposed Transaction, a
pro forma consolidated balance sheet of the Parent and its consolidated
Subsidiaries (the “Transaction Pro Forma”), based on recent financial data,
which shall be accurate and complete in all material respects and shall fairly
present the assets, liabilities and financial condition of the Parent and its
consolidated Subsidiaries in accordance with GAAP consistently applied, but
taking into account such Proposed Transaction and the funding of all Advances in
connection therewith, and (x) such Transaction Pro Forma shall reflect that
average daily Undrawn Availability for the thirty (30) day period preceding the
consummation of such Proposed Transaction would have exceeded Fifty Million
Dollars ($50,000,000) on a pro forma basis (giving effect to such Proposed
Transaction and all Advances made and Letters of Credit issued in connection
therewith as if made or issued on the first day of such period), (y) the
Transaction Projections (as hereinafter defined) shall reflect that such Undrawn
Availability of not less than Fifty Million Dollars ($50,000,000) shall continue
for at least thirty (30) days after the consummation of such Proposed
Transaction, and (z) on a pro forma basis (giving effect to such Proposed
Transaction and all Advances made and Letters of Credit issued in connection
therewith as if made on the first day of such period), the Loan Parties would
have been in compliance with the financial covenant set forth in Section 6.4,
for a period of four fiscal quarters ended with the most recent fiscal quarter
for which financial statements have been provided (or are required to have been
provided) pursuant to Sections 9.7 and 9.8,

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respectively, as if such financial covenant were applicable notwithstanding the
fact that Undrawn Availability may be in excess of Twenty Million Dollars
($20,000,000);
     (ii) within fifteen days of the consummation of such Proposed Transaction,
updated versions of the most recently delivered projections under Section 9.11
covering a period of four fiscal quarters, commencing with the fiscal quarter in
which the Proposed Transaction is to be consummated and otherwise prepared in
accordance with the projections required to be delivered under Section 9.11 (the
“Transaction Projections”) and based upon the financial statements (I) of the
Parent and its consolidated Subsidiaries for Parent’s most recently completed
fiscal year and each fiscal quarter during the current fiscal year for which
financial statements have been provided (or are required to have been provided)
pursuant to Sections 9.7 and9.8, respectively, in relation to the date of such
required delivery of the Proposed Transaction, taking into account such Proposed
Transaction and (II) in the case of an investment, of such Person in which such
investment is being made, for a period similar to the period described in clause
(I) above.
          “Permitted Public Notes Refinancing” shall mean a replacement or
refinancing of the Public Notes in existence on the date hereof, provided that
such replacement or refinancing (i) does not provide for an interest rate in
excess of the rate applicable to the Public Notes on the date hereof, (ii) does
not increase the aggregate principal amount thereof or reduce the average
weighted life to maturity thereof, (iii) is not secured by any Lien, and
(iv) contains covenants and events of default which are no more onerous than
those contained in the Indenture as in existence on the date hereof.
          “Person” shall mean any individual, sole proprietorship, partnership,
corporation, business trust, joint stock company, trust, unincorporated
organization, association, limited liability company, institution, public
benefit corporation, joint venture, entity or government (whether federal,
state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof).
          “Plan” shall mean any employee pension benefit plan within the meaning
of Section 3(2) of ERISA, maintained for employees of any Loan Party or any
Subsidiary thereof or any member of the Controlled Group or any such Plan to
which any Loan Party or any Subsidiary thereof or any member of the Controlled
Group is required to contribute on behalf of any of its employees.
          “Post-Closing Waiver Letter” shall mean the Post-Closing Waiver
Letter, dated as of the Closing Date, among the Loan Parties and the Agent.
          “Projections” shall have the meaning set forth in Section 5.6(a).
          “Proposed Acquisition” shall have the meaning set forth in
Section 7.1(b) hereof.
          “Public Note Documents” shall mean the Indenture, the Public Notes and
each other document executed in connection therewith, and, in the case of a
Permitted Public Notes Refinancing, the documents related thereto.
          “Public Noteholder” shall mean the holder or purchaser of any Public
Note under the Indenture.

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          “Public Notes” shall mean the Parent’s 11-1/2% Senior Notes due 2012
issued on May 1, 2002 pursuant to the Indenture, including any notes issued in
exchange therefor pursuant to the Registration Rights Agreement, and includes
any Indebtedness issued in connection with a Permitted Public Notes Refinancing.
          “Qualified Counterparty” shall mean the Agent, any Affiliate of the
Agent and any Lender (or a Person who was a lender at the time of execution and
delivery of a Hedging Contract with a Loan Party) who has entered into a Hedging
Contract with a Loan Party.
          “Real Property” shall mean all real property, both owned and leased,
of any Loan Party.
          “Receivable” shall mean an Account.
          “Register” shall have the meaning set forth in Section 15.5(c).
          “Registration Rights Agreement” shall mean that certain Registration
Rights Agreement dated as of April 25, 2002 by and among Parent, Electronics,
Controls and the initial purchasers of the Public Notes.
          “Reportable Event” shall mean a reportable event described in Section
4043(b) of ERISA or the regulations promulgated thereunder.
          “Required Lenders” shall mean, at any time, (x) if there are more than
two Lenders, Lenders (excluding, for purposes of this definition, Lenders then
constituting “Defaulting Lenders” under Section 2.11) holding greater than fifty
percent (50%) of the aggregate amount of the Revolving Commitments of all of the
Lenders at such time; provided, however, that, if all of the Revolving
Commitments are terminated pursuant to the terms hereof, then, the term
“Required Lenders” means Lenders (excluding, for purposes of this definition,
any Defaulting Lenders) having greater than fifty percent (50%) of the aggregate
principal amount of the Advances of all of the Lenders outstanding at such time,
plus the Letter of Credit Exposure at such time (excluding, for purposes of this
clause (x), the outstanding Revolving Commitments and the outstanding amount of
Advances and Letter of Credit Exposure of any such Defaulting Lender); and
(y) if there are no more than two (2) Lenders, all Lenders (excluding, for
purposes of this clause (y), any Defaulting Lenders).
          “Revolving Advance Request” shall have the meaning set forth in
Section 2.2(a).
          “Revolving Advances” shall mean each of the Advances made pursuant to
Section 2.1.
          “Revolving Borrowing” shall mean a Borrowing comprised of Revolving
Advances which are made, converted or continued by the Lenders on a single date,
and, in the case of Libor Rate Loans, which are in a single currency and as to
which a single Interest Period is in effect.
          “Revolving Commitment” shall mean, with respect to any Lender, (a) the
commitment of such Lender to make Revolving Advances in an aggregate amount not
to exceed the Dollar amount set forth below such Lender’s name on such Lender’s
signature page hereto as such Lender’s Revolving Commitment, as same may be
adjusted upon any assignment by a Lender pursuant to Section 15.5(b) or as may
be otherwise adjusted from time to time in accordance with this Agreement or
(b) the Dollar amount set forth in any Assignment and Assumption to which such
Lender is a party as such Lender’s Revolving Commitment.

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          “Revolving Domestic Advances” shall mean the Revolving Advances made
to any of the Borrowers other than the UK Borrowers.
          “Revolving Note” or “Revolving Notes” shall mean, singularly or
collectively, as the context may require, the promissory notes referred to in
Section 2.2(c).
          “Revolving Percentage” shall mean, as to any Lender at any time, the
percentage that such Lender’s Revolving Commitment then constitutes of the total
Revolving Commitments (or, at any time after the Revolving Commitments shall
have expired or terminated, the percentage that the aggregate principal amount
of such Lender’s Revolving Advances outstanding at such time constitutes of the
aggregate principal amount of the Revolving Advances of all of the Lenders
outstanding at such time).
          “Revolving UK Advances” shall mean the Revolving Advances made to
either of the UK Borrowers.
          “RCRA” shall mean the Resource Conservation and Recovery Act of 1976,
as amended from time to time.
          “Secured Creditor” or “Secured Creditors” shall have the meanings set
forth in Section 4.1.
          “Securities Account Control Agreement” shall mean an agreement in form
and substance satisfactory to the Agent, executed by the Borrowing Agent and the
Agent and acknowledged and agreed to by the relevant Approved Securities
Intermediary.
          “Security Questionnaire” shall mean, with respect to each Loan Party,
the completed Security Questionnaire provided by such Loan Party to the Agent.
          “Settlement Date” shall mean the Closing Date and thereafter Wednesday
of each week unless such day is not a Business Day in which case it shall be the
next succeeding Business Day.
          “Settlement Week” shall mean the time period commencing with the
opening of business on a Tuesday and ending on the end of business the following
Tuesday.
          “Specified Fixed Assets” shall mean and include with respect to any
Person, such Person’s Real Property, all Investment Property and Security
Entitlements consisting of any equity interests in any Subsidiaries or joint
ventures, and all Equipment and Fixtures.
          “Specified Fixed Asset Collateral” shall mean, with respect to any
Loan Party, such Loan Party’s:
     (a) Specified Fixed Assets;
     (b) policies and certificates of insurance covering Specified Fixed Assets;
     (c) accessions to, substitutions for, and all replacements, Products and
Proceeds of the Specified Fixed Assets including proceeds of insurance policies
insuring such Specified Fixed Assets and proceeds of any insurance, indemnity,
warranty or guaranty, all to the extent relating to or arising from any of the
Specified Fixed Assets; and

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     (d) books, records, and other property (including credit files, programs,
printouts, computer software (owned by such Person or in which it has an
interest), and disks, magnetic tape and other magnetic media, and other
materials and records) pertaining to any such above-referenced property.
          “Stated Amount” shall mean, with respect to each Letter of Credit, the
maximum available to be drawn thereunder (regardless of whether any conditions
or other requirements for drawing could then be met).
          “StuckyNet System” shall mean the Agent’s StuckyNet-Link
internet-based communication system.
          “Subsidiary” shall mean, in respect of any Person that is not a
natural Person, a corporation or other business entity the shares constituting a
majority of the outstanding capital stock (or other form of ownership) or
constituting a majority of the voting power in any election of directors (or
shares constituting both majorities) of which are (or upon the exercise of any
outstanding warrants, options or other rights would be) owned directly or
indirectly at the time in question by such Person or another subsidiary of such
Person or any combination of the foregoing.
          “Subchapter S” shall mean subchapter S of the Code.
          “Synthetic Lease Obligation” means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
          “Termination Event” shall mean: (i) a Reportable Event with respect to
any Plan or Multiemployer Plan; (ii) the withdrawal of any Loan Party or any
Subsidiary thereof or any member of the Controlled Group from a Plan during a
plan year in which such entity was a “substantial employer” as defined in
Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to
terminate a Plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the institution by the PBGC of proceedings to terminate a Plan or
Multiemployer Plan; (v) any event or condition (a) which could reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Plan or Multiemployer
Plan, or (b) that could reasonably be expected to result in termination of a
Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or
complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of
any Loan Party, any Subsidiary thereof or any member of the Controlled Group
from a Multiemployer Plan.
          “Toxic Substance” shall mean and include any material present on the
Real Property which has been shown to have significant adverse effect on human
health or which is subject to regulation under the Toxic Substances Control Act
(TSCA), 15 U.S.C. Sections 2601 et seq., applicable state law, or any other
applicable Federal or state laws now in force or hereafter enacted relating to
toxic substances. “Toxic Substance” includes but is not limited to asbestos,
polychlorinated biphenyls (PCBs) and lead-based paints.
          “Trademark Security Agreement” shall mean a trademark security
agreement, executed and delivered by a Loan Party in connection with this
Agreement, in form and substance satisfactory to the Agent.

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          “Type” shall mean an Advance consisting of Libor Rate Loans made in
Dollars, an Advance consisting of Libor Rate Loans made in a single Alternative
Currency, or an Advance consisting of Alternate Base Rate Loans, as applicable.
          “UCP” shall have the meaning set forth in Section 2.9(d).
          “UK Assets” shall mean the respective assets of each of the UK
Borrowers.
          “UK Borrower Sublimit” shall mean an amount equal to Thirty Million
Dollars ($30,000,000) (determined in an equivalent amount in Dollars for each
Loan denominated in Alternative Currency).
          “UK Collateral” shall mean the respective Collateral of each of the UK
Borrowers.
          “UK Collateralized Loan Amount” shall mean, as of any date of
determination and to the extent that the conditions set forth in Section 8.3,
have been satisfied, the amount equal to the lesser of (i) the UK Formula
Amount, or (ii) the sum of the aggregate Revolving UK Advances outstanding plus
the Letter of Credit UK Exposure.
          “UK Formula Amount” shall mean, as of any date of determination, the
following:
(i) up to eighty-five percent (85%) of the face amount of Eligible UK
Receivables, plus
(ii) either (A) sixty-five percent multiplied by the value of Eligible UK
Inventory valued at the lower of cost (determined on a first-in-first-out basis)
or market value, or (B) in the event that the Borrowing Agent elects to have its
or any other Loan Party’s Inventory appraised for the purpose of determining the
value of the Inventory portion of the UK Formula Amount by an appraisal firm
acceptable to the Agent, in its sole discretion, the lesser of either
(1) seventy percent (70%) of the value of Eligible UK Inventory valued at the
lower of cost (determined on a first-in-first-out basis) or market value, or
(2) eighty-five percent (85%) of the Net Orderly Liquidation Value of Eligible
UK Inventory; provided, however, in no event will the aggregate amount of all
such Revolving Advances from all Lenders made with respect to Eligible Domestic
Inventory and Eligible UK Inventory exceed Thirty-Five Million Dollars
($35,000,000) (the “Inventory Sublimit”), minus
(iii) such reserves as the Agent may deem proper and necessary with respect to
the Eligible UK Receivables and the Eligible UK Inventory from time to time in
the exercise of its Permitted Discretion, including, without limitation,
reserves relating to the Enterprise Act 2002.
          “ÚK Security Documents” shall mean the Mortgage Debenture executed by
the English Borrower in favor of the Agent, the Notice to Account Bank in
respect of the Collection Account of the English Borrower executed by the
English Borrower in favor of the Agent, the Acknowledgement of the Notice of
Account Bank executed by the account bank with respect to the Notice of Account
Debtor of the Collection Account of the English Borrower, the Mortgage Debenture
executed by the Scottish Borrower in favor of the Agent, the Notice to Account
Bank in respect of the Collection Account of the Scottish Borrower executed by
the Scottish Borrower in favor of the Agent, the Acknowledgement of the Notice
of Account Bank executed by the account bank with respect to the Notice of
Account Debtor of the Collection Account of the

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Scottish Borrower, and any other note, mortgage, deed of trust, security
agreement, pledge, guaranty, insurance assignment or other lien instrument,
reimbursement agreement, indemnity agreement, audit report, environmental audit,
officer’s certificate or other writing of any kind which is now or hereafter
required to be delivered by or on behalf of any UK Borrower to the Agent, the
Issuer or any Lender (or any of their respective Affiliates) in connection with
this Agreement or any other Loan Document or the liens granted by the UK
Borrowers in connection with this Agreement or any other Loan Document.
          “Undrawn Availability” shall mean, as of any date of determination, an
amount equal to (a) the lesser of (i) the Aggregate Formula Amount at such time
and (ii) the sum of the Maximum Revolving Advance Amount less the Letter of
Credit Exposure at such time, minus (b) the sum of (i) the outstanding amount of
Revolving Advances at such time, (ii) all amounts at such time due and owing to
any Loan Party’s trade creditors which are outstanding ninety (90) days or more
beyond the due date (without duplication with respect to any such amount
deducted from the Aggregate Formula Amount), and (iii) fees and expenses for
which any Loan Party is liable at such time but which have not been paid or
charged to the Loan Account.
          “Uniform Commercial Code” shall mean the Uniform Commercial Code or
other similar law of the State of Ohio as in effect on the date of this
Agreement and as amended from time to time.
          “Unpaid Reimbursement Obligation” shall have the meaning set forth in
Section 2.9(g).
          “USA Patriot Act” shall mean the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Public Law 107-56.
          “Waivers” shall mean, collectively, any and all landlord’s waivers,
warehouseman’s waivers, consignee waivers, creditor’s waivers, mortgagee waivers
and processing facility and similar bailee’s waivers, executed and delivered in
connection with this Agreement, in form and substance satisfactory to the Agent.
          “Wholly-Owned Subsidiary” shall mean each Subsidiary of the Parent at
least ninety-nine percent (99%) of whose capital stock, equity interests and
partnership interests, other than director’s qualifying shares or similar
interests, are owned directly or indirectly by the Parent.
          “Withholding Certificate” shall mean, with respect to (i) a Domestic
Borrower, a Form W-9; a Form W-8BEN; a Form W-8ECI; a Form W-8IMY and the
related statements and certifications as required under Section 1.1441-1(e)(2)
or (3) of the Income Tax Regulations; a statement described in Section
1.871-14(c)(2)(v) of the Income Tax Regulations; or any other certificates under
the Code or Income Tax Regulations that certify or establish the status of a
payee or beneficial owner as a U.S. or foreign person, (ii) a Foreign Borrower,
a Form “Claim on Behalf of a United States Domestic Corporation to Relief from
United Kingdom Income Tax on Interest and Royalties Arising in the United
Kingdom” or any successor forms.
     1.4 Certain Matters of Construction.
          For the purpose of computing periods of time from a specified date to
a later specified date, the word “from” means “from and including” and the words
“to” and “until” each mean “to but excluding”. Unless the context otherwise
requires, (a) any definition of or reference to any agreement, instrument or
Other Loan Document herein shall be construed as referring to such agreement,
instrument, or Other Loan Document as from time to time amended,

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supplemented or otherwise modified, substituted, amended and restated or
replaced, (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 any particular provision hereof, (d) any
reference to payment, repayment, or prepayment shall be construed as referring
to payment of immediately available funds in Dollars (or the substantial
equivalent thereof in an Alternative Currency), (e) any pronoun used shall be
deemed to cover all genders, (f) wherever appropriate in the context, terms used
herein in the singular also include the plural and vice versa, (h) all
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations, (i) the word “including” may be
read to mean “including, without limitation,” as the context requires and
(j) unless otherwise stated, all section references are to this Agreement.
     1.5 Currency Equivalents.
          For purposes of this Agreement, except as otherwise specified herein,
(i) the equivalent in Dollars of any Alternative Currency shall be determined by
using the quoted spot rate at which the Agent offers to exchange Dollars for
such Alternative Currency at its Payment Office at 9:00 A.M. (local time at the
Lending Installation) two Business Days prior to the date on which such
equivalent is to be determined, and (ii) the equivalent in any Alternative
Currency of Dollars shall be determined by using the quoted spot rate at which
the Agent’s Lending Installation offers to exchange such Alternative Currency
for Dollars at the Payment Office at 9:00 A.M. (local time at the Payment
Office) two Business Days prior to the date on which such equivalent is to be
determined; provided, that (A) the equivalent in Dollars of each Libor Rate Loan
made in an Alternative Currency shall be, for the purposes of determining the
unused portion of each Lender’s Commitment, or any or all Advances outstanding
on such date, calculated or recalculated, as the case may be, on the date that
the Libor Rate applicable to such Advance is established, on the last day of the
Interest Period applicable thereto, and on each date that it shall be necessary
(or the Agent shall elect) to determine the unused portion of each Lender’s
Commitment; (B) the equivalent in Dollars of any Letter of Credit Exposure in
respect of any Letter of Credit denominated in an Alternative Currency shall be
determined at the time the drawing under such Letter of Credit was paid or
disbursed by the applicable Issuer; (C) for purposes of determining the Maximum
Revolving Advance amount, the UK Formula Amount, the UK Collateralized Loan
Amount, the Letter of Credit Exposure or the Undrawn Availability as
contemplated by Sections 2.1(a), 2.5(c), 2.7(b), 2.9(a) and 3.2, the equivalent
in Dollars of the face amount of any Letter of Credit denominated in an
Alternative Currency shall be calculated (x) on the date of the issuance of the
respective Letter of Credit, (y) on the first Business Day of each calendar
month thereafter and (z) in any other case where the same is required or
permitted to be calculated, on such other day as the Agent may, in its Permitted
Discretion, consider appropriate; and (D) for purposes of calculating letter of
credit fees as contemplated by Section 3.4, the equivalent in Dollars of the
Stated Amount of any Letter of Credit denominated in an Alternative Currency
shall be calculated on the first day of each calendar month in the quarterly
period in which the respective payment is due pursuant to said sections.
Notwithstanding the foregoing, for purposes of determining the amount of the
unused facility fees or the Applicable Margin payable pursuant to Sections 3.5
or 3.2 hereof, the equivalent in Dollars of any outstanding Revolving Advances
which are denominated in Alternative Currency shall be determined by using the
quoted spot rate at which the Agent offers to exchange Dollars for such
Alternative Currency at its Payment Office at 9:00 A.M. (local time at the
Payment Office) two Business Days prior to the commencement date of the
applicable Interest Period for such Revolving Advances, unless the Agent, in its
sole discretion, shall elect to use another day or basis for determining such
equivalent in Dollars.

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     1.6 Addition of Borrowers.
          By execution of a Borrower Joinder Agreement (including a Borrower
Joinder Agreement executed in connection with a Permitted Acquisition) by a
signatory thereof, and upon acceptance of such Borrower Joinder Agreement by the
Agent, in its sole discretion, and such signatory’s satisfaction of all
conditions and completion of all deliveries specified in the Joinder Amendment
(if any) and the Borrower Joinder Agreement, this Agreement shall be amended so
that such signatory shall become for all purposes a party to this Agreement as
if an original signatory hereto and shall be admitted as a Borrower hereunder.
This Agreement (as amended by each Joinder Amendment) shall be binding for all
purposes upon such signatory Borrower as if such signatory was an original
signatory hereto, and, if applicable, accommodate the consummation of the
Permitted Acquisition. The Borrower Joinder Agreement shall require, among other
things, (x) a supplement the Schedules provided by the Loan Parties in
connection with this Agreement to reflect the new Borrower, (y) to the extent
acceptable to the Agent in its sole discretion, an update of certain previously
delivered Schedules to the date of the Joinder Amendment to reflect any change
in the disclosures therein made, (z) the delivery of new Notes reflecting all
Borrowers.
     1.7 Joinder Amendments.
          In connection with each Borrower Joinder Agreement, each of the Loan
Parties, the Agent and the Required Lenders may execute an amendment to this
Agreement (each a “Joinder Amendment”), which amendment shall amend such
provisions of this Agreement and the Other Loan Documents as deemed necessary by
the Agent to accommodate the addition of the applicable new Person as a
Borrower. The consent and execution thereof by all Lenders (and if applicable,
the Issuer) shall be required with respect to any provision of a Joinder
Amendment which would otherwise require pursuant to Section 15.3 hereof
unanimous consent by all Lenders (and if applicable, the Issuer).
     1.8 Liability of Borrowers.
          The parties intend that this Agreement shall in all circumstances be
interpreted to provide that (i) each Foreign Borrower is liable only for the
Advances made to such Foreign Borrower, interest on such outstanding Advances,
such Foreign Borrower’s guaranty pursuant to Section 2.9 of reimbursement
obligations owing to the Issuer by its Foreign Subsidiaries, and its pro rata
share of otherwise unallocated general fees, reimbursements and charges
hereunder and under any Other Loan Documents, except that each UK Borrower is
liable for all of the foregoing amounts with respect to the other UK Borrower,
(ii) the Collateral owned by each Foreign Borrower shall secure only those
Obligations described in clause (i) of this Section 1.8, except that the
Collateral owned by each UK Borrower shall secure those Obligations of the other
UK Borrower, and (iii) Net Proceeds or other moneys paid to Agent by a Foreign
Borrower or otherwise in respect of any assets of a Foreign Borrower (whether or
not Collateral) shall not be applied to the payment or prepayment of any
Obligations other than the Obligations described in clause (i) of this
Section 1.8. The parties likewise intend that this Agreement shall in all
circumstances be interpreted to provide, unless otherwise expressly stated to
the contrary, that each Domestic Borrower and each Domestic Subsidiary which is
a Guarantor is liable for all Obligations of all the Borrowers.
     1.9 Agreement Regarding Permitted Secured Indebtedness and Liens.
          (a) Notwithstanding any provision of this Agreement or any Other Loan
Document to the contrary with respect to restrictions on Indebtedness, Liens,
and prepayment of Indebtedness, but subject to Section 15.3, the Loan Parties
may incur certain Indebtedness in an amount not to exceed Two Hundred Million
Dollars ($200,000,000), in the aggregate (the

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“Permitted Secured Indebtedness”), grant Liens securing the Permitted Secured
Indebtedness and certain Hedging Obligations, and prepay the Public Notes with
the proceeds of the Permitted Secured Indebtedness so long as: (i) all Permitted
Secured Indebtedness is issued by the Parent and, to the extent requested by the
holders thereof, guaranteed by the other Loan Parties; (ii) the proceeds of the
Permitted Secured Indebtedness are promptly used to refinance all of the
outstanding Indebtedness owing with respect to the Public Notes and to pay all
costs and expenses relating to such refinancing, with any excess of proceeds of
Permitted Secured Indebtedness to be used for general corporate purposes;
(iii) the Permitted Secured Indebtedness and such Hedging Obligations are on
terms and conditions satisfactory to the Required Lenders; (iv) the Liens
securing the Permitted Secured Indebtedness and such Hedging Obligations are
(A) first priority Liens with respect to Specified Fixed Asset Collateral which
secures the Permitted Secured Indebtedness, and (B) not secured by any
Collateral unless (y) such Liens are subordinate to the Liens of the Agent with
respect to the Collateral on terms satisfactory to the Required Lenders and
(z) the Agent is granted a subordinate Lien with respect to all Specified Fixed
Asset Collateral which secures the Permitted Secured Indebtedness on terms
satisfactory to the Required Lenders; (v) the Permitted Secured Indebtedness,
such Hedging Obligations and Liens relating to the Permitted Secured
Indebtedness and such Hedging Obligations are subject to an inter-creditor
agreement satisfactory to the Required Lenders; and (vi) no Event of Default
exists or would otherwise occur as a result of incurring the Permitted Secured
Indebtedness or such Hedging Obligations, granting such Liens, or refinancing
the Public Notes.. In addition, the Agent and the Required Lenders agree that,
pursuant to such inter-creditor agreement in form and substance satisfactory to
the Required Lenders, the Agent and the Required Lenders will agree to
subordinate the Agent’s interest in and rights to Net Proceeds of all assets and
all Collateral other than ABL Collateral. “ABL Collateral” shall mean all
Collateral consisting of: (i) Accounts, (ii) Inventory, (iii) Chattel Paper;
(iv) Investment Property and Security Entitlements consisting of Cash
Equivalents; (v) Deposit Accounts, Securities Accounts, and all cash, checks,
and other property held therein or credited thereto other than identifiable
proceeds of Specified Fixed Asset Collateral and any Collateral other than
Accounts, Inventory, Chattel Paper and such Investment Property and Security
Entitlements, and (vi) solely to the extent evidencing, governing, securing or
otherwise related to the items referred to in the preceding clauses (i) through
(v), all Instruments, Letter of Credit Rights, Supporting Obligations,
Documents, Commercial Tort Claims, General Intangibles (other than Intellectual
Property, so long as Agent continues to have an unrestricted license to use such
Intellectual Property in accordance with Section 11.1) and Payment Intangibles,
(vii) accessions to, substitutions for, and all replacements, Products and
Proceeds of the foregoing property including proceeds of insurance policies
insuring such property, and proceeds of any insurance, indemnity, warranty or
guaranty with respect to such property and (viii) books, records, and other
property (including credit files, programs, printouts, computer software, and
disks, magnetic tape and other magnetic media, and other materials and records)
pertaining to any of such forgoing property. In addition, the Loan Parties shall
be permitted to otherwise prepay Indebtedness with respect to the Public Notes
in accordance with Section 7.17
          (b) All of the parties to this Agreement will enter into amendments to
this Agreement and the Other Loan Documents as are deemed necessary by the
Required Lenders to reflect the transactions related to the Permitted Secured
Indebtedness and to include additional financial performance covenants and other
covenants consistent with and similar to but no more restrictive than those
additional financial performance covenants and other covenants contained in the
documentation evidencing the Permitted Secured Indebtedness. In addition, if
(i) the Parent has issued Permitted Secured Indebtedness and prepaid or redeemed
all of the outstanding Public Notes, and (ii) no Event of Default has occurred
and is continuing, then, at the request of the Borrowing Agent, the Facility
Termination Date shall be extended to the date designated by the Borrowing Agent
which is not later than the earlier of: (A) five years after the Closing Date,
and (B) 180 days prior to the final maturity of the Permitted Secured
Indebtedness.

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     1.10 Time References.
          All time references in this Agreement are to Cleveland, Ohio time.
II. ADVANCES; PAYMENTS.
     2.1 Revolving Advances to Borrowers.
          (a) Subject to the terms and conditions set forth in this Agreement,
each Lender with a Revolving Commitment severally and not jointly agrees to
make, until and including the Business Day immediately preceding the Facility
Termination Date, Revolving Advances to the Borrowers; provided, however, that
the aggregate outstanding amount of such Lender’s Revolving Advances shall not
at any time exceed of the lesser of: (x) such Lender’s Revolving Percentage of
an amount equal to the Maximum Revolving Advance Amount less the Letter of
Credit Exposure and (y) such Lender’s Revolving Percentage of an amount equal to
the sum of:
(i) up to eighty-five percent (85%) multiplied by the face amount of Eligible
Domestic Receivables, plus
(ii) either (A) sixty-five percent multiplied by the value of Eligible Domestic
Inventory valued at the lower of cost (determined on a first-in-first-out basis)
or market value, or (B) in the event that the Borrowing Agent elects to have its
or any other Loan Party’s Inventory appraised for the purpose of determining the
value of the Inventory portion of the Aggregate Formula Amount by an appraisal
firm acceptable to the Agent, in its sole discretion, the lesser of either
(1) seventy percent (70%) multiplied by the value of Eligible Domestic Inventory
valued at the lower of cost (determined on a first-in-first-out basis) or market
value, or (2) eighty-five percent (85%) of the Net Orderly Liquidation Value of
Eligible Domestic Inventory; provided, however, in no event will the aggregate
amount of all such Revolving Advances from all Lenders made with respect to
Eligible Domestic Inventory and Eligible UK Inventory exceed Thirty-Five Million
Dollars ($35,000,000) (the “Inventory Sublimit”); provided, further, that in no
event will the aggregate amount of all such Revolving Advances from all Lenders
made with respect to Eligible Domestic Inventory located in Mexico exceed Five
Million Dollars ($5,000,000), plus
(iii) the UK Collateralized Loan Amount, minus
(iv) the aggregate Letter of Credit Domestic Exposure, minus
(v) such reserves as the Agent may deem proper and necessary (other than
reserves with respect to the UK Eligible Receivables and the UK Eligible
Inventory) from time to time in the exercise of its Permitted Discretion.
The percentages set forth in the definition of “UK Formula Amount” and in this
clause (a) above with respect to Eligible Domestic Inventory, Eligible UK
Inventory, Eligible Domestic Receivables and Eligible Domestic Inventory shall
be collectively referred to as the “Advance Rates”. The amount derived at any
time and from time to time from the sum of clauses (i), (ii) and (iii)
hereinabove minus the sum of clauses (iv) and (v) hereinabove shall be referred
to as the “Aggregate Formula Amount”. Prior to the Facility Termination Date,
the Borrowers may use the Revolving Advances by borrowing, prepaying and
reborrowing, all in accordance with the terms and conditions hereof.

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          (b) Subject to Section 15.3(viii), the Advance Rates and the Inventory
Sublimit may be increased or decreased by the Agent at any time and from time to
time, in its Permitted Discretion. Each Borrower consents to any such increases
or decreases (to the extent such increase or decrease was made in the Agent’s
Permitted Discretion) and acknowledges that decreasing the Advance Rates and the
Inventory Sublimit, or increasing the reserves may limit or restrict Advances
requested by the Borrowing Agent.
          (c) Subject to the terms and conditions of this Agreement, Revolving
Advances may be Alternate Base Rate Loans or Libor Rate Loans, and, in the case
of Libor Rate Loans, denominated in Dollars or an Alternative Currency;
provided, however, that (i) all Revolving Advances made as part of the same
Borrowing shall, unless otherwise specifically provided herein, consist of
Revolving Advances of the same Type and currency, (ii) Foreign Borrowers may
borrow Revolving Advances denominated only in an Alternative Currency, (iii) the
aggregate principal amount of Revolving Advances denominated in an Alternative
Currency shall not exceed at any time outstanding the Alternative Currency
Sublimit, (iv) the sum of the aggregate principal amount of Revolving Advances
made to the Foreign Borrowers plus the Letter of Credit UK Exposure shall not
exceed the Foreign Borrower Sublimit, and (v) the sum of the aggregate principal
amount of Revolving UK Advances plus the Letter of Credit UK Exposure shall not
exceed the UK Borrower Sublimit.
     2.2 Requests For Revolving Advances.
          (a) Requests for Revolving Borrowings shall be given by the Borrowing
Agent to the Agent not later than 1:00 p.m: (i) on the Business Day which is the
requested date of a proposed Borrowing comprised of Alternate Base Rate Loans,
(ii) on the Business Day which is three (3) Business Days before the requested
date of a proposed Borrowing comprised of Libor Rate Loans denominated in
Dollars, and (iii) on the Business Day which is five (5) Business Days before
the requested date of a proposed Borrowing comprised of Libor Rate Loans
denominated in an Alternative Currency. Each such request (a “Revolving Advance
Request”) for Alternate Base Rate Loans shall be transmitted to the Agent by an
Approved Electronic Communication (or if requested by the Agent, only by a
request posted to the Agent’s StuckyNet System). Each Revolving Advance Request
for Libor Rate Loans shall be transmitted to the Agent by the Borrowing Agent in
a written or telephonic notice (in the case of a telephonic notice, promptly
confirmed in writing if requested by the Agent). Each written Revolving Advance
Request for Libor Rate Loans or written confirmation shall be substantially in
the form of Exhibit C attached hereto, executed or otherwise acceptably
authenticated by the Borrowing Agent and transmitted to the Agent in accordance
with Section 15.8. Each Revolving Advance Request shall be irrevocable and
binding on the Borrowers and be subject to the indemnification provisions of
this Agreement. Each Revolving Advance Request shall specify the following
information:
          (i) the date of the proposed Borrowing, which shall be a Business Day;
          (ii) the amount of the proposed Borrowing;
          (iii) whether the resulting Borrowing is to consist of Alternate Base
Rate Loans or Libor Rate Loans;
          (iv) in the case of a proposed Borrowing of Libor Rate Loans, the
duration of the initial Interest Period; and
          (v) in the case of a proposed Borrowing of Libor Rate Loans, whether
the Libor Rate Loans are to be denominated in Dollars or an Alternative
Currency.

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If any such Revolving Advance Request requests a Borrowing consisting of Libor
Rate Loans but does not specify an Interest Period, then the Borrowing Agent
shall be deemed to have selected an Interest Period of one (1) month’s duration.
No Libor Rate Loan shall be made available to the Borrowers during the
continuance of a Default or an Event of Default other than Libor Rate Loans in
an Alternative Currency having an Interest Period of one (1) month.
          (b) Revolving Advances shall be made as part of a Borrowing consisting
of Advances made by the Lenders ratably in accordance with the Revolving
Percentage of each Lender. Revolving Advances shall be comprised of one or more
Revolving Borrowings as the Borrowers may elect from time to time by delivery to
the Agent by the Borrowing Agent of a Revolving Advance Request or an Interest
Election Request in accordance with this Agreement. Each Revolving Borrowing
comprised of Libor Rate Loans shall be in an aggregate amount of not less than
Five Hundred Thousand Dollars ($500,000) (or the substantial equivalent thereof
in an Alternative Currency) or an integral multiple of One Hundred Thousand
Dollars ($100,000) (or the substantial equivalent thereof in an Alternative
Currency) in excess thereof. No minimum advance amounts shall apply to Revolving
Borrowings comprised of Alternate Base Rate Loans.
          (c) Each Lender’s Revolving Advances to the Borrowers shall be
evidenced at all times by a Revolving Note substantially in the form attached
hereto as Exhibit B which shall: (i) be executed and delivered by the Borrowers
and payable to the order of such Lender and (ii) be in a stated principal amount
equal to the Revolving Commitment of such Lender and payable for the unpaid
principal amount of the Revolving Advances evidenced thereby, (iii) mature on
the Facility Termination Date, (iv) bear interest as provided in this Agreement,
(v) be subject to optional and mandatory prepayment as provided in this
Agreement, and (vi) be entitled to the benefits of this Agreement and the Other
Loan Documents.
          (d) The Borrowers shall be deemed to have made a request for a
Revolving Borrowing (a “Deemed Credit Request”), which Deemed Credit Request
shall be irrevocable upon any interest, principal, fee or other Obligation of
the Borrowers (including Unpaid Reimbursement Obligations) hereunder becoming
due, for (i) to the extent such Revolving Borrowing is made in Dollars, a
Revolving Borrowing comprised of Alternate Base Rate Loans in an amount
necessary to pay such interest, principal fee or Obligation and (ii) to the
extent such Revolving Borrowing is made in an Alternative Currency, a Revolving
Borrowing comprised of LIBOR Rate Loans with an Interest Period of one (1) month
in an amount necessary to pay such interest, principal fee or Obligation. Each
Lender agrees that its obligation to make or participate in Revolving Advances
pursuant to a Deemed Credit Request is absolute and unconditional and shall not
be affected by any circumstance whatsoever, including the occurrence of any
Default or Event of Default or the failure of any condition precedent.
          (e) In the case of a Revolving Advance Request with respect to a
proposed Revolving Borrowing comprised of Libor Rate Loans denominated in an
Alternative Currency, the obligation of each Lender to make its Libor Rate Loan
in Alternative Currency as part of such Revolving Borrowing is subject to the
confirmation by the Agent to the Borrower Agent not later than the fourth
Business Day before the requested date of such Borrowing that the requested
Alternative Currency is readily and freely transferable and convertible into
Dollars.
          (f) If the Agent has not provided the confirmation referred to in
clause (e) above, the Agent shall promptly notify the Borrowing Agent and each
Lender, whereupon the Borrowing Agent shall, by notice to the Agent not later
than the third Business Day before the requested date of such Borrowing,
withdraw the Revolving Advance Request relating to such requested Borrowing. If
the Borrowing Agent does so withdraw such Revolving Advance Request, the
Borrowing requested in such Revolving Advance Request shall not occur and the
Agent shall promptly so notify each Lender. If the Borrowing Agent does not so
withdraw such

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Revolving Advance Request, the Agent shall promptly so notify each Lender and
such Revolving Advance Request shall be deemed to be a Revolving Advance Request
which requests a Revolving Borrowing comprised of Libor Rate Loans in an
aggregate amount in Dollars equivalent, on the date the Agent so notifies each
Lender, to the amount of the originally requested Revolving Borrowing in the
Alternative Currency; and in such notice by the Agent to each Lender the Agent
shall state such aggregate equivalent amount of such Revolving Borrowing in
Dollars and such Lender’s ratable portion of such Borrowing.
     2.3 Interest Elections; Conversions of Advances.
          (a) All Revolving Advances made on the Closing Date shall consist of
Alternate Base Rate Loans. After the Closing Date, and, with respect to
Revolving Advances, the Borrowing Agent may elect to convert any Revolving
Borrowing to a different Type or to continue any such Borrowing and, in the case
of a Borrowing consisting of Libor Rate Loans, may elect Interest Periods
therefor, as provided in this Section 2.3. The Borrowing Agent 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 Advances comprising such Borrowing, and the Advances comprising each
such portion shall be considered a separate Borrowing. The Borrowers shall not
be entitled to have outstanding in the aggregate at one time more than nine
(9) Borrowings of Revolving Advances consisting of Libor Rate Loans. This
Section 2.3 shall not apply to Revolving Advances made under Section 15.4, which
may not be converted or continued.
          (b) To make an election pursuant to this Section 2.3, the Borrowing
Agent shall notify the Agent of such election in a written or telephonic notice
(in the case of a telephonic notice, promptly confirmed in writing if requested
by the Agent) (each, an “Interest Election Request”) by the time that a
Revolving Advance Request would be required under Section 2.2(a) if the
Borrowing Agent were requesting a Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each Interest
Election Request shall be irrevocable and binding on the Borrowing Agent and be
subject to the indemnification provisions of this Agreement. Each Interest
Election Request shall specify the following information:
               (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 consist of Alternate
Base Rate Loans or Libor Rate Loans;
               (iv) if the resulting Borrowing is to consist of Libor Rate
Loans, the Interest Period to be applicable thereto after giving effect to such
election.
If any such Interest Election Request relates to a Borrowing consisting of Libor
Rate Loans denominated in either Dollars or an Alternative Currency, but does
not specify an Interest Period, then the Borrowing Agent shall be deemed to have
selected an Interest Period of one (1) month’s duration in Dollars or such
Alternative Currency, as applicable.

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     If the Borrowing Agent fails to deliver a timely Interest Election Request
with respect to a Revolving Borrowing consisting of Libor Rate Loans denominated
in Dollars 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 a Revolving Borrowing consisting of
Alternate Base Rate Loans. If the Borrowing Agent fails to deliver a timely
Interest Election Request with respect to a Borrowing consisting of Libor Rate
Loans denominated in an Alternative Currency 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 continued as
a Borrowing consisting of Libor Rate Loans denominated in such Alternative
Currency for an Interest Period of one (1) month’s duration.
     2.4 Disbursement of Proceeds of Advances.
          All amounts shall be made available by each of the Lenders to the
Agent in Dollars or the applicable Alternative Currency and immediately
available funds at the Payment Office. The Agent shall then make all Advances
available to the Borrowing Agent by disbursing such Advances from whichever
office or other place the Agent may designate from time to time and, such
Advances, together with any and all other Obligations of the Borrowers, shall be
charged to the Loan Account on the Agent’s books. The proceeds of each Revolving
Advance requested by the Borrowing Agent under Section 2.2 or deemed to have
been requested by the Borrowers under Section 2.2(d) shall, (i) with respect to
requested Revolving Advances to any Domestic Borrower, be made available to the
Domestic Borrower on the day so requested by way of credit to an operating
account of the Borrowing Agent or a Domestic Borrower at National City Bank as
the Borrowing Agent may designate following notification to the Agent, in
immediately available funds, (ii) with respect to requested Revolving Advances
to any UK Borrower, be made available to the UK Borrower on the day so requested
by way of a wire transfer to any operating account of the UK Borrower at such
other bank as may be designated in writing to the Agent, and (iii) with respect
to Revolving Advances deemed to have been requested by the Borrowers, be
disbursed to the Agent to be applied to the outstanding Obligations giving rise
to such deemed request.
     2.5 Repayment of Advances.
          (a) The Revolving Advances shall be due and payable in full on the
Facility Termination Date subject to earlier prepayment as provided in
Section 2.7 and the application of payments from Account Debtors as provided in
this Section. 2.5(a). Reimbursements of drawings on Letters of Credit shall be
made as provided in Section 2.9(f). The Borrowers shall pay principal, interest,
and all other amounts payable hereunder, or under any Other Loan Document,
without any deduction whatsoever, including any deduction for any setoff or
counterclaim.
          (b) Each payment (including each prepayment) by the Borrowers on
account of the principal of and interest on the Advances shall be applied
according to the applicable Percentage of the Lenders.
          (c) Any payment by an Account Debtor with respect to a Receivable
which is evidenced by a check, note, draft or any other similar item of payment
may not be immediately collectible. In calculating outstanding Revolving
Advances and Undrawn Availability, the Agent agrees that any such item of
payment will be deemed to have been received by the Agent and will be
provisionally credited (even though not evidenced by collected funds) to the
Loan Account by the Agent on the Business Day on which the Agent has actual
possession of such item of payment for deposit to any of the Cash Concentration
Accounts. With respect to such calculation of outstanding Revolving Advances and
Undrawn Availability, the Agent also agrees that any payment from an Account
Debtor consisting of a federal wire transfer pursuant to the

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United States Treasury Fedwire Deposit System, an automatic clearing house
credit or other similar payment mechanism will be deemed to have been received
by the Agent and will be credited to the Loan Account by the Agent on the
Business Day on which the Agent has received such payment prior to 11:00 a.m. in
immediately available funds for deposit to any of the Cash Concentration
Accounts. In consideration of the Agent’s agreement for provisional crediting of
items of payment, each Borrower agrees that, in calculating interest and other
charges on the Obligations, all payments from Account Debtors will be treated as
having been credited to the Loan Account on the Business Day immediately
following the Business Day on which such payments are deemed to have been
received by the Agent pursuant to this Section 2.5(c), other than payments in
the form of federal wire transfers pursuant to the United States Treasury
Fedwire Deposit System and automatic clearing house credits will be treated as
having been credited to the Loan Account on the Business Day on which such
payments are deemed to have been received by the Agent pursuant to this
Section 2.5(c).
          (d) The Agent shall not be required to credit the Loan Account for the
amount of any item of payment or other payment which is unsatisfactory to the
Agent in the exercise of its Permitted Discretion. All credits (other than
federal wire transfers) shall be provisional, subject to verification and final
settlement. The Agent may charge the Loan Account for the amount of any item of
payment or other payment which is returned to the Agent unpaid or otherwise not
collected. Each Borrower agrees that any information and data reported to the
Borrowers pursuant to any service which is received prior to final posting and
confirmation is subject to correction and is not to be construed as final
posting information. The Agent and the Lenders shall have no liability for the
content of such preliminary service related information.
          (e) Except as expressly provided herein, all payments (including
prepayments) of principal, interest, fees and other amounts payable hereunder,
or under any of the Other Loan Documents, shall be made without set-off or
counterclaim to the Agent at the Payment Office not later than 11:00 a.m. on the
due date in federal funds or other funds to the Agent and in lawful money of the
United States of America (in the case of Advances denominated in Dollars) or in
the applicable Alternative Currency (in the case of Advances denominated in
Alternative Currency) ).
     2.6 Increase in Revolving Commitments.
          (a) The Borrowing Agent may, by written notice to the Agent from time
to time, request that the Revolving Commitments be increased by an amount not to
exceed the Incremental Revolving Advance Amount at such time. Upon the approval
of such request by the Agent (which approval shall be in the Agent’s Permitted
Discretion), the Agent shall deliver a copy thereof to each Lender with a
Revolving Commitment. Such notice shall set forth the amount of the requested
increase in the aggregate Revolving Commitments (which shall be in minimum
aggregate increments of $5,000,000 and a minimum aggregate amount of $10,000,000
or equal to the remaining Incremental Revolving Advance Amount) and the date on
which such increase is requested to become effective (which shall be not less
than ten (10) Business Days nor more than sixty (60) days after the date of such
notice and which, in any event, must be on or prior to the termination of the
Revolving Commitments in accordance with the terms of this Agreement), and shall
offer each such Lender the opportunity to increase its Revolving Commitment by
its Revolving Percentage of the proposed increased amount. Each such Lender
shall, by notice to the Borrowing Agent and the Agent given not more than ten
(10) Business Days after the date of the Agent’s notice, either agree to
increase its Revolving Commitment by all or a portion of the offered amount
(each such Lender so agreeing being an “Increasing Revolving Lender”) or decline
to increase its Revolving Commitment (and any such Lender that does not deliver
such a notice within such period of ten (10) Business Days shall be deemed to
have declined to increase its Revolving Commitment), each Lender so declining or
being deemed to have declined being a “Non-Increasing Revolving Lender”). In the
event that, on the tenth

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(10th) Business Day after the day the Agent has delivered a notice pursuant to
the second sentence of this paragraph, the Increasing Revolving Lenders have
agreed pursuant to the preceding sentence to increase their Revolving
Commitments by an aggregate amount less than the increase in the aggregate
Revolving Commitments requested by the Borrowing Agent, the Borrowing Agent may
arrange for one or more banks or other entities (any such bank or other entity
referred to in this clause being an “Augmenting Revolving Lender”), which may
include any Lender, to extend Revolving Commitments or increase their existing
Revolving Commitments in an aggregate amount equal to the unsubscribed amount;
provided that each Augmenting Revolving Lender, if not already a Lender with a
Revolving Commitment hereunder, shall be subject to the approval of the Agent
(which approval shall be in the Agent’s Permitted Discretion) and the Borrowing
Agent, and each Augmenting Revolving Lender shall execute all such documentation
as the Agent shall reasonably specify to evidence its Revolving Commitment
and/or its status as a Lender with a Revolving Commitment hereunder. Any
increase in the aggregate Revolving Commitments may be made in an amount which
is less than the increase requested by the Borrowing Agent if the Borrowing
Agent is unable to arrange for, or chooses not to arrange for, Augmenting
Revolving Lenders.
          (b) Each of the parties hereto agrees that the Agent may take any and
all actions as may be reasonably necessary to ensure that, after giving effect
to any increase in the aggregate Revolving Commitments pursuant to this
Section 2.6, the outstanding Revolving Advances (if any) are held by the Lenders
with Revolving Commitments in accordance with their new Revolving Percentages.
This may be accomplished at the discretion of the Agent (w) by requiring the
outstanding Revolving Advances to be prepaid with the proceeds of new Revolving
Advances, (x) by causing Non-Increasing Revolving Lenders to assign portions of
their outstanding Revolving Advances to Increasing Revolving Lenders and
Augmenting Revolving Lenders, (y) by permitting the Revolving Advances
outstanding at the time of any increase in the aggregate Revolving Commitments
pursuant to this Section 2.6 to remain outstanding until the last days of the
respective Interest Periods therefor, even though the Lenders would hold such
Revolving Advances other than in accordance with their new Revolving
Percentages, or (z) by any combination of the foregoing. Any prepayment or
assignment described in this Section 2.6(b) shall be subject to Section 3.10
hereof but otherwise without premium or penalty.
          (c) Notwithstanding the foregoing, no increase in the aggregate
Revolving Commitments (or in the Revolving Commitment of any Lender) or addition
of a new Lender shall become effective under this Section 2.6 unless, (i) on the
date of such increase, the conditions set forth in Section 8.2 shall be
satisfied and the Agent shall have received a certificate to that effect dated
such date and executed by a responsible financial officer of the Parent,
(ii) the Parent shall have provided to the Agent and the Lenders an officer’s
certificate, signed by an authorized officer of the Parent, and otherwise in
form and substance satisfactory to the Agent, certifying that all of the
Obligations (including any increase in the aggregate Revolving Commitments)
constitute and will continue to be permitted under any material agreement of the
Loan Parties, and (iii) the Agent shall have received (with sufficient copies
for each of the Lenders with Revolving Commitments) legal opinions, board
resolutions and an officer’s certificate consistent with those delivered on the
Closing Date under Sections 8.1(f), 8.1(g), 8.1(h),8.1(i), 8.1(j), 8.1(l) and
8.1(bb).
     2.7 Voluntary and Mandatory Prepayments; Reduction of Commitments.
          (a) Subject to the provisions of Section 3.10, at their option and
upon three (3) Business Days’ prior written notice, the Borrowers may prepay the
Advances in whole at any time or in part from time to time, without premium or
penalty, but with accrued interest on the principal being prepaid to the date of
such prepayment. The Borrowing Agent shall specify the date of prepayment of
Advances which are Libor Rate Loans and the amount of such

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prepayment. In the event that any prepayment of a Libor Rate Loan is made on a
date other than the last Business Day of the then current Interest Period with
respect thereto, the Borrowers shall indemnify the Agent and the Lenders
therefor in accordance with Section 3.10.
          (b) Subject to the provisions of Section 1.8, if, on any Business Day,
the aggregate principal amount of Revolving Advances then outstanding exceeds
the lesser of: (i) the Maximum Revolving Advance Amount minus the Letter of
Credit Exposure or (ii) the Aggregate Formula Amount, the Borrowers shall on
such day prepay to the Agent an amount sufficient to eliminate such excess,
which amount shall be used to prepay Revolving Advances ratably in accordance
with each Lender’s Revolving Percentage. If, on any Business Day, the aggregate
outstanding principal amount of Revolving Advances denominated in Alternative
Currency plus the Letter of Credit Exposure denominated in Alternative Currency
exceeds the Alternative Currency Sublimit, the Borrowers shall on such day
prepay to the Agent an amount sufficient to eliminate such excess, which amount
shall be used to prepay Revolving Advances denominated in Alternative Currency
ratably in accordance with each Lender’s Revolving Percentage. If, on any
Business Day, the aggregate outstanding principal amount of Revolving Advances
made to Foreign Borrowers plus the Letter of Credit Exposure attributable to the
Foreign Borrowers exceeds the Foreign Borrower Sublimit, the Borrowers shall on
such day prepay to the Agent an amount sufficient to eliminate such excess,
which amount shall be used to prepay Revolving Advances to Foreign Borrowers
ratably in accordance with each Lender’s Revolving Percentage. If, on any
Business Day, (i) the sum of the aggregate outstanding principal amount of
Revolving UK Advances plus the Letter of Credit UK Exposure exceeds (ii) the UK
Borrower Sublimit, the Borrowers shall on such day prepay to the Agent an amount
sufficient to eliminate such excess, which amount shall be used to prepay
Revolving UK Advances ratably in accordance with each Lender’s Revolving
Percentage.
          (c) So long as any Revolving Advances are outstanding, the Borrowers
shall pay to the Agent any Net Proceeds received by a Loan Party promptly upon
receipt thereof and the Agent shall apply such Net Proceeds to the Obligations
outstanding at the time of such receipt in such order as the Agent may
determine; provided, however, that: (i) the Net Proceeds of any UK Assets and
any other Net Proceeds attributable or relating to a UK Borrower shall not be
applied to any Obligations other than the Obligations of the UK Borrowers
described in clause (i) of Section 1.8, (ii) no such payment to the Agent of any
Net Proceeds from the disposition of Specified Fixed Asset Collateral consisting
of equity interests in any Subsidiaries or joint ventures or the assets of any
Foreign Subsidiaries other than the UK Borrowers) pursuant to this Section 2.7
shall be required, (iii) no such payment to the Agent of any Net Proceeds from
the disposition of, or from a Material Recovery Event with respect to, Specified
Fixed Asset Collateral (other than Specified Fixed Asset Collateral consisting
of equity interests in any Subsidiaries or joint ventures or the assets of any
Foreign Subsidiaries other than the UK Borrowers) pursuant to this Section 2.7
shall be required so long as no Event of Default has occurred and is continuing,
(iv) no such payment to the Agent of any Net Proceeds from the disposition of,
or from a Material Recovery Event with respect to, Collateral pursuant to this
Section 2.7 shall be required so long as no Activation Notice has been delivered
to the Borrowing Agent, (v) nothing in this Section 2.7 or in the definition of
“Net Proceeds” shall constitute authorization not otherwise permitted by this
Agreement for any Loan Party to enter into any transaction that would generate
Net Proceeds and (vi) no prepayment pursuant to this Section 2.7 shall be
required with respect to any Net Proceeds of Collateral from a Material Recovery
Event while such Net Proceeds are available for reinvestment as permitted by
Section 4.19. For the avoidance of doubt, any cash proceeds from a casualty
loss, compulsory transfer or non-appealable judgment not constituting Net
Proceeds of Collateral from a Material Recovery Event by reason of being in an
amount less than One Million Dollars ($1,000,000) from any individual event
giving rise thereto, shall be applied by the Agent to principal Revolving
Advances then outstanding in accordance with Section 4.14(h) only in the event
that an Activation Notice has been delivered to the Borrowing Agent. In
addition, to the extent any

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portion of the Net Proceeds remains after the application of Net Proceeds to
outstanding Revolving Advances as required under this Section 2.7(c), such
remaining Net Proceeds shall be released to the Borrowing Agent.
          (d) Each prepayment applied to Revolving Advances pursuant to this
Section 2.7 shall not constitute a permanent reduction of the Maximum Revolving
Advance Amount and the amount of outstanding Revolving Advances so prepaid may
be reborrowed. Any prepayment under this Section 2.7 shall be subject to
Section 3.10; provided, however, the Agent will use reasonable efforts to avoid
an application of Net Proceeds which causes early prepayment of a Borrowing of
Libor Rate Loans prior to the expiration of the Interest Period applicable to
such Libor Rate Loans.
          (e) Upon three (3) Business Days’ prior written notice from the
Borrowing Agent to the Agent, the Borrowers may request that the Lenders
permanently reduce, in whole or in part, the aggregate Revolving Commitments,
whereupon the aggregate Revolving Commitments shall be so reduced. Each
reduction in the aggregate Revolving Commitments hereunder shall be made among
the Lenders ratably in accordance with their Revolving Commitments. Each
reduction shall be subject to the following: (i) each such reduction shall be in
an aggregate principal amount of not less than Five Million Dollars ($5,000,000)
or a multiple of One Million Dollars ($1,000,000) in excess thereof and (ii) the
Borrowers shall not be permitted to reduce the aggregate Revolving Commitments
unless, concurrently with any reduction, one or more of the Borrowers shall make
principal payments, ratable among the Lenders, on each Lender’s then outstanding
Revolving Advances to the Borrowers in an amount which, when aggregated with
such ratable payment to the Lenders by the other Borrowers, will result in the
aggregate Revolving Credit Advances of the Lenders to the Borrowers outstanding
after such payments, when taken together with the aggregate Letter of Credit
Exposure then outstanding, not exceeding the aggregate Revolving Commitments. On
the date of each such reduction, the Borrowers shall pay to the Agent for the
account of the Lenders (A) the unused facility fees referenced in Section 3.5
and interest referenced in Section 3.1, in each case accrued through the date of
such reduction in respect of the aggregate Revolving Commitment of the Lenders
so reduced and (B) any amounts required pursuant to the provisions of
Section 3.10. Each reduction in the Revolving Commitments hereunder, if any,
shall be a permanent reduction and no amount in excess of such reduced
commitment may be borrowed or reborrowed.
     2.8 Statement of Account.
          The Agent shall maintain, in accordance with its customary procedures,
a loan account (“Loan Account”) in the name of the Borrowers in which shall be
recorded, among other things, the date and amount of each Advance made by the
Lenders, each Letter of Credit issued by the Issuer and the date and amount of
each payment in respect thereof; provided, however, the failure by the Agent to
record the date and amount of any Advance or Letter of Credit shall not
adversely affect the Agent or any Lender. Each calendar month, the Agent shall
send to the Borrowing Agent a statement showing the accounting for the Advances
made and Letters of Credit issued, payments made or credited in respect thereof,
and other transactions between the Agent and the Borrowers, during such month,
and the Agent shall provide the Borrowing Agent with access to Agent’s global
GIR and StuckyNet System as relating to the Borrowers. The monthly statements
shall be deemed correct and binding upon the Borrowers in the absence of
manifest error and shall constitute an account stated between the Lenders and
the Borrowers unless the Agent receives a written statement from the Borrowing
Agent of the Borrowers’ specific exceptions thereto within thirty (30) days
after such statement is received by the Borrowing Agent. The records of the
Agent with respect to the Loan Account shall be presumed correct evidence absent
manifest error of the amounts of Advances, Letters of Credit and other charges
thereto and of payments applicable thereto.

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          Any sums expended by the Agent or any Lender due to the Borrowers’
failure to perform or comply with its obligations under this Agreement or any
Other Loan Document including payments made in connection with the Borrowers’
obligations under Sections 2.5, 3.13, 4.2, 4.4, 4.12, 4.13, 6.1 and 15.12 may be
charged to the Loan Account as a Revolving Advance to the Borrowers and shall
thereafter be Obligations hereunder.
     2.9 Letters of Credit.
          (a) Subject to the terms and conditions hereof, the Issuer shall issue
or cause the issuance of certain Letters of Credit on behalf of any Domestic
Borrower or UK Borrower denominated and payable in Dollars or an Alternative
Currency in such form as may be approved by the Issuer and the Agent; provided,
however, that the Issuer will not be required to issue or cause to be issued any
Letters of Credit to the extent that the face amount of such Letters of Credit
would cause the then outstanding Revolving Advances to exceed the lesser of
(A) the Maximum Revolving Advance Amount minus the sum of the Letter of Credit
Exposure or (B) the Aggregate Formula Amount. The Letter of Credit Exposure
shall not exceed Ten Million Dollars ($10,000,000)) at any time. All
disbursements or payments related to Letters of Credit shall be deemed to be
Alternate Base Rate Loans consisting of Revolving Advances and shall bear
interest at the Alternate Base Rate, unless and until converted to Libor Rate
Loans hereunder in accordance with Section 2.3. Letters of Credit that have not
been drawn upon shall not bear interest.
          (b) Schedule 2.9 contains a description of all Existing Letters of
Credit. All such Existing Letters of Credit shall constitute a “Letter of
Credit” hereunder for all purposes hereof and shall be deemed to have been
issued, for purposes of Section 3.4 hereof, as of the Closing Date. From and
after the Closing Date, the terms of this Agreement shall apply to such Existing
Letters of Credit, superseding any other agreement otherwise applicable to them
to the extent inconsistent with the terms hereof.
          (c) The Borrowing Agent, on behalf of any Domestic Borrower or UK
Borrower, may request the Issuer to issue or cause the issuance of a Letter of
Credit by delivering to the Issuer at the Payment Office, the Issuer’s form of
letter of credit application (a “Letter of Credit Application”) completed to the
satisfaction of the Issuer, and such other certificates, documents and other
papers and information as the Issuer may reasonably request no later than 12:00
noon at least two (2) Business Days’ prior to the date of such proposed
issuance. The Agent shall notify the Lenders of the request by the Borrowing
Agent for a Letter of Credit hereunder within a reasonable time after receiving
such request.
          (d) Each Letter of Credit shall, among other things, (i) provide for
the payment of sight drafts or other forms of written demand for payment, or
acceptances of, issued drafts when presented for honor thereunder in accordance
with the terms thereof and when accompanied by the documents described therein
and (ii) have an expiry date not later than the earlier of one (1) year from the
date of issuance or the Facility Termination Date. Each trade Letter of Credit
shall be subject to the Uniform Customs and Practice for Documentary Credits
(2007 Revision), International Chamber of Commerce Publication No. 600, and any
amendments or revisions thereof adhered to by the Issuer (the “UCP”). Each
standby Letter of Credit shall be subject to the International Standby Practices
(1998), International Chamber of Commerce Publication 590 and any amendments or
revisions thereof adhered to by the Issuer (the “ISP”) or the UCP, as determined
by the Issuer. Each Letter of Credit shall be governed, to the extent not
inconsistent with the UCP or the ISP, as applicable, by the laws of the State of
Ohio.
          (e) Effective as of the date of its issuance of a Letter of Credit,
the Issuer grants to each Lender, and each Lender acquires, an undivided
participation in such Letter of Credit equal to such Lender’s Revolving
Percentage of such Letter of Credit’s face amount.

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Each Lender acknowledges and agrees that its obligation to pay for such
acquisition pursuant to this Section 2.9(e) is absolute and unconditional and
shall not be affected by any event or circumstance whatsoever, including the
occurrence of any Default or Event of Default hereunder or the failure of any
condition precedent in this Agreement to be satisfied and each payment in
satisfaction thereof shall be made without any offset, abatement, withholding or
reduction whatsoever; provided, however, that the Issuer shall not be excused
from liability to any Lender for any direct damages caused by the Issuer’s gross
negligence or willful misconduct.
          (f) Whenever there is a drawing on a Letter of Credit, the Borrowers
agree to pay the Agent on the date of such drawing for the account of the Issuer
an amount equal to the amount of such drawing, with such payment to be made in
Dollars (and in the amount which is the Dollar equivalent of any such payment or
disbursement made or denominated in an Alternative Currency). Should the
Borrowers fail to reimburse the Issuer for the amount of such drawing, the
Borrowers shall be deemed to have requested a Revolving Borrowing consisting of
Alternate Base Rate Loans to be made by the Lenders to the Borrowers pursuant to
Section 2.2 in an aggregate amount equal to the amount of such drawing (with the
Agent’s having determined in the case of any payment by the Issuer made in an
Alternative Currency the equivalent thereof in Dollars), without regard to any
minimums and multiples for lending amounts specified hereunder. Each Lender
agrees that its obligation to make any such Revolving Advance is absolute and
unconditional and shall not be affected by any circumstances whatsoever,
including the occurrence and continuance of a Default or Event of Default
hereunder (except for an Event of Default arising under Section 10.7 or
Section 10.8), and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. The Agent shall disburse the
proceeds of such disbursement directly to the Issuer and such disbursement shall
satisfy the Borrowers’ reimbursement obligation.
          (g) In the event that the Revolving Advances requested pursuant to
Section 2.2(a) cannot be made because of the occurrence and continuance of an
Event of Default under Section 10.7 or Section 10.8, each Lender shall be
obligated to consummate the purchase, on the date its Revolving Advance would
have been made pursuant to this Section 2.9(g), of its undivided participating
interest in each outstanding unpaid reimbursement obligation (the “Unpaid
Reimbursement Obligation”) owing to the Issuer. On the purchase date, each such
Lender shall pay to the Agent, for the benefit of the Issuer, the purchase price
for its participating interest in an amount equal to its Revolving Percentage of
such Unpaid Reimbursement Obligation. Each Lender shall comply with its
obligation under this Section 2.9(g) by wire transfer of immediately available
funds, in the same manner as provided in Section 2.10 with respect to Revolving
Advances made by such Lender (and Section 2.10 shall apply, mutatis mutandis, to
the payment obligations of the Lenders), and the Agent shall promptly pay to the
Issuer the amounts so received by it from the Lenders. After the date of such
purchase, the outstanding Unpaid Reimbursement Obligation shall bear interest
for the account of the Lenders for each day from and including the date of the
drawing giving rise to the Unpaid Reimbursement Obligation until the earlier of:
(i) the date of reimbursement by the Borrowers and (ii) the date on which such
drawing is reimbursed by Revolving Advances as provided in this Section 2.9(g),
in each case, at the rate per annum that would apply to Alternate Base Rate
Loans. After the date of such purchase, any payment by the Borrowers to the
Agent with respect to the Unpaid Reimbursement Obligation, together with
interest thereon, shall be promptly distributed by the Agent to each Lender
based on its Revolving Percentage. Any Unpaid Reimbursement Obligation shall be
deemed to be a Revolving Advance for all purposes of this Agreement and the
Other Loan Documents until such Unpaid Reimbursement Obligation is repaid by the
Borrowers in full, together with interest thereon as herein specified.
          (h) In connection with the issuance of any Letter of Credit, the
Borrowers shall indemnify, save and hold the Agent, each Lender and each Issuer
harmless from any loss, cost, expense or liability, including payments made by
the Agent, any Lender or any Issuer and

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expenses and reasonable attorneys’ fees incurred by the Agent, any Lender or
Issuer arising out of, or in connection with, any Letter of Credit to be issued
or created for any Borrower, except for any loss, cost, expense or liability
resulting from gross negligence or willful misconduct of the Agent, the Issuer
or any correspondent of the Issuer. The Borrowers shall be bound by the Agent’s
or any Issuer’s regulations and good faith interpretations of any Letter of
Credit issued or created for the Loan Account, although this interpretation may
be different from its own; and, neither the Agent, nor any Lender, nor any
Issuer nor any of their correspondents shall be liable for any error,
negligence, or mistakes, whether of omission or commission, in following the
Borrowing Agent’s or any Borrower’s instructions or those contained in any
Letter of Credit or of any modifications, amendments or supplements thereto or
in issuing or paying any Letter of Credit, except for the Agent’s, any Lender’s,
any Issuer’s or such correspondents’ gross negligence or willful misconduct.
          (i) The Borrowing Agent shall authorize and direct the Issuer to name
the applicable Domestic Borrower or UK Borrower as the “Applicant” or “Account
Party” of each Letter of Credit whether the issuance is for the benefit of such
Borrower or any Subsidiary of such Borrower. The Borrowing Agent shall authorize
and direct the Issuer to deliver to the Agent all instruments, documents, and
other writings and property received by the Issuer pursuant to the Letter of
Credit and to accept and rely upon the Agent’s instructions and agreements with
respect to all matters arising in connection with the Letter of Credit and the
Letter of Credit Application.
          (j) In connection with all Letters of Credit issued by the Issuer
under this Agreement, each Borrower hereby appoints the Issuer, or its designee,
as its attorney, with full power and authority upon the occurrence and during
the continuance of an Event of Default: (i) to sign or endorse such Borrower’s
name upon any warehouse or other receipts, letter of credit applications and
acceptances; (ii) to sign such Borrower’s name on bills of lading; (iii) to
clear Inventory through the United States Customs Department (“Customs”) in the
name of such Borrower or Issuer or Issuer’s designee, and to sign and deliver to
Customs officials powers of attorney in the name of such Borrower for such
purpose; and (iv) to complete in the name of such Borrower or Issuer or Issuer’s
designee, any order, sale or transaction, obtain the necessary documents in
connection therewith, and collect the proceeds thereof. Neither Issuer nor its
attorneys will be liable for any acts or omissions or for any errors of judgment
or mistakes of fact or law, except for Issuer’s or its attorney’s willful
misconduct or gross negligence. This power, being coupled with an interest, is
irrevocable as long as any Letters of Credit remain outstanding.
     2.10 Funding of Advances by Lenders; Sharing of Payments; Settlement.
          (a) Each Revolving Borrowing shall be advanced according to the
applicable Revolving Percentage of the Lenders.
          (b) Notwithstanding anything to the contrary contained in
Section 2.5(b) hereof, commencing with the first Business Day following the
Closing Date, Revolving Advances shall be advanced by the Agent and each payment
by the Borrowers on account of Revolving Advances shall be applied first to
those Revolving Advances advanced by the Agent. On or before 1:00 p.m. on each
Settlement Date commencing with the first Settlement Date following the Closing
Date, the Agent and the Lenders shall make certain payments as follows: (i) if
the aggregate amount of new Revolving Advances made by the Agent during the
preceding Settlement Week (if any) exceeds the aggregate amount of repayments
applied to outstanding Revolving Advances during such preceding Settlement Week,
then each Lender shall provide the Agent with funds in an amount equal to its
applicable Revolving Percentage of the difference between (x) such Revolving
Advances and (y) such repayments and (ii) if the aggregate amount of repayments
applied to outstanding Revolving Advances during such Settlement Week exceeds
the aggregate amount of new Revolving Advances made during such Settlement Week,
then the

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Agent shall provide each Lender with funds in an amount equal to its applicable
Revolving Percentage of the difference between (x) such repayments and (y) such
Revolving Advances. Each Lender shall be entitled to earn interest applicable
under this Agreement on outstanding Advances which it has funded. On each
Settlement Date, the Agent shall submit to each Lender a settlement statement of
the amount of outstanding Revolving Advances at the end of the Settlement Week
immediately preceding such Settlement Date which shall disclose the net amount
due to or due from such Lender on such Settlement Date. Such settlement
statement of the Agent shall be presumed correct in the absence of manifest
error.
          (c) If any Lender shall at any time receive any payment of all or part
of its Advances, or interest thereon, or receive any Collateral in respect
thereof (whether voluntarily or involuntarily or by set-off) in a greater
proportion than any such payment to and Collateral received by any other Lender,
if any, in respect of such other Lender’s Advances, or interest thereon (a
“benefited Lender”), and such greater proportionate payment or receipt of
Collateral is not expressly permitted hereunder, such benefited Lender shall
purchase for cash from the other Lenders a participation in such portion of each
such other Lender’s Advances, or shall provide such other Lender with the
benefits of any such Collateral, or the proceeds thereof, as shall be necessary
to cause such benefited Lender to share the excess payment or benefits of such
Collateral or proceeds ratably with each of the other Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. Each benefited Lender so purchasing a portion of
another Lender’s Advances may exercise all rights of payment (including rights
of set-off) with respect to such portion as fully as if such Lender were the
direct holder of such portion.
          (d) Unless the Agent shall have been notified by telephone, confirmed
in writing, by any Lender that such Lender will not make the amount which would
constitute its applicable Percentage of the Advances available to the Agent, the
Agent may (but shall not be obligated to) assume that such Lender shall make
such amount available to the Agent on the next Settlement Date and, in reliance
upon such assumption, make available to the Borrowers a corresponding amount. If
such amount is not made available to the Agent by such Lender by the next
Settlement Date, such Lender shall pay to the Agent on demand (i) such unpaid
amount plus (ii) interest calculated at the daily average Federal Funds
Effective Rate (computed on the basis of a year of three hundred and sixty
(360) days) during the period from such Settlement Date to the date on which
such amount does become available to the Agent from the Lender in immediately
available funds. If such amount is not made available to the Agent by such
Lender within three (3) Business Days after such Settlement Date, the Agent
shall also be entitled on demand to repayment of such an amount from the
Borrowers with interest thereon at the rate per annum equal to the rate then
applicable to Revolving Advances hereunder; provided, however, that the Agent’s
right to such recovery shall not prejudice or otherwise adversely affect any
rights the Borrowers’ may have against such Lender.
     2.11 Defaulting Lender.
          (a) Notwithstanding anything to the contrary contained herein, in the
event any Lender (x) has failed (which failure constitutes a breach by such
Lender of its obligations under this Agreement) to make available its portion of
any Advance or participation purchase price obligation as required under this
Agreement or (y) has notified either the Agent or the Borrowing Agent that it
does not intend to make available its portion of any Advance or participation
purchase price obligation as required under this Agreement (if the actual
failure would constitute a breach by such Lender of its obligations under this
Agreement) (each, a “Lender Default”), all rights and obligations hereunder of
such Lender (a “Defaulting Lender”) shall be modified to the extent provided by
this Section 2.11 while such Lender Default remains in effect. In addition, in
the case of any failure described in clause (x) or any such notice to the

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Agent from a Lender described in clause (y), the Agent will promptly notify the
Borrowing Agent of any such failure or of its receipt of any such notice from a
Lender.
          (b) The Agent shall not be obligated to transfer to such Defaulting
Lender any payments made by the Borrowers for the benefit of such Defaulting
Lender until such Defaulting Lender has cured its failure. Until the earlier of
such Defaulting Lender’s cure of its failure to fund or the termination of all
of the Commitments, all amounts repaid to the Agent by the Borrowers which would
otherwise be required to be applied to such Defaulting Lender’s Advances or
participation purchase price obligation, as the case may be, shall be advanced
to the Borrowers by the Agent on behalf of such Defaulting Lender to cure, in
full or in part, the failure by such Defaulting Lender to fund, but shall
nevertheless be deemed to have been paid to such Defaulting Lender in
satisfaction of, the Obligations to which such payment would otherwise have been
applied.
          (c) A Defaulting Lender shall not be entitled to give instructions to
the Agent or to approve, disapprove, consent to or vote on any matters relating
to this Agreement and the Other Loan Documents. All amendments, waivers and
other modifications of this Agreement and the Other Loan Documents may be made
without regard to a Defaulting Lender and, for purposes of the definition of
“Required Lenders”, a Defaulting Lender shall be deemed not to be a Lender and
not to have Advances (or participation purchase price obligations) outstanding.
          (d) Other than as expressly set forth in this Section 2.11, the rights
and obligations of a Defaulting Lender (including the obligation to indemnify
the Agent) and the other parties hereto shall remain unchanged. Nothing in this
Section 2.11 shall be deemed to release any Defaulting Lender from its
obligations under this Agreement and the Other Loan Documents, shall alter such
obligations, shall operate as a waiver of any default by such Defaulting Lender
hereunder, or shall prejudice any rights which any Borrower, the Agent or any
Lender may have against any Defaulting Lender as a result of any default by such
Defaulting Lender hereunder. In the event a Defaulting Lender retroactively
cures to the satisfaction of the Agent the breach which caused a Lender to
become a Defaulting Lender, such Defaulting Lender shall no longer be a
Defaulting Lender and shall be treated as a Lender under this Agreement.
     2.12 Funding by Lending Installations.
          All or any part of the Advances or Letters of Credit that any Lender
or the Issuer (the “Obligated Lender”) may be obligated to fund pursuant to this
Agreement: (i) may be funded by such Obligated Lender on behalf of such
Obligated Lender’s Lending Installation or (ii) may be funded on such Obligated
Lender’s behalf by such Lender by and through any such Lending Installation;
provided, however, that, (a) if any Lending Installation fails to fund all or
any part of any such Advance or Letter of Credit, the Obligated Lender shall be
obligated to fund such Advance or Letter of Credit pursuant to the terms hereof,
(b) in no event shall any such funding by or through any Lending Installation
increase the costs or expenses for which the Borrowers are liable under this
Agreement and (c) in no event shall any such funding on behalf of or through any
such Lending Installation subject any Borrower to any taxes, assessments and
governmental charges without such Obligated Lender’s being subject to the
exercise by such Borrower of its rights under Section 3.13. The funding of an
Advance or Letter of Credit by a Lending Installation hereunder shall utilize
the applicable commitment of the Obligated Lender to the same extent, and as if,
such Advance or Letter of Credit were funded by such Obligated Lender, and for
purposes of this Agreement, such Advance or Letter of Credit shall be deemed to
have been made directly by such Obligated Lender.

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     2.13 Use of Proceeds.
          The Borrowers shall apply the proceeds of the Revolving Advances
(i) to pay fees and expenses relating to the transaction contemplated by this
Agreement, (ii) to pay all amounts owing under or with respect to that certain
Credit Agreement, dated as of May 1, 2002, among Parent, the lending
institutions that are signatories thereto, and National City Bank, as the
administrative agent to such lenders, as amended and modified from time to time,
(iii) to fund any Permitted Acquisitions and (iv) for general corporate
purposes.
III. INTEREST; FEES; YIELD PROTECTION.
     3.1 Interest.
          The Borrowers shall pay interest on the unpaid principal amount of
each Advance from the date such Advance is made until the principal amount
thereof shall have been paid in full as follows. Interest charges shall be
computed on the actual principal amount of Advances outstanding during the
calendar month.
          (a) Alternate Base Rate Loans. So long as no Event of Default has
occurred which is continuing, Alternate Base Rate Loans shall bear interest for
each day at a rate per annum equal to the Alternate Base Rate plus the
Applicable Base Rate Margin which is then in effect for Revolving Borrowings
comprised of Alternate Base Rate Loans. Interest on Alternate Base Rate Loans
shall be payable in arrears on the first (1st) day of each calendar month, on
the date such Revolving Advances comprising any such Revolving Borrowing shall
be paid in full (whether at maturity, by reason of acceleration or otherwise)
and, after maturity, on demand.
          (b) Libor Rate Loans. So long as no Event of Default has occurred
which is continuing, Libor Rate Loans shall bear interest during each applicable
Interest Period at a rate per annum equal to the Libor Rate plus the Applicable
Libor Rate Margin which is then in effect and applicable to the Borrowings
comprised of such Libor Rate Loans. Interest on Libor Rate Loans shall be
payable at the last day of each Interest Period (but for Libor Rate Loans with
an Interest Period in excess of three (3) months, on the ninetieth (90th) day
after the commencement of such Libor Rate Loan, and after each ninety (90) day
interval thereafter), on the date such Revolving Advances comprising any such
Revolving Borrowing shall be paid in full (whether at maturity, by reason of
acceleration or otherwise) and, after maturity, on demand.
     3.2 Applicable Margins.
          At the end of each fiscal quarter, the Agent shall determine the
Undrawn Availability for such fiscal quarter based upon the average daily
Undrawn Availability for each day of such fiscal quarter. From each Incentive
Pricing Effective Date until the next Incentive Pricing Effective Date, the
Applicable Base Rate Margin, the Applicable Libor Rate Margin, the Applicable
Unused Facility Fee Percentage and the Applicable Letter of Credit Fee
Percentage shall be determined by reference to the applicable Undrawn
Availability on the grid below; provided, however, that Tier IV pricing shall
apply through and including November 30, 2007.

                                                              Applicable Letter
  Applicable Unused         Applicable Libor   Applicable Base   of Credit Fee  
Facility Fee Tier   Undrawn Availability   Rate Margin   Rate Margin  
Percentage   Percentage I   ≤ $25,000,000     1.75 %     0.25 %     1.75 %    
0.25 % II   > $25,000,000 but
≤ $50,000,000     1.50 %     0 %     1.50 %     0.25 %

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                                                              Applicable Letter
  Applicable Unused         Applicable Libor   Applicable Base   of Credit Fee  
Facility Fee Tier   Undrawn Availability   Rate Margin   Rate Margin  
Percentage   Percentage III   > $50,000,000 but
≤ $70,000,000     1.25 %     0 %     1.25 %     0.25 % IV   > $70,000,000    
1.00 %     0 %     1.00 %     0.25 %

If any financial statement or certificate delivered pursuant to Article IX is
shown to be inaccurate (regardless of whether this Agreement is in effect when
such inaccuracy is discovered), and such inaccuracy, if corrected, would have
led to the application of a higher Applicable Base Rate Margin, Applicable Libor
Rate Margin, Applicable Unused Facility Fee Percentage or Applicable Letter of
Credit Fee Percentage for any period (such period, the “Applicable Period”),
than the Applicable Base Rate Margin, Applicable Libor Rate Margin, Applicable
Unused Facility Fee Percentage or Applicable Letter of Credit Fee Percentage, as
applicable, actually applied to such Applicable Period, then, upon the written
request of the Agent, such margin or percentage shall be determined in
accordance with the correct financial information for such Applicable Period and
the Borrowers shall immediately pay to the Agent any accrued additional interest
and fees owing as a result of such increased margin or percentage for such
Applicable Period, which payment shall be applied promptly by the Agent to the
Lenders in accordance with the terms of this Agreement. This paragraph shall not
limit the rights of the Agent or the Lenders with respect to Article XI or to
charge the Default Rate pursuant to Section 3.3.
     3.3 Default Rate.
          Upon the occurrence of an Event of Default which is continuing, upon
the election of the Agent, or upon the request of the Required Lenders, the
Obligations (including with respect to all Letter of Credit Fees) shall bear
interest at a rate per annum equal at all times to two percent (2%) in excess of
the otherwise applicable interest rate payable pursuant to the terms of this
Agreement (the “Default Rate”).
     3.4 Letter of Credit Fees.
          The Borrowers shall pay (x) to the Agent, for the ratable benefit of
the Lenders, fees for each Letter of Credit for the period commencing with the
date of issuance of such Letter of Credit and ending on the date of expiration
or termination thereof, equal to the average daily face amount of each
outstanding Letter of Credit multiplied by the Applicable Letter of Credit Fee
Percentage, such fees to be calculated on the basis of a 360-day year for the
actual number of days elapsed and to be payable monthly in arrears on the first
day of each calendar month and on the Facility Termination Date, and (y) to the
Issuer, for its own account, any and all fees and expenses as agreed upon by the
Issuer and the Borrowing Agent in connection with any Letter of Credit,
including in connection with the opening, amendment or renewal of any such
Letter of Credit and any acceptances created thereunder (all of the foregoing
fees, the “Letter of Credit Fees”). All such charges shall be deemed earned in
full on the date when the same are due and payable hereunder and shall not be
subject to rebate or proration upon the termination of this Agreement for any
reason. Any such charge in effect at the time of a particular transaction shall
be the charge for that transaction, notwithstanding any subsequent change in the
Issuer’s prevailing charges for that type of transaction.
     3.5 Unused Facility Fees.
          If, during any calendar month, the sum of (i) the average daily unpaid
balance of the Revolving Advances for each day of such calendar month, plus
(ii) the average daily outstanding face amount of Letters of Credit for each day
of such calendar month, does not equal the Maximum Revolving Advance Amount,
then the Borrowers shall pay to the Agent for the

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ratable benefit of the Lenders a fee at a rate per annum equal to (x) the
Applicable Unused Facility Fee Percentage multiplied by (y) the amount by which
the Maximum Revolving Advance Amount exceeds such aggregate average daily sum.
Such fee shall be payable to the Agent in arrears on the first (1st) day of each
calendar month after the date hereof until the Facility Termination Date and on
the Facility Termination Date.
     3.6 Computation of Interest and Fees.
          Interest and fees hereunder shall be computed on the basis of a year
of three hundred and sixty-five (365) days and for the actual number of days
elapsed. If any payment to be made hereunder becomes due and payable on a day
other than a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and interest thereon shall be payable at the rate
otherwise applicable under this Agreement during such extension.
     3.7 Maximum Charges.
          In no event whatsoever shall interest and other charges charged
hereunder exceed the highest rate permissible under law. In the event interest
and other charges as computed hereunder would otherwise exceed the highest rate
permitted under law, such excess amount shall be first applied to any unpaid
principal balance owed by the Borrowers, and if the then remaining excess amount
is greater than the previously unpaid principal balance, the Lenders shall
promptly refund such excess amount to the Borrowers and the provisions hereof
shall be deemed amended to provide for such permissible rate.
     3.8 Increased Costs.
          In the event that the Agent or any Lender shall determine that (a) the
introduction after the effective date of this Agreement of any law, treaty, rule
or regulation or any change therein after the effective date of this Agreement,
(b) any change after the effective date of this Agreement in the interpretation
or administration of any law, treaty, rule or regulation by any central bank or
other Governmental Body or (c) the compliance by the Agent or such Lender with
any guideline, request or directive from any central bank or other Governmental
Body (whether or not having the force of law) promulgated or issued after the
effective date of this Agreement (for purposes of this Section 3.8, the terms
“Agent” and “Lender” shall include any corporation or bank controlling the Agent
or such Lender and the office or branch where the Agent or such Lender makes or
maintains any Libor Rate Loans), shall:
     (a) subject the Agent or such Lender to any tax of any kind whatsoever with
respect to this Agreement or any Other Loan Document or change the basis of
taxation of payments to the Agent or such Lender of principal, fees, interest or
any other amount payable hereunder or under any Other Loan Documents (except for
changes in the rate of tax on the overall net income of the Agent or such Lender
by the jurisdiction in which it maintains its principal office);
     (b) impose, modify or hold applicable any reserve, special deposit,
assessment or similar requirement against assets held by, or deposits in or for
the account of, advances or loans by, or other credit extended by any office of
the Agent or such Lender, including pursuant to Regulation D of the Board of
Governors of the Federal Reserve System; or
     (c) impose on the Agent or such Lender or the London interbank offered rate
market any other condition with respect to this Agreement or any Other Loan
Document;

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and the result of any of the foregoing is to increase the cost to the Agent or
such Lender of making, renewing or maintaining its Revolving Advances hereunder
by an amount that the Agent or such Lender deems to be material or to reduce the
amount of any payment (whether of principal, interest or otherwise) in respect
of any of the Revolving Advances by an amount that the Agent or such Lender
deems to be material, then, in any case, the Borrowers shall promptly pay the
Agent or such Lender, upon its demand, such additional amount as will compensate
the Agent or such Lender for such additional cost or such reduction, as the case
may be; provided, however, the foregoing shall not apply to increased costs
which are reflected in the Eurocurrency Reserve Percentage. The Agent or such
Lender, upon determining in good faith that any such additional amounts will be
payable pursuant to this Section 3.8, will give prompt written notice thereof to
the Borrowing Agent, which notice shall set forth, in reasonable detail, the
basis of the calculation of such additional amounts, which basis must be
reasonable and which calculation shall be presumed correct absent manifest
error, although the failure to give any such notice shall not release or
diminish any of the Borrowers’ obligations to pay additional amounts pursuant to
this Section 3.8 upon the subsequent receipt of such notice.
     3.9 Non-Ascertainable Libor Rate; Unavailable Deposits.
          In the event that the Agent shall have determined that:
     (a) reasonable means do not exist for ascertaining the Libor Rate
applicable for any Interest Period; or
     (b) Dollar deposits in the relevant amount and for the relevant maturity
are not available in the London interbank offered rate market, with respect to
an outstanding Libor Rate Loan, a proposed Libor Rate Loan, or a proposed
conversion of an Alternate Base Rate Loan into a Libor Rate Loan,
then the Agent shall give the Borrowing Agent prompt written, telephonic or
telegraphic notice of such determination. If such notice is given, (i) any such
requested Libor Rate Loan shall be made as an Alternate Base Rate Loan, unless
the Borrowing Agent shall notify the Agent, no later than 10:00 a.m. two
(2) Business Days prior to the date of such proposed Borrowing, that its request
for such Borrowing shall be cancelled or made as an unaffected type of Libor
Rate Loan, (ii) any Alternate Base Rate Loan or Libor Rate Loan which was to
have been converted to an affected type of Libor Rate Loan shall be continued as
or converted into an Alternate Base Rate Loan, or, if the Borrowing Agent shall
notify the Agent, no later than 10:00 a.m. two (2) Business Days prior to the
proposed conversion, shall be maintained as an unaffected type of Libor Rate
Loan, and (iii) any outstanding affected Libor Rate Loans shall be converted
into an Alternate Base Rate Loan, or, if the Borrowing Agent shall notify the
Agent, no later than 10:00 a.m. two (2) Business Days prior to the last Business
Day of the then current Interest Period applicable to such affected Libor Rate
Loan, shall be converted into an unaffected type of Libor Rate Loan, on the last
Business Day of the then current Interest Period for such affected Libor Rate
Loans. Until such notice has been withdrawn, the Lenders shall have no
obligation to make an affected type of Libor Rate Loan or maintain outstanding
affected Libor Rate Loans and the Borrowers shall not have the right to convert
an Alternate Base Rate Loan or an unaffected type of Libor Rate Loan into an
affected type of Libor Rate Loan.
     3.10 Libor Rate Loan Losses.
          The Borrowers shall indemnify the Agent and the Lenders and hold the
Agent and the Lenders harmless from and against any and all losses or expenses
that the Agent and the Lenders may sustain or incur as a consequence of any
prepayment, conversion of, or any default by the Borrowers in the payment of the
principal of or interest on any Libor Rate Loan or failure by the Borrowers to
complete a Borrowing of, a prepayment of or conversion of or to a Libor

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Rate Loan after notice thereof has been given, including any interest payable by
the Agent or the Lenders to lenders of funds obtained by it in order to make or
maintain its Libor Rate Loans hereunder. The Agent or such Lender, upon
determining in good faith that any such additional amounts will be payable
pursuant to this Section 3.10, will give prompt written notice thereof to the
Borrowing Agent, which notice shall set forth, in reasonable detail, the basis
of the calculation of such additional amounts, which basis must be reasonable
and which calculation shall be presumed correct absent manifest error, although
the failure to give any such notice shall not release or diminish any of the
Borrowers’ obligations to pay additional amounts pursuant to this Section 3.10
upon the subsequent receipt of such notice.
     3.11 Capital Adequacy.
          In the event that the Agent or any Lender shall have determined that
(a) the introduction after the effective date of this Agreement of any law,
treaty, rule or regulation or any change therein after the effective date of
this Agreement, (b) any change after the effective date of this Agreement in the
interpretation or administration of any law, treaty, rule or regulation by any
central bank or other Governmental Body or (c) the compliance by any Lender or
the Issuer with any guideline, request or directive from any central bank or
other Governmental Body (whether or not having the force of law) promulgated or
issued after the effective date of this Agreement (for purposes of this
Section 3.11, the terms “Agent” and “Lender” shall include any corporation or
bank controlling the Agent or any Lender and the office or branch where any such
Lender makes or maintains any Libor Rate Loans), has or would have the effect of
reducing the rate of return on the Agent or any Lender’s capital as a
consequence of its obligations hereunder to a level below that which the Agent
or such Lender could have achieved but for such adoption, change or compliance
(taking into consideration the Agent’s and each Lender’s policies with respect
to capital adequacy) by an amount deemed by the Agent or any Lender to be
material, then, from time to time, the Borrowers shall pay upon demand to the
Agent or such Lender such additional amount or amounts as will compensate the
Agent or such Lender for such reduction. In determining such amount or amounts,
the Agent or such Lender may use any reasonable averaging or attribution
methods. The protection of this Section 3.11 shall be available to the Agent and
each Lender regardless of any possible contention of invalidity or
inapplicability with respect to the applicable law, regulation or condition. The
Agent or such Lender, upon determining in good faith that any such additional
amounts will be payable pursuant to this Section 3.11, will give prompt written
notice thereof to the Borrowing Agent, which notice shall set forth, in
reasonable detail, the basis of the calculation of such additional amounts,
which basis must be reasonable and which calculation shall be presumed correct
absent manifest error, although the failure to give any such notice shall not
release or diminish any of the Borrowers’ obligations to pay additional amounts
pursuant to this Section 3.11 upon the subsequent receipt of such notice.
     3.12 Illegality.
          Notwithstanding any other provision hereof, if any applicable law,
treaty, regulation or directive adopted after the effective date of this
Agreement, or any change therein or in the interpretation or application thereof
after the effective date of this Agreement, shall make it unlawful for the Agent
or any Lender (for purposes of this Section 3.12, the terms “Agent” and “Lender”
shall include any corporation or bank controlling the Agent or such Lender or
the office or branch where any such Lender or makes or maintains any Libor Rate
Loans) to make or maintain its Libor Rate Loans, the obligation of the Lenders
to make Libor Rate Loans hereunder shall forthwith be cancelled and the
Borrowers shall, if any affected Libor Rate Loans are then outstanding, promptly
upon request from the Agent, either pay all such affected Libor Rate Loans or
convert such affected Libor Rate Loans into loans of another Type. If any such
payment or conversion of any Libor Rate Loan is made on a day that is not the
last day of the Interest Period applicable to such Libor Rate Loan, the
Borrowers shall pay the Agent,

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upon the Agent’s request, such amount or amounts as may be necessary to
compensate the Lenders for any loss or expense sustained or incurred by the
Lenders in respect of such Libor Rate Loan as a result of such payment or
conversion, including any interest or other amounts payable by the Lenders to
lenders of funds obtained by the Lenders in order to make or maintain such Libor
Rate Loan. The Agent or such Lender, upon determining in good faith that any
such additional amounts will be payable pursuant to this Section 3.12, will give
prompt written notice thereof to the Borrowing Agent, which notice shall set
forth, in reasonable detail, the basis of the calculation of such additional
amounts, which basis must be reasonable and which calculation shall be presumed
correct absent manifest error, although the failure to give any such notice
shall not release or diminish any of the Borrowers’ obligations to pay
additional amounts pursuant to this Section 3.12 upon the subsequent receipt of
such notice.
     3.13 Taxes; Withholding; Tax Indemnification.
          (a) All payments made by the Loan Parties under this Agreement and the
Notes shall be made free and clear of, and without deduction or withholding for
or on account of, any present or future taxes, levies, imposts, charges,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Body, excluding (i) taxes imposed on or
measured by the overall net income (however denominated) of, and franchise taxes
imposed on (in lieu of net income taxes) any of the Agent, Issuer or the Lenders
by the jurisdiction (or any political subdivision thereof) 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 Installation is
located, (ii) any branch profits taxes imposed by the United States or any
similar tax imposed by any other jurisdiction in which any Loan Party is located
and (iii) in the case of a Foreign Lender (other than an assignee pursuant to a
request by any Borrower under Section 15.5(g)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party hereto (or designates a new lending office) or is
attributable to such Foreign Lender’s failure or inability (other than as a
result of a change in law) to comply with Section 3.13(c), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from such Loan Party with respect to such withholding tax pursuant to
this Section 3.13(a) (all such non-excluded taxes, levies, imposts, charges,
deductions and withholdings, the “Non-Excluded Taxes”). In addition, the Loan
Parties agree to pay to the relevant Governmental Body in accordance with
applicable law any current or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies that arise from any payment
made hereunder or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any Other Loan Document (“Other Taxes”).
          (b) If any Non-Excluded Taxes or Other Taxes are required by law to be
withheld from any amounts payable to the Lenders or the Issuer hereunder or
under the Notes, the amounts so payable to such Person shall be increased to the
extent necessary to yield to such Person a net amount equal to interest or any
such other amounts that would have been paid without such withholdings, at the
rates or in the amounts specified in this Agreement and the Notes. Whenever any
Non-Excluded Taxes or Other Taxes are payable by the Loan Parties, the Borrowing
Agent shall send to the Agent a certified copy of any original official receipt
received by any Loan Party showing payment thereof or, if such receipts are not
obtainable, other evidence of such payments by such Loan Party reasonably
satisfactory to the Lenders, the Issuer or the Agent, as applicable. The Loan
Parties shall indemnify the Agent, the Lenders and the Issuer for the full
amount of Non-Excluded Taxes and Other Taxes that are paid by such indemnified
Person (including penalties, interest and expenses arising with respect thereto)
whether or not such Non-Excluded Taxes or Other Taxes were correctly or legally
imposed or asserted by any Governmental Body.

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          (c) Each Lender, the Issuer or assignee or participant of a Lender or
the Issuer that is a Foreign Lender (and, upon the written request of the Agent,
each other Lender, the Issuer or assignee or participant of a Lender or the
Issuer) agrees that it will deliver to each of the Borrowing Agent and the Agent
two (2) duly completed appropriate valid Withholding Certificates certifying its
status as a U.S. or foreign person and, if appropriate, making a claim of
complete exemption from U.S. withholding tax on the basis of an income tax
treaty or an exemption provided by the Code. Each Lender or the Issuer, assignee
or participant required to deliver to the Borrowing Agent and the Agent
Withholding Certificates shall deliver such valid Withholding Certificates as
follows: (A) each Lender or the Issuer which is a party hereto on the Closing
Date shall deliver such valid Withholding Certificate not more than five
(5) Business Days after it enters into this Agreement; (B) each assignee or
participant shall deliver such valid Withholding Certificates at least five
(5) Business Days before the effective date of such assignment or participation
(unless the Agent in its sole discretion shall permit such assignee or
participant to deliver such valid Withholding Certificates less than five
(5) Business Days before such date in which case it shall be due on the date
specified by the Agent). Each Lender, the Issuer, assignee or participant which
so delivers Withholding Certificates further undertakes to deliver to each of
the Borrowing Agent and the Agent two (2) additional copies of such Withholding
Certificate (or a successor form) on or before the date that such Withholding
Certificate expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent Withholding Certificate so delivered by
it, and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Borrowing Agent or the Agent.
          (d) The Lenders as of the Closing Date agree to submit promptly after
the Closing Date to the taxing authority of the country in which such Lender is
resident for tax purposes (with a copy to the Agent and the Borrowing Agent) for
certification and forwarding by such taxing authority to the appropriate United
Kingdom taxing authority, two copies of Form “Claim on Behalf of a United States
Domestic Corporation to Relief from United Kingdom Income Tax on Interest and
Royalties Arising in the United Kingdom” (or its counterpart for jurisdictions
other than the United Kingdom), or any successor forms (wherein such Lender
claims entitlement to complete exemption from or reduced rate of United Kingdom
withholding tax on interest paid by such Borrower hereunder) and to provide
successor forms thereto if any previously delivered form is found to be
incomplete or incorrect in any material respect or upon the obsolescence of any
previously delivered form. Each Lender and Issuer becoming such after the
Closing Date that is managed and controlled from or incorporated under the laws
of any jurisdiction other than the United Kingdom and which is making an Advance
to any of the UK Borrowers through a lending branch or lending office located
outside the United Kingdom agrees to submit on or before the time of becoming
such a Lender or Issuer to the taxing authority of the country in which such
Lender is resident for tax purposes (with a copy to the Agent and the Borrowing
Agent), for certification and forwarding by such taxing authority to the
appropriate United Kingdom taxing authority, two copies of Form “Claim on Behalf
of a United States Domestic Corporation to Relief from United Kingdom Income Tax
on Interest and Royalties Arising in the United Kingdom” (or its counterpart for
jurisdictions other than the United Kingdom), or any successor forms (wherein
such Lender claims entitlement to complete exemption from or reduced rate of
United Kingdom withholding tax on interest paid by such Borrower hereunder) and
to provide successor forms thereto if any previously delivered form is found to
be incomplete or incorrect in any material respect or upon the obsolescence of
any previously delivered form. Unless the Agent and the Borrowing Agent have
received a copy of the “Claim on Behalf of a United States Domestic Corporation
to Relief from United Kingdom Income Tax on Interest and Royalties Arising in
the United Kingdom” (or its counterpart for jurisdictions other than the United
Kingdom) from such Lender or Issuer, each of the UK Borrowers may withhold taxes
from such payments at the applicable statutory rate (subject, in the case of
each of the UK Borrowers to the requirements of Section 3.13(a) above);
provided, however, that, if each such UK Borrower has withheld, the Borrowing
Agent shall so notify the

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Agent. Any Lender or Issuer which ceases to be exempt from United Kingdom
withholding taxes shall notify the Agent and the Borrowing Agent promptly
thereof.
          (e) Upon the written request of any Borrower, each Lender promptly
will provide to such Borrower and to the Agent, or file with the relevant taxing
authority (with a copy to the Agent), such form, certification or similar
documentation that it is legally able to provide (each duly completed, accurate
and signed) as is required by the relevant jurisdiction in order to obtain an
exemption from, or reduced rate of, Non-Excluded Taxes or Other Taxes to which
such Lender or the Agent is entitled pursuant to an applicable tax treaty or the
law of the relevant jurisdiction; provided, however, such Lender will not be
required to (i) disclose information which in its Permitted Discretion it deems
confidential or proprietary or (ii) incur a disadvantage if it determines, in
its Permitted Discretion, that such disadvantage would be substantial.
          (f) If and to the extent that any Lender that is either a Non-UK
Lender or a UK Lender is able, in its sole opinion, to apply or otherwise take
advantage of any offsetting Tax credit or other similar Tax benefit out of or in
conjunction with any deduction, withholding or payment which gives rise to an
obligation on either UK Borrower to pay any additional amount pursuant to
Section 3.13(a), or Section 3.13(b), such Lender shall, to the extent that in
its sole opinion it can do so without prejudice to the retention of the amount
of such credit or benefit and without any other adverse Tax consequences for
that Lender, reimburse to each UK Borrower, at such time as such Tax credit or
benefit shall have actually been received by that Lender such amount as that
Lender shall, in its sole opinion, have determined to be attributable to the
relevant deduction, withholding or payment and as will leave it in no better or
worse position in respect of its worldwide Tax liabilities than it would have
been in if the payment of such additional amount had not been required.
          (g) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreement and liabilities of the Borrowers contained in
this Section 3.13 shall survive the payment in full of the Obligations.
IV. COLLATERAL: GENERAL TERMS.
     4.1 Security Interest in the Collateral.
          (a) To secure the prompt payment and performance of the Obligations,
each Domestic Obligor hereby grants to the Agent, for its benefit and the
ratable benefit of each Lender and the Issuer (and, in each case, their
Subsidiaries and Affiliates to which Obligations are owed) (the “Secured
Creditors”, and each individually, a “Secured Creditor”), a continuing security
interest in and a pledge of all of the Domestic Collateral. In addition, each
Domestic Obligor shall promptly provide the Agent with written notice of all
Commercial Tort Claims, such notice to contain the case title together with the
applicable court and a brief description of the claim(s). Upon delivery of each
such notice, such Domestic Obligor shall be deemed to hereby grant to the Agent
a security interest and lien in and to such Commercial Tort Claims and all
proceeds thereof.
          (b) To secure the prompt payment and performance of the Obligations
owing from the UK Borrowers, each UK Borrower hereby grants to the Agent, for
its benefit and the ratable benefit of each of the Secured Creditors, a
continuing security interest in and a pledge of all of the UK Collateral. In
addition, each UK Borrower shall promptly provide the Agent with written notice
of all Commercial Tort Claims, such notice to contain the case title together
with the applicable court and a brief description of the claim(s). Upon delivery
of each such notice, such UK Borrower shall be deemed to hereby grant to the
Agent a security interest and lien in and to such Commercial Tort Claims and all
proceeds thereof.

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     4.2 Perfection of Security Interest.
          Each Obligor shall take all action that may be necessary or desirable,
or that the Agent may request, so as at all times to maintain the validity,
perfection, enforceability and priority of the Agent’s security interest in the
Collateral or to enable the Agent to protect, exercise or enforce its rights
hereunder and in the Collateral, including (i) immediately discharging all Liens
other than Permitted Encumbrances, (ii) using commercially reasonable efforts to
obtain applicable Waivers, as the Agent may request, (iii) delivering to the
Agent, endorsed or accompanied by such instruments of assignment as the Agent
may specify, and stamping or marking, in such manner as the Agent may specify,
any and all Chattel Paper, Instruments, Letters of Credit and advices thereof
and Documents evidencing or forming a part of the Collateral, (iv) entering into
lockbox, warehousing and other custodial arrangements satisfactory to the Agent
as and to the extent required hereunder, and (v) executing and delivering
control agreements, instruments of pledge, mortgages, notices, assignments and
lockbox arrangements, in each case in form and substance satisfactory to the
Agent, relating to the creation, validity, perfection, maintenance or
continuation of the Agent’s security interest in Collateral under the Uniform
Commercial Code or other applicable law. By its signature hereto, each Obligor
hereby authorizes the Agent to file against such Obligor one or more financing,
continuation, or amendment statements pursuant to the Uniform Commercial Code to
perfect Liens in the Collateral securing Obligations arising hereunder in form
and substance satisfactory to the Agent (which may describe the Collateral with
such words as “all assets” or other words of similar effect so long as the
Specified Fixed Asset Collateral is stated to be specifically excluded). All
charges, expenses and fees the Agent may incur in doing any of the foregoing,
and any local taxes relating thereto, shall be charged to the Loan Account as a
Revolving Advance of an Alternate Base Rate Loan and added to the Obligations,
or, at the Agent’s option, shall be paid to the Agent for the ratable benefit of
the Secured Creditors immediately upon demand. Each Obligor shall mark its
respective books and records as may be necessary or appropriate to evidence,
protect and perfect the Agent’s security interest and shall cause its financial
statements to reflect such security interest.
     4.3 Disposition of Collateral.
          Each Obligor will safeguard and protect all Collateral and shall make
no disposition thereof whether by sale, lease or except as may be otherwise
permitted under this Agreement.
     4.4 Preservation of Collateral.
          Following the occurrence and during the continuation of an Event of
Default, in addition to the rights and remedies set forth in Section 11.1, the
Agent may at any time take such steps as the Agent deems necessary to protect
the Agent’s interest in and to preserve the Collateral, including: (a) the
hiring of such security guards or the placing of other security protection
measures as the Agent may deem appropriate and the employing and maintaining at
any Obligor’s premises a custodian who shall have full authority to do all acts
necessary to protect the Agent’s interests in the Collateral, (b) leasing
warehouse facilities to which the Agent may move all or part of the Collateral,
and (c) using any of each Obligor’s owned or leased lifts, hoists, trucks and
other facilities or equipment for handling or removing the Collateral. The Agent
shall have, and is hereby granted, a right of ingress and egress to the places
where the Collateral is located, and may proceed over and through any of each
Obligor’s owned or leased property. Each Obligor shall cooperate fully with all
of the Agent’s efforts to preserve the Collateral as permitted in the foregoing
sentence and will take such actions to preserve the Collateral as the Agent may
direct. All of the Agent’s expenses of preserving the Collateral in accordance
with the foregoing, including any expenses relating to the bonding of a
custodian,

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shall be charged to the Loan Account as a Revolving Advance of an Alternate Base
Rate Loan and added to the Obligations.
     4.5 Ownership of Collateral.
          With respect to the Collateral, at the time the Collateral becomes
subject to the Agent’s security interest: (a) each Obligor shall be the sole
owner of and fully authorized and able to sell, transfer, pledge or grant a
perfected security interest in each and every item of its respective Collateral
to the Agent; and, except for Permitted Encumbrances, the Collateral shall be
free and clear of all Liens and encumbrances whatsoever; (b) each document and
agreement executed by each Obligor or delivered to the Agent or any Lender in
connection with this Agreement shall be true and correct in all material
respects; (c) all signatures and endorsements of each Obligor that appear on
such documents and agreements shall be genuine and such Obligor shall have full
capacity to execute same; and (d) each Obligor’s Inventory shall be located as
set forth on Schedule 5.23 and shall not be removed from such location(s)
without the prior written consent of the Agent, except (i) with respect to the
sale of Inventory in the ordinary course of business, (ii) with respect to
Inventory in transit from one location identified on Schedule 5.23 to another
location identified on Schedule 5.23 and (iii) such other location appearing on
any subsequent amendments to Schedule 5.23 as consented to by the Agent pursuant
to Section 15.3.
     4.6 Defense of Agent’s and Lenders’ Interests.
          Each Obligor shall defend the Agent’s interests in the Collateral
against any and all Persons whatsoever. At any time during the continuance of an
Event of Default, the Agent shall have the right to take possession of the
indicia of the Collateral and the Collateral in whatever physical form
contained, including: labels, stationery, documents, instruments and advertising
materials. If the Agent exercises such right to take possession of the
Collateral, the Obligors shall, upon demand, assemble it in the best manner
possible and make it available to the Agent at a place reasonably convenient to
the Agent. In addition, with respect to all Collateral, the Agent, the Issuer
and the Lenders shall be entitled to all of the rights and remedies set forth
herein and further provided by the Uniform Commercial Code or other applicable
law. At any time during the continuance of an Event of Default, each Obligor
shall and the Agent may, at its option, instruct all suppliers, carriers,
forwarders, warehousers or others receiving or holding cash, checks, Inventory,
Documents or Instruments in which the Agent holds a security interest to deliver
same to the Agent or subject to the Agent’s order and if they shall come into
any Obligor’s possession, they, and each of them, shall be held by such Obligor
in trust as the Agent’s trustee, and such Obligor will immediately deliver them
to the Agent in their original form together with any necessary endorsement.
     4.7 Books and Records.
          Each Obligor shall (a) keep proper books of record and account in
which true and correct entries will be made of all dealings or transactions of
or in relation to its business and affairs, (b) set up on its books accruals
with respect to all taxes, assessments and other Charges, levies and claims, and
(c) on a reasonably current basis set up on its books, from its earnings,
allowances against doubtful Receivables, advances and investments and all other
proper accruals (including accruals for premiums, if any, due on required
payments and accruals for depreciation, obsolescence, or amortization of
properties) which should be set aside from such earnings in connection with its
business. All determinations pursuant to this Section 4.7 shall be made in all
material respects in accordance with, or as required by, GAAP consistently
applied in the opinion of such independent public accountant as shall then be
regularly engaged by the Obligors.

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     4.8 Financial Disclosure.
          Each Obligor irrevocably authorizes and directs: (i) all accountants
and auditors employed by such Obligor at any time and promptly after the request
of the Agent to exhibit and deliver to the Agent copies of such Obligor’s or any
Subsidiary’s financial statements (if any exist at or prior to the date of such
request), trial balances or other accounting records of any sort in the
accountant’s or auditor’s possession, and to disclose to the Agent any
information such accountants may have concerning such Obligor’s or such
Subsidiary’s financial status and business operations and (ii) to the extent
permitted by applicable law, all federal, state and municipal authorities to
furnish to the Agent copies of reports or examinations relating to such Obligor
or such Subsidiary, whether made by such Obligor or such Subsidiary or
otherwise; provided, however, prior to the occurrence of an Event of Default
which is continuing, the Agent may only obtain such information or materials
from such accountants or such authorities if such Obligor or such Subsidiary, as
applicable, fails to furnish such information or materials to the Agent within
fifteen (15) Business Days after the Agent has requested such information and
material from such Obligor.
     4.9 Compliance with Laws.
          Each Obligor shall be in compliance with all laws, acts, rules,
regulations and orders of any Governmental Body with jurisdiction over it or the
Collateral or any part thereof or the operation of such Obligor’s business,
except to the extent any noncompliance, when taken singly or in the aggregate
with all other similar instances of noncompliance, has not resulted or could not
reasonably be expected to result in a Material Adverse Effect. Each Obligor may,
however, contest or dispute any acts, rules, regulations, orders and directions
of those Governmental Bodies or officials in any reasonable manner; provided,
however, that any related Lien is otherwise a Permitted Encumbrance. The
Collateral at all times shall be maintained in accordance with the material
requirements of all insurance carriers which provide insurance with respect to
the Collateral so that such insurance shall remain in full force and effect.
     4.10 Inspection of Premises.
          At all reasonable times as the Agent deems necessary, the Agent shall
have full access to and the right to audit, check, inspect and make abstracts
and copies from each Obligor’s books, records, audits, correspondence and all
other papers relating to the Collateral and the operation of such Obligor’s
business. The Agent and its agents may enter upon any Obligor’s premises at any
time during business hours and at any other reasonable time, and from time to
time as the Agent deems necessary or desirable, for the purpose of auditing,
inspecting and appraising the Collateral and any and all records pertaining
thereto and the operation of such Obligor’s business. Each Lender shall have the
right to request that such Lender be permitted to accompany the Agent with
respect to any such visit or inspection, and shall have the option to so
accompany the Agent, all at such Lender’s expense. The Agent shall have the
right to conduct such audits, appraisals and field examinations at such times as
the Agent deems necessary and such audits, appraisals and field examinations
shall be at the Borrowers’ expense; provided, however, such audits, appraisals
and field examinations shall be at the Borrowers’ expense only to the extent
that (i) such audit, appraisal and field examination of the Collateral is the
first conducted by Agent during the then current fiscal year, (ii) such audit,
appraisal and field examination of the Collateral is the second conducted by
Agent during the then current fiscal year and the average daily amount of the
aggregate outstanding Revolving Credit Advances and Letter of Credit Exposure
exceeds Fifty Million Dollars ($50,000,000) for any sixty (60) consecutive day
period during such then current fiscal year, or (iii) such audit, appraisal and
field examination of the Collateral is conducted by Agent at any time an Event
of Default has occurred and is continuing.

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     4.11 Insurance.
          (a) Each Obligor shall bear the full risk of any loss of any nature
whatsoever with respect to the Collateral and the other assets of such Obligor.
At each Obligor’s own cost and expense, such Obligor shall, with financially
sound and reputable insurance carriers having a “Financial Strength Rating” of
at least A- as provided by A.M. Best Company, Inc., (i) keep all its properties
and assets insured against the hazards of fire, business interruption, those
hazards covered by extended coverage insurance and such other hazards as is
customary in the case of companies engaged in businesses similar to such
Obligor’s, (ii) maintain public and product liability insurance, as is customary
in the case of companies engaged in businesses similar to such Obligor’s against
claims for personal injury, death or property damage suffered by others and
employee theft, embezzlement and other criminal activities, and (iii) maintain
all such worker’s compensation or similar insurance as may be required under the
laws of any state or jurisdiction in which such Obligor is engaged in business.
All such insurance shall be in amounts, cover such assets and be under policies
acceptable to the Agent in its Permitted Discretion, but, in any case, no less
than is customary for companies engaged in businesses similar to such Obligor’s.
In the event any Collateral or other properties or assets of any Obligor is
located in any area that has been designated by the Federal Emergency Management
Agency as a “Special Flood Hazard Area”, the applicable Obligor shall purchase
and maintain flood insurance on such Collateral, properties or assets (including
any personal property which is located on any Real Property leased by an Obligor
within a “Special Flood Hazard Area”). The amount of all insurance required by
this Section 4.11 shall at a minimum comply with applicable law, including the
Flood Disaster Protection Act of 1973.
          (b) The Obligors shall furnish the Agent with (i) a status report with
respect to the renewal of all such insurance no later than ten (10) days before
the expiration date thereof, (ii) evidence of the maintenance of all such
insurance by the renewal thereof no later than the expiration date thereof, and
(iii) with respect to the Collateral, appropriate loss payable endorsements in
form and substance satisfactory to the Agent, naming the Agent as a additional
insured and lender loss payee, as its interests may appear and providing
(A) that all proceeds thereunder covering a loss of or damage to Collateral
shall be payable to the Agent, (B) no such insurance shall be affected by any
act or neglect of the insured or owner of the property described in such policy,
and (C) that such policy and loss payable clauses may not be cancelled, amended
or terminated unless at least thirty (30) days’ prior written notice is given to
the Agent. The Obligors shall provide copies of all such insurance policies
(including the appropriate lender loss payee and additional insured
endorsements) within thirty (30) days after the Agent’s request, however, only
certificates of such insurance shall be required on the Closing Date.
          (c) The carriers named in any insurance policies covering Collateral
shall be directed in such policies that in the event of any loss to make payment
for such loss to the Agent and not to the applicable Obligors and the Agent
jointly. The Agent may endorse any Obligor’s name on any insurance losses with
respect to Collateral paid by check, draft or other instrument payable to any
Obligor and the Agent jointly and do such other things as the Agent may deem
advisable to reduce the same to cash. At any time during the continuance of an
Event of Default, the Agent is hereby authorized to adjust and compromise claims
under insurance coverage with respect to Collateral, and, so long as any
Revolving Advances are outstanding, with respect to any other assets or
properties. All loss recoveries upon any insurance with respect to a Material
Recovery Event received by the Agent or the applicable Obligor shall be applied
in accordance with Section 4.19 and Section 2.7(c). In the event that an Event
of Default has occurred and is continuing and any Revolving Advances are
outstanding, any loss recoveries attributable to Specified Fixed Asset
Collateral (other than Specified Fixed Asset Collateral consisting of equity
interests in any Subsidiaries or joint ventures) not relating to a Material
Recovery Event shall be payable directly to the Agent to be applied to the
Obligations as required by the terms of Section 4.14(h) and Section 2.7(c). In
the event that an Activation Notice has been delivered to

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the Borrowing Agent, any loss recoveries attributable to assets other than
Specified Fixed Asset Collateral and not relating to a Material Recovery Event
shall be payable directly to the Agent to be applied to the Obligations as
required by the terms of Section 4.14(h) and Section 2.7(c).
          (d) Each Obligor shall give the Agent prior written notice of any
change in insurance carriers and any new insurance policy shall comply with the
provisions of this Section 4.11 and otherwise be acceptable to the Agent in its
Permitted Discretion. Without in any way limiting the foregoing, in no event
shall any Obligor change any insurance carrier with respect to the Collateral
without first obtaining a loss payable endorsement in form and substance
satisfactory to the Agent.
     4.12 Failure to Pay Insurance.
          If any Obligor fails to obtain insurance as hereinabove provided, or
to keep the same in force, the Agent, if the Agent so elects, may obtain such
insurance and pay the premium therefor on behalf of such Obligor, and charge the
Loan Account therefor as a Revolving Advance of an Alternate Base Rate Loan to
the Borrowers and such expenses so paid shall be part of the Obligations.
     4.13 Payment of Leasehold Obligations.
          Each Obligor shall at all times pay, when and as due (in accordance
with all applicable grace periods, if any), its rental obligations under all
leases under which it is a tenant, and shall otherwise comply, in all material
respects, with all other terms of such leases and keep them in full force and
effect, and, at the Agent’s reasonable request, will provide evidence of having
done so.
     4.14 Receivables; Investments, Cash Management.
          (a) Nature of Receivables. Each of the Receivables shall be a bona
fide and valid Receivable representing a bona fide obligation incurred by the
Account Debtor therein named, for a fixed sum as set forth in the invoice
relating thereto (provided immaterial or unintentional invoice errors shall not
be deemed to be a breach hereof) with respect to an absolute sale or lease and
delivery of goods upon stated terms of an Obligor, or work, labor or services
theretofore rendered by an Obligor as of the date each Receivable is created.
Each Receivable shall be due and owing without dispute, setoff or counterclaim
at the time of its inclusion as an Eligible Receivable on the Borrowing Base
Certificate and shall be excluded from being an Eligible Receivable on each
Borrowing Base Certificate delivered by the Borrowing Agent to the Agent after
assertion of any such dispute, setoff or counterclaim against such Receivable
that would cause such Receivable not to be an Eligible Receivable.
          (b) Solvency of Account Debtors. Each Account Debtor with respect to
Receivables, to the applicable Obligor’s knowledge, as of the date each
Receivable is created, is and will be solvent and able to pay all Receivables on
which the Account Debtor is obligated in full when due (other than with respect
to Delphi Corp. and any other debtor-in-possession Account Debtor whose
insolvency is disclosed to the Agent in writing and whose insolvency is deemed
acceptable to the Agent, in its Permitted Discretion,) or with respect to such
Account Debtors of any Obligor who are not solvent such Borrower has or will
promptly set up on its books and in its financial records bad debt reserves in
accordance with GAAP.
          (c) Chief Executive Offices. Each Obligor’s chief executive office is
located at the addresses set forth on Schedule 4.14(c) hereto. Until written
notice is given to the Agent by the Borrowing Agent of any other office at which
any Obligor keeps its records pertaining to Receivables, all such records shall
be kept at such disclosed chief executive office.

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          (d) Notification of Assignment of Receivables. At any time an Event of
Default has occurred and is continuing, the Agent shall have the right to send
notice of the assignment of, and the Agent’s security interest in, the
Receivables to any and all Account Debtors or any third party holding or
otherwise concerned with any of the Collateral. During the continuance of any
Event of Default, the Agent shall have the sole right to collect the
Receivables, take possession of the Collateral, or both. The Agent’s actual
reasonable collection expenses, including stationery and postage, telephone and
telecopier, secretarial and clerical expenses and the salaries of any collection
personnel used for collection (including reasonable attorneys’ fees), may be
charged to the Loan Account as a Revolving Advance of an Alternate Base Rate
Loan to the Borrowers and such expenses so paid shall be part of the
Obligations.
          (e) Power of Attorney to Act for Obligors. The Agent shall have the
right, upon the occurrence of an Event of Default which is continuing, to
receive, endorse, assign and deliver in the name of the Agent or any Obligor any
and all checks, drafts and other instruments for the payment of money relating
to the Receivables, and each Obligor hereby waives notice of presentment,
protest and non-payment of any instrument so endorsed. Each Obligor hereby
constitutes the Agent or the Agent’s designee as such Obligor’s attorney with
power at any time upon the occurrence of an Event of Default which is
continuing: (i) to endorse such Obligor’s name upon any notes, acceptances,
checks, drafts, money orders or other evidences of payment of Collateral,
(ii) to sign such Obligor’s name on any invoice or bill of lading relating to
any of the Receivables, drafts against Account Debtors, assignments and
verifications of Receivables, (iii) to send verifications of Receivables to any
Account Debtor, (iv) to demand payment of the Receivables, (v) to enforce
payment of the Receivables by legal proceedings or otherwise, (vi) to exercise
all of such Obligor’s rights and remedies with respect to the collection of the
Receivables and any other Collateral, (vii) to settle, adjust, compromise,
extend or renew the Receivables, (viii) to settle, adjust or compromise any
legal proceedings brought to collect Receivables, (ix) to prepare, file and sign
such Obligor’s name on a proof of claim in bankruptcy or similar document
against any Account Debtor, (x) to prepare, file and sign such Obligor’s name on
any notice of Lien, assignment or satisfaction of Lien or similar document in
connection with the Receivables, and (xi) to do all other lawful acts and things
necessary to collect the Receivables. All acts of said attorney or designee are
hereby ratified and approved, and said attorney or designee shall not be liable
for any acts of omission or commission nor for any error of judgment or mistake
of fact or of law, unless done with gross negligence or willful misconduct; this
power being coupled with an interest is irrevocable while any of the Obligations
remain unpaid. The Agent shall have the right at any time an Event of Default
has occurred and is continuing, to change the address for delivery of mail
addressed to any Obligor to such address as the Agent may designate and to
receive and open all mail addressed to any Obligor.
          (f) No Liability. None of the Agent, the Issuer or any Lender shall,
under any circumstances or in any event whatsoever, have any liability for any
error or omission or delay of any kind occurring in the settlement, collection
or payment of any of the Receivables or any instrument received in payment
thereof, or for any resulting damage unless such liability arises from the
Agent’s, the Issuer’s or any Lender’s willful misconduct or gross negligence as
finally determined by a court of competent jurisdiction. Upon the occurrence of
an Event of Default which is continuing, the Agent may, without notice or
consent from any Obligor, sue upon or otherwise collect, extend the time of
payment of, compromise or settle for cash, credit or upon any terms any of the
Receivables or any other securities, instruments or insurance applicable thereto
or release any obligor thereof. The Agent is authorized and empowered to accept,
upon the occurrence of an Event of Default which is continuing, the return of
the goods represented by any of the Receivables, without notice to or consent by
any Obligor, all without discharging or in any way affecting any Obligor’s
liability hereunder.
          (g) Establishment of Lockboxes and Collection Accounts. The Domestic
Obligors have established and shall maintain one or more Lockboxes with National
City Bank

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and with each other Lockbox Bank. The Domestic Obligors have established and
will maintain a deposit account (each a “Collection Account”) with each Lockbox
Bank in the name of the Borrowing Agent or such other Obligors as are acceptable
to the Agent, in its sole discretion. In the case of National City Bank, after
the Borrowing Agent has received an Activation Notice, each Cash Concentration
Account maintained at National City Bank shall function as a Collection Account
maintained at National City Bank for all purposes of this Section 4.14(g) and
4.14(h). Each Lockbox Bank and the Borrowing Agent (or other applicable Obligor)
have entered into agreements establishing the Lockboxes maintained by such
Lockbox Bank (each a “Lockbox Agreement”) and agreements with respect to the
Collection Account maintained at such Lockbox Bank (each a “Deposit Account
Agreement”), each such Lockbox Agreement and Deposit Account Agreement to be in
form and substance satisfactory to the Agent. The Borrowing Agent (or other
applicable Domestic Obligor), the Agent and the applicable Lockbox Bank at which
the each Collection Account is located shall have entered into a blocked account
agreement (each a “Blocked Account Agreement”) relating to rights of the Agent
with respect to the Lockboxes and the Collection Accounts maintained at such
Lockbox Bank. The Collection Accounts shall not be subject to any deduction,
set-off, banker’s lien or any other right in favor of any Person, except for the
fees of the related Lockbox Bank and with respect to returned items. All funds
deposited into the Collection Accounts shall be subject to the sole and
exclusive control of the Agent on behalf of the Lenders and shall be subject
only to such signing authority designated from time to time by the Agent, in
accordance with the terms of the applicable Blocked Account Agreement; provided,
however, that, prior to the delivery to the Borrowing Agent of an Activation
Notice, the Obligors shall have the authority to direct the withdrawal,
application, investment or handling of the funds in the Collection Accounts. No
Domestic Obligor shall have control over such funds except as described in the
immediately preceding sentence. Agent shall only be permitted to deliver an
Activation Notice to the Borrowing Agent in the event that either (i) an Event
of Default has occurred and is continuing or (ii) the Undrawn Availability is
less than Twenty-Five Million Dollars ($25,000,000).
          Schedule 4.14(g) hereto lists the following information with respect
to each Domestic Obligor: (i) all present Lockboxes, all Collection Accounts and
all Cash Concentration Accounts, (ii) the name and address of each Lockbox,
(iii) the account number of each Collection Account and each Cash Concentration
Account, (iv) a contact Person at each Lockbox Bank, and (v) a list describing
all Blocked Account Agreements. Other than: (a) such Lockboxes, Collection
Accounts and Cash Concentration Accounts, (b) Securities Accounts, and (c) those
other operating accounts (whether checking or Deposit Accounts) disclosed on the
Schedule 4.14(g) (which such Domestic Obligor shall use solely for the purpose
of disbursing monies of such Domestic Obligor (or as otherwise described on
Schedule 4.14(g)) and not for collecting or depositing collections or
remittances of proceeds of other Collateral) which have been consented to by the
Agent from time to time in the Agent’s sole discretion, no Domestic Obligor
shall maintain nor permit any other Person to maintain a post office box,
Deposit Account or checking account receiving any such Collections or
remittances of Proceeds of other Collateral or otherwise holding monies of such
Obligor.
          The UK Security Documents shall set forth the terms for establishing
and maintaining lockboxes and collection accounts with respect to the proceeds
of the UK Collateral and the UK Assets.
          (h) Processing Collections and Proceeds; Cash Concentration Accounts.
Each Domestic Obligor shall notify all of its Account Debtors and any other
remitter of the proceeds of other Collateral to forward all collections and
remittances of every kind due such Obligor to either a Lockbox or to a
Collection Account (such notices to be in such form and substance as the Agent
may reasonably require from time to time). In accordance with the terms of the
applicable Blocked Account Agreement, each Lockbox Bank shall be instructed to
deposit on a daily basis all collections from customers or other remittances of
Proceeds of any Domestic

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Obligor sent to the Lockbox maintained by such Lockbox Bank directly into the
applicable Collection Account in the identical form in which such collections
were made (except for any necessary endorsements) whether by cash or check. In
accordance with the terms of the applicable Blocked Account Agreement, such
Lockbox Bank shall be instructed that, upon its receipt of any Activation
Notice, it shall deposit on a daily basis all funds from collections deposited
into such Collection Account to one of the Cash Concentration Accounts. None of
the Cash Concentration Accounts shall be subject to any deduction, set off,
banker’s lien or any other right in favor of any Person. Subject to this
paragraph, all funds deposited into any of the Cash Concentration Accounts shall
be the exclusive property of the Agent on behalf of the Lenders, shall be
subject to the sole and exclusive control of the Agent and only to such signing
authority designated from time to time by the Agent, and the Agent shall apply
such funds deposited in any of the Cash Concentration Accounts to the repayment
of the Obligations in accordance with Section 2.7(c), if no Event of Default has
occurred and is continuing, in accordance with Section 11.7, if an Event of
Default has occurred and is continuing, or as otherwise agreed by the Agent and
the Borrowing Agent; provided however, after payment in full has been made of
the amounts described in Section 2.7(c) or Section 11.7, as applicable, unless
the Borrowing Agent’s has provided other instructions with respect thereto, any
additional funds then held in any of the Cash Concentration Accounts shall be
released to the Borrowing Agent. Prior to the delivery of an Activation Notice
by the Agent, all funds received into a Collection Account and not applied to
the Obligations shall be released to the Borrowing Agent.
          Each Domestic Obligor hereby agrees to deposit immediately collections
of Accounts and all other Proceeds of Collateral in the identical form in which
such collections or Proceeds were received (except for any necessary
endorsements), whether by cash or check, into a Collection Account. Any
collections or Proceeds received by the Obligors shall be deemed held by the
Obligors in trust and as fiduciary for the Lenders until deposit is made into
the applicable Collection Account or, after an Activation Notice has been
received by the Borrowing Agent, into the applicable Cash Concentration Account.
Each Domestic Obligor hereby agrees to deposit immediately such directly
received collections and all other Proceeds of Collateral into any Collection
Account maintained by or on behalf of such Domestic Obligor, or, after an
Activation Notice has been received by the Borrowing Agent, into any Cash
Concentration Account. The Agent and National City Bank shall have entered into
an agreement, such agreement to be in form and substance satisfactory to the
Agent and acknowledged by the Borrowing Agent (or other applicable Obligor) (the
“Cash Concentration Accounts Agreement”), whereby National City Bank will agree
to maintain the Cash Concentration Accounts on behalf of the Agent. In the event
that any terms or provisions of any Cash Concentration Accounts Agreement and
this Agreement conflict, the terms and provisions of this Agreement shall
govern.
          Each Domestic Obligor agrees not to commingle any such collections or
Proceeds with any of such Obligor’s other funds or property, but to hold such
funds separate and apart in trust and as fiduciary for the Lenders until deposit
is made into the applicable Collection Account in the identical form in which
such collections were made (except for any necessary endorsements) whether by
cash or check. In accordance with the terms of the applicable Blocked Account
Agreement, each Lockbox Bank shall be instructed, prior to the delivery of an
Activation Notice to the Borrowing Agent, to deposit on a daily basis all funds
from collections and Proceeds deposited into a Lockbox into the Collection
Account, and, after an Activation Notice has been delivered to the Borrowing
Agent, each Lockbox Bank shall be instructed to deposit on a daily basis all
funds received into the Collection Account into the applicable Cash
Concentration Account.
          The UK Security Documents shall set forth the terms for processing
collections and proceeds of the UK Collateral and the UK Assets.

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          (i) Adjustments. No Obligor shall, nor shall such Obligor permit any
other Person to, without the Agent’s consent, compromise or adjust any
Receivables (or extend the time for payment thereof) or accept any returns of
merchandise or grant any additional discounts, allowances or credits thereon,
except for those compromises, adjustments, returns, discounts, credits and
allowances as have been heretofore (A) customary in the business or industry of
such Obligor or (B) done in the ordinary course of such Obligor’s business
          (j) Securities Accounts. Within sixty (60) days after the Closing
Date, all Investment Property of the Domestic Obligors constituting Collateral
which is held by a Securities Intermediary shall be held in a Securities Account
which is subject to a Securities Account Control Agreement. The Securities
Accounts shall not be subject to any deduction, set-off, broker’s lien or any
other right in favor of any Person, except for the fees of the Securities
Intermediary. All funds deposited into the Securities Accounts shall be subject
to the sole and exclusive control of the Agent on behalf of the Lenders and
shall be subject only to such signing authority designated from time to time by
the Agent, in accordance with the terms of the applicable Securities Account
Control Account Agreement; provided, however, that, prior to the delivery to the
Borrowing Agent of an Activation Notice, the Obligors shall have the authority
to direct the withdrawal, application, investment or handling of the funds in
the Securities Accounts. No Domestic Obligor shall have control over such funds
except as described in the immediately preceding sentence. Agent shall only be
permitted to deliver an Activation Notice to the Borrowing Agent in the event
that either (i) an Event of Default has occurred and is continuing or (ii) the
Undrawn Availability is less than Twenty-Five Million Dollars ($25,000,000).
          Schedule 4.14(j) hereto lists the following information with respect
to each Domestic Obligor: (i) all present Securities Accounts (ii) the account
number of each Securities Account and (iii) within sixty (60) days after the
Closing Date, a list describing all Securities Account Control Agreements.
          The UK Security Documents shall set forth the terms for establishing
and maintaining securities accounts with respect to the Investment Property (to
the extent constituting Collateral) of the UK Borrowers.
     4.15 Maintenance of Equipment.
          Each Obligor shall maintain, and shall cause each Subsidiary thereof
to maintain, its Equipment in good operating condition and repair in accordance
in all material respects with industry standards (reasonable wear and tear
excepted) and shall make or cause to be made all necessary replacements of and
repairs thereto as are deemed necessary by the Obligor, in its good-faith
reasonable business judgment,. No Obligor shall, nor shall such Obligor permit
any Subsidiary or other Person to, use or operate the Equipment in violation of
any law, statute, ordinance, code, rule or regulation except to the extent that
any violation, when taken singly or in the aggregate with all other
noncompliance has not resulted or could not reasonably be expected to result in
a Material Adverse Effect.
     4.16 Exculpation of Liability.
          Nothing herein contained shall be construed to constitute the Agent,
the Issuer or any Lender as any Obligor’s agent for any purpose whatsoever, nor
shall the Agent, the Issuer or any Lender be responsible or liable for any
shortage, discrepancy, damage, loss or destruction of any part of the Collateral
wherever the same may be located and regardless of the cause thereof, except for
the Agent’s or any Lender’s gross negligence or willful misconduct. None of the
Agent, the Issuer or any Lender, whether by anything herein or in any assignment
or otherwise, shall assume any of each Obligor’s obligations under any contract
or agreement assigned to the

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Agent, the Issuer or such Lender, and neither the Agent, the Issuer nor any
Lender shall be responsible in any way for the performance by any Obligor of any
of the terms and conditions thereof.
     4.17 Environmental Matters.
          (a) Obligor Compliance. Each Obligor: (i) shall use and operate its
business, facilities, leaseholds, assets and properties, and cause each of its
Subsidiaries to use and operate its respective facilities and properties, in
compliance with Environmental Laws, (ii) shall remain in compliance with, and
shall cause each of its Subsidiaries to remain in compliance with, all necessary
Environmental Permits, and (iii) shall handle all Hazardous Substances in
compliance with all applicable Environmental Laws except to the extent, as to
all of the foregoing, that any noncompliance, when taken singly or in the
aggregate with all other such noncompliance, has not resulted or could not
reasonably be expected to result in a Material Adverse Effect or in aggregate
liabilities in excess of Five Million Dollars ($5,000,000). No Obligor shall
suffer to exist, nor permit any of its Subsidiaries to suffer to exist, a
environmental condition with respect to any of the Real Property or leasehold
which, when taken singly or in the aggregate with all other environmental
conditions, has resulted or could reasonably be expected to result in a Material
Adverse Effect or in aggregate liabilities in excess of Five Million Dollars
($5,000,000).
          (b) Notification. Each Obligor shall furnish to the Agent promptly
after receipt a copy of any notice such Obligor or any Subsidiary thereof may
receive from any Governmental Body or any other Person that any litigation,
investigation or proceeding pertaining to any environmental matter had been
instituted or is threatened against such Obligor or such Subsidiary, any of the
Real Property or any past or present operation of such Obligor or such
Subsidiary.
          (c) Remedial Actions. If any Obligor shall fail to comply with the
requirements of Section 4.17(a), the Agent may, but shall not be obligated to,
to the extent the Agent, in the exercise of its Permitted Discretion, determines
such action is necessary to protect the Agent’s interest in the Collateral:
(A) give such notices or (B) enter onto the Real Property (or authorize third
parties to enter onto the Real Property) and take such actions as the Agent (or
such third parties as directed by the Agent) reasonably deems necessary or
advisable, to clean up, remove, mitigate or otherwise deal with any resulting
environmental condition or non-compliance. All reasonable costs and expenses
incurred by the Agent (or such third parties) in the exercise of any such
rights, including any sums paid in connection with any judicial or
administrative investigation or proceedings, fines and penalties, together with
interest thereon from the date expended at the Default Rate for Alternate Base
Rate Loans constituting Revolving Advances shall be paid upon demand by the
Obligors, and until paid shall be deemed to be Obligations.
          (d) Environmental Assessments. If any Obligor shall fail to comply
with the requirements of Section 4.17(a), the Agent may, but shall not be
obligated to, to the extent the Agent, in the exercise of its Permitted
Discretion, determines such action is necessary to protect the Agent’s interest
in the Collateral, require the Obligors to promptly provide the Agent, at the
Obligors’ expense, with an environmental assessment or environmental audit
report prepared by an environmental engineering firm acceptable in the
reasonable opinion of the Agent, to assess the existence of any discharge of
Hazardous Substance or the potential costs in connection with abatement, cleanup
and removal of any Hazardous Substances on or at the Real Property. At such
times as no Event of Default has occurred and is continuing, if the Agent
determines, in the exercise of its Permitted Discretion, that any discharge of
Hazardous Substances has occurred on or at the Real Property, and that such
event or condition has resulted or could reasonably be expected to result in a
Material Adverse Effect or in aggregate liabilities in excess of Five Million
Dollars ($5,000,000), then, upon the written request of the Agent, the Obligors
shall

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promptly provide the Agent, at the Obligors’ expense, with an environmental
assessment or environmental audit report prepared by an environmental
engineering firm acceptable in the reasonable opinion of the Agent, to assess
the existence of any such event or condition or the potential costs in
connection with abatement, cleanup and removal of any Hazardous Substances on or
at the Real Property. Any report or investigation of such discharge of Hazardous
Substances proposed or acceptable to the Governmental Body charged to oversee
the cleanup of such discharges shall be acceptable to the Agent.
          (e) Environmental Indemnities. The Obligors shall defend and indemnify
the Agent, the Issuer and their respective employees, agents, directors and
officers, and hold each such Person harmless from and against all losses,
liabilities, damages, expenses, claims, costs, fines and penalties, including
attorney’s fees, suffered or incurred by any such Person in connection with the
transactions contemplated by this Agreement, the execution, delivery or
recording of any Other Loan Document, the administration of the facilities
pursuant to this Agreement or enforcement of the rights and remedies of the
Agent and Lenders and Issuer under this Agreement or any Other Loan Document
under or on account of any Environmental Law, the discharge of any Hazardous
Substances from the Real Property, or the presence of any Hazardous Substances
affecting the Real Property, whether or not the same originates or emerges from
the Real Property as a result of the foregoing, unless, in each case, such
losses, liabilities, damages, expenses, claims fines or penalties are the result
of the gross negligence or willful misconduct of such Person.
     4.18 Financing Statements.
          Except for the financing statements filed by the Agent and those
financing statements filed in connection with Liens permitted by Section 7.2, no
financing statement (or analogous filing or registration under the laws of any
other jurisdiction) covering any of the Collateral or any Proceeds thereof is on
file in any public office or registry.
     4.19 Material Recovery Event.
          Within 10 days after the occurrence of any Material Recovery Event,
the Borrowing Agent shall furnish to the Agent written notice thereof. If any
Material Recovery Event results in Net Proceeds, a portion or all of which is
required to be applied as a mandatory prepayment of the Advances pursuant to
Section 2.7(c), the applicable Obligor will pay over such Net Proceeds to the
Agent; provided, however, if: (i) no Default or Event of Default has occurred
which is continuing and (ii) the Borrowing Agent notifies the Agent in writing
prior to the Material Recovery Prepayment Date that the applicable Obligor
intends to rebuild or restore the affected property, that such rebuilding or
restoration can be accomplished within twelve (12) months out of such Net
Proceeds and any other cash (other than cash obtained from Advances hereunder)
and such written notice includes an estimate of the amount of Net Proceeds
required for such investment, then no such Section 2.7(c) prepayment of the
Advances shall be required, and (Z) until the Material Recovery Prepayment Date,
the Agent may in its Permitted Discretion reserve against the Revolving Advances
an amount equal to such Net Proceeds. Any Net Proceeds of a Material Recovery
Event not so applied by the Material Recovery Prepayment Date to the costs of
rebuilding or restoration shall be applied to the prepayment of the Obligations
in accordance with and to the extent required by Section 2.7(c). Application of
any Net Proceeds to the Revolving Advances pursuant to Section 2.7(c) pending
reinvestment thereof by such Obligor, or otherwise, shall not result in a
permanent reduction of the Maximum Revolving Advance Amount.

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     4.20 Partial Release of Liens.
          Each Lender hereby irrevocably authorizes the Agent, at its option and
in its discretion, to release any Lien granted to or held by the Agent upon any
Collateral which: (i) constitutes property being sold or disposed of and the
applicable Obligor certifies to the Agent that the sale or disposition is made
in compliance with the provisions of this Agreement (and the Agent may rely in
good faith conclusively on any such certificate, without further inquiry),
(ii) constitutes property covered by Permitted Encumbrances with lien priority
superior to those Liens in favor of the Agent hereunder, (iii) constitutes
property in addition to that addressed by clauses (i) and (ii) above, with an
aggregate fair market value of less than One Million Dollars ($1,000,000), or
(iv) to the extent not restricted by Section 15.3(v), constitutes property in
addition to that addressed by clauses (i) through (iii) above, as to which the
Required Lenders have otherwise consented in writing to the sale or other
disposition thereof.
V. REPRESENTATIONS AND WARRANTIES.
          Each Loan Party represents and warrants as follows:
     5.1 Authority.
          Each Loan Party has the full power, authority and legal right to enter
into this Agreement and the Other Loan Documents to which it is a party and to
perform all of its respective obligations thereunder. This Agreement and the
Other Loan Documents to which each Loan Party is a party constitute the legal,
valid and binding obligations of such Loan Party, enforceable against it in
accordance with their terms, except as such enforceability may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally and by general principles of equity. The
execution, delivery and performance of this Agreement and of the Other Loan
Documents by each Loan Party, as applicable, (a) are within such Loan Party’s
corporate, limited partnership or limited liability company powers, as the case
may be, have been duly authorized, are not in contravention of any applicable
law or the terms of such Loan Party’s charter document, by-laws, operating
agreement, articles of incorporation, articles of organization or other
applicable documents relating to such Loan Party’s formation or organization, as
the case may be, or to the conduct of such Loan Party’s business or of any
material agreement, instrument or undertaking to which such Loan Party is a
party or by which such Loan Party is bound (including the Material Business
Agreements) and (b) will not conflict with nor result in any breach in any of
the provisions of or constitute a default under or will not result in the
creation of any Lien (other than in favor of the Agent) upon any asset of such
Loan Party under the provisions of any applicable law, any such charter
document, by-laws, operating agreement, articles of incorporation, articles of
organization or other applicable documents, or any such material agreement,
instrument or undertaking, to which such Loan Party is a party or by which it or
its property may be bound, including the Material Business Agreements.
     5.2 Formation and Qualification/Subsidiaries.
          Each Loan Party and each Subsidiary thereof is duly incorporated or
organized, as the case may be, and in existence or good standing under the laws
of the jurisdictions listed on Schedule 5.2 and is qualified to do business and
is in good standing in the jurisdictions listed on Schedule 5.2 which constitute
all jurisdictions in which qualification and good standing are necessary for
such Loan Party or such Subsidiary to conduct its business and own its property
and where the failure to so qualify or be in good standing could reasonably be
expected to have a Material Adverse Effect. Each Loan Party has delivered to the
Agent true and complete copies of its articles of incorporation and by-laws,
articles of organization and operating agreement or other organizational
documents, as the case may be, and will notify the Agent of any amendment

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or changes thereto promptly, or in any event, within three Business Days of such
amendment or changes. The only Subsidiaries of each Loan Party are listed on
Schedule 5.2. Schedule 5.2 contains for each Loan Party, such Loan Party’s
corporation identification number or other applicable organizational
identification number issued by such Loan Party’s jurisdiction of organization.
     5.3 Officers, Directors, Shareholders, Capitalization.
          The names and titles of all executive officers and directors, managers
or general partners, as applicable, of each Loan Party, as of the Closing Date,
are set forth on Schedule 5.3. Schedule 5.3 also sets forth for each Loan Party
other than the Parent, as of the Closing Date, the names of such Loan Party’s
shareholders, members, or partners, as applicable, and a description of such
Person’s equity interest in such Loan Party (including, if applicable, a listing
of the share certificates and the number of shares of capital stock held by such
Person). There are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments of any nature relating to any equity
interests in any Loan Party (other than the Parent) or any Subsidiary thereof.
     5.4 Survival of Representations and Warranties.
          All representations and warranties of each Loan Party contained in
this Agreement and the Other Loan Documents, as the case may be, shall be true
at the time of such Loan Party’s execution of this Agreement and the Other Loan
Documents, as the case may be. All such representations and warranties of each
such Loan Party shall survive the execution, delivery and acceptance thereof by
the parties thereto and the closing of the transactions described therein or
related thereto.
     5.5 FEINs/Tax Returns.
          The federal tax identification number of each Loan Party and each
Subsidiary thereof is set forth on Schedule 5.5. Each Loan Party and each
Subsidiary thereof has filed all federal, state and local tax returns and other
reports such Loan Party or such Subsidiary is required by law to file. Except as
set forth on Schedule 5.5, each Loan Party and each Subsidiary thereof has paid
all taxes, assessments, fees and other governmental charges that are due and
payable. Except as set forth on Schedule 5.5, all applicable income tax returns
of each Loan Party and each Subsidiary thereof have been examined and reported
upon by the appropriate taxing authority or closed by applicable statute and
satisfied for all fiscal years prior to and including the fiscal year ending
December 31, 2005. The provision for taxes on the books of each Loan Party and
each Subsidiary thereof is adequate for all years not closed by applicable
statutes, and for its current fiscal year, and none of such Loan Parties or such
Subsidiaries has any knowledge of any deficiency or additional assessment in
connection therewith not provided for on its books. Except as set forth on
Schedule 5.5., there is no action, suit, investigation, audit, claim, assessment
or, to the best of each Loan Party’s knowledge, asserted deficiency pending or
proposed or threatened with respect to taxes of any Loan Party or any
Subsidiary, and to the knowledge of such Loan Parties or such Subsidiaries, no
basis exists therefor.
     5.6 Financial Statements.
          (a) The four-quarter cash flow projections of Parent and its
consolidated Subsidiaries for the fiscal year ending on December 31, 2007 and
for the five fiscal years ending on December 31, 2011, and their projected
balance sheets as of the Closing Date, copies of which are annexed hereto as
Exhibit H (the “Projections”) were prepared by or under the supervision of the
chief financial officer of Parent, are based on underlying assumptions and
estimates which Parent reasonably believes in good faith provide a reasonable
basis for the

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projections contained therein and, with respect to the four-quarter cash flow
projections for the fiscal year ending on December 31, 2007, reflect such Loan
Party’s judgment based on present circumstances of the most likely set of
conditions and course of action for the projected period.
          (b) The consolidated balance sheets of Parent and its consolidated
Subsidiaries as of December 31, 2006, and the related consolidated statements of
income, changes in stockholder’s equity, and changes in cash flow for the period
ended on such date, all accompanied by reports thereon containing opinions
without qualification by independent certified public accountants, copies of
which have been delivered to the Agent, have been prepared in accordance with
GAAP, consistently applied, and present fairly in all material respects the
financial condition of Parent and its consolidated Subsidiaries at such date and
the results of their operations for such period. Since December 31, 2006, there
has been no change in the financial condition of Parent and its consolidated
Subsidiaries taken as a whole as shown on the consolidated balance sheet as of
such date which individually or in the aggregate has had, or reasonably could be
expected to cause in the future, a Material Adverse Effect.
     5.7 Corporate Names.
          Except as set forth on Schedule 5.7, during the previous five
(5) years, no Loan Party nor any Domestic Subsidiary thereof: (i) has been known
by any other legal name, (ii) has done business or sold Inventory under or been
known by any other name, (iii) has been the surviving entity of a merger or
consolidation or (iv) has acquired all or substantially all of the assets of any
Person.
     5.8 O.S.H.A. and Environmental Compliance.
          (a) Except as set forth on Schedule 5.8, and subject to the next
sentence, each Loan Party and each Subsidiary thereof has duly complied with,
and each Loan Party and each such Subsidiary’s facilities, business, assets and
property, and to such Loan Party’s knowledge, each Loan Party’s and each such
Subsidiary’s leaseholds, are in compliance with the provisions of the Federal
Occupational Safety and Health Act, the Environmental Protection Act, RCRA (or
the equivalent laws and/or statutes of any other jurisdiction, to the extent
applicable) and all other Environmental Laws. To the extent any Loan Party or
Subsidiary thereof has not complied or is not in compliance with the provisions
of the Federal Occupational Safety and Health Act, the Environmental Protection
Act, RCRA (or the equivalent laws and/or statutes of any other jurisdiction, to
the extent applicable) and all other Environmental Laws, such noncompliance,
whether taken singly or in the aggregate with all other noncompliance and with
all liabilities resulting from subsection (d) below and all failures under
subsection (b) below, has not resulted and can not reasonably be expected to
result in a Material Adverse Effect or in aggregate liabilities in excess of
Five Million Dollars ($5,000,000). Except as set forth on Schedule 5.8, there
are no outstanding citations, notices or orders of non-compliance issued to any
Loan Party or any Subsidiary thereof or relating to its business, assets,
property, or leaseholds under any such laws, rules or regulations.
          (b) Each Loan Party and each Subsidiary thereof has been issued all
required federal, state and local licenses, certificates or permits relating to
all applicable Environmental Laws and the Federal Occupational Safety and Health
Act (or the equivalent laws and/or statutes of any other jurisdiction, to the
extent applicable), except to the extent that failure .to have such licenses,
certificates or permits, whether taken singly or in the aggregate with all other
such failures, has not resulted in and is not reasonably expected to result in
(i) any Loan Party’s being unable to conduct its business in the manner
otherwise currently conducted and (ii) aggregate liabilities in excess of Five
Million Dollars ($5,000,000), whether taken singly or in the aggregate with all
other such failures, and when combined with all liabilities resulting from

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subsection (d) below and all noncompliance under subsection (a) above, in excess
of Five Million Dollars ($5,000,000).
          (c) To the best of each Loan Party’s knowledge, after due inquiry,
there are no underground storage tanks or polychlorinated biphenyls on the Real
Property.
          (d) There have been no releases, spills, discharges, leaks or
disposals of Hazardous Substances at, upon, under or within any Real Property;
the Real Property has not ever been used as a treatment, storage or disposal
facility of Hazardous Substances; and no Hazardous Substances are present on the
Real Property, in each case, to the extent such releases, spills, discharges,
leaks or disposals, use or presence has resulted or could reasonably be expected
to result in a Material Adverse Effect or in aggregate liabilities, when
combined with all liabilities resulting from all noncompliance under subsection
(a) above or all failures under subsection (b) above, in excess of Five Million
Dollars ($5,000,000).
     5.9 Solvency; No Litigation, Violation of Laws.
          (a) After giving effect to the transactions contemplated by this
Agreement, each Loan Party and each Material Subsidiary will be solvent, will be
able to pay its respective debts as they mature, will have capital sufficient to
carry on its respective business and all businesses in which it is about to
engage, and (i) as of the Closing Date, the fair present saleable value of its
respective assets, calculated on a going concern basis, is in excess of the
amount of its respective liabilities and (ii) at all times subsequent to the
Closing Date, the fair saleable value of its respective assets (calculated on a
going concern basis) will be in excess of the amount of its respective
liabilities.
          (b) Except as set forth in Schedule 5.9(b), no Loan Party nor any
Subsidiary thereof has any pending or, to the best of its knowledge, threatened
litigation, arbitration, actions or proceedings. No such pending or threatened
litigation, arbitration, actions or proceedings could reasonably be expected to
result in a Material Adverse Effect.
          (c) No Loan Party or any Subsidiary thereof is in violation of any
applicable statute, regulation or ordinance, or any order of any court,
Governmental Body or arbitration board or tribunal, in any respect which could
reasonably be expected to result in a Material Adverse Effect.
     5.10 ERISA Compliance.
          No Loan Party, nor any Subsidiary thereof or any member of the
Controlled Group maintains or contributes to any Plan other than those listed on
Schedule 5.10 hereto. Except as set forth in Schedule 5.10, (i) no Plan has
incurred any “accumulated funding deficiency,” as defined in Section 302(a)
(2) of ERISA and Section 412(a) of the Code, whether or not waived, and each
Loan Party, each such Subsidiary and each member of the Controlled Group has met
all applicable minimum funding requirements under Section 302 of ERISA in
respect of each Plan, (ii) each Plan which is intended to be a qualified plan
under Section 401(a) of the Code as currently in effect has been determined by
the Internal Revenue Service to be qualified under Section 401(a) of the Code
and the trust related thereto is exempt from federal income tax under Section
501(a) of the Code, or the prototype plan that has been adopted, as appropriate,
has a favorable determination letter from the Internal Revenue Service, (iii) no
Loan Party, nor any Subsidiary thereof or any member of the Controlled Group has
incurred any liability to the PBGC other than for the payment of premiums, and
there are no premium payments which have become due which are unpaid, (iv) no
Plan has been terminated by the plan administrator thereof nor by the PBGC, and
there is no occurrence which would cause the PBGC to institute proceedings under
Title IV of ERISA to terminate any Plan, (v) at this time,

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the current value of the assets of each Plan exceeds the present value of the
accrued benefits and other liabilities of such Plan and no Loan Party, nor any
such Subsidiary or any member of the Controlled Group knows of any facts or
circumstances which would materially change the value of such assets and accrued
benefits and other liabilities, (vi) no Loan Party, nor any such Subsidiary or
any member of the Controlled Group has breached any of the responsibilities,
obligations or duties imposed on it by ERISA with respect to any Plan, (vii) no
Loan Party, nor any such Subsidiary or any member of the Controlled Group has
incurred any liability for any excise tax arising under Section 4972 or 4980B of
the Code, and no fact exists which could give rise to any such liability,
(viii) no Loan Party, nor any such Subsidiary or any member of the Controlled
Group nor any fiduciary of, nor any trustee to, any Plan, has engaged in a
“prohibited transaction” described in Section 406 of ERISA or Section 4975 of
the Code nor taken any action which would constitute or result in a Termination
Event with respect to any such Plan which is subject to ERISA, (ix) each Loan
Party, each of its Subsidiaries and each member of the Controlled Group has made
all contributions due and payable with respect to each Plan, (x) there exists no
event described in Section 4043(b) of ERISA, for which the thirty (30) day
notice period contained in 29 CFR Section 2615.3 has not been waived, (xi) no
Loan Party, nor any such Subsidiary or any member of the Controlled Group has
any fiduciary responsibility for investments with respect to any plan existing
for the benefit of persons other than employees or former employees of any Loan
Party, any such Subsidiary or any member of the Controlled Group, and (xii) no
Loan Party, nor any such Subsidiary or any member of the Controlled Group has
withdrawn, completely or partially, from any Multiemployer Plan so as to incur
liability under the Multiemployer Pension Plan Amendments Act of 1980. Except as
disclosed on Schedule 5.10, no Loan Party, nor any Subsidiary thereof or any
member of the Controlled Group, maintains an employee welfare benefit plan
(within the meaning of Section 3(1) of ERISA) that provides postretirement
medical or life insurance benefits to former employees, other than as required
under Part 6 of Title I of ERISA. No Loan Party or any Subsidiary thereof has
received , in relation to the UK Pension Scheme, a financial support direction
or contribution notice from the UK Pensions Regulator (or any written
communication of the UK Pensions Regulator indicating an intention to issue any
such notice or direction) and no period of assessment by the UK Pension
Protection Fund has commenced.
     5.11 Patents, Trademarks, Copyrights and Licenses.
          All patents, patent applications, trademarks, trademark applications,
service marks, service mark applications, copyrights, copyright applications,
design rights, tradenames, assumed names and licenses of any of the foregoing
owned or utilized by any Loan Party (“IP Rights”) are set forth on
Schedule 5.11. Any such IP Rights material to and necessary for the operation of
the Loan Parties’ businesses (“Material IP Rights”) are valid and have been duly
registered or filed (if applicable) with all appropriate Governmental Bodies and
constitute all of the IP Rights which are material to and necessary for the
operation of the Loan Parties’ businesses. To the best knowledge of each of the
Loan Parties, there is no objection to or pending challenge to the validity of
any Material IP Rights and no Loan Party is aware of any grounds for any
challenge, except as set forth in Schedule 5.11 hereto. Each of the Material IP
Rights was lawfully created, acquired or licensed by such Loan Party from the
proper and lawful owner thereof. Each of the Material IP Rights has been
maintained so as to preserve the utility thereof in the Loan Parties’
businesses. There is no customized software licensed by any Loan Party which is
necessary for the continued operation in any material respect of such Loan
Party.
     5.12 Licenses and Permits.
          Each Loan Party and each Subsidiary thereof is in compliance with and
has procured and is now in possession of, all material licenses or permits
required by any applicable federal, state or local law or regulation for the
operation of its business in each jurisdiction wherein it is now conducting or
proposes to conduct business and where the failure to comply

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with or procure such licenses or permits could reasonably be expected to have a
Material Adverse Effect.
     5.13 No Burdensome Restrictions.
          No Loan Party or any Subsidiary thereof is party to any contract or
agreement, the performance of which could reasonably be expected to have a
Material Adverse Effect. No Loan Party nor any Subsidiary thereof has agreed or
consented to cause or permit in the future (upon the happening of a contingency
or otherwise) any of its property, whether now owned or hereafter acquired, to
be subject to a Lien which is not a Permitted Encumbrance.
     5.14 No Default Under Indenture.
          No “Event of Default” (as defined in the Indenture or any other Public
Note Document) or “Default” (as defined in the Indenture or any other Public
Note Document) exists, nor will any such Event of Default or Default exist under
the Indenture or any other Public Note Document immediately after the making of
any Advance or other extension of credit hereunder.
     5.15 No Labor Disputes.
          No Loan Party nor any Subsidiary thereof is involved in any material
labor dispute or any labor dispute involving any bargaining unit or other group
of employees generally; there are no strikes or walkouts or, to the best of each
Loan Party’s knowledge, after due inquiry, union organization activity of any of
such Loan Party’s or such Subsidiary’s employees in existence or threatened,
which, in the case of any of the foregoing, has had, or is reasonably expected
to have a Material Adverse Effect. Except as set forth on Schedule 5.15 hereof,
no Loan Party has any labor contract that is scheduled to expire prior to the
Facility Termination Date.
     5.16 Margin Regulations.
          No Loan Party nor any Subsidiary thereof is engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of “purchasing” or “carrying” any “margin
stock” within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect. No part of the proceeds of any Advance
will be used for “purchasing” or “carrying” “margin stock” as defined in
Regulation U of such Board of Governors.
     5.17 Investment Company Act.
          No Loan Party or any Subsidiary thereof is an “investment company”
registered or required to be registered under the Investment Company Act of
1940, as amended, nor is it controlled by such a company.
     5.18 Disclosure.
          No representation or warranty made by any Loan Party in this Agreement
or in any financial statement, report, certificate or any other document
furnished in connection herewith contains any untrue statement of material fact
or omits to state any material fact necessary to make the statements herein or
therein made not misleading in light of the circumstances in which such
representation or warranty was made. There is no fact known to any Loan Party
(other than facts regarding general economic, political or demographic matters
and facts regarding the automotive or automotive parts industries generally, to
the extent

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addressed and disclosed in the firm’s annual report for the fiscal year ending
December 31, 2006 filed with the Securities and Exchange Commission or in any
periodic report filed by the Borrowing Agent with the Securities and Exchange
Commission after the Closing Date) which could reasonably be expected to have a
Material Adverse Effect, which such Loan Party has not disclosed to the Agent
herein or otherwise in writing in Other Loan Documents, certificates and
statements furnished to the Agent for use in connection with the transaction
contemplated by this Agreement.
     5.19 Hedging Contracts.
          No Loan Party nor any Subsidiary thereof is a party to, nor will it be
a party to, any Hedging Contract unless same provides that the settlement
amounts upon termination are payable without regard to default on the part of
either party (i.e. on a “Second Method” basis if the Hedging Contract is under
the 1992 ISDA Master Agreement or an equivalent basis if otherwise documented).
     5.20 Conflicting Agreements.
          No provision of any mortgage, indenture, contract or agreement,
judgment, decree or order binding on any Loan Party or any Subsidiary thereof or
affecting the Collateral or any other property of any Loan Party conflicts with,
or requires any Consent which has not already been obtained by such Loan Party
or such Subsidiary where such conflict or a failure to obtain such Consent would
in any way prevent the execution, delivery or performance by the Loan Parties of
the terms of this Agreement or the Other Loan Documents or the rights of any of
the Agent, Lenders or Issuer thereunder.
     5.21 Application of Certain Laws and Regulations; Bulk Sales.
          No Loan Party, nor any Subsidiary thereof or any Affiliate of such
Loan Party or such Subsidiary is subject to any statute, rule or regulation
which regulates the incurrence of any Indebtedness, including statutes or
regulations relative to common or interstate carriers or to the sale of
electricity, gas, steam, water, telephone, telegraph or other public utility
services. All of the Loan Parties’ Inventory has been acquired or manufactured
by the Loan Parties in the ordinary course of the Loan Parties’ business and
such acquired Inventory has been acquired by the Loan Parties from Persons in
the business of selling Inventory of that kind and do not require compliance by
the Loan Parties or any other Person with any bulk transfer laws or regulations
of any Governmental Body.
     5.22 Business and Property.
          No Loan Party nor any Subsidiary thereof is engaged in any business
other than as set forth on Schedule 5.22 hereto and activities necessary to
conduct such business or incidental thereto. On the Closing Date, each Loan
Party and each Subsidiary thereof will own, lease or license all the property
and possess all of the rights and Consents necessary for the conduct of its
business.
     5.23 Locations.
          Schedule 5.23 lists each Real Property and whether such Real Property
is owned or leased. Schedule 5.23 further indicates each location where any Loan
Party or any Domestic Subsidiary thereof has any assets whether or not such
location is a Real Property. To the extent that any such location is leased, the
name and address of the applicable landlord, a good faith estimate of the market
value of the Collateral held at such location and a summary of the primary lease
terms are also contained on Schedule 5.23. Other than as disclosed on Schedule
5.23, no

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Loan Party nor any direct Subsidiary of any Loan Party owns real property which
is subject to a mortgage. Except as disclosed on Schedule 5.23, none of the
Collateral is in the possession of any bailee, warehouseman, processor or
consignee. To the extent that any of the Collateral is in the possession of any
bailee, warehouseman, processor or consignee, Schedule 5.23 also contains a good
faith estimate of the market value of the Collateral held by each such Person at
each location.
     5.24 [Reserved.]
     5.25 Disclosure of Material Business Agreements.
          Schedule 5.25 lists each Material Business Agreement to which any Loan
Party or any Subsidiary thereof is a party.
     5.26 Anti-Terrorism Laws.
          (a) No Loan Party, any Subsidiary of any Loan Party, any Affiliate of
any Loan Party or any of their agents acting or benefiting in any capacity in
connection with the Advances, the Letters of Credit, or other transactions
hereunder is in violation in any material respect of any Anti-Terrorism Law or
engages in or conspires to engage in any transaction that evades or avoids, or
has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law.
          (b) No Loan Party, any Subsidiary of any Loan Party, any Affiliate of
any Loan Party or any of their agents acting or benefiting in any capacity in
connection with the Advances, the Letters of Credit, or other transactions
hereunder, is any of the following (each a “Blocked Person”):
               (i) a Person that is listed in the annex to, or is otherwise
subject to the provisions of, the Executive Order No. 13224;
               (ii) a Person owned or controlled by, or acting for or on behalf
of, any Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order No. 13224;
               (iii) a Person with which any Lender or the Issuer is prohibited
from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;
               (iv) a Person that commits, threatens or conspires to commit or
supports “terrorism” as defined in the Executive Order No. 13224;
               (v) a Person that is named as a “specially designated national”
on the most current list published by the U.S. Treasury Department Office of
Foreign Asset Control at its official website or any replacement website or
other replacement official publication of such list, or
               (vi) a Person who is affiliated or associated with a Person
listed above.
No Loan Party, any Subsidiary of any Loan Party, any Affiliate of any Loan Party
or any of their agents acting or benefiting in any capacity in connection with
the Advances, the Letters of Credit, or other transactions hereunder:
(i) conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any Blocked Person or
(ii) deals in, or otherwise engages in any transaction relating to, any property
or interests in property blocked pursuant to the Executive Order No. 13224.

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VI. AFFIRMATIVE COVENANTS.
          Each Loan Party shall until payment in full of the Obligations and
termination of this Agreement:
     6.1 Taxes.
          Pay, and cause each Subsidiary thereof to pay, when due, all taxes,
assessments and other Charges lawfully levied or assessed upon such Loan Party
or any of the assets or property of any Loan Party including real and personal
property taxes, assessments and other Charges and all franchise, income,
employment, social security, withholding, and sales taxes; provided, however,
that no such tax, assessment, Charge or levy need be paid so long as and to the
extent that: (i) it is contested in good faith and by timely and appropriate
proceedings effective, during the pendency of such proceedings, to stay the
enforcement of such taxes, assessments, Charges and levies, (ii)(x) such stay
prevents the creation of any Lien (other than inchoate Liens for property taxes)
or (y) a bond has been provided which prevents the creation of any Lien (other
than inchoate Liens for property taxes) and (iii) appropriate reserves, as
required by GAAP, are established on the books of such Loan Party or its
Subsidiaries, as applicable, which are sufficient reserves to the reasonable
satisfaction of the Agent to protect the Agent’s security interest in or Lien on
the Collateral. Each Loan Party hereby indemnifies and holds the Agent, the
Issuer and each Lender harmless in respect of any and all such Charges. If any
tax, assessment or other Charge by any Governmental Body creates a Lien on the
Collateral which the Agent, in the exercise of its Permitted Discretion,
determines is currently enforceable and neither inchoate nor stayed, the Agent
may without notice to the Loan Parties pay such tax, assessments or other
Charge. Agent shall promptly provide the Borrowing Agent with written notice of
any such tax payment subsequent to the payment thereof.
     6.2 Conduct of Business and Maintenance of Existence and Assets.
          (a) Maintain all of its properties necessary in its business in good
working order and condition (reasonable wear and tear excepted and except as may
be disposed of in accordance with the terms of this Agreement), including all
Material IP Rights; (b) take all actions necessary to enforce and protect the
validity of its Material IP Rights, unless the relevant Loan Party or Subsidiary
determines in its reasonable business judgment that taking any such actions is
not in its best interest; (c) keep in full force and effect its existence and
comply in all respects with the laws and regulations governing the conduct of
its business where the failure to do so could reasonably be expected to have a
Material Adverse Effect; and (d) make all such reports and pay all such
franchise and other taxes and license fees and do all such other acts and things
as may be lawfully required to maintain the rights, licenses, leases, powers and
franchises necessary to its business under the laws of any jurisdiction to which
it or its assets are subject.
     6.3 Violations.
          Notify the Agent in writing promptly, and in any event within three
Business Days of obtaining knowledge of any violation of any law, statute,
regulation or ordinance of any Governmental Body, or of any agency thereof,
applicable to any Loan Party or any Subsidiary thereof or the assets or property
of any Loan Party which could reasonably be expected to have a Material Adverse
Effect.
     6.4 Fixed Charge Coverage Ratio.
          At any time at which the Undrawn Availability is less than Twenty
Million Dollars ($20,000,000), maintain a Fixed Charge Coverage Ratio of not
less than 1.10 to 1.00.

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The Fixed Charge Coverage Ratio shall be calculated as of the last day of each
fiscal quarter for the period equal to the four consecutive fiscal quarters then
ending.

  6.5   Execution of Supplemental Instruments.

          Execute and deliver to the Agent from time to time, upon demand, such
supplemental agreements, statements, assignments and transfers, or instructions
or documents relating to the Collateral, and such other instruments as the Agent
may reasonably request, in order for the full intent of this Agreement to be
carried into effect.

  6.6   Standards of Financial Statements.

          Cause all financial statements referred to in Sections 9.7, 9.8, 9.10
or 9.11, in each case, as to which GAAP is applicable, to be complete and
correct in all material respects (subject, in the case of interim financial
statements, to notes and normal year-end audit adjustments) and to be prepared
in reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein (except as concurred in by such reporting
accountants or officer, as the case may be, and disclosed therein).
VII. NEGATIVE COVENANTS.
          Until satisfaction in full of the Obligations and termination of this
Agreement, no Loan Party shall, nor shall it permit any of its Subsidiaries to:

  7.1   Merger, Consolidation, Acquisition and Sale of Assets.

          Wind up, liquidate or dissolve its affairs; enter into any transaction
of merger, consolidation or other reorganization with or into any other Person
or permit any other Person to consolidate with or merge with it; acquire all or
a substantial portion of the assets or stock of any Person; sell, pledge, lease
transfer or otherwise dispose of any of its property or assets other than
Inventory in the ordinary course of business; except that the following shall be
permitted:
          (a) If no Default or Event of Default has occurred and is continuing
or would result therefrom,
               (i) the merger, consolidation or amalgamation of any Domestic
Subsidiary with or into the Parent or into another Domestic Subsidiary which is
both a Borrower and a Wholly-Owned Subsidiary, so long as in any merger,
consolidation or amalgamation involving the Parent, the Parent is the surviving
or continuing or resulting corporation;
               (ii) the merger, consolidation or amalgamation of any UK Borrower
with or into another Subsidiary which is both a UK Borrower and a Wholly-Owned
Subsidiary;
               (iii) the merger, consolidation or amalgamation of any Foreign
Subsidiary other than a UK Borrower with or into another Subsidiary which is
both a Foreign Subsidiary and a Wholly-Owned Subsidiary;
               (iv) the liquidation, winding up or dissolution of any Foreign
Subsidiary of the Parent other than a UK Borrower;

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               (v) other than as permitted under Section 7.1(c) hereof, the
sale, pledge, lease, transfer or disposition of Equipment, Fixtures or any Real
Property of any Loan Party or any Subsidiary of any Loan Party; provided that:
          (A) the aggregate consideration for such transaction represents fair
value (as determined in good faith by management of the Parent),
          (B) the aggregate consideration for all such transactions effected on
a cumulative basis on or after the Closing Date does not exceed Fifty Million
Dollars ($50,000,000), and
          (C) any assets or proceeds thereof in excess of the aggregate amount
of Capital Expenditures of all of the Loan Parties and all of their Subsidiaries
in such fiscal year on a cumulative basis shall be treated as “Net Proceeds” for
purposes of Section 2.7(c) hereof;
               (vi) the transfer or other disposition of any property by the
Parent to any Domestic Subsidiary which is both a Domestic Obligor and a
Wholly-Owned Subsidiary, or by any Domestic Subsidiary to the Parent or to any
other Domestic Subsidiary which is both an Obligor and a Wholly-Owned Subsidiary
of the Parent;
               (vii) the transfer or other disposition of part or all of any
Loan Party’s or any Subsidiary’s interest in any joint venture; and
               (viii) the transfer or other disposition of any property by a UK
Borrower to the Parent or to any Domestic Subsidiary which is both an Obligor
and a Wholly-Owned Subsidiary.
          (b) If no Default or Event of Default has occurred and is continuing
or would result therefrom, any Obligor may acquire all or substantially all of
the assets or capital stock of any Person (in each case, a “Proposed
Acquisition”), subject to the satisfaction of each of the following conditions
(in each case, a “Permitted Acquisition”):
               (i) the Agent shall receive at least ten (10) Business Days’
prior written notice of such Proposed Acquisition, which notice shall include a
detailed description of such Proposed Acquisition;
               (ii) such Proposed Acquisition shall only involve assets
comprising a business, or those assets of a business, of the type engaged in by
the Loan Parties as of the Closing Date, and which business would not subject
the Agent or any Lender to regulatory or third party approvals in connection
with the exercise of its rights and remedies under this Agreement or any Other
Loan Document;
               (iii) such Proposed Acquisition shall be consensual and shall
have been approved by the board of directors of such Person (and if such
Proposed Acquisition is a sale of stock, the board of directors of the seller)
and, if required by applicable law, the shareholders of such Person;

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               (iv) no Indebtedness, contingent obligations or other liabilities
shall be incurred or assumed in connection with such Proposed Acquisition,
except (A) Advances made hereunder, (B) ordinary course trade payables, accrued
expenses and unsecured Indebtedness of such Person assumed in connection
therewith, and (C) Indebtedness incurred to finance such Proposed Acquisition so
long as such Indebtedness (1) is fully subordinated to the Obligations on terms
acceptable to the Agent in its sole discretion, (2) does not allow for any
amortization of principal prior to six months following payment in full of the
Obligations, (3) is not secured by any Lien on assets of a Loan Party or any
Subsidiary thereof, (4) does not exceed more than twenty-five percent (25%) of
the aggregate purchase price of the Proposed Acquisition, and (5) is subject to
such other terms acceptable to the Agent in its sole discretion (together,
“Permitted Acquisition Assumed Indebtedness”);
               (v) the sum of all amounts payable in connection with all
Permitted Acquisitions (including all transaction costs and, without
duplication, all Indebtedness, liabilities and contingent obligations incurred
or assumed in connection therewith, including therein the maximum amount of any
earn-out or deferred purchase price payable) during any fiscal year of the Loan
Parties, shall not exceed (A) so long as the Undrawn Availability is equal to or
less than Thirty Million Dollars ($30,000,000) on a pro forma basis (as further
described in subsection 7.1(b)(ix)(A) below) immediately prior to and
immediately following the consummation of such Permitted Acquisition, Zero
Dollars, (B) so long as the Undrawn Availability is in excess of Thirty Million
Dollars ($30,000,000) on a pro forma basis (as further described in subsection
7.1(b)(ix)(A) below) immediately prior to and immediately following the
consummation of such Permitted Acquisition, Forty Million Dollars ($40,000,000)
and (C) so long as the Undrawn Availability is in excess of Sixty-Five Million
Dollars ($65,000,000) on a pro forma basis (as further described in subsection
7.1(b)(ix)(A) below) immediately prior to and immediately following the
consummation of such Permitted Acquisition, an unlimited amount;
               (vi) if the Proposed Acquisition is a stock purchase or merger,
such Person shall have positive earnings before interest, income taxes,
depreciation and amortization for the trailing four-quarter period preceding the
anticipated closing date of the Proposed Acquisition, as determined based upon
the financial statements of such Person for its most recently completed fiscal
year and its most recent interim financial period completed within sixty
(60) days prior to the date of consummation of such Proposed Acquisition;
               (vii) at or prior to the closing of any Permitted Acquisition
with respect to a Person or the assets of a Person organized under the laws of
or located in the United States, any state thereof or the District of Columbia,
the Agent shall have a first priority perfected Lien (subject to Permitted
Encumbrances) in all Receivables, Inventory and other assets acquired pursuant
thereto, or in the assets of such Person, as applicable, other than Excluded
Property and Specified Fixed Asset Collateral, and the Agent shall have received
such documents as may be required in connection therewith;
               (viii) with respect to the closing of any Permitted Acquisition
described in subsection 7.1(b)(vii) above, the Agent shall have conducted a
field examination of and a collateral audit of all assets acquired pursuant
thereto, or in the assets of such Person, as applicable, prior to any such
acquired assets being included in the calculation of the Aggregate Formula
Amount;

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               (ix) the Borrowing Agent shall have delivered to the Agent, in
form and substance satisfactory to the Agent:
          (A) within fifteen days of the consummation of such Proposed
Acquisition, a pro forma consolidated balance sheet of the Parent and its
consolidated Subsidiaries (the “Acquisition Pro Forma”), based on recent
financial data, which shall be accurate and complete in all material respects
and shall fairly present the assets, liabilities and financial condition of the
Parent and its consolidated Subsidiaries in accordance with GAAP consistently
applied, but taking into account such Proposed Acquisition and the funding of
all Advances in connection therewith, and (x) such Acquisition Pro Forma shall
reflect that average daily Undrawn Availability for the thirty (30) day period
preceding the consummation of such Proposed Acquisition would have exceeded
Thirty Million Dollars ($30,000,000) or Sixty-Five Million Dollars
($65,000,000), as applicable pursuant to subsection (v) above on a pro forma
basis (giving effect to such Proposed Acquisition and all Advances made and
Letters of Credit issued in connection therewith as if made or issued on the
first day of such period), (y) the Acquisition Projections (as hereinafter
defined) shall reflect that such Undrawn Availability of Thirty Million Dollars
($30,000,000) or Sixty-Five Million Dollars ($65,000,000), as applicable
pursuant to subsection (v) above, shall continue for at least thirty (30) days
after the consummation of such Proposed Acquisition, and (z) on a pro forma
basis (giving effect to such Proposed Acquisition and all Advances made and
Letters of Credit issued in connection therewith as if made on the first day of
such period), the Loan Parties would have been in compliance with the financial
covenant set forth in Section 6.4, for a period of four fiscal quarters ended
with the most recent fiscal quarter for which financial statements have been
provided (or are required to have been provided) pursuant to Sections 9.7
and9.8, respectively, as if such financial covenant were applicable
notwithstanding the fact that Undrawn Availability may be in excess of Twenty
Million Dollars ($20,000,000);
          (B) within fifteen days of the consummation of such Proposed
Acquisition, updated versions of the most recently delivered projections under
Section 9.11 covering a period of four fiscal quarters, commencing with the
fiscal quarter in which the Proposed Acquisition is to be consummated and
otherwise prepared in accordance with the projections required to be delivered
under Section 9.11 (the “Acquisition Projections”) and based upon the financial
statements (I) of the Parent and its consolidated Subsidiaries for Parent’s most
recently completed fiscal year and each fiscal quarter during the current fiscal
year for which financial statements have been provided (or are required to have
been provided) pursuant to Sections 9.7 and9.8, respectively, in relation to the
date of such required delivery of the Proposed Acquisition, taking into account
such Proposed Acquisition and (II) of such Person being acquired for a period
similar to the period described in clause (I) above; and
               (x) a certificate of the chief financial officer of the Borrowing
Agent to the effect that: (w) the Loan Parties will be solvent upon the
consummation of the Proposed Acquisition, (x) the Acquisition Pro Forma fairly
presents the financial condition of the Parent and its consolidated Subsidiaries
as of the date thereof after giving effect to the Proposed Acquisition, (y) the
Acquisition Projections are reasonable estimates of the future financial
performance of the Loan Parties subsequent to the date thereof based upon the
historical

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performance of the Loan Parties, and (z) the Borrowing Agent has completed its
due diligence investigation with respect to the Proposed Acquisition, which
investigation was conducted in a manner similar to that which would have been
conducted by a prudent purchaser of a comparable business or assets, as
applicable, and the results of which investigation were delivered to the Agent
and Lenders;
               (xi) the form and substance of the Proposed Acquisition shall be
reasonably acceptable to the Agent; and
               (xii) any necessary Joinder Amendment and Borrower Joinder
Agreements shall have been fully executed and delivered and all conditions
precedent to the effectiveness thereto shall have been fully completed or
satisfied or shall be so satisfied upon the consummation of the Proposed
Acquisition.
          (c) Parent or any of its Subsidiaries may sell, pledge, lease,
transfer or otherwise dispose of any Equipment that, in the reasonable business
judgment of the management of Parent or any such Subsidiary, is obsolete, worn
out, unnecessary or no longer useful in Parent’s or such Subsidiary’s business,
including the aircraft described on Schedule 7.1.
          (d) Parent and its Subsidiaries shall be permitted to make any Capital
Expenditures permitted pursuant to Section 7.6.
          (e) The Parent and its Subsidiaries shall be permitted to make the
investments permitted pursuant to Section 7.4.
          (f) The Parent and its Subsidiaries shall be permitted to make the
distributions and pay the dividends permitted pursuant to Section 7.7.

  7.2   Creation of Liens.

          Create, assign, transfer or suffer to exist any Lien upon or against
any part of the Collateral or any assets or property of any Loan Party, except
Permitted Encumbrances.

  7.3   Guarantees.

          Become liable upon the obligations of any Person by assumption,
endorsement or guaranty thereof or otherwise (other than to the Lenders or the
Issuer) except (a) guarantees existing on the Closing Date and set forth on
Schedule 7.3, (b) the endorsement of checks in the ordinary course of business,
(c) guarantees made by a Loan Party or any Subsidiary thereof with respect to
the Indebtedness of any Domestic Obligor or UK Borrower that is otherwise
permitted pursuant to Section 7.8, (d) guarantees made by a Domestic Obligor or
a UK Borrower with respect to the Indebtedness of any Foreign Subsidiary other
than a UK Borrower so long as the aggregate amount of all such Indebtedness
guaranteed under this clause (d), together with any extensions of credit from
any Loan Party to a Foreign Subsidiary other than a UK Borrower permitted under
Section 7.5(d) and investments of any Loan Party in a Foreign Subsidiary other
than a UK Borrower, joint venture or partnership permitted under Section 7.4(d),
does not exceed Fifteen Million Dollars ($15,000,000) in the aggregate, and
(e) at any time during a Permitted Period, additional guarantees made by a
Domestic Obligor or a UK Borrower with respect to the Indebtedness of any
Foreign Subsidiary.

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  7.4   Investments.

          Purchase or acquire obligations or stock of, or any other interest in,
any Person, except (a) investments existing on the Closing Date and set forth on
Schedule 7.4, (b) Permitted Acquisitions and any related Permitted Acquisition
Assumed Indebtedness in connection therewith, (c) investments in any Domestic
Obligor or UK Borrower, (d) investments in any Foreign Subsidiary other than a
UK Borrower or in any joint venture or partnership so long as the aggregate
amount of all such investments under this clause (d), together with any
guarantees by a Loan Party of any Foreign Subsidiary other than a UK Borrower
permitted under Section 7.3(d) and any extensions of credit from any Loan Party
to a Foreign Subsidiary other than a UK Borrower permitted under Section 7.5(d),
does not exceed Fifteen Million Dollars ($15,000,000) in the aggregate, (e) at
any time during a Permitted Period, additional investments in any Foreign
Subsidiary or in any joint venture or partnership, (f) cash and Cash
Equivalents; provided, however, the Borrowers and any of their Subsidiaries may
invest in cash and Cash Equivalents as follows: (A) during any time that
Revolving Advances are outstanding to the Domestic Borrowers and an Activation
Notice has not been delivered by the Agent pursuant to Section 4.14(g), the
aggregate amount of all cash and Cash Equivalents held by the Domestic Borrowers
or any of their Domestic Subsidiaries permitted by this subsection (f) shall not
exceed Forty-Six Million Dollars ($46,000,000) for any period of three
consecutive Business Days; (B) during any time that Revolving Advances are
outstanding to the UK Borrowers or any other Foreign Borrowers and an Activation
Notice has not been delivered by the Agent pursuant to Section 4.14(g), the
aggregate amount of all such investments held by any of the UK Borrowers or any
other Foreign Borrowers permitted by this subsection (f) of this Section 7.4
shall not exceed Fifteen Million Dollars ($15,000,000) for any period of three
consecutive Business Days; (C) the aggregate amount of all cash and Cash
Equivalents held by Foreign Subsidiaries of the Loan Parties (other than the UK
Borrowers, any other Foreign Borrowers, or any Subsidiaries of the UK Borrowers
or any other Foreign Borrowers) shall not be restricted, and (D) during any time
that Revolving Advances are outstanding to any Borrowers and an Activation
Notice has been delivered by the Agent pursuant to Section 4.14(g), the
aggregate amount of all such investments held by the Borrowers, any of their
Domestic Subsidiaries, the UK Borrowers, any other Foreign Borrower, or any
Subsidiaries of the UK Borrowers or any other Foreign Borrowers permitted by
subsection (f) of this Section 7.4 shall not exceed One Million Dollars
($1,000,000) for any period of three consecutive Business Days.

  7.5   Extensions of Credit.

          Make advances, loans or extensions of credit to any Person except
(a) advances, loans or extensions of credit to any Domestic Obligor or UK
Borrower, (b) extensions of commercial trade credit in connection with the sale
of Inventory in the ordinary course of its business, (c) advances, loans or
extensions of credit existing on the Closing Date as set forth on Schedule 7.5
and additional subsequent advances, loans or extension of credit replacing the
foregoing in amounts not to exceed the amounts set forth on Schedule 7.5,
(d) advances, loans or extensions of credit to any Foreign Subsidiary other than
a UK Borrower so long as the aggregate amount of all such advances, loans or
extensions of credit permitted under this clause (d), together with any
guarantees by a Loan Party of any Foreign Subsidiary other than a UK Borrower of
Indebtedness permitted under Section 7.3(d) and investments by a Loan Party in
any Foreign Subsidiary, joint venture or partnership permitted under
Section 7.4(d), does not exceed Fifteen Million Dollars ($15,000,000) in the
aggregate, and (e) at any time during a Permitted Period, additional advances,
loans or extensions of credit to any Foreign Subsidiary.

  7.6   Capital Expenditures.

          Make or incur any Capital Expenditure or commitments for Capital
Expenditures (including capitalized leases) unless such Capital Expenditures do
not exceed Thirty-seven

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Million Dollars ($37,000,000) in the aggregate on a consolidated basis for the
Loan Parties and their Subsidiaries in any calendar year.

  7.7   Dividends and Distributions; Grants.

          Declare, pay or make any dividends on any shares of the common stock
or preferred stock or other equity interest, as the case may be, of any Loan
Party or any Subsidiary thereof (other than dividends or distributions payable
in stock or other equity interest, as the case may be, or split-ups, or
reclassifications of its stock), or apply or otherwise distribute any of its
funds, property or assets to the purchase, redemption or other retirement of any
common or preferred stock or other equity interest, as the case may be, or of
any options to purchase or acquire any such shares of common or preferred stock
or other equity interest, as the case may be, or enter into or issue, as
applicable, any subscriptions, options, warrants, calls, rights or other
agreements or commitments of any nature relating to any equity interests of such
Loan Party or such Subsidiary; except that (i) any wholly-owned direct
Subsidiary of any Domestic Obligor may declare and pay cash dividends to its
shareholders or members, (ii) an Foreign Subsidiary other than the UK Borrowers
may declare and pay cash dividends to its shareholders or members, and (iii) the
Parent or any Subsidiary may pay cash dividends to its shareholders or members
at any time during a Permitted Period.

  7.8   Indebtedness.

          Create, incur, assume or suffer to exist any Indebtedness except in
respect of:
          (a) Indebtedness existing on the Closing Date and set forth on
Schedule 7.8 (including any extensions, renewals or refinancings thereof);
provided that the principal amount of such Indebtedness shall not be increased
without the prior written consent of the Required Lenders;
          (b) Indebtedness to the Lenders and the Issuer under or pursuant to
this Agreement or the Other Loan Documents;
          (c) Indebtedness in respect of the Public Notes or a Permitted Public
Notes Refinancing, in either case in an aggregate principal amount not to exceed
Two Hundred Million Dollars ($200,000,000);
          (d) Indebtedness incurred for Capital Expenditures permitted under
Section 7.6;
          (e) Indebtedness as permitted under Section 7.5;
          (f) Indebtedness consisting of the guarantees permitted under
Section 7.3;
          (g) Permitted Acquisition Assumed Indebtedness in an aggregate amount
not to exceed Fifteen Million Dollars ($15,000,000);
          (h) Hedging Obligations arising under Hedging Contracts complying with
the requirements set forth in Section 5.19 and entered into in the ordinary
course of business and not with a speculative purpose;
          (i) Indebtedness owing from a Foreign Subsidiary other than the UK
Borrowers to any party other than a Loan Party which does not exceed Fifty
Million Dollars ($50,000,000) in the aggregate; and

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          (j) without duplication with the foregoing clauses, unsecured
Indebtedness (other than Indebtedness incurred for Capital Expenditures), in an
aggregate amount not to exceed Five Million Dollars ($5,000,000) at any time.

  7.9   Nature of Business.

          Substantially change the nature of the business in which it is
currently engaged.

  7.10   Transactions with Affiliates.

          Directly or indirectly, purchase, acquire or lease any property from,
or sell, transfer or lease any property to, or otherwise deal with, any
Affiliate, except transactions in the ordinary course of business, on an arm’s
length basis on terms no less favorable than terms which would have been
obtainable from a Person other than an Affiliate other than transactions
permitted pursuant to Sections 7.3, 7.4 and 7.5.

  7.11   Leases.

          Enter as lessee into any lease arrangement for real or personal
property (unless capitalized and permitted under Section 7.6) if, after giving
effect thereto, rental payments for all leased property would exceed Ten Million
Dollars ($10,000,000) in the aggregate on a consolidated basis in any calendar
year.

  7.12   Subsidiaries.

          Form any Domestic Subsidiary unless, at the sole discretion of the
Agent, (i) (A) such Subsidiary expressly becomes a Borrower and becomes jointly
and severally liable for the obligations of the Borrowers hereunder, under the
Notes and under any other agreement between the Borrowers and the Lenders in
accordance with the provisions of Sections 1.6 and 1.7; provided, however, none
of such Subsidiary’s assets shall be included in the Aggregate Formula Amount in
accordance with the terms of this Agreement until such time as the Agent makes
such determination in its Permitted Discretion, or (B) such Subsidiary expressly
becomes a Guarantor for the Obligations by delivering an executed Guarantor
Joinder Agreement to the Agent, (ii) the Agent shall have received all
documents, including appropriate Waivers, Consents, organizational documents,
corporate resolutions and legal opinions it may reasonably require in connection
therewith, and (iii) the Agent shall have obtained, for the benefit of the
Secured Creditors, a first priority perfected Lien in all assets (other than
Excluded Property and Specified Fixed Asset Collateral) of such Subsidiary.

  7.13   Fiscal Year and Accounting Changes.

          Change its fiscal year from a calendar year or make any material
change (i) in accounting treatment and reporting practices except as required or
permitted by GAAP or (ii) in tax reporting treatment except as required or
permitted by law.

  7.14   Pledge of Credit.

          Now or hereafter pledge the Agent’s or any Lender’s credit on any
purchase or for any purpose whatsoever.

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  7.15   Amendment of Organizational Documents.

          Amend, modify or waive any material term or provision of its articles
of incorporation, by-laws, certificate of formation, operating agreement or
other organizational documents, as applicable, unless required by law.

  7.16   Compliance with ERISA.

          (i) Maintain, or permit any member of the Controlled Group to maintain
or become obligated to contribute, or permit any member of the Controlled Group
to become obligated to contribute, to any Plan, other than those Plans disclosed
on Schedule 5.10, (ii) engage, or, permit any member of the Controlled Group to
engage, in any non-exempt “prohibited transaction”, as that term is defined in
Section 406 of ERISA and Section 4975 of the Code, (iii) incur, or permit any
member of the Controlled Group to incur, any “accumulated funding deficiency”,
as that term is defined in Section 302 of ERISA or Section 412 of the Code,
(iv) terminate, or permit any member of the Controlled Group to terminate, any
Plan where such event could result in any liability of any Loan Party, any
Subsidiary thereof or any member of the Controlled Group or the imposition of a
lien on the property of any Loan Party, any Subsidiary thereof or any member of
the Controlled Group pursuant to Section 4068 of ERISA, (v) assume, or permit
any member of the Controlled Group to assume, any obligation to contribute to
any Multiemployer Plan not disclosed on Schedule 5.10, (vi) incur, or permit any
member of the Controlled Group to incur, any withdrawal liability to any
Multiemployer Plan; (vii) fail to notify immediately the Agent of the occurrence
of any Termination Event, (viii) fail to comply, or permit a member of the
Controlled Group to fail to comply, with the requirements of ERISA or the Code
or other applicable laws in respect of any Plan, or (ix) fail to meet, or permit
any member of the Controlled Group to fail to meet, all minimum funding
requirements under ERISA or the Code or postpone or delay or allow any member of
the Controlled Group to postpone or delay any funding requirement with respect
of any Plan.

  7.17   Repayment or Prepayment of Indebtedness.

          At any time, directly or indirectly, prepay any Indebtedness (other
than the Obligations to the extent permitted under the terms of this Agreement)
or repurchase, redeem, retire or otherwise acquire any Indebtedness of any Loan
Party or any Subsidiary thereof; provided, however, (i) the Parent may repay,
prepay, redeem or acquire for value any of its Public Notes (a) from available
cash and cash equivalents existing as of the Closing Date, (b) from available
cash and cash equivalents arising after the Closing Date so long as such cash
and cash equivalents do not arise from the proceeds of Revolving Advances, or
(c) from the proceeds of Revolving Advances; (ii) any Subsidiary may repay or
prepay any Domestic Obligor or UK Borrower with respect to any Indebtedness; and
(iii) at any time during a Permitted Period, any Domestic Obligor, UK Borrower
or other Subsidiary may repay or prepay any other Subsidiary with respect to any
Indebtedness; provided, further, in the case of each of subclauses (a), (b) and
(c) of clause (i) above, (x) no Event of Default then exists or would exist by
reason of such repayment or repurchase and (y) the Undrawn Availability after
such repayment or repurchase exceeds Thirty Million Dollars ($30,000,000).

  7.18   Bailee Documents of Title.

          At any time, permit any Inventory to be located (a) at any processor,
warehouseman or similar bailee which issues negotiable warehouse receipts or
other negotiable documents of title or (b) at any processor, warehouseman or
similar bailee which issues non-negotiable warehouse receipts or other
non-negotiable documents of title unless such non-negotiable documents of title
are issued to or for the account of the Agent and such documents of title are
delivered to the Agent.

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  7.19   Modification of Material Business Agreements.

          Amend, supplement or replace, or waive any of the provisions of any
Material Business Agreement, except pursuant to a written agreement or
instrument which is delivered in advance to the Agent; provided, however, that
no such prior delivery shall be required for any amendment, supplement,
replacement or waiver that does not adversely affect the Lenders.

  7.20   Modification of Indenture.

          Except in connection with a Permitted Public Notes Refinancing, enter
into or permit any amendment to, or modification or change of, any Public Note
Document as in effect on the Closing Date, unless, prior to the effectiveness
thereof, such amendment, modification or change has been approved in writing by
the Agent, acting on instructions from the Required Lenders; provided, however,
that no such approval shall be required for an amendment, modification or change
that does not adversely affect the Lenders.

  7.21   Anti-Terrorism Laws.

          At any time, (i) directly or through its Affiliates and agents,
conduct any business or engage in any transaction or dealing with any Blocked
Person, including the making or receiving of any contribution of funds, goods or
services to or for the benefit of any Blocked Person, (ii) directly or through
its Affiliates and agents, deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to the
Executive Order No. 13224, (iii) directly or through its Affiliates and agents,
engage in or conspire to engage in any transaction that evades or avoids, or has
the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in the Executive Order No. 13224, the USA Patriot Act or
any other Anti-Terrorism Law or (iv) fail to deliver to the Lenders or the
Issuer any certification or other evidence requested from time to time by any
Lender or the Issuer in its Permitted Discretion, confirming each Loan Party’s
compliance with this Section 7.21.
VIII. CONDITIONS PRECEDENT.

  8.1   Conditions to Initial Advances.

          The agreement of the Lenders to make the initial Advances requested to
be made and the Issuer to issue the initial Letters of Credit requested to be
issued on the Closing Date is subject to the satisfaction immediately prior to
or concurrently with the making of such Advances and the issuance of such
Letters of Credit, of the following conditions precedent unless waived by the
Agent pursuant to the Post-Closing Waiver Letter:

  (a)   Loan Documents. The Agent shall have received an executed version of
this Agreement, the Notes and, to the extent not otherwise specifically
described below, any Other Loan Documents to be delivered on the Closing Date,
including (i) the Post-Closing Waiver Letter and (ii) the other documents
required to be delivered pursuant to the Closing Agenda, in each case, in form,
substance and number satisfactory to the Agent;     (b)   Collateral and
Security. The Agent shall have received an executed version of each IP Security
Agreement, in form, substance and number satisfactory to the Agent, and all
Collateral items required to be physically delivered to the Agent under this
Agreement or any Other Loan Document shall have been so delivered, accompanied
by any appropriate instruments of transfer (or arrangements satisfactory to the
Agent for such delivery shall be in place), and all taxes, fees and other
charges then due and payable in connection with the execution,

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      delivery, recording, publishing and filing of such instruments and
incurrence of the Obligations and the delivery of this Agreement and the Other
Loan Documents shall have been paid in full.

  (c)   Lien Searches. The Agent shall have received accurate and complete
copies of all of the Lien, pending suit and other public records searches
required by the Agent (as more fully described on the Closing Agenda);     (d)  
Tax Returns. The Agent shall have received the first page of each Loan Party’s
federal tax returns for the most recent two (2) tax years;     (e)   Filings,
Registrations and Recordings. Each document (including any Uniform Commercial
Code financing statement) required by this Agreement, any related agreement or
under law or reasonably requested by the Agent to be filed, registered or
recorded in order to create, in favor of the Agent, a perfected security
interest in or Lien upon the Collateral shall have been properly filed,
registered or recorded in each jurisdiction in which the filing, registration or
recordation thereof is so required or requested and all actions necessary or, in
the opinion of the Agent, desirable to perfect and protect the Lien of the Agent
granted hereunder shall have been taken;     (f)   Corporate Proceedings. The
Agent shall have received a copy of the resolutions in form and substance
reasonably satisfactory to the Agent, of the Board of Directors (or if
applicable, the general partner or board of managers) of each Loan Party
(i) authorizing the execution, delivery and performance of this Agreement, the
Notes, and the Other Loan Documents to which such Loan Party is a party, and
(ii) the granting by such Loan Party of the security interests in and Liens upon
the Collateral, in each case certified by the Secretary or Assistant Secretary
of such Loan Party as of the Closing Date and such certificate shall state that
the resolutions thereby certified are true, accurate and complete and have note
been amended, modified, revoked or rescinded as of the date of such certificate;
    (g)   Authorization Certificates. The Agent shall have received a
certificate of the Secretary or an Assistant Secretary of the Borrowing Agent,
dated the Closing Date, as to the authority and incumbency of various specified
employees of the Borrowing Agent to utilize the StuckyNet System, deliver
Borrowing Base Certificates, Compliance Certificates, other Collateral Reports
and otherwise communicate with the Agent.     (h)   Incumbency Certificates. The
Agent shall have received a certificate of the Secretary or an Assistant
Secretary of each Loan Party, dated the Closing Date, as to the incumbency and
signature of the officers of such Loan Party executing this Agreement and the
Other Loan Documents to which such Loan Party is a party together with evidence
of the incumbency of such Secretary or such Assistant Secretary;     (i)  
Charter Documents. The Agent shall have received a copy of the Articles of
Incorporation, Certificate of Incorporation, Certificate of Formation or
Articles of Organization, as the case may be, of each Loan Party, together with
all amendments thereto, certified by the Secretary of State or other appropriate
official of such Loan Party’s jurisdiction of incorporation or organization, as
the case may be, together with copies of the by-laws, limited liability company
agreement, limited partnership agreement, operating agreement or code of
regulations, as the case may be, of such Loan Party, in each case, together with
all

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      amendments and supplements thereto, and all agreements of such Loan Party
shareholders or members, as the case may be, certified as accurate and complete
by the Secretary or Assistant Secretary of such Loan Party;

  (j)   Good Standing. The Agent shall have received copies of good standing
certificates, or similar certifications, as applicable, for each Loan Party
dated not more than thirty (30) days prior to the Closing Date, issued by the
Secretary of State or other appropriate official of such Loan Party’s
jurisdiction of incorporation or organization, as the case may be, and each
jurisdiction where the conduct of such Loan Party’s business activities or the
ownership of its properties necessitates qualification, except where the failure
to be so qualified could not reasonably be expected to cause a Material Adverse
Effect;     (k)   Compliance with Law. The Agent shall have received evidence
that each Loan Party and each Subsidiary thereof is in compliance in all
material respects with all pertinent federal, state and local regulations
including those with respect to the Environmental Laws, the Federal Occupational
Safety and Health Act and ERISA (or the equivalent laws and/or statutes of any
other jurisdiction, to the extent applicable);     (l)   Legal Opinion. The
Agent shall have received the executed legal opinion of Baker & Hostetler LLP,
Burns & Levinson LLP, or such other law firms reasonably satisfactory to Agent,
in form and substance satisfactory to the Agent, which shall cover such matters
incident to the transactions contemplated by this Agreement and the Other Loan
Documents, as the Agent may reasonably require, and each Loan Party hereby
authorizes and directs such counsel to address such opinion to the Agent, the
Lenders and the Issuer, and in each case, their respective successors and
assigns;     (m)   No Litigation. (i) No litigation, investigation or proceeding
before or by any arbitrator or Governmental Body shall be continuing or
threatened against any Loan Party or any Subsidiary thereof or against the
officers, directors or managers of such Loan Party or such Subsidiary (A) in
connection with this Agreement or the Other Loan Documents or any of the
transactions contemplated thereby and which, in the reasonable opinion of the
Agent, is deemed material or (B) which could, in the reasonable opinion of the
Agent, have a Material Adverse Effect; and (ii) no injunction, writ, restraining
order or other order of any nature materially adverse to such Loan Party or such
Subsidiary or the conduct of its business or inconsistent with the due
consummation of the transactions contemplated by this Agreement shall have been
issued by any Governmental Body;     (n)   Financial Condition Certificate. The
Agent shall have received an executed Financial Condition Certificate in the
form of Exhibit F;     (o)   Field Examination. The Agent shall have completed a
Collateral field examination of the Loan Parties, and reviewed all books and
records in connection with such Collateral, and the results of such examination
shall be satisfactory in form and substance to the Agent;     (p)   Fees. The
Agent shall have received, or will receive as part of the funding on the Closing
Date, all fees payable to the Agent, the Lead Arranger, the Issuer and the
Lenders on or prior to the Closing Date pursuant to Article III hereto or the
Agent’s Fee Letter;

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  (q)   Projections. The Agent shall have received a copy of the Projections
which shall be satisfactory in all material respects to the Agent;     (r)  
Insurance. The Agent shall have received evidence satisfactory to the Agent that
each Loan Party has the personal and real property, liability, business
interruption and other insurance required by Section 4.11, with Agent’s loss
payable endorsements, in form and substance satisfactory to Agent, listing the
Agent as loss payee with respect to the Collateral and as additional insured;  
  (s)   Letters of Credit and Letter of Credit Application. The Agent shall have
received from the Borrowing Agent (i) a completed Letter of Credit Application
for the Letters of Credit to be issued on the Closing Date and (ii) an accurate
and complete copy of each Letter of Credit set forth in Schedule 2.9 attached
hereto;     (t)   Disbursement Instruction Letter and Flow of Funds. The Agent
shall have received written instructions from the Borrowing Agent directing the
application of proceeds of the initial Advances made pursuant to this Agreement,
such instructions shall attach a detailed flow of funds which shall outline the
distribution of necessary funds from the operating accounts of the Borrowers to
pay for the costs, expenses and fees required to be paid by the Loan Parties on
the Closing Date, the repayment of Indebtedness required to be repaid on the
Closing Date and the funding of any other amounts required to be funded on the
Closing Date;     (u)   Collection Accounts. The Agent shall have received
(i) the duly executed Blocked Account Agreements or other agreements
establishing the Collection Accounts and the Cash Concentration Accounts with
financial institutions acceptable to the Agent for the collection or servicing
of the Receivables and proceeds of the Collateral other than the UK Collateral
and (ii) evidence satisfactory to the Agent that each Domestic Borrower has sent
or shall, immediately upon the Closing Date, send a notice to all of its
respective Account Debtors instructing such Account Debtors to remit payments to
the Collection Accounts;     (v)   Consents. The Agent shall have received any
and all Consents necessary to permit the effectuation of the transactions
contemplated by this Agreement and the Other Loan Documents and, in each case,
the Consents of such third parties as might assert claims with respect to the
Collateral, as the Agent and its counsel shall deem necessary;     (w)   No
Material Adverse Change. (i) Since December 31, 2006, there shall not have
occurred any event, condition or state of facts which could reasonably be
expected to have a Material Adverse Effect and (ii) no representations made or
information supplied to the Agent shall have been proven to be inaccurate or
misleading in any material respect;     (x)   Waivers. The Agent shall have
received an executed copy of each Waiver required by the Closing Agenda to be
delivered on the Closing Date;     (y)   Leasehold and Similar Agreements. The
Agent shall have received copies of all leases, mortgages, warehouseman
agreements, consignment agreements, processing agreements or similar agreements
in effect with respect to (i) all premises leased by any Loan Party and (ii) all
locations at which Inventory of any Loan Party is located;

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  (z)   Contract Review. The Agent shall have received Schedule 5.25 listing all
of the Material Business Agreements of each Loan Party;     (aa)   Termination
of Existing Indebtedness. The Agent shall have received (i) a payoff letter, in
form and substance satisfactory to the Agent, from National City Bank (the
“Exiting Bank”), pursuant to which any Indebtedness of the Loan Parties to the
Exiting Bank in existence on the Closing Date will be paid in full, (ii) a
payoff letter, in form and substance satisfactory to the Agent, pursuant to
which any other existing Indebtedness that is to be repaid by the Advances to be
made on the Closing Date will be paid in full, and (iii) evidence satisfactory
to the Agent that all necessary termination statements, satisfaction documents
and any other applicable releases in connection with any existing Indebtedness
and all other Liens with respect to any Loan Party or any Subsidiary thereof
that are not Permitted Encumbrances have been filed or arrangements satisfactory
to the Agent have been made for such filing;     (bb)   Bring-Down Certificate.
The Agent shall have received a certificate signed by the chief financial
officer of each Loan Party, dated as of the Closing Date, stating that (i) all
representations and warranties set forth in this Agreement and the Other Loan
Documents to which such Loan Party is a party are true and correct in all
material respects on and as of such date, (ii) such Loan Party, as applicable,
is on such date in compliance with all the terms and provisions set forth in
this Agreement and the Other Loan Documents, as the case may be, (iii) on such
date no Default or Event of Default has occurred or is continuing and (iv) all
of the deliveries to be made by or on behalf of such Loan Party as specified in
the Closing Agenda shall have been furnished to the Agent;     (cc)   Borrowing
Base Certificate; Undrawn Availability. The Agent shall have received a
Borrowing Base Certificate, as of the Closing Date, which shall indicate an
Aggregate Formula Amount and a UK Formula Amount such that, after giving effect
to the initial Advances made and Letters of Credit issued on the Closing Date
and all closing costs, fees and expenses through the Closing Date, the Undrawn
Availability shall be at least Fifty-Five Million Dollars ($55,000,000);    
(dd)   Public Note Documents. The Borrowers shall have provided to the Agent and
the Lenders (i) a copy of the Public Note Documents, together with any
amendments or supplements thereto, certified by an officer of the Parent as
being true and complete and (ii) an officer’s certificate, signed by an
authorized officer of the Parent, and otherwise in form and substance
satisfactory to the Agent and the Lenders, certifying (A) that no “Default” (as
defined in the Indenture) or “Event of Default” (as defined in the Indenture)
exists under the Indenture, nor will exist after the making of the initial
Advances hereunder, (B) that all of the Obligations constitute “Permitted
Indebtedness” (as defined in the Indenture), and (C) such other matters with
respect to the Public Note Documents as the Agent shall deem necessary or
appropriate.;     (ee)   Closing Agenda Conditions. Each other condition
precedent described on the Closing Agenda shall have been fulfilled to the
satisfaction of the Agent; and     (ff)   Other. All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Agent and its counsel.

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  8.2   Conditions to Each Advance.

          The agreement of the Lenders to make any Advance requested to be made
on the occasion of each Borrowing (including the initial Borrowing) and the
agreement of the Issuer to issue any Letter of Credit requested to be issued on
any date (including the initial Letters of Credit) is subject to the
satisfaction of the following conditions precedent as of the date the Advances
requested to be made as part of such Borrowing or such Letter of Credit is
issued.

  (a)   Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to this Agreement and any Other
Loan Documents to which it is a party, as the case may be, and each of the
representations and warranties contained in any certificate, document or
financial or other statement furnished at any time under or in connection with
this Agreement or any Other Loan Document shall be true and correct in all
material respects on and as of such date as if made on and as of such date
except for representations and warranties made as of or regarding a specified
date.     (b)   No Default. No Event of Default or Default shall have occurred
and be continuing on such date, or would exist after giving effect to the
Advances requested to be made or Letters of Credit requested to be issued, on
such date; provided, however that, the Agent, in its sole discretion, may,
pursuant to Section 15.4 continue to make Advances and the Issuer, in its sole
discretion, may continue to issue Letters of Credit, in each case,
notwithstanding the existence of an Event of Default or Default and any Advances
so made or Letters of Credit so issued shall not be deemed a waiver of any such
Event of Default or Default.     (c)   Maximum Advances. Subject to
Section 15.4, in the case of any Advances requested to be made or Letters of
Credit requested to be issued, after giving effect thereto, the aggregate
Advances or Letters of Credit shall not exceed the maximum amount of the
applicable Advances permitted under Section 2.1 or the maximum amount of Letters
of Credit under Section 2.9.     (d)   Request for Advances. Each request for an
Advance or a Letter of Credit by the Borrowing Agent hereunder shall constitute
a representation and warranty by each Loan Party as of the date of such Advance
or Letter of Credit that the conditions contained in this Section shall have
been satisfied.

  8.3   Conditions to Initial Advances Based on Eligibility of Inventory and
Receivables of UK Borrowers.

          The agreement of the Lenders to make any Advance requested to be made
on the occasion of each Borrowing (including the initial Borrowing) and the
agreement of the Issuer to issue any Letter of Credit requested to be issued on
any date (including the initial Letters of Credit) which includes the Inventory
or Receivables of either of the UK Borrowers as “Eligible UK Inventory” or
“Eligible UK Receivables”, is subject to the satisfaction of the following
conditions precedent as of the date such Advances requested to be made as part
of such Borrowing or such Letter of Credit is issued.

  (a)   Field Examination. The Agent shall have completed a Collateral field
examination of each of the UK Borrowers, and reviewed all books and records in
connection with such Collateral, the results of such examination shall be
satisfactory in form and substance to the Agent.

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  (b)   Collateral Audit. The Agent shall have completed a collateral audit of
each of the UK Borrowers with respect to the Collateral of each of the UK
Borrowers, and the results of such collateral audits shall be satisfactory in
form and substance to the Agent. and     (c)   UK Security Documents. The Agent
shall have received an executed version of each UK Security Documents, in each
case, in form, substance and number satisfactory to the Agent.

IX. NOTICE AND DISCLOSURE REQUIREMENTS.
          Each Loan Party shall, on behalf of itself and its Subsidiaries, until
satisfaction in full of the Obligations and the termination of this Agreement:

  9.1   Disclosure of Material Matters.

          Promptly, and in any event with three Business Days upon learning
thereof, report to the Agent all matters materially affecting the value,
enforceability or collectibility of any portion of the Collateral, including
such Loan Party’s reclamation or repossession of, or the return to such Loan
Party of, a material amount of goods or material claims or material disputes
asserted by any Account Debtor or other obligor.

  9.2   Schedules; Collateral Reporting Information; Borrowing Base Certificate.

          Deliver to the Agent on or before the twentieth (20th) day of each
calendar month as and for the prior calendar month (a) accounts payable agings
and accounts receivable agings of the Borrowers (reconciled to the general
ledger and the Borrowing Base Certificate), (b) Inventory reports of the
Borrowers (which shall include a lower of cost or market calculation) and (c) a
Borrowing Base Certificate (which shall be calculated as of the last day of the
prior calendar month and which shall not be binding upon the Agent or
restrictive of the Agent’s rights under this Agreement). Such inventory reports
shall include, with respect to any inventory owned by the Domestic Borrowers and
located in Mexico, a perpetual inventory report listing the types of inventory
per location (including product number or SKU description), and the quantity on
hand, per unit cost and extended value of each such type of inventory per
location. In addition, for any period during which Undrawn Availability does not
exceed Twenty Million Dollars ($20,000,000), unless otherwise agreed by the
Agent, the Borrowing Agent shall deliver to the Agent on a calendar weekly basis
an interim Borrowing Base Certificate and inventory report (i) reflecting all
activity of the Domestic Borrowers (sales, collections, credits, etc.) impacting
the Receivables of the Borrowers for all Business Days since the preparation of
the immediately prior week interim Borrowing Base Certificate, and
(ii) reflecting all changes in the types of inventory and quantity on hand, per
unit cost and extended value of such types of inventory per location in Mexico
since the preparation of the immediately prior week interim inventory report.
The amount excluded from Eligible UK Receivables or Eligible Domestic
Receivables on such interim Borrowing Base Certificate shall be the amount that
is calculated and updated monthly pursuant to this Section 9.2 and which is
satisfactory to the Agent. The amount of Eligible UK Inventory or Eligible
Domestic Inventory to be included on such interim Borrowing Base Certificate
shall be calculated and updated monthly pursuant to this Section 9.2 and which
is satisfactory to the Agent. Such interim Borrowing Base Certificate shall also
include a reconciliation of the Inventory reported thereon with the Inventory of
the Borrowers reported on the general ledger of the Borrowers. In addition, with
respect to any period during which Undrawn Availability does not exceed Twenty
Million Dollars ($20,000,000), the Borrowing Agent will deliver to the Agent at
such intervals as the Agent may reasonably require: (i) confirmatory assignment
schedules, (ii) copies of Account Debtor’s invoices, (iii) evidence of shipment
or delivery, (iv) accounts payable schedules of the Borrowers (reconciled to the
general

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ledger) and (v) such further schedules, documents or information regarding the
Collateral as the Agent may require including trial balances and test
verifications. The Agent shall have the right to confirm and verify all
Receivables by any manner and through any medium it considers advisable and do
whatever it may deem reasonably necessary to protect its interests hereunder.
The items to be provided under this Section are to be in form satisfactory to
the Agent and executed by the applicable Loan Parties and delivered to the Agent
from time to time solely for the Agent’s convenience in maintaining records of
the Collateral, and any Person’s failure to deliver any of such items to the
Agent shall not affect, terminate, modify or otherwise limit the Agent’s Lien
with respect to the Collateral. The items to be provided under this Section 9.2
shall be delivered to the Agent by Approved Electronic Communication (or, if
requested by the Agent, only by posting to the Agent’s StuckyNet system).

  9.3   Environmental Reports.

          Furnish the Agent, concurrently with the delivery of the financial
statements referred to in Sections 9.7 and 9.8, with a certificate signed by an
authorized officer of each Loan Party stating that each Loan Party and each
Subsidiary thereof is in compliance with all federal, state and local laws
relating to environmental protection and control and occupational safety and
health, except to the extent noncompliance has not had or could not reasonably
be expected to have a Material Adverse Effect or has not resulted in or could
not reasonably be expected to result in aggregate liabilities in excess of Five
Million Dollars ($5,000,000). To the extent any Loan Party or any Subsidiary
thereof is not so in compliance, the certificate shall set forth with
specificity all areas of non-compliance and the proposed action such Loan Party
or such Subsidiary will implement in order to achieve such compliance.

  9.4   Litigation.

          Promptly, and in any event within three Business Days, notify the
Agent in writing of any litigation, suit or administrative proceeding against
any Loan Party or any Subsidiary thereof, whether or not the claim is covered by
insurance, which could reasonably be expected to result in a Material Adverse
Effect.

  9.5   Material Occurrences.

          Promptly, and in any event with three Business Days, notify the Agent
in writing upon the occurrence of (a) any Event of Default or Default, (b) any
default or event of default under any Material Business Agreement which has or
could reasonably be expected to have a Material Adverse Effect, (c) any event,
development or circumstance whereby any financial statements or other reports
furnished to the Agent fail in any material respect to present fairly, in
accordance with GAAP consistently applied, the financial condition or operating
results of Parent and its consolidated Subsidiaries on a consolidated basis as
of the date of such statements, (d) any accumulated retirement plan funding
deficiency which, if such deficiency continued for two (2) plan years and was
not corrected as provided in Section 4971 of the Code, could subject any Loan
Party or any Subsidiary thereof to a tax imposed by Section 4971 of the Code,
(e) each and every default by such Loan Party or such Subsidiary which could
reasonably be expected to result in the acceleration of the maturity of any
Indebtedness with an outstanding principal amount exceeding Two Million Five
Hundred Thousand Dollars ($2,500,000), including the names and addresses of the
holders of such Indebtedness with respect to which there is a default existing
or with respect to which the maturity has been or could be accelerated, and the
amount of such Indebtedness, and (f) any other development in the business or
affairs of such Loan Party or such Subsidiary which could reasonably be expected
to have a Material Adverse Effect; in each case, to the extent permitted by
applicable law, describing the nature thereof and the action such Loan Party or
such Subsidiary proposes to take with respect thereto.

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  9.6   Government Receivables.

          Promptly, and in any event with three Business Days, notify the Agent
if any of its Receivables arise out of contracts between any Loan Party and the
United States or any state or any department, agency or instrumentality thereof.

  9.7   Annual Financial Statements.

          Within ninety (90) days after the end of each fiscal year of Parent
and its consolidated Subsidiaries, furnish the Agent with, or otherwise make
available to the Agent online (whether by filing with the Securities and
Exchange Commission or otherwise), audited financial statements of Parent and
its consolidated Subsidiaries on a consolidated basis including statements of
income or operations and shareholders’ equity and cash flow of Parent and its
consolidated Subsidiaries on a consolidated basis from the beginning of such
current fiscal year to the end of such fiscal year and the balance sheet as at
the end of such fiscal year, all prepared in accordance with GAAP applied on a
basis consistent with prior practices, and in reasonable detail and reported
upon without qualification by an independent certified public accounting firm
selected by the Loan Parties and their Subsidiaries and reasonably satisfactory
to the Agent. In addition, the reports shall be accompanied by a Compliance
Certificate which shall state that, based on an examination sufficient to permit
such authorized officer to make an informed statement, no Default or Event of
Default exists, or, if such is not the case, specifying such Default or Event of
Default, its nature, when it occurred, whether it is continuing and the steps
being taken by the Loan Parties and their Subsidiaries with respect to such
event, and such Compliance Certificate shall have appended thereto calculations
which set forth compliance, if applicable, with the requirements or restrictions
imposed by Sections 6.4, 7.6 and 7.11.

  9.8   Quarterly Financial Statements.

          Within forty-five (45) days after the end of each of the first three
fiscal quarters of the fiscal year of the Parent and its consolidated
Subsidiaries, furnish the Agent with, or otherwise make available to the Agent
online (whether by filing with the Securities and Exchange Commission or
otherwise), an unaudited balance sheet of Parent and its consolidated
Subsidiaries on a consolidated basis and unaudited statements of income or
operations and shareholders’ equity and cash flow of Parent and its consolidated
Subsidiaries on a consolidated basis reflecting results of operations from the
beginning of the fiscal year to the end of such month and for such month, all
prepared on a basis consistent with prior practices and complete and correct in
all material respects, subject to normal and recurring year end adjustments that
individually and in the aggregate are not material to the business of the Loan
Parties and setting forth in each case in comparative form the figures from the
projected annual operation budget delivered pursuant to Section 9.11 covering
the current fiscal year. In addition, the reports shall be accompanied by a
Compliance Certificate, which shall state that, based on an examination
sufficient to permit such authorized officer of the Borrowing Agent to make an
informed statement, no Default or Event of Default exists, or, if such is not
the case, specifying such Default or Event of Default, its nature, when it
occurred, whether it is continuing and the steps being taken by the applicable
Loan Parties and their Subsidiaries with respect to such event and, such
Compliance Certificate shall have appended thereto calculations which set forth
compliance, if applicable, with the requirements or restrictions imposed by
Sections 6.4, 7.6 and 7.11.

  9.9   Securities Filings.

          Furnish the Agent as soon as available, but in any event within ten
(10) days after the filing thereof, with copies of such financial statements,
proxy statements, registration

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statements, reports and returns as any Loan Party or any Subsidiary thereof is
required to file with the United States Securities and Exchange Commission or
any state securities commission.

  9.10   Additional Information.

          Furnish the Agent with such additional information as the Agent shall
reasonably request in order to enable the Agent to determine whether the terms,
covenants, provisions and conditions of this Agreement and the Notes have been
complied with by each Loan Party including, without the necessity of any request
by the Agent (a) promptly, and in any event with three Business Days upon
Agent’s request therefor, copies of any Material Business Agreement reasonably
requested by the Agent, (b) copies of all environmental audits and reviews not
previously provided, (c) at least thirty (30) days prior thereto, notice of any
Loan Party’s or any Subsidiary’s opening of any new place of business or any
Loan Party’s or any Subsidiary’s closing of any existing place of business,
(d) at least thirty (30) days prior thereto, notice of any Loan Party’s or any
Subsidiary’s change in its legal name, and (e) promptly, and in any event with
three Business Days upon any Loan Party’s learning thereof, notice of any
material labor dispute to which any Loan Party or any Subsidiary is reasonably
expected to become a party, any strikes or walkouts relating to any of its
plants or other facilities, and the expiration of any labor contract to which
such Loan Party or such Subsidiary is a party or by which such Loan Party or
such Subsidiary is bound.

  9.11   Projected Operating Budget.

          Furnish the Agent, no later than February 15 of each fiscal year of
the Parent and its consolidated Subsidiaries, commencing with fiscal year 2008
and each fiscal year thereafter, quarter by quarter projected financial
statements of the Parent and its consolidated Subsidiaries on a consolidated
basis for such fiscal year (including statements of income or operations and
shareholders’ equity and cash flow for each fiscal quarter and a balance sheet
as at the end of each fiscal quarter), such projections to be accompanied by a
certificate signed by the chief financial officer of the Borrowing Agent to the
effect that such projections have been prepared on the basis of sound financial
planning practice consistent with past budgets and financial statements and that
such officer has no reasonable basis to question the reasonableness of any
material assumptions on which such projections were prepared.

  9.12   Notice of Suits, Adverse Events.

          Furnish the Agent promptly, and in any case within three Business
Days, notice of (i) any lapse or other termination of any Consent issued to any
Loan Party or any Material Subsidiary thereof by any Governmental Body or any
other Person that is material to the operation of such Loan Party’s or such
Material Subsidiary’s business, (ii) any refusal by any Governmental Body or any
other Person to renew or extend any such Consent, (iii) copies of any periodic
or special reports filed by such Loan Party or such Material Subsidiary with any
Governmental Body or Person, if such reports indicate any material adverse
change in the business, operations, affairs or condition of such Loan Party or
such Subsidiary, and (iv) copies of any material notices and other
communications from any Governmental Body which specifically relate to any
material adverse change or condition of such Loan Party or such Material
Subsidiary.

  9.13   ERISA Notices and Requests.

          Furnish the Agent with immediate written notice in the event that
(i) any Loan Party, any Subsidiary thereof or any member of the Controlled Group
knows or has reason to know that a Termination Event has occurred, together with
a written statement describing such

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Termination Event and the action, if any, which such Loan Party, such Subsidiary
or any member of the Controlled Group has taken, is taking, or proposes to take
with respect thereto and, when known, any action taken or threatened by the
Internal Revenue Service, Department of Labor or PBGC with respect thereto,
(ii) such Loan Party, such Subsidiary or any member of the Controlled Group
knows or has reason to know that a prohibited transaction (as defined in
Sections 406 of ERISA and 4975 of the Code) has occurred together with a written
statement describing such transaction and the action which such Loan Party, such
Subsidiary or any member of the Controlled Group has taken, is taking or
proposes to take with respect thereto, (iii) a funding waiver request has been
filed with respect to any Plan together with all communications received by such
Loan Party, such Subsidiary or any member of the Controlled Group with respect
to such request, (iv) any increase in the benefits of any existing Plan or the
establishment of any new Plan or the commencement of contributions to any Plan
to which such Loan Party, such Subsidiary or any member of the Controlled Group
was not previously contributing shall occur, (v) such Loan Party, such
Subsidiary or any member of the Controlled Group shall receive from the PBGC a
notice of intention to terminate a Plan or to have a trustee appointed to
administer a Plan, together with copies of each such notice, (vi) such Loan
Party, such Subsidiary or any member of the Controlled Group shall receive any
favorable or unfavorable determination letter from the Internal Revenue Service
regarding the qualification of a Plan under Section 401(a) of the Code, together
with copies of each such letter, (vii) such Loan Party, such Subsidiary or any
member of the Controlled Group shall receive a notice regarding the imposition
of withdrawal liability, together with copies of each such notice, (viii) such
Loan Party, such Subsidiary or any member of the Controlled Group shall fail to
make a required installment or any other required payment under Section 412 of
the Code on or before the due date for such installment or payment, (ix) such
Loan Party, such Subsidiary or any member of the Controlled Group knows that
(a) a Multiemployer Plan has been terminated, (b) the administrator or plan
sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan, or
(c) the PBGC has instituted or will institute proceedings under Section 4042 of
ERISA to terminate a Multiemployer Plan, or (ix) a Loan Party or any Subsidiary
thereof receives a financial support direction or contribution notice for the UK
Pensions Regulator (or any written communication of the UK Pensions Regulator
indicating an intention to issue any such notice or direction) or that a period
of assessment by the UK Pension Protection Fund has commenced.

  9.14   Notices Regarding Public Note Documents.

          Furnish the Agent with written notice promptly, and in any event with
three Business Days, of any notice provided to the trustee or the Public
Noteholders under the Indenture, the Public Notes or any of the other Public
Note Documents.

  9.15   Additional Documents.

          Execute and deliver to the Agent, upon request, such documents and
agreements as the Agent may, from time to time, reasonably request to carry out
the purposes, terms or conditions of this Agreement.

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X. EVENTS OF DEFAULT.
          The occurrence of any one or more of the following events shall
constitute an “Event of Default”:
      10.1 Payment of Obligations.
          (a) Failure by any Borrower to pay any principal with respect to the
Obligations when due, whether at maturity, by reason of acceleration pursuant to
the terms of this Agreement, or by required prepayment;
          (b) Failure by any Borrower to pay any interest with respect to the
Obligations when due, or failure by any Loan Party to pay any other liabilities
or make any other payment, fee or charge provided for under this Agreement or
any Other Loan Document herein when due, if any such failure shall continue for
five or more days;
      10.2 Misrepresentations.
          Any representation or warranty made or deemed made by any Loan Party
thereof in this Agreement, any Other Loan Document or in any certificate,
document or financial or other statement furnished at any time in connection
herewith or therewith, as the case may be, shall prove to have been misleading
in any material respect on the date when made or deemed to have been made;
      10.3 Failure to Furnish Information.
          Failure by any Loan Party to (a) furnish financial information
required to be provided hereunder when due, (b) furnish any additional financial
information reasonably requested by the Agent within fifteen (15) Business Days
after such information is requested, or (c) permit the inspection of its or any
of its Subsidiaries’ books or records to the extent such inspection is provided
for hereunder;
      10.4 Liens Against Assets.
          Issuance of a notice of Lien, levy, assessment, injunction or
attachment against a material portion of any Loan Party’s or any Subsidiary’s
property (other than property of a Foreign Subsidiary which is not a UK
Borrower) which is not stayed or lifted within thirty (30) days except for Liens
described in clause (h) of the definition of Permitted Encumbrances;
      10.5 Breach of Covenants.
          Except as otherwise provided for in Sections 10.1, 10.3 and 10.4,
(i) failure or neglect of any Loan Party to perform, keep or observe any term,
provision, condition, covenant herein contained (other than any term, provision,
condition, covenant referenced in clause (ii) hereof), or the failure or neglect
by any Loan Party or any Subsidiary thereof to perform, keep or observe any
term, provision, condition, covenant contained in any Other Loan Document, or
(ii) failure or neglect of any Loan Party or any Subsidiary thereof to perform,
keep or observe any term, provision, condition, covenant herein contained in
Sections 4.6, 4.7, 4.9,4.13, 4.15 or 6.2(a) or 6.2(c) and such failure shall
continue for thirty (30) days from the date upon which any Loan Party has
knowledge of the occurrence of such failure or neglect;

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      10.6 Judgment.
          Any money judgment, writ or warrant of attachment or similar process
(including but not limited to distraint or execution) involving an amount, when
aggregated with all such money judgment, writ or warrant of attachment or
similar process outstanding at such time, in excess of Five Million Dollars
($5,000,000) is entered or filed against any Loan Party or any Subsidiary
thereof or, in each case, against any of its respective assets and is not
released, discharged, vacated, fully bonded or stayed within thirty (30) days
after such judgment, writ or warrant of attachment or similar proceeding is
entered, unless such judgment is covered by insurance from an insurance carrier
which has acknowledged coverage in the amount of the claim without any
reservation of rights or which has been ordered by a court of competent
jurisdiction to pay such claim;
      10.7 Insolvency and Related Proceedings.
          (a) Any Loan Party or any other Subsidiary which is a Material
Subsidiary shall (i) apply for, consent to or suffer the appointment of, or the
taking of possession by, a receiver, custodian, trustee, liquidator or similar
fiduciary of itself or of all or a substantial part of its property, (ii) make a
general assignment for the benefit of creditors, (iii) commence a voluntary case
under any state or federal bankruptcy laws (as now or hereafter in effect),
(iv) be adjudicated a bankrupt or insolvent, (v) file a petition seeking to take
advantage of any other law providing for the relief of debtors, (vi) acquiesce
to, or fail to have dismissed, within sixty (60) days, any petition filed
against it in any involuntary case under such bankruptcy laws, (vii) take any
action for the purpose of effecting any of the foregoing or (viii) admit in
writing its inability, or be generally unable, to pay its debts as they become
due;
          (b) Any occurrence analogous to any of the matters described in clause
(a) above occurs in relation to a Loan Party or any Material Subsidiary under
the laws of any other jurisdiction.
      10.8 Cessation of Operations.
          Any Loan Party or any Domestic Subsidiary thereof shall cease
operation of its present business for more than five consecutive Business Days;
      10.9 Material Adverse Effect.
          Any change in any Loan Party’s or any Subsidiary’s condition or
affairs (financial or otherwise) which in the Agent’s reasonable opinion has or
could reasonably be expected to have a Material Adverse Effect;
      10.10 Loss of Priority Lien.
          The Agent’s Liens in the Collateral created hereunder or provided for
hereby or under any Other Loan Document for any reason ceases to be in full
force and effect and a perfected Lien having a first priority interest, except
for Liens described in clause (f) of the definition of Permitted Encumbrances;
      10.11 Breach of Material Agreements.
          A material default of the obligations of any Loan Party or any
Subsidiary thereof under any Material Business Agreement to which it is a party
shall occur which default is not cured within any applicable cure period;

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      10.12 Cross Default; Cross Acceleration.
          Any Loan Party or any Subsidiary thereof shall (a) default in any
payment of principal of or interest on any Indebtedness beyond any period of
grace with respect to such payment if the outstanding principal amount of all
such defaulted Indebtedness exceeds Ten Million Dollars ($10,000,000) in the
aggregate, or (b) default in the observance of any other covenant, term or
condition contained in any agreement or instrument pursuant to which such
Indebtedness is created, secured or evidenced, if the outstanding principal
amount of all such defaulted Indebtedness exceeds Ten Million Dollars
($10,000,000) in the aggregate and the effect of such default is to permit the
acceleration of such Indebtedness;
      10.13 Default Under Indenture.
          If (a) any “Event of Default” (as defined in the Indenture) shall
occur under the Indenture; or (b) the Obligations, or any part thereof, shall
cease to be “Permitted Indebtedness” (as defined in the Indenture);
      10.14 Termination of Guaranty.
          Termination or breach of any Guaranty or similar agreement executed
and delivered to the Agent in connection with the Obligations of any Loan Party,
or if any Guarantor attempts to terminate, challenges the validity of, or its
liability under, any such Guaranty, any similar agreement or its obligations
under Section 14.2;
      10.15 Change of Control.
          Any Change of Control shall occur;
      10.16 Invalidity of Credit Agreement.
          Any material provision of this Agreement shall, for any reason, cease
to be valid and binding on any Loan Party, or any Loan Party shall so claim in
writing to the Agent;
      10.17 Loss of Material Intellectual Property.
          (a) Any Governmental Body shall (A) revoke, terminate, suspend or
adversely modify any Material IP Rights or any material license or permit
necessary for the continued operation of the Loan Parties’ businesses, or
(B) commence proceedings to suspend, revoke, terminate or adversely modify any
Material IP Rights or any material license or permit necessary for the continued
operation of the Loan Parties’ businesses and such proceedings shall not be
dismissed or discharged within sixty (60) days, or (C) schedule or conduct a
hearing on the renewal of any Material IP Rights or any material license or
permit necessary for the continued operation of the Loan Parties’ businesses and
the staff of such Governmental Body issues a report recommending the
termination, revocation, suspension or material, adverse modification of such
Material IP Rights or material license or permit necessary for the continued
operation of the Loan Parties’ businesses,; (b) any agreement which is necessary
and material to the operation of such Loan Party’s business shall be revoked or
terminated and not replaced by a substitute reasonably acceptable to the Agent
within thirty (30) days after the date of such revocation or termination, and,
in the case of clause (a) or (b) above, such revocation or termination and
non-replacement could reasonably be expected to have a Material Adverse Effect;

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      10.18 Forfeiture of Assets.
          Any adjudication against any Loan Party or any Subsidiary thereof in
criminal proceedings requiring such Loan Party’s or such Subsidiary’s forfeiture
of any assets having, either individually or in the aggregate, a value in excess
of Two Million Five Hundred Thousand Dollars ($2,500,000), or any portion of the
Collateral having, either individually or in the aggregate, a value in excess of
One Million Dollars ($1,000,000) shall be seized or taken by a Governmental
Body, or any Loan Party or any Subsidiary thereof or the title and rights of
such Loan Party or such Subsidiary shall have become the subject matter of
litigation which could, in the reasonable opinion of the Agent, upon final
determination, result in material impairment or loss of the security provided by
this Agreement or the Other Loan Documents;
      10.19 Business Interruption.
          The operations of any Loan Party or any Subsidiary thereof are
interrupted at any time for more than two (2) consecutive Business Days, which
interruption could reasonably be expected to have a Material Adverse Effect; or
      10.20 ERISA Events.
          An event or condition specified in Sections 7.16 or 9.13 shall occur
or exist with respect to any Plan and, as a result of such event or condition,
together with all other such events or conditions, any Loan Party, any
Subsidiary thereof or any member of the Controlled Group shall incur, or is
reasonably likely to incur, a liability to a Plan or the PBGC (or both) which
could reasonably be expected to have a Material Adverse Effect or results or
could reasonably be expected to result in aggregate liabilities in excess of One
Million Dollars ($1,000,000).
XI. LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT
      11.1 Rights and Remedies.
          Upon the occurrence of (i) an Event of Default pursuant to
Section 10.7, all Obligations (other than Hedging Obligations) shall be
immediately due and payable and this Agreement and the obligation of the Lenders
and to make Advances and the Issuer to issue Letters of Credit shall be deemed
terminated all without presentment, demand or notice of any kind (all of which
are hereby expressly waived by each Loan Party), and (ii) any Event of Default
(other than pursuant to Section 10.7), the Agent may, and upon the written
request of the Required Lenders shall, declare all Obligations to be immediately
due and payable and terminate the obligation of the Lenders to make Advances and
the Issuer to issue Letters of Credit, all without presentment, demand or notice
of any kind (all of which are hereby expressly waived by each Loan Party). Upon
the occurrence of any Event of Default, the Agent shall have the right to
exercise any and all other rights and remedies provided for herein, under the
Uniform Commercial Code and at law or equity generally, including the right to
foreclose the security interests granted herein and to realize upon any
Collateral by any available judicial procedure or to take, to the extent
permitted by applicable law, possession of and sell any or all of the Collateral
with or without judicial process. The Agent may enter any Obligor’s premises or
other premises without legal process and without incurring liability to such
Obligor therefor, and the Agent may thereupon, or at any time thereafter, in its
discretion without notice or demand, take the Collateral and remove the same to
such place as the Agent may deem advisable and the Agent may require such
Obligor to make the Collateral available to the Agent at a convenient place or
places. With or without having the Collateral at the time or place of sale, and
subject to the applicable provisions of the Uniform Commercial Code, the Agent
may sell the Collateral, or any part thereof, at public or private sale, at any
time or place, in one or more sales, at such price or prices, and upon such
terms, either for cash, credit or future delivery, as the Agent may elect.

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Except as to that part of the Collateral which is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, the Agent shall give such Obligor reasonable notification of such sale
or sales, it being agreed that in all events written notice mailed to such
Obligor at least ten (10) days prior to such sale or sales is reasonable
notification. At any public sale the Agent, any Lender or the Issuer may bid for
and become the purchaser, and the Agent, any Lender, the Issuer or any other
purchaser at any such sale thereafter shall hold the Collateral sold absolutely
free from any claim or right of whatsoever kind, including any equity of
redemption, and such right and equity are hereby expressly waived and released
by each Obligor. In connection with the exercise of the foregoing remedies, the
Agent is granted permission to use all of each Obligor’s trademarks, trade
styles, trade names, patents, patent applications, licenses, franchises and
other proprietary rights which are used in connection with (a) Inventory for the
purpose of disposing of such Inventory and (b) Equipment for the purpose of
completing the manufacture of unfinished goods. The proceeds realized from the
sale of any Collateral shall be applied in accordance with Section 11.7. If any
deficiency shall arise, the Borrowers shall remain liable to the Agent, the
Lenders and the Issuer therefor.
      11.2 [Reserved]
      11.3 Setoff.
          In addition to any other rights which the Agent, any Lender or the
Issuer may have under applicable law, upon the occurrence of an Event of Default
hereunder, the Agent, such Lender and the Issuer, including any branch,
Subsidiary or Affiliate of the Agent, such Lender or the Issuer, shall have a
right to apply any Obligor’s property held by the Agent, such Lender, the
Issuer, such branch, Subsidiary or Affiliate to reduce the Obligations. However,
each Lender agrees that it shall not, without the express written consent of the
Agent, and that it shall, to the extent it is lawfully entitled to do so, upon
the written request of the Agent, setoff against the Obligations any amounts
owing by such Lender to any Obligor or in any Deposit Account of any Obligor now
or hereafter maintained with such Lender.
      11.4 Letter of Credit Collateral Account.
          Immediately upon the request of the Agent, after the occurrence and
during the continuance of an Event of Default, the Borrowers will deposit and
maintain cash in an account with the Agent (the “Letter of Credit Collateral
Account”), as cash collateral, in an amount equal to one hundred five percent
(105%) of the Letter of Credit Exposure. Upon such occurrence and request, the
Borrowers hereby irrevocably authorize the Agent, on the Borrowers’ behalf and
in the Borrower’s name, to open such Letter of Credit Collateral Account and to
make and maintain deposits in the Letter of Credit Collateral Account, in such
required amounts, out of the proceeds of Receivables or other Collateral or out
of any other funds of the Borrowers in the Agent’s possession at any time. The
Agent will invest such cash collateral (less applicable reserves) in such
short-term money-market items and the net return on such investments shall be
credited to such account and constitute additional cash collateral. The Letter
of Credit Collateral Account shall be under the sole dominion and control of the
Agent subject to the terms of this Agreement and the Borrowers shall not be
entitled to withdraw any funds from the Letter of Credit Collateral Account. The
Agent may apply funds held in the Letter of Credit Collateral Account to the
payment of any amounts as shall have become or shall become due and payable by
the Borrowers to the Issuer and, after the occurrence which is continuing, to
the payment of Obligations then outstanding.
      11.5 Appointment of Receiver.
          Upon the occurrence of an Event of Default which is continuing, the
Agent shall be entitled, upon application to the United States District Court
for the Northern District of Ohio,

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to the immediate appointment of a receiver for all or part of the Collateral,
whether such receivership is incidental to a proposed sale of the Collateral,
pursuant to the Uniform Commercial Code or otherwise. Each Obligor hereby
consents to the appointment of such a receiver without bond, to the full extent
permitted by applicable statute or law.
      11.6 Rights and Remedies not Exclusive; Non-Waiver.
          The enumeration of the foregoing rights and remedies is not intended
to be exhaustive and the exercise of any right or remedy shall not preclude the
exercise of any other rights or remedies provided for herein or otherwise
provided by law, all of which shall be cumulative and not alternative. No delay
or omission on the Agent’s, any Lender’s or the Issuer’s part in exercising any
right, remedy or option shall operate as a waiver of such or any other right,
remedy or option or of any Default or Event of Default.
      11.7 Allocation of Payments After Event of Default.
          Notwithstanding any other provisions of this Agreement to the contrary
other than Sections 1.8 and 14.2, after the occurrence and during the
continuance of an Event of Default, all amounts collected or received by the
Agent on account of the Obligations or any other amounts outstanding under any
of the Other Loan Documents or in respect of the Collateral shall be paid over
or delivered as follows:
     First, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of the Agent in connection with enforcing
the rights of the Lenders and the Issuer under this Agreement and the Other Loan
Documents and any protective advances made by the Agent with respect to the
Collateral under or pursuant to the term of this Agreement;
     Second, to payment of any fees owed to the Agent by any Borrower under this
Agreement or the Other Loan Documents;
     Third, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of each of the Lenders and the Issuer in
connection with enforcing its rights under this Agreement and the Other Loan
Documents or otherwise with respect to the Obligations owing to such Lender or
the Issuer (other than Hedging Contracts with a Qualified Counterparty and other
than Obligations relating to Banking Services);
     Fourth, to the payment of all of the Obligations consisting of accrued fees
and interest arising under or pursuant to this Agreement or the Other Loan
Documents (other than Hedging Contracts with a Qualified Counterparty and other
than Obligations relating to Banking Services);
     Fifth, to the ratable payment of the outstanding principal amount of the
Revolving Advances (including the payment or cash collateralization of the
Letter of Credit Exposure);
     Sixth, to the ratable payment of all reasonable out-of-pocket costs and
expenses (including reasonable attorneys’ fees), accrued fees and interest, and
any other amounts owing with respect to the Obligations relating to Banking
Services;
     Seventh, to all other Obligations and other obligations which shall have
become due and payable under this Agreement and the Other Loan Documents and not
repaid pursuant to clauses “First” through “Sixth” above; and

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     Eighth, to the payment of the surplus, if any, to the Loan Parties or
whoever may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders and the Issuer shall receive (so
long as it is not a Defaulting Lender) an amount equal to its pro rata share
(based on the proportion that then outstanding Advances held by such Lender or
the Issuer bears to the aggregate then outstanding Advances) of amounts
available to be applied pursuant to clauses “Third”, “Fourth”, “Fifth”, “Sixth”
and “Seventh” above; and (iii) to the extent that any amounts available for
distribution pursuant to clause “Fifth” above are attributable to the Letter of
Credit Exposure, such amounts shall be held by the Agent in a cash collateral
account and applied (A) first, to reimburse the Issuer from time to time for any
drawings under such Letters of Credit and (B) then, following the expiration of
all Letters of Credit, to all other obligations of the types described in
clauses “Fifth”, “Sixth” and “Seventh” above in the manner provided in this
Section 11.7.
XII. EFFECTIVE DATE; TERMINATION
     12.1 Effective Date.
          This Agreement shall become effective on the date and as of the time
on and as of which the Loan Parties, the Agent, each Lender and the Issuer shall
have signed a copy hereof (whether the same or different copies) and shall have
delivered the executed original to the Agent at the address specified in
Section 15.8. As of such time, this Agreement shall be binding upon and inure to
the benefit of the Loan Parties, the Agent, each Lender and the Issuer, and
their respective successors and assigns, except that no Loan Party shall have
any right to assign its rights hereunder or any interest herein except as set
forth in Section 15.5(a).
      12.2 Termination.
          The Loan Parties may terminate this Agreement at any time upon sixty
(60) days’ prior written notice to the Agent and upon payment in full of the
Obligations (including all amounts due pursuant to Article III). The termination
of this Agreement shall not affect any Loan Party’s, the Agent’s, any Lender’s
or the Issuer’s rights, or any of the Obligations having their inception prior
to the effective date of such termination, and the provisions hereof shall
continue to be fully operative until all transactions entered into, rights or
interests created or Obligations have been fully disposed of, concluded or
liquidated. The security interests, Liens and rights granted to the Agent, the
Lenders and the Issuer hereunder and the financing statements filed hereunder
shall continue in full force and effect, notwithstanding the termination of this
Agreement or the fact that the Loan Account may from time to time have a zero or
negative balance, until all of the Obligations (other than Obligations with
respect to Section 15.7) have been paid or performed in full after the
termination of this Agreement or any Loan Party or any Subsidiary thereof has
furnished the Agent, the Lenders and the Issuer with an indemnification
satisfactory to the Agent, the Lenders and the Issuer with respect thereto.
Accordingly, each Loan Party waives any rights which it may have under the
Uniform Commercial Code to demand the filing of termination statements with
respect to the Collateral, and the Agent shall not be required to send such
termination statements to the Loan Parties, or to file them with any filing
office, unless and until this Agreement shall have been terminated in accordance
with its terms and all Obligations (other than Obligations with respect to
Section 15.7) paid in full in immediately available funds. All representations,
warranties, covenants, waivers and agreements contained herein shall survive
termination hereof until all Obligations are paid or performed in full. All
indemnification obligations contained herein shall survive the termination
hereof and payment in full of the Obligations.

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XIII. AGENCY PROVISIONS.
      13.1 Appointment.
          Each Lender and the Issuer hereby designates NCBC to act as the Agent
for such Lender and the Issuer under this Agreement and the Other Loan
Documents. Each Lender and the Issuer hereby irrevocably authorizes the Agent to
take such action on its behalf under the provisions of this Agreement and the
Other Loan Documents and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto and the Agent shall hold all Collateral, payments of
principal and interest, fees, charges and collections (without giving effect to
any collection days) received pursuant to this Agreement, for the ratable
benefit of the Secured Creditors. The Agent may perform any of its duties
hereunder by or through its agents or employees. As to any matters not expressly
provided for by this Agreement (including collection of the Notes) the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding; provided, however, that the Agent shall
not be required to take any action which exposes the Agent to liability or which
is contrary to this Agreement or the Other Loan Documents or applicable law
unless the Agent is furnished with an indemnification reasonably satisfactory to
the Agent with respect thereto.
          The Agent shall also act as the “collateral agent” under this
Agreement and the Other Loan Documents, and each of the Lenders and the Issuer
hereby irrevocably appoints and authorizes the Agent to act as the agent of such
Lender and Issuer for purposes of acquiring, holding and enforcing any and all
Liens on Collateral granted by any of the Loan Parties to secure any of the
Obligations, together with such powers and discretion as are reasonably
incidental thereto. In this connection, the Agent, as “collateral agent” and any
agents or employees appointed by such Agent pursuant to this Section for
purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under this Agreement or the Other Loan Documents, or for
exercising any rights and remedies thereunder at the direction of such Agent),
shall be entitled to the benefits of all provisions of this Article XIII and
Article XV as if set forth in full herein with respect thereto.
          In relation to all Liens and Collateral constituted under the laws of
England or Scotland, the Agent hereby declares that it holds such Liens and
Collateral (in addition to, and not in substitution for, its capacity as
“collateral .agent”) as trustee for itself, the Lenders and the Issuer. Each of
the Lenders, the Issuer and the Loan Parties herby appoints the Agent as trustee
for that purpose. The perpetuity period applicable to the trust constituted by
this declaration shall be eighty (80) years. References to the Agent in this
Agreement include a reference to the Agent acting as security trustee in respect
of all Liens and Collateral constituted under the laws of England or Scotland.
      13.2 Nature of Duties.
          The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and the Other Loan Documents. Neither the
Agent nor any of its officers, directors, employees or agents shall be
(i) liable for any action taken or omitted by them as such hereunder or in
connection herewith, unless caused by their gross negligence or willful
misconduct or (ii) responsible in any manner for any recitals, statements,
representations or warranties made by any Loan Party or any Subsidiary thereof
or, in each case, any officer thereof, contained in this Agreement, or in any of
the Other Loan Documents or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any of the Other Loan Documents, as the

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case may be, or for the value, validity, effectiveness, genuineness, due
execution, enforceability or sufficiency of this Agreement, or any of the Other
Loan Documents or for any failure of any Loan Party to perform its obligations
hereunder. The Agent shall not be under any obligation to any Lender or the
Issuer to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any of the
Other Loan Documents, or to inspect the properties, books or records of any Loan
Party or any Subsidiary thereof. The Agent shall not be responsible to any
Lender or the Issuer for the financial condition of any Loan Party or any
Subsidiary thereof, or be required to make any inquiry concerning the financial
condition of any Loan Party or any Subsidiary thereof, or the existence of any
Event of Default or any Default. The duties of the Agent as respects the
Advances to the Borrowers shall be mechanical and administrative in nature; the
Agent shall not have by reason of this Agreement a fiduciary relationship in
respect of any Lender or the Issuer, and nothing in this Agreement, expressed or
implied, is intended to or shall be so construed as to impose upon the Agent any
obligations in respect of this Agreement except as expressly set forth herein.
      13.3 Lack of Reliance on Agent and Resignation.
          Independently and without reliance upon the Agent, any other Lender or
the Issuer, each Lender and the Issuer has made and shall continue to make
(i) its own independent investigation of the financial condition and affairs of
the Loan Parties in connection with the making and the continuance of the
Advances hereunder and the taking or not taking of any action in connection
herewith and (ii) its own appraisal of the creditworthiness of the Loan Parties.
The Agent shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Lender or the Issuer with any credit or other
information with respect thereto, whether coming into its possession before
making of the Advances or at any time or times thereafter except as shall be
provided by any Loan Party pursuant to the terms hereof.
          The Agent may resign on thirty (30) days’ written notice to each of
the Lenders, the Issuer and the Borrowing Agent and upon such resignation, the
Required Lenders will promptly designate a successor Agent reasonably
satisfactory to the Loan Parties. Any such successor of the Agent shall succeed
to the rights, powers and duties of the Agent, and the term “Agent” shall mean
such successor agent effective upon its appointment, and the former the Agent’s
rights, powers and duties as the Agent shall be terminated, without any other or
further act or deed on the part of such former Agent. After the Agent’s
resignation as the Agent, the provisions of this Article XIV shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Agent under this Agreement.
      13.4 Certain Rights of Agent.
          If the Agent shall request instructions from the Lenders and the
Issuer with respect to any act or action (including failure to act) in
connection with this Agreement or any Other Loan Document, the Agent shall be
entitled to refrain from such act or taking such action unless and until the
Agent shall have received instructions from the Required Lenders; and the Agent
shall not incur liability to any Person by reason of so refraining. Without
limiting the foregoing, the Lenders and the Issuer shall not have any right of
action whatsoever against the Agent as a result of its acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders.
      13.5 Reliance.
     The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cablegram, order or Other Loan Document
or telephone message believed by it to be genuine and correct and to have been
signed, sent or made by the proper person or entity, and, with respect to

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all legal matters pertaining to this Agreement and the Other Loan Documents and
its duties hereunder, upon advice of counsel selected by it. The Agent may
employ agents and attorneys-in-fact and shall not be liable for the default or
misconduct of any such agents or attorneys-in-fact selected by the Agent with
reasonable care.
      13.6 Notice of Default.
          The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder or under the Other Loan
Documents, unless the Agent has received notice from a Lender, the Issuer or a
Loan Party referring to this Agreement or the Other Loan Documents, describing
such Default or Event of Default and stating that such notice is a “notice of
default”. In the event that the Agent receives such a notice, the Agent shall
give notice thereof to the Lenders and the Issuer. The Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided, however, that, unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as is permitted hereunder or under
applicable law and as it shall deem advisable in the best interests of the
Lenders and the Issuer.
      13.7 Posting to an Approved Electronic Platform.
          Each of the Lenders, the Issuer and the Loan Parties agree that the
Agent may, but shall not be obligated to, make the Approved Electronic
Communications available to the Lenders and Issuer by posting such Approved
Electronic Communications on IntraLinks ™ , Syndtrack™ or a substantially
similar electronic platform chosen by the Agent to be its electronic
transmission system (the “Approved Electronic Platform”).
          Although the Approved Electronic Platform and its primary web portal
are secured with generally-applicable security procedures and policies
implemented or modified by the Agent from time to time and the Approved
Electronic Platform is secured through a single-user-per-deal authorization
method whereby each user may access the Approved Electronic Platform only on a
deal-by-deal basis, each of the Lenders, the Issuer and the Loan Parties
acknowledges and agrees that the distribution of material through an electronic
medium is not necessarily secure and that there are confidentiality and other
risks associated with such distribution. In consideration for the convenience
and other benefits afforded by such distribution and for the other consideration
provided hereunder, the receipt and sufficiency of which are hereby
acknowledged, each of the Lenders, the Issuer and the Loan Parties hereby
approves distribution of the Approved Electronic Communications through the
Approved Electronic Platform and understands and assumes the risks of such
distribution. Each of the Lenders, the Issuer, and the Loan Parties agrees that
the Agent may, but (except as may be required by applicable law) shall not be
obligated to, store the Approved Electronic Communications on the Approved
Electronic Platform in accordance with the Agent’s generally-applicable document
retention procedures and policies.
THE APPROVED ELECTRONIC PLATFORM AND THE APPROVED ELECTRONIC COMMUNICATIONS ARE
PROVIDED “AS IS” AND “AS AVAILABLE”. The Agent and any of its Affiliates or any
of their respective officers, directors, employees, agents, advisors or
representatives do not warrant the accuracy, adequacy or completeness of the
Approved Electronic Communications or the Approved Electronic Platform and
expressly disclaim liability for errors or omissions in the Approved Electronic
Platform. No warranty of any kind, express, implied or statutory, including any
warranty of merchantability, fitness for a particular purpose, non-infringement
of third party rights or freedom from viruses or other code defects, is made by
the Agent or such Affiliates or such respective officers, directors, employees,
agents, advisors or

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representatives in connection with the Approved Electronic Platform or the
Approved Electronic Communications.
      13.8 Indemnification of Agent and Issuer.
          To the extent the Agent or the Issuer is not reimbursed and
indemnified by the Loan Parties (or any other Person on any Loan Party’s
behalf), each Lender will reimburse and indemnify the Agent or the Issuer, as
applicable, in accordance with their Percentages, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent or the Issuer in
performing its duties hereunder, or in any way relating to or arising out of
this Agreement or any Other Loan Document; provided, however, that, the Lenders
shall not be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of the Agent or the
Issuer, as applicable.
      13.9 Agent in its Individual Capacity.
          With respect to the obligation of the Agent to lend under this
Agreement, the Advances made by it shall have the same rights and powers
hereunder as any other Lender and as if it were not performing the duties as the
Agent specified herein; and the term “Lender” or any similar term shall, unless
the context clearly otherwise indicates, include the Agent in its individual
capacity as a Lender. The Agent may engage in business with any Loan Party or
any Subsidiary thereof as if it were not performing the duties specified herein,
and may accept fees and other consideration from any Loan Party or any
Subsidiary thereof for services in connection with this Agreement or otherwise
without having to account for the same to the Lenders.
      13.10 Delivery of Documents.
          Whenever the Agent receives financial statements required under
Section 9.7 and Section 9.8 and\or a Borrowing Base Certificate pursuant to the
terms of this Agreement, the Agent will promptly furnish such documents and
information to the Lenders and the Issuer.
      13.11 No Reliance on Agent’s Customer Identification Program.
          Each of the Lenders and the Issuer acknowledges and agrees that
neither such Lender nor the Issuer, nor any of their Affiliates, participants or
assignees, may rely on the Agent to carry out such Lender’s, Issuer’s,
Affiliate’s, participant’s or assignee’s customer identification program, or
other obligations required or imposed under or pursuant to the USA Patriot Act
or the regulations thereunder, including the regulations contained in 31 CFR
103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other
Anti-Terrorism Law, including any programs involving any of the following items
relating to or in connection with any of the Loan Parties, their Affiliates or
their agents, this Agreement, the Other Loan Documents or the transactions
hereunder or contemplated hereby: (i) any identity verification procedures,
(ii) any record keeping, (iii) comparisons with government lists, (iv) customer
notices or (v) other procedures required under the CIP Regulations or such other
laws.
      13.12 Agent May File Proofs of Claim.
          In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Loan Party, the Agent (irrespective of
whether the principal of any Advance or any Obligation with respect to a Letter
of Credit shall then be due and payable as herein expressed or by

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declaration or otherwise and irrespective of whether the Agent shall have made
any demand on any Borrower) shall be entitled and empowered, by intervention in
such proceeding or otherwise:
          (a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Advances, Obligations owing with
respect to a Letter of Credit and all other Obligations that are owing and
unpaid and to file such Other Loan Documents as may be necessary or advisable in
order to have the claims of the Lenders, the Issuer, the Agent and the other
Secured Creditors (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders, the Issuer, the Agent and
the other Secured Creditors and their respective agents and counsel and all
other amounts due the Lenders, the Issuer and the Agent under Sections 3.4, 3.5
and 15.12) allowed in such judicial proceeding; and
          (b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the Issuer to make such payments to the Agent and, in the event
that the Agent shall consent to the making of such payments directly to the
Lenders and the Issuer, to pay to the Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Agent and its agents
and counsel, and any other amounts due the Agent under Sections 3.5 and 15.12.
          Nothing contained herein shall be deemed to authorize the Agent to
authorize or consent to or accept or adopt on behalf of any Lender, any Issuer
or any other Secured Creditor any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lender,
any Issuer or any other Secured Creditor to authorize the Agent to vote in
respect of the claim of any Lender, any Issuer or any other Secured Creditor in
any such proceeding.
      13.13 Collateral and Guaranty Matters.
          The Lenders and the Issuer irrevocably authorize the Agent, at its
option and in its Permitted Discretion:
          (a) to release any Lien on any property granted to or held by the
Agent under this Agreement or any Other Loan Document (i) upon termination of
the aggregate Revolving Commitments and payment in full of all Obligations
(other than contingent indemnification obligations not yet accrued and payable),
and the expiration or termination of all Letters of Credit, (ii) that is sold or
to be sold as part of or in connection with any sale permitted hereunder or
under any Other Loan Document, or (iii) subject to Section 15.3(v), if approved,
authorized or ratified in writing by the Required Lenders;
          (b) to release any Guarantor from its obligations under the applicable
Guaranty if such Person ceases to be a Subsidiary as a result of a transaction
permitted hereunder;
          (c) to subordinate any Lien on any property granted to or held by the
Agent hereunder or under any Other Loan Document to the holder of any Lien on
such property that is permitted by Section 7.8(d) and Section 7.2 pursuant to
clause (f) of the definition of Permitted Encumbrances; and
          (d) upon request by the Agent at any time, the Required Lenders (or,
if necessary, all Lenders) will confirm in writing the authority of the Agent to
release its interest in

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particular types or items of property, or to release any Guarantor from its
obligations under the applicable Guaranty pursuant to this Section 13.13. In
each case as specified in this Section 13.13, the Agent will, at the Parent’s
expense, execute and deliver to the applicable Loan Party such documents as such
Loan Party may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted hereunder and under
the Other Loan Documents, or to release such Guarantor from its obligations
under the applicable Guaranty, in each case in accordance with the terms of the
Other Loan Documents and this Section 13.13.
      13.14 No Independent Action.
          Notwithstanding any other provision of this Agreement, each Lender
agrees that it shall not, unless specifically requested to do so by the Agent,
take any action to protect or enforce its rights arising out of this Agreement
or the Other Loan Documents, it being the intent of the Lenders that any such
action to protect or enforce rights under this Agreement and the Other Loan
Documents shall be taken in concert and at the direction or with the consent of
the Agent or the Required Lenders.

XIV.   BORROWING AGENCY; BORROWERS AND OTHER LOAN PARTIES JOINTLY AND SEVERALLY
LIABLE.

      14.1 Borrowing Agency Provisions.
          (a) Each Borrower hereby irrevocably designates the Borrowing Agent to
be its attorney and agent and in such capacity to borrow, sign and endorse
notes, and execute and deliver all notices, instruments, documents, writings and
further assurances now or hereafter required hereunder, on behalf of such
Borrower or the Borrowers, and hereby authorizes the Agent to pay over or credit
all proceeds of Advances hereunder in accordance with the requests of the
Borrowing Agent.
          (b) The handling of this credit facility as a co-borrowing facility
with a borrowing agent in the manner set forth in this Agreement is solely as an
accommodation to the Borrowers and at their request. Neither the Agent, any
Lender nor the Issuer shall incur liability to the Loan Parties as a result
thereof. To induce the Agent, the Lenders and the Issuer to do so, and in
consideration thereof, each Loan Party hereby indemnifies the Agent, each Lender
and the Issuer and holds the Agent, each Lender and the Issuer harmless from and
against any and all liabilities, expenses, losses, damages and claims of damage
or injury asserted against the Agent, any Lender or the Issuer by any Person
arising from or incurred by reason of the handling of the financing arrangements
of the Loan Parties as provided herein, reliance by the Agent, any Lender or the
Issuer on any request or instruction from the Borrowing Agent or any other
action taken by the Agent, any Lender or the Issuer with respect to this
Section 14.1 except due to willful misconduct or gross negligence by the
indemnified party. This Section 14.1 shall survive the termination of this
Agreement.
      14.2 Cross-Obligations of Loan Parties.
          (a) To induce the Lenders to make the Advances to the Borrowers and
the Issuer to issue Letters of Credit, and in consideration thereof, each of the
Domestic Borrowers hereby unconditionally and irrevocably: (a) agrees to be
jointly and severally liable for the due and punctual payment in immediately
available funds of all Obligations (whether by acceleration or otherwise) of the
Borrowers, (b) agrees to be jointly and severally liable to the Issuer for the
due and punctual payment in immediately available funds of all reimbursement
obligations and (c) agrees jointly and severally to pay any and all reasonable
expenses which may be incurred by the Agent in enforcing its rights with respect
to such Obligations of the Borrowers. To induce

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the Lenders to make the Advances to the Borrowers and the Issuer to issue
Letters of Credit, and in consideration thereof, each Guarantor who is a
Domestic Obligor hereby (i) unconditionally and irrevocably guarantees, the
punctual payment when due, whether at stated maturity, by acceleration or
otherwise, of all Obligations of the other Loan Parties, of every type and
description and (ii) agrees jointly and severally to pay any and all reasonable
expenses which may be incurred by the Agent in enforcing its rights with respect
to such guaranty. The maximum liability of a Domestic Obligor for its guaranty
under this Section (including, to the extent that the agreement by each Domestic
Borrower to be jointly and severally liable for the Obligations of the Borrowers
is construed to be a guaranty of the Obligations of any other Borrower) shall be
the greatest amount which after taking into consideration all other valid and
enforceable debts and liabilities of such Domestic Obligor, an applicable court
has determined (after any appeals) would not render such Domestic Obligor
insolvent, unable to pay its debts as they become due, inadequately capitalized
for the business which it intends to conduct (in all such cases, within the
meaning of Section 548 of the Bankruptcy Code, 11 U.S.C. §§101, et. seq., or any
other similar state law), or unable to pay a judgment rendered upon a claim that
is the subject of an action or proceeding pending at the time when such guaranty
(or the agreement to be so jointly and severally liable) is incurred or
increased. In no event shall the UK Borrowers or any other Foreign Subsidiary of
Parent guaranty the obligations of any Domestic Borrower hereunder or under the
Other Loan Documents. In addition, no assets or Collateral of the UK Borrowers
shall secure any Obligations other than Obligations of the UK Borrowers.
          (b) Such guaranty (or, if applicable, the agreement to be so jointly
and severally liable) shall be irrevocable, unconditional and absolute and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected, except for payment of such Obligations and to
the extent permitted by applicable law, by: (i) any extension, renewal,
settlement, compromise, waiver or release in respect of any Obligation under
this Agreement or any Other Loan Document by operation of law or otherwise;
(ii) any modification or amendment of or supplement to this Agreement or any
Other Loan Document; (iii) any modification, amendment, waiver, release,
non-perfection or invalidity of any direct or indirect security, or of any
guarantee or other liability of any third party, of the Obligations with respect
to which the such guaranty (or, if applicable, agreement to be jointly and
severally liable) relates; (iv) any change in the corporate existence,
structure, or ownership of, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting such Domestic Obligor or its assets or any
resulting release or discharge of any of the Obligations; (v) the existence of
any claim, set-off or other rights which any Loan Party may have at any time
against any Lender, the Issuer or any other Person, whether or not arising in
connection with this Agreement or any Other Loan Document; (vi) any invalidity
or unenforceability relating to or against any Loan Party thereof for any reason
of this Agreement or any Other Loan Document or any provision of applicable law
or regulation purporting to prohibit the payment by any Loan Party of any
Obligation under this Agreement or any Other Loan Document; or (vii) to the
extent permitted by applicable law, any other act or omission to act or delay of
any kind by any Loan Party, the Agent, the Lenders, the Issuer or any other
Person or any other circumstance whatsoever that might, but for the provisions
of this paragraph, constitute a legal or equitable discharge of such Domestic
Obligor’s guaranty (or, if applicable, agreement to be jointly and severally
liable) hereunder. In no event shall the UK Borrowers or any other Foreign
Subsidiary of Parent guaranty the obligations of any Domestic Borrower hereunder
or under the Other Loan Documents.
          (c) The agreement of each Domestic Obligor under this Section 14.2
(including the agreement of each Domestic Borrower to be jointly and severally
liable for the Obligations of the other Borrowers) shall remain in full force
and effect until all Commitments of the Lenders and the obligations of the
Issuer are terminated and the Obligations under this Agreement or any Other Loan
Document have been paid in full. If at any time any payment of any amount
payable by any other Loan Party under this Agreement and the Other Loan
Documents is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of such Loan Party or otherwise, the
agreement of each Domestic

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Obligor under this Section (including the agreement of each Domestic Borrower to
be so jointly and severally liable for the Obligations of the other Borrowers)
shall be reinstated at such time as though such payment had become due but had
not been made at such time. This Section 14.2 shall survive the termination of
this Agreement until the payment in full of all amounts payable under this
Agreement and any Other Loan Documents.
          (d) No Domestic Obligor shall be entitled to enforce any remedy which
the Agent, any Lender or the Issuer now has or may hereafter have against any of
the other Loan Party, in respect of all or any part of the Obligations paid by
such Domestic Obligor pursuant to its guaranty hereunder (or its agreement to be
jointly and severally liable) until all of the Obligations shall have been fully
and finally paid to the Agent for the benefit of the Secured Creditors and all
Commitments of the Lenders and the Issuer to the Borrowers have terminated. Each
such Domestic Obligor hereby waives any benefit of, and any right to participate
in, any security or collateral given to the Agent to secure payment of the
Obligations. Each such Domestic Obligor also waives all setoffs and
counterclaims and all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, and notices
of acceptance of this agreement to guaranty the Obligations (and to be jointly
and severally liable, if applicable). Each such Domestic Obligor waives all
notices of the existence, creation or incurring of additional Obligations by any
other Loan Party, and also waives all notices that the principal amount, or any
portion thereof, and/or any interest on any instrument or document evidencing
all or any part of the Obligations is due, notices of any and all proceedings to
collect all or any part of such Obligations, and, to the extent permitted by
law, notices of exchange, sale, surrender or other handling of any Collateral
given to the Agent to secure payment of the Obligations. If acceleration of the
time for payment of any amount payable by any Loan Party under this Agreement or
any Other Loan Document in respect of Obligations is stayed upon the insolvency,
bankruptcy or reorganization of any Loan Party, all such amounts otherwise
subject to acceleration under the terms of this Agreement shall nonetheless be
payable by each of the other Loan Parties who are a Domestic Obligor under their
agreement to guaranty the Obligations (and, if applicable, to be jointly and
severally liable), to the extent permitted by applicable law.
      14.3 Rights of Subrogation.
          (a) If any Domestic Obligor makes a payment in respect of
Section 14.2, it shall be subrogated to the rights, if any, of the Lenders and
Issuer and other payees against the other Loan Parties with respect to such
payment and shall have the rights of contribution set forth below against the
other Loan Parties; provided, however, that such Domestic Obligor shall not
enforce its rights to any payment by way of subrogation or by exercising its
right of contribution until all the Obligations owing hereunder shall have been
finally paid in full and may not under applicable insolvency laws be required to
be repaid, and all Commitments of the Lenders and all obligations of the Issuer
to issue Letters of Credit hereunder have been terminated. Subject to all of the
Obligations hereunder having been finally paid in full and not subject to
required repayment under applicable insolvency laws and all Commitments of the
Lenders hereunder and all obligations of the Issuer to issue Letters of Credit
hereunder having terminated, each Domestic Obligor shall make, and agrees with
each of the other Domestic Obligors (and the successors and assigns of such
Domestic Obligors) to make, payments in respect of the Obligations of such Loan
Parties to which such other Domestic Obligors are subrogated by reason of making
payment pursuant to Section 14.2, or contribution payments to which such other
Domestic Obligors are entitled, such that, taking into account all such payments
on account of subrogation or contribution rights:
     (i) Each Domestic Obligor shall have paid to the other Domestic Obligors on
account of such subrogation and contribution rights (A) all Obligations the
benefit of which has been received by such Domestic Obligor or which relate to
Obligations the

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benefit of which has been received by such Domestic Obligor or (B) if the
aggregate of all such payments by all Domestic Obligors to all other Domestic
Obligors would exceed the outstanding Obligations, such Domestic Obligor’s pro
rata share of the outstanding Obligations , in accordance with the amount of the
benefit received by such Domestic Obligor as described under subsection
(A) hereinabove; and
     (ii) If there remain Obligations unpaid after application of the payments
referred to above, the deficiency shall be shared among the Domestic Obligors
pro rata in proportion to their respective net worth on the Closing Date of this
Agreement.
XV. MISCELLANEOUS.
      15.1 Governing Law.
          This Agreement and the Other Loan Documents and the respective rights
and obligations of the parties thereunder shall be governed by and construed in
accordance with the internal laws of the State of Ohio (without regard to any
conflict of law principles thereof and except to the extent that perfection of
the Agent’s security interests and Liens and the effect thereof are otherwise
governed by the Uniform Commercial Code of any other jurisdiction).
      15.2 Entire Understanding.
          This Agreement and the documents executed concurrently herewith
contain the entire understanding among the Loan Parties, the Agent, each Lender
and the Issuer and supersede all prior agreements and understandings, if any,
relating to the subject matter hereof. Any promises, representations, warranties
or guarantees not herein contained and hereinafter made shall have no force and
effect unless in writing, signed by each Loan Party’s, the Agent’s, each
Lender’s and the Issuer’s respective officers. Each Loan Party acknowledges that
it has been advised by counsel in connection with the execution of this
Agreement and the Other Loan Documents and is not relying upon oral
representations or statements inconsistent with the terms and provisions of this
Agreement.
      15.3 Amendments.
          None of this Agreement, any Other Loan Document, or, in each case, any
portion or provisions thereof, may be changed, modified, amended, waived,
supplemented, discharged, cancelled or terminated orally or by any course of
dealing, or in any manner other than by an agreement in writing, signed by the
party to be charged. The Required Lenders, the Agent with the consent in writing
of the Required Lenders, and the Loan Parties and their Subsidiaries (as
applicable), may, subject to the provisions of this Section 15.3, from time to
time enter into written supplemental agreements to this Agreement or the Other
Loan Documents executed by such parties for the purpose of adding or deleting
any provisions or otherwise changing, varying, waiving or otherwise amending in
any manner the rights of the Lenders, the Issuer, the Agent, the Loan Parties or
their Subsidiaries thereunder or the conditions, provisions or terms thereof, or
consenting to any deviation therefrom, or waiving any Event of Default
thereunder, but only to the extent specified in such written agreements;
provided, however that, the consent of the Issuer must be obtained with respect
to any amendment, waiver of or consent with respect to Section 2.9 or any other
provisions the amendment or waiver of which would adversely affect the Issuer
and, provided, further, that no such supplemental agreement shall, without the
consent of all Lenders:
     (i) increase any Commitment of any Lender or increase the Maximum Revolving
Advance Amount.

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     (ii) alter the definition of the term Revolving Percentage.
     (iii) Except to the extent permitted by Section 1.9(b), extend the maturity
of any Note or, without the consent of the affected Person, the due date for any
amount payable hereunder, or decrease the rate of interest or reduce any fee
payable by any Loan Party to the Lenders or the Issuer pursuant to this
Agreement.
     (iv) alter the definition of the term Required Lenders or alter, amend or
modify this Section 15.3.
     (v) release all or substantially all of the Collateral.
     (vi) change the rights and duties of the Agent.
     (vii) permit any Revolving Advance to be made if, after giving effect
thereto, (x) the sum of the Revolving Advances outstanding plus the Letter of
Credit Exposure would exceed (y) (A) the Maximum Revolving Advance Amount on any
Business Day or (B) the Aggregate Formula Amount for more than thirty
(30) consecutive Business Days or one hundred five percent (105%) of the
Aggregate Formula Amount on any Business Day.
     (viii) increase the Advance Rates above the Advance Rates in effect on the
Closing Date or increase the limit on advances with respect to Eligible UK
Inventory, Eligible Domestic Inventory or Eligible Domestic Inventory located in
Mexico.
     (ix) release any Person from the Obligations under this Agreement, any
applicable Guaranty, if any, or any Other Loan Document.
     (x) alter, amend or modify Section 11.7.
Any such supplemental agreement shall apply equally to each Lender and the
Issuer and shall be binding upon the Lenders, the Issuer, the Agent and all
future holders of the Obligations. In the case of any waiver, the Loan Parties,
their Subsidiaries, the Agent, the Lenders and the Issuer shall be restored to
their former positions and rights, and any Event of Default waived shall be
deemed to be cured and not continuing, but no waiver of a specific Event of
Default shall extend to any subsequent Event of Default (whether or not the
subsequent Event of Default is the same as the Event of Default which was
waived), or impair any right consequent thereon.
          (b)Notwithstanding the foregoing, the Loan Parties may, with the
written consent of the Agent, from time to time amend or supplement the
Schedules to this Agreement (other than Schedules 7.2, 7.3, 7.4, 7.5 and 7.8).
      15.4 Special and Protective Agent Advances.
          (a) Notwithstanding (a) the existence of a Default or an Event of
Default, (b) that any of the other applicable conditions precedent set forth in
Section 8.2 have not been satisfied or (c) any other provision of this
Agreement, the Agent may at its discretion and without the consent of the
Required Lenders, voluntarily permit the outstanding Revolving Advances, plus
the Letter of Credit Exposure at any time to exceed one hundred five percent
(105%) of the Aggregate Formula Amount for up to thirty (30) consecutive
Business Days provided that such outstanding Advances do not exceed the Maximum
Revolving Advance Amount. For purposes of the preceding sentence, the discretion
granted to the Agent hereunder shall not preclude involuntary overadvances that
may result from time to time due to the fact that either of the UK Formula
Amount or the Aggregate Formula Amount were unintentionally

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exceeded for any reason, including Collateral previously deemed to be either
“Eligible UK Receivables”, “Eligible Domestic Receivables”, “Eligible UK
Inventory” or “Eligible Domestic Inventory”, as applicable, becomes ineligible
or collections of Receivables applied to reduce outstanding Revolving Advances
are thereafter returned for insufficient funds or overadvances are made to
protect or preserve the Collateral. In the event the Agent involuntarily permits
either the outstanding Revolving Advances to exceed the Aggregate Formula Amount
by more than five percent (5%), the Agent shall use its efforts to have the
Borrowers decrease any such excess in as expeditious a manner as is practicable
under the circumstances and not inconsistent with the reason for such excess.
Revolving Advances made after the Agent has determined the existence of
involuntary overadvances shall be deemed to be involuntary overadvances and
shall be decreased in accordance with the preceding sentence.
          (b) In addition to the discretionary voluntary Revolving Advances
permitted above in Section 15.4(a), the Agent is hereby authorized by each Loan
Party, the Lenders and the Issuer, from time to time in the Agent’s sole
discretion (a) after the occurrence and during the continuation of an Event of
Default or (b) at any time that any of the other applicable conditions precedent
set forth in Section 8.2 have not been satisfied, to make protective Revolving
Advances to the Borrowers on behalf of the Lenders which the Agent, in its
Permitted Discretion, deems necessary or desirable (i) to preserve or protect
the Collateral, or any portion thereof, (ii) to enhance the likelihood of, or
maximize the amount of, repayment of the Advances and other Obligations, or
(iii) to pay any other amount chargeable to the Loan Parties pursuant to the
terms of this Agreement; provided, that at any time after giving effect to any
such Revolving Advances, the outstanding Revolving Advances do not exceed the
lesser of (X) one hundred five percent (105%) of the Aggregate Formula Amount or
(Y) the Maximum Revolving Advance Amount less the Letter of Credit Exposure.
      15.5 Transfers and Assignments; Replacement of Certain Lenders.
          (a) Successors and Assigns. 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, except that no Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender. No Lender may assign or otherwise transfer any
of its rights or obligations hereunder except: (i) to an Eligible Assignee in
accordance with the provisions of Section 15.5(b), (ii) by way of participation
in accordance with the provisions of Section 15.5(d) or (iii) by way of pledge
or assignment of a security interest subject to the restrictions of
Section 15.5(e) (and any other attempted assignment or transfer by any party
hereto 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, Participants to the
extent provided in Section 15.5(d) and, to the extent expressly contemplated
hereby, the Affiliates of each of the Agent, the Lenders and the respective
directors, officers, employees, agents and advisors of such Affiliates of each
of the Agent, the Lenders) any legal or equitable right, remedy or claim under
or by reason of this Agreement.
          (b) Transfer of Commitments. Any Lender may at any time assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of any Commitment hereunder and the
Advances at the time owing to such Lender); provided, however that: (i) except
in the case of an assignment of the entire remaining amount of the assigning
Lender’s Revolving Commitment hereunder and the Advances at the time owing to
such Lender or in the case of an assignment to a Lender or an Affiliate of a
Lender or an Approved Fund with respect to a Lender, the aggregate amount of the
Revolving Commitment (which for this purpose includes Revolving Advances
outstanding thereunder) or, if the Revolving Commitment is not then in effect,
the principal outstanding balance of the Advances of the assigning Lender
subject to each such assignment (determined as

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of the date the Assignment and Assumption with respect to such assignment is
delivered to the Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date) shall not be less than Five Million Dollars
($5,000,000), in the case of any assignment in respect of Revolving Advances
unless each of the Agent and, so long as no Default or Event of Default has
occurred and is continuing, the Borrowing Agent otherwise consents (each such
consent not to be unreasonably withheld or delayed); (ii) 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 with respect to
the Advances or the Commitment hereunder assigned, except that this clause
(ii) shall not prohibit any Lender from assigning all or a portion of its rights
and obligations in or among separate Advances on a non-pro rata basis; (iii) any
assignment of a Commitment or Advance hereunder must be approved by the Agent
and the Issuer unless the Person that is the proposed assignee is itself a
Lender with an existing Commitment or Advance, as applicable (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee); and (iv) the
parties to each assignment shall execute and deliver to the Agent an Assignment
and Assumption, together with a processing and recordation fee of Three Thousand
Five Hundred Dollars ($3,500), and the Eligible Assignee, if it shall not be a
Lender, shall deliver to the Agent an Administrative Questionnaire. Subject to
acceptance and recording thereof by the Agent pursuant to Section 15.5(c), from
and after the effective date specified in each Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning 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 Section 15.5
with respect to facts and circumstances occurring prior to the effective date of
such assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this Section 15.5(b) 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 Section 15.5(d).
          (c) Maintenance of Register. The Agent, acting solely for this purpose
as an agent of the Borrowers, shall maintain at its office in Cleveland, Ohio, a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, the Commitments of, and
principal amounts of the Advances owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrowers, the Agent 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 Borrowers and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.
          (d) Participations. Any Lender may at any time, without the consent
of, or notice to, any Loan Party or the Agent, sell participations to any Person
(other than a natural person or any Loan Party, its Subsidiaries or any of their
Affiliates) (each, a “Participant”) in all or a portion of such Lender’s rights
and/or obligations under this Agreement (including all or a portion of its
Commitments and/or the Advances owing to it); provided, however, 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) the Loan Parties, the Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided, further, that such agreement or instrument may
provide that such Lender will not, without the consent of the

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Participant, agree to any amendment, modification or waiver described in
Section 15.3 that affects such Participant. Each Loan Party agrees that each
Participant shall be entitled to the benefits of Article III, and Article XV to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section 15.5. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 11.3 as though it
were a Lender, provided such Participant agrees to be subject to Section 2.10(c)
as though it were a Lender.
A Participant shall not be entitled to receive any greater payment under this
Section 15.5(d) than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant unless the sale of
the participation to such Participant is made with the Borrowers’ prior written
consent. A Participant that is not incorporated under the laws of the United
States or a state thereof shall not be entitled to the benefits of Section 2.5
unless the Borrowers are notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrowers, to comply with
Section 3.13 as though it were a Lender.
          (e) Pledge of Interests. 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; provided, however, that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
          (f) Replacement of Notes. Each Borrower shall execute and deliver:
(i) to the Agent, the transferor and the transferee, any consent or release (of
all or a portion of the obligations of the transferor) to be delivered in
connection with each Assignment and Assumption, (ii) if a Lender’s entire
Revolving Commitment and all of its Revolving Advances, have been transferred to
the transferee, appropriate replacement notes against return of the Notes (each
marked “replaced”) held by the transferor and (iii) if only a portion of a
Lender’s interest in its Revolving Commitment and Revolving Advances has been
transferred, replacement notes to each of the transferor and the transferee
against return of the original such Notes of the transferor (each marked
“replaced”) held by the transferor; provided, however, that, simultaneously with
the Borrowers’ delivery of new Notes pursuant to this Section 15.5(f), the
transferor Lender will deliver to the Borrowers any Note being replaced in whole
or in part, and each such Note delivered by the transferor Lender shall be
conspicuously marked “replaced” when so delivered.
          (g) Replacement of Certain Lenders. If any Lender is a Defaulting
Lender hereunder or if any Borrower is required to pay any additional amount to
any Lender or any Governmental Body for the account of any Lender pursuant to
Section 3.13, then, the Borrowers may, at the such Lender’s sole expense and
effort, upon notice to such Lender and the Agent, require such Lender to assign
and delegate, without recourse (in accordance with the restrictions contained in
Section 15.5(b)), all of its interests, rights and obligations under this
Agreement to an Eligible Assignee that shall assume such obligations; provided,
however, that (i) the Borrowers shall have received the prior written consent of
the Agent, which consent shall not be unreasonably withheld and (ii) such Lender
shall have received payment of an amount equal to the outstanding principal of
its Advances, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrowers (in the case of all
other amounts). None of the Lenders shall be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrowers to require such
assignment and delegation cease to apply.
          (h) Replacement of Non-Consenting Lenders. If, in connection with any
proposed amendment, waiver or consent hereunder pursuant to Section 15.2
(i) requiring the

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consent of all Lenders, the consent of Required Lenders is obtained but the
consent of all Lenders whose consent is required is not obtained or
(ii) requiring the consent of Required Lenders, the consent of Lenders holding
fifty-one percent (51%) or more of the applicable threshold, is obtained but the
consent of Required Lenders is not obtained (any Lender withholding consent as
described in clause (i) and (ii) hereof being referred to as a “Non-Consenting
Lender”), then, so long as the Agent is not a Non-Consenting Lender, the Agent
may, at the sole expense of the Borrowers, upon notice to such Non-Consenting
Lender and the Borrowers, require such Non-Consenting Lender to assign and
delegate, without recourse (in accordance with the restrictions contained in
Section 15.5(b)), all of its interests, rights and obligations under this
Agreement to an Eligible Assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided,
however, that such Lender shall have received payment of an amount equal to the
outstanding principal of its Advances, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder, from the assignee (to the extent
of such outstanding principal and accrued interest and fees) or the Borrowers
(in the case of all other amounts).
      15.6 Application of Payments.
          Except to the extent expressly otherwise provided in Sections 1.8,
11.7 and 14.2, the Agent shall have the continuing and exclusive right to apply
or reverse and re-apply any payment and any and all proceeds of Collateral to
any portion of the Obligations. To the extent that any Loan Party or any
Subsidiary thereof makes a payment or the Agent, any Lender or the Issuer
receives any payment or proceeds of the Collateral for any Loan Party’s or any
Subsidiary’s benefit, which are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
debtor in possession, receiver, custodian or any other party under any
bankruptcy law, common law or equitable cause, then, to such extent, the
Obligations or part thereof intended to be satisfied shall be revived and
continue as if such payment or proceeds had not been received by the Agent, such
Lender or the Issuer.
      15.7 Indemnity.
          Each Loan Party shall indemnify the Agent, each Lender, the Issuer and
each of their respective officers, directors, Affiliates, employees and agents
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind or nature whatsoever (including reasonable fees and disbursements of
counsel) which may be imposed on, incurred by, or asserted against the Agent,
any Lender or the Issuer in any litigation, proceeding or investigation
instituted or conducted by any Governmental Body or any other Person with
respect to any aspect of, or any transaction contemplated by, or referred to in,
or any matter related to, this Agreement or the Other Loan Documents, whether or
not the Agent, any Lender or the Issuer is a party thereto, except to the extent
that any of the foregoing arises out of the gross negligence or willful
misconduct of the party being indemnified.
      15.8 Notice.
          (a) Notice Addresses. Except for notices required to be delivered by
Approved Electronic Communication, any notice or request hereunder may be given
to any Loan Party or to the Agent, any Lender or the Issuer at the following
respective addresses (or at such other address as may hereafter be specified in
a notice designated as a notice of change of address under this Section):

     
(A) If to Agent:
  National City Business Credit, Inc.
 
  1965 East Sixth Street
 
  4th Floor
 
  Locator 01-3049

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  Cleveland, Ohio, 44114
 
  Attention: Anthony Alexander or Stoneridge
 
  Account Manager
 
  Telephone: (216)222-9302
 
  Telecopier: (216)222-8155
 
  Email: anthony.alexander@nationalcity.com
 
   
(B) If to the Issuer:
  National City Bank
 
  1965 East 6th Street
 
  4th Floor
 
  Locator 01-3049
 
  Cleveland, Ohio 44114
 
  Attention: Anthony Alexander or Operations Manager
 
  Telephone: 216-222-3055
 
  Telecopier: 216-222-9555
 
  Email: anthony.alexander@nationalcity.com
 
   
(C) If to a Lender:
  As specified on the signature pages hereof.
 
   
(D) If to the Borrowing Agent or a Loan Party:
  Stoneridge, Inc., as Borrowing Agent
 
  9400 East Market Street
 
  Warren, Ohio 44484
 
  Attention: George E. Strickler, Executive Vice
 
  President, Chief Financial Officer and Treasurer
 
  Telephone: (330)856-2443
 
  Telecopier: (330)856-3618
 
  Email: gstrickler@stoneridge.com

Unless otherwise required or limited by the terms of this Agreement, any notice,
request, demand, direction or other communication (for purposes of this
Section 15.8 only, a “Notice”) to be given to or made upon any party hereto
under any provision of this Agreement shall be given or made by telephone or in
writing or facsimile transmission or similar telecommunications device). Unless
the context of this Agreement would indicate otherwise, an Approved Electronic
Communication shall satisfy any requirement for a writing. Any such Notice must
be delivered to the applicable parties hereto at the addresses and numbers set
forth in this Agreement or in accordance with any subsequent unrevoked Notice
from any such party that is given in accordance with this Section 15.8.
          (b) Effectiveness of Notices. All Notices shall be effective (i) if
delivered by hand, including any overnight courier service, upon personal
delivery, (ii) if delivered by mail, four (4) days after being deposited with
the United States Postal Service, with first-class postage prepaid, return
receipt requested, (iii) if delivered by posting to an Approved Electronic
Platform, an internet website or a similar telecommunication device requiring
that a user have prior access to such Approved Electronic Platform, website or
other device (to the extent permitted by Section 13.7 to be delivered
thereunder), when such Notice shall have been made generally available on such
Approved Electronic Platform, internet website or similar device to the party
being notified (regardless of whether such party must accomplish, and whether or
not such party shall have accomplished, any action prior to obtaining access to
such items, including registration, disclosure of contact information,
compliance with a standard user agreement or undertaking a duty of
confidentiality) and such party has been notified that such communication has
been posted to the Approved Electronic Platform, (iv) if delivered by other
Approved

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Electronic Communication, when actually received by the target electronic
system, (v) if by a facsimile transmission, when sent to the applicable party’s
facsimile machine’s telephone number, if the party sending such Notice receives
confirmation of the delivery thereof from its own facsimile machine; and (vi) if
by telephonic Notice, when a party is contacted by telephone, if delivery of
such telephonic Notice is confirmed no later than the next Business Day by hand
delivery, a facsimile or electronic transmission, an Approved Electronic
Communication or an overnight courier delivery of a confirmatory Notice
(received at or before noon on such next Business Day); provided, however, that
Notices to the Agent shall not be effective until actually received by the
Agent.
          (c) Concurrent Notice. Any Lender or the Issuer giving a Notice to the
Borrowing Agent or a Loan Party shall concurrently send a copy thereof to the
Agent, and the Agent shall promptly notify the other Lenders and the Issuer of
its receipt of such Notice.
      15.9 Notice by Approved Electronic Communications.
          The Agent, the Issuer, each Lender and each of their Affiliates is
authorized to transmit, post or otherwise make or communicate, in its sole
discretion (but shall not be required to do so), by Approved Electronic
Communications in connection with this Agreement or any Other Loan Document and
the transactions contemplated therein. Each of the Loan Parties, the Agent, the
Lenders and the Issuer hereby acknowledges and agrees that the use of Approved
Electronic Communications is not necessarily secure and that there are risks
associated with such use, including risks of interception, disclosure and abuse
and each indicates it assumes and accepts such risks by hereby authorizing each
of the Agent, the Issuer, each Lender and each of their Affiliates to transmit
Approved Electronic Communications.
          No Approved Electronic Communications shall be denied legal effect
merely because it is made electronically. Approved Electronic Communications
that are not readily capable of bearing either a signature or a reproduction of
a signature may be signed, and shall be deemed signed, by attaching to, or
logically associating with such Approved Electronic Communication, an
E-Signature, upon which the Agent, the Issuer, each Lender and the Loan Parties
may rely and assume the authenticity thereof. Each Approved Electronic
Communication containing a signature, a reproduction of a signature or an
E-Signature shall, for all intents and purposes, have the same effect and weight
as a signed paper original. Each E-Signature shall be deemed sufficient to
satisfy any requirement for a “signature” and each Approved Electronic
Communication shall be deemed sufficient to satisfy any requirement for a
“writing”, in each case including pursuant to this Agreement, any Other Loan
Document, the Uniform Commercial Code, the Federal Uniform Electronic
Transactions Act, the Electronic Signatures in Global and National Commerce Act
and any substantive or procedural law governing such subject matter. Each party
or beneficiary hereto agrees not to contest the validity or enforceability of an
Approved Electronic Communication or E-Signature under the provisions of any
applicable law requiring certain documents to be in writing or signed; provided,
that nothing herein shall limit such party’s or beneficiary’s right to contest
whether an Approved Electronic Communication or E-Signature has been altered
after transmission.
      15.10 Survival.
          The obligations of the Loan Parties under Sections 3.8, 3.9, 3.10,
3.11, 4.17(e), 13.8, and 15.12 and Article XIV shall survive termination of this
Agreement and the Other Loan Documents and payment in full of the Obligations.

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      15.11 Severability.
          If any part of this Agreement is contrary to, prohibited by, or deemed
invalid under applicable laws or regulations, such provision shall be
inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given effect so far as possible.
      15.12 Expenses.
          Each Loan Party agrees to pay on demand all reasonable costs and
expenses of (a) the Agent (including the reasonable fees and out-of-pocket
expenses of counsel or other advisors for the Agent and including internal
counsel) in connection with the negotiation, preparation, execution, delivery,
administration, modification, amendment, forbearance and waiver of this
Agreement and the Other Loan Documents, and (b) the Agent, the Lenders and the
Issuer (including the reasonable fees and out-of-pocket expenses of counsel or
other advisors) in connection with (i) any workout or restructuring of the
Obligations or (ii) the enforcement of, the exercise of remedies under, or the
preservation of rights and remedies under this Agreement or any of the Other
Loan Documents (including any collection, bankruptcy or other enforcement
proceedings arising with respect to any Loan Party, this Agreement, or any Event
of Default under this Agreement). Each Loan Party further agrees to pay to the
Agent on demand all usual and customary fees and expenses which the Agent incurs
in connection with (a) the forwarding of Advance proceeds and (b) the
establishment and maintenance of any Collection Accounts as provided for in
Section 4.14(g).
      15.13 Injunctive Relief.
          Each Loan Party recognizes that, in the event any Loan Party fails to
perform, observe or discharge any of its obligations or liabilities under this
Agreement, any remedy at law may prove to be inadequate relief to the Lenders
and/or the Issuer. Therefore, the Agent, if the Agent so requests, shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving that actual damages are not an adequate remedy.
      15.14 Consequential Damages.
          None of the Agent, any Lender or the Issuer, nor any agent or attorney
for any of them, shall be liable to the Loan Parties, for any special,
incidental, consequential or punitive damages arising from any breach of
contract, tort or other wrong relating to the establishment, administration or
collection of the Obligations.
      15.15 Captions.
          The captions at various places in this Agreement are intended for
convenience only and do not constitute and shall not be interpreted as part of
this Agreement.
      15.16 Counterparts; Telecopied Signatures.
          This Agreement may be executed in any number of and by different
parties hereto on separate counterparts, all of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same agreement. Any signature delivered by a party by facsimile transmission
shall be deemed to be an original signature hereto.

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      15.17 Construction.
          The parties acknowledge that each party and its counsel have reviewed
this Agreement and that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or any amendments, schedules or exhibits
thereto.
      15.18 Confidentiality.
          The Agent, each Lender, the Issuer, each Eligible Assignee party to an
Assignment and Assumption and each Participant shall hold all non-public
information obtained by the Agent, such Lender, the Issuer, such Eligible
Assignee party to an Assignment and Assumption or such Participant pursuant to
the requirements of this Agreement in accordance with the Agent’s, such
Lender’s, the Issuer’s, such Eligible Assignee’s and such Participant’s
customary procedures for handling confidential information of this nature;
provided, however, the Agent, each Lender, the Issuer, each Eligible Assignee
party to an Assignment and Assumption and each Participant may disclose such
confidential information (in all cases on a confidential basis) (a) to its
examiners, affiliates, outside auditors, counsel and other professional
advisors, (b) to the Agent, any Lender, the Issuer, any prospective assignee,
any Eligible Assignee which is a party to an Assignment and Assumption and any
Participants, and (c) as required or requested by any Governmental Body or
representative thereof or pursuant to legal process; provided, further that
(i) unless specifically prohibited by applicable law or court order, the Agent,
each Lender, the Issuer and each Eligible Assignee a party to an Assignment and
Assumption and each Participant shall use its best efforts prior to disclosure
thereof, to notify the Loan Parties of the applicable request for disclosure of
such non-public information (A) by a Governmental Body or representative thereof
(other than any such request in connection with an examination of the financial
condition of a Lender, the Issuer, a each Eligible Assignee a party to an
Assignment and Assumption or a Participant by such Governmental Body) or
(B) pursuant to legal process and (ii) in no event shall the Agent, any Lender,
the Issuer, any Eligible Assignee a party to an Assignment and Assumption or any
Participant be obligated to return any materials furnished by the Loan Parties
other than those documents and instruments in possession of the Agent, any
Lender or the Issuer in order to perfect its Lien on the Collateral once the
Obligations have been paid in full and this Agreement has been terminated.
      15.19 No Sharing of Information Without Consent.
          Each Loan Party acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
any Loan Party or one or more of its Affiliates (in connection with this
Agreement or otherwise) by any Lender, the Issuer or by one or more Subsidiaries
or Affiliates of such Lender or the Issuer. None of the Agent, any Lender or the
Issuer is authorized to share any information delivered to such Lender or the
Issuer or the Agent by or on behalf of any Loan Party or any Subsidiary thereof
pursuant to or in connection with this Agreement, or in connection with the
decision of such Lender or the Issuer or the Agent to enter into this Agreement,
to any such Subsidiary or Affiliate of such Lender or the Issuer or the Agent,
without the prior written consent of the Borrower Agent..
      15.20 USA Patriot Act.
          Each Lender, the Issuer or assignee or participant of a Lender or the
Issuer that is not incorporated under the laws of the United States or a state
thereof (and is not excepted from the certification requirement contained in
Section 313 of the USA Patriot Act and the applicable regulations because it is
both (i) an affiliate of a depository institution or foreign bank that maintains
a physical presence in the United states or foreign country and (ii) subject to
supervision by a banking authority regulating such affiliated depository
institution or foreign

125

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bank) shall deliver to the Agent the certification, or, if applicable,
recertification, certifying that such Lender or the Issuer is not a “shell” and
certifying to other matters as required by Section 313 of the USA Patriot Act
and the applicable regulations (1) within ten (10) days after the Closing Date,
and (2) as such other times as are required under the USA Patriot Act.
      15.21 Publicity.
          Each Loan Party, each Lender and the Issuer hereby authorizes the
Agent to make appropriate announcements of the financial arrangement entered
into among the Loan Parties, the Agent, the Lenders and the Issuer, including
announcements which are commonly known as tombstones, in such publications and
to such selected parties as the Agent shall in its sole and absolute discretion
deem appropriate. Each Loan Party, each Lender and the Issuer hereby further
authorizes the Agent to disclose information relating to this Agreement to Gold
Sheets, and other similar bank trade publications, with such information to
consist of deal terms and other information customarily found in such
publications.
      15.22 Judgment Currency.
          (a) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder or under any of the Notes in any
currency (the “Original Currency”) into another currency (the “Other Currency”)
the parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Agent could purchase the Original Currency with the Other
Currency at the Payment Office on the second Business Day preceding that on
which final judgment is given.
          (b) The obligation of any Borrower or any Loan Party in respect of any
sum due in the Original Currency from it to any Lender, the Issuer or the Agent
hereunder shall, notwithstanding any judgment in any Other Currency, be
discharged only to the extent that on the Business Day following receipt by such
Lender, the Issuer or the Agent (as the case may be) of any sum adjudged to be
so due in such Other Currency such Lender, the Issuer or the Agent (as the case
may be) may in accordance with normal banking procedures purchase Dollars with
such Other Currency; if the amount of the Original Currency so purchased is less
than the sum originally due to such Lender, the Issuer or the Agent (as the case
may be) in the Original Currency, such Borrower and/or any other applicable Loan
Party agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify such Lender, the Issuer or the Agent (as the case may be) against such
loss, and if the amount of the Original Currency so purchased exceeds the sum
originally due to any Lender, the Issuer or the Agent (as the case may be) in
the Original Currency, such Lender, the Issuer or the Administrative Agent (as
the case may be) agrees to remit to the applicable Borrower or other Loan Party
such excess.
      15.23 Waiver of Jury Trial and Submission to Non-Exclusive Jurisdiction.
          EACH OF THE PARTIES HERETO WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE
IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG
THE PARTIES OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
          Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
Ohio state court or federal court of

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the United States sitting in Cuyahoga County, Ohio, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement, the Notes or any Other 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 any such Ohio 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 shall affect any right that any party
may otherwise have to bring any action or proceeding relating to this Agreement,
the Notes or any Other Loan Document in the courts of any jurisdiction.
          Each Loan Party hereby waives personal service of any and all process
upon it and consents that all such service of process may be made by registered
mail (return receipt requested) directed to such Loan Party at its address set
forth in Section 15.8 and service so made shall be deemed completed five
(5) days after the same shall have been so deposited in the mails of the United
States, or, at the Agent’s option, by service upon such Loan Party. Nothing
herein shall affect the right to serve process in any manner permitted by law or
shall limit the right of the Agent, any Lender or the Issuer to bring
proceedings against any Loan Party in the courts of any other jurisdiction.
          Each of the parties hereto hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that 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, the Notes or
any Other Loan Document in any Ohio state or federal court sitting in Ohio. Each
of the parties hereto hereby 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. The parties confirm that the foregoing waivers are informed
and freely made.
[SIGNATURES FOLLOW]

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          Each of the parties has signed this Agreement as of the day and year
first above written.

            BORROWERS:

STONERIDGE, INC.
      By:   /s/ George E. Strickler         Name:   George Strickler       
Title:   CFO        STONERIDGE CONTROL DEVICES, INC.
      By:   /s/ George E. Strickler         Name:   George Strickler       
Title:   Vice President        STONERIDGE ELECTRONICS, INC.
      By:   /s/ George E. Strickler         Name:   George Strickler       
Title:   Vice President        STONERIDGE-POLLAK LIMITED
      By:   /s/ George E. Strickler         Name:   George Strickler       
Title:   Director        STONERIDGE ELECTRONICS LIMITED
      By:   /s/ George E. Strickler         Name:   George Strickler       
Title:   Director   

            (Witness)   /s/ Greg Fritz       (Print Full Name) Greg Fritz     
(Address)  9400 East Market Street
                  Warren, OH 44484   

S-1

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            GUARANTOR:

STONERIDGE FAR EAST LLC
      By:   /s/ George E. Strickler         Name:   George Strickler       
Title:   Vice President        AGENT:

NATIONAL CITY BUSINESS CREDIT, INC.,
as Agent
      By:   /s/ Anthony D. Alexander         Name:   Anthony D. Alexander       
Title:   Vice President        ISSUER:

NATIONAL CITY BANK, as Issuer
      By:   /s/ Michael P. McNeirney         Name:   Michael P. McNeirney       
Title:   Vice President   

S-2

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            LENDERS:

NATIONAL CITY BUSINESS CREDIT, INC.,
as a Lender
      By:   /s/ Anthony D. Alexander         Name:   Anthony D. Alexander       
Title:   Vice President        Revolving Commitment: $28,000,000
        Notice Information:

National City Business Credit, Inc.
1965 East Sixth Street
4th Floor
Locator 01-3049
Cleveland, OH 44114
Attention: Anthony Alexander or
Stoneridge Account Manager
Telephone: (216)222-9302
Telecopier: (216)222-8155
Email: anthony.alexander@nationalcity.com
     

S-3

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            COMERICA BANK., as a Lender
      By:   /s/ Scott Kowalski         Name:   Scott Kowalski        Title:  
Vice President        Revolving Commitment: $20,000,000
        Notice Information:

Comerica Bank
500 Woodward
9th Floor
Detroit, MI
Attention: Scott Kowalski
Vice President
Telephone: (313) 222-9452
Telecopier: (313) 222-9514
Email: smkowalski@comerica.com
     

S-4

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            JPMORGAN CHASE BANK., as a Lender
      By:   /s/ Matthew A. Brewer         Name:   Matthew A. Brewer       
Title:   Vice President        Revolving Commitment: $20,000,000
        Notice Information:

JPMorgan Chase Bank, N.A.
1300 E. Ninth Street
13th Floor
Cleveland, Ohio. 44114
Matthew A. Brewer, Assistant Vice President
Tel: 216-781-2589
Fax: 216-781-2071
Email: matthew.a.brewer@chase.com
     

S-5

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            PNC BANK, NATIONAL ASSOCIATION,
as a Lender
      By:   /s/ Michael A. Gasser         Name:   Michael A. Gasser       
Title:   Vice President        Revolving Commitment: $20,000,000
        Notice Information:

PNC Bank, National Association
One PNC Plaza, Sixth Floor
249 Fifth Ave.
Pittsburgh, PA 15222
Attention: Eric Moore
Telephone: (412) 768-1332
Facsimile: (412) 768-4369
     

S-6

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            FIFTH THIRD BANK., as a Lender
      By:   /s/ Roy Lanctot         Name:   Roy Lanctot        Title:   Vice
President        Revolving Commitment: $12,000,000
        Notice Information:

Fifth Third Bank
600 Superior Ave East
Cleveland, Ohio. 44114
Roy Lanctot, Vice President
Tel: 216-274-5473
Fax: 216-274-5621
Email: roy.lanctot@53.com
     

S-7

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SCHEDULES
TO
CREDIT AND SECURITY AGREEMENT (the “Agreement”)
BY AND AMONG
NATIONAL CITY BUSINESS CREDIT, INC.
(AS LENDER AND AGENT)
and
NATIONAL CITY BANK
(AS ISSUER)
and
SUCH OTHER LENDERS WHICH ARE NOW OR HEREAFTER A PARTY THERETO
and
STONERIDGE, INC.,
(AS BORROWER),
SUCH OTHER BORROWERS WHICH ARE NOW OR HEREAFTER A PARTY THERETO
and
SUCH GUARANTORS WHICH ARE NOW OR HEREAFTER A PARTY THERETO
and
NATIONAL CITY BANK
(AS LEAD ARRANGER AND BOOK RUNNER)
 
Dated as of November ___, 2007
 
     These Schedules are qualified in their entirety by reference to specific
provisions of the Agreement, and are not intended to constitute, and shall not
be construed as constituting, any representations or warranties of any Loan
Party except as and to the extent provided in the Agreement, subject to the
limitations therein. Certain information contained in the Schedules may not be
required to be disclosed pursuant to the Agreement. Such information is included
solely for informational purposes, and disclosure of such information shall not
be deemed to enlarge or enhance any of the representations or warranties in the
Agreement. Inclusion of information herein shall not be construed as an
admission that such information is material to any Loan Party.
     Disclosures in one part of a particular Schedule for any purpose will be
deemed disclosed for all purposes of such particular Schedule where such
disclosure is reasonably apparent. Disclosures by attachments and documents
referenced by these Schedules (other than with respect to schedules and exhibits
to the Contracts set forth in Schedule 5.25) are deemed made herein. Headings
have been inserted in the Schedules for convenience of reference only and shall
not have the effect of amending or changing the information presented or
creating a standard for disclosure different than that set forth in the
Agreement. Capitalized terms used in these Schedules and not otherwise defined
herein shall have the respective meanings assigned to such terms in the
Agreement.

 

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Schedule 2.9
Existing Letters of Credit
1. Irrevocable letter of credit, dated as of June 18, 2002, by Stoneridge, Inc.
in favor of National Union Fire Insurance Co. (AIG) and with a balance as of
October 1, 2007 of $1,300,000; expires June 18, 2008.
2. Irrevocable letter of credit, dated as of May 18, 2001, by Stoneridge, Inc.
in favor of The Travelers Indemnity Company and with a balance as of October 1,
2007 of $400,000; expires May 31, 2008.
3. Irrevocable letter of credit, dated as of May 21, 2001, by Stoneridge, Inc.
in favor of National Union Fire Insurance Co. (AIG) of Pittsburgh, PA and other
beneficiaries and with a balance as of October 1, 2007 of $951,634; expires
December 31, 2007.
4. Irrevocable letter of credit, dated as of June 27, 2003, by Stoneridge, Inc.
in favor of National Union Fire Insurance Co. (AIG) of Pittsburgh, PA and other
beneficiaries and with a balance as of October 1, 2007 of $675,000; expires
June 27, 2008.
5. Irrevocable letter of credit, dated as of January 23, 2007, by Stoneridge,
Inc. in favor of Ace American Insurance Company and with a balance as of
October 1, 2007 of $484,684; expires December 31, 2007.

2

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Schedule 4.1
Commercial Tort Claims
None.

3

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Schedule 4.14(c)
Chief Executive Offices
Chief Executive Offices
1. Stoneridge, Inc., 9400 East Market Street, Warren, Ohio 44484
2. Stoneridge Electronics, Inc., #6 Butterfield Trail Blvd., El Paso, TX 79906
3. Stoneridge Control Devices, Inc., 300 Dan Road, Canton, Massachusetts 02021
4. Stoneridge-Pollak Limited, Adelante House, Vantage point business Village,
Mitcheldean, GL17 0DD, Gloucestershire United Kingdom
5. Stoneridge Electronics Limited, Charles Bowman Avenue, Claverhouse Industrial
Park, Dundee, DD4 9UB, Tayside Scotland
6. Stoneridge Far East LLC c/o Stoneridge, Inc., 9400 East Market Street,
Warren, Ohio 44484
Additional Locations at which Records are Kept
Stoneridge, Inc.
7292 26th Court East, Sarasota, FL 34243
345 South Mill Street, Lexington, OH 44904
8640 East Market Street, Warren, OH 44484
700 Industrial Drive, Portland, IN 47371
Stoneridge Control Devices, Inc.
#6 Butterfield Trail Blvd., El Paso, TX 79906
28000 Cabot Drive, Suite 100, Novi, MI 48377
Stoneridge Electronics, Inc.
None.
Stoneridge Far East LLC
None.
Stoneridge-Pollak Limited
None.
Stoneridge Electronics Limited
None.

4

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Schedule 4.14(g)
Lockboxes; Bank Accounts
[Omitted]

5

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

 

Schedule 4.14(j)
Securities Accounts
See Schedule 4.14(g).

6

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Schedule 5.2
Incorporation/Organization/Qualification

                          Jurisdictions in     Organizational         Which
Qualified to     Identification Company   Place of Incorporation   do Business  
  Number
Stoneridge, Inc.
  Ohio   Michigan, Indiana, Massachusetts, Florida, Texas     732877  
Stoneridge Electronics, Inc.
  Texas   None.     156117100  
Stoneridge Control Devices, Inc.
  Massachusetts   None.     043493548  
Stoneridge-Pollak Limited
  United Kingdom   None.     3707981  
Stoneridge Electronics Limited
  Scotland   None.     139213  
Stoneridge Far East LLC
  Delaware   None.     3990152  
Stoneridge Pollak (Holdings) Limited
  United Kingdom   None.     N/A  
Stoneridge Holdings CV
  Netherlands   None.     N/A  
Stoneridge European Holdings B.V.
  Netherlands   None.     N/A  
Stoneridge International Financial Services Company
  Ireland   None.     N/A  
Stoneridge AB
  Sweden   None.     N/A  
Stoneridge Electronics AB
  Sweden   None.     N/A  
Stoneridge GmbH
  Germany   None.     N/A  
Stoneridge Electronics AS
  Estonia   None.     N/A  
Stoneridge Electronics SrL
  Italy   None.     N/A  
TED de Mexico
  Mexico   None.     N/A  
Alphabet de Mexico
  Mexico   None.     N/A  
Alphabet de Mexico de Monclova
  Mexico   None.     N/A  
Stoneridge Asia Holdings Ltd.
  Mauritius   None.     N/A  
Stoneridge Asia Pacific Electronics (Suzho) Co. Ltd.
  China   None.     N/A  

7

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Schedule 5.3
Officers, Directors, Shareholders, Capitalization

              Loan Party   Officers   Directors   Shareholders/Members
Stoneridge, Inc.
  John Corey — President and CEO   William Lasky (Chairman)   Public
 
      John Corey    
 
  George Strickler — Executive Vice President, CFO and Treasurer   Avery Cohen  
 
 
      Jeffrey Draime    
 
  Thomas Beaver — Vice President of Global Sales and Systems Engineering  
Sheldon Epstein    
 
      Douglas Jacobs    
 
  Mark Tervalon — Vice President and President of the Electronics Division   Kim
Korth    
 
      Earl Linehan    
 
  Avery Cohen — Secretary        
 
           
Stoneridge Electronics, Inc.
  John Corey — President   George Strickler   Stoneridge, Inc., 100% (100
shares, certificates numbered 2 and 3)
 
  George Strickler — Vice President, Assistant Secretary and Treasurer   John
Corey    
 
      Avery Cohen    
 
  Avery Cohen — Secretary        
 
           
Stoneridge Control Devices, Inc.
  John Corey — President   George Strickler   Stoneridge, Inc., 100% (100
shares, certificates numbered 3 and 4)
 
  George Strickler — Vice President, Assistant Secretary and Treasurer   John
Corey    
 
      Avery Cohen    
 
  Avery Cohen — Secretary        
 
           
Stoneridge-Pollak Limited
  Avery Cohen — Secretary   George Strickler
John Corey   Stoneridge Pollak Holdings Ltd., 100% (8,084,001 shares;
certificate numbers not available)
 
      Avery Cohen    
 
           
Stoneridge Electronics Limited
  Avery Cohen — Secretary   George Strickler
John Corey   Stoneridge Pollak Holdings Ltd., 100% (250,000 shares; certificate
numbers not available)
 
      Avery Cohen    
 
      Mark Jenkins    
 
           
Stoneridge Far East LLC
  John Corey — President   None.   Stoneridge, Inc., 100%
 
  George Strickler — Vice President, Assistant Secretary and Treasurer        
 
  Avery Cohen — Secretary        

8

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Schedule 5.5
FEINS/Tax Returns

      Loan Party or Loan Party Subsidiary   FEIN
Stoneridge, Inc.
  34-1598949
Stoneridge Electronics, Inc.
  52-2206181
Stoneridge Control Devices, Inc.
  04-3493548
Stoneridge-Pollak Limited
  N/A
Stoneridge Electronics Limited
  N/A
Stoneridge Far East LLC
  51-0548248
Stoneridge Pollak (Holdings) Limited
  N/A
Stoneridge Holdings CV
  N/A
Stoneridge European Holdings B.V.
  N/A
Stoneridge International Financial Services Company
  N/A
Stoneridge AB
  N/A
Stoneridge Electronics AB
  N/A
Stoneridge GmbH
  N/A
Stoneridge Electronics AS
  N/A
Stoneridge Electronics SrL
  N/A
TED de Mexico
  N/A
Alphabet de Mexico
  N/A
Alphabet de Mexico de Monclova
  N/A
Stoneridge Asia Holdings Ltd.
  N/A
Stoneridge Asia Pacific Electronics (Suzho) Co. Ltd.
  N/A

                              Income Tax                     Returns Not        
            Examined and                     Reported                     Upon
or                     Closed by   Current   Current   Current        
Applicable   Federal   State   Foreign Entity   Jurisdiction   Statute   Audits
  Audits   Audits
Stoneridge, Inc.
  US   2004-2005   2005   IN 2004-2006 MA   N/A
 
              1999-2001    
 
                   
Stoneridge Control Devices, Inc.
  US   2004-2005   2005   IN 2004-2006 MA   N/A
 
              1999-2001    
 
                   
Stoneridge Electronics, Inc.
  US   2004-2005   2005   IN 2004-2006 MA   N/A
 
              1999-2001    
 
                   
Stoneridge Far East LLC
  US   2005   2005   N/A   N/A
 
                   
Stoneridge Holdings CV
  NETHERLANDS   2001-2005   N/A   N/A   N/A
 
                   
Stoneridge European Holdings B.V.
  NETHERLANDS   2001-2005   N/A   N/A   N/A
 
                   
Stoneridge International Financial
  IRE   2002-2005   N/A   N/A   N/A
Services
                   

9

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

 

                              Income Tax                     Returns Not        
            Examined and                     Reported                     Upon
or                     Closed by   Current   Current   Current        
Applicable   Federal   State   Foreign Entity   Jurisdiction   Statute   Audits
  Audits   Audits
Company
                   
 
                   
Stoneridge AB
  SWEDEN   2001-2005   N/A   N/A   N/A
 
                   
Stoneridge Electronics AB
  SWEDEN   2001-2005   N/A   N/A   N/A
 
                   
Stoneridge GmbH
  GER   2001-2005   N/A   N/A   N/A
 
                   
Stoneridge Electronics AS
  ESTONIA   N/A   N/A   N/A   N/A
 
                   
Stoneridge Pollak (Holdings) Limited
  UK   2002-2005   N/A   N/A   N/A
 
                   
Stoneridge-Pollak Limited
  UK   2002-2005   N/A   N/A   N/A
 
                   
Stoneridge Electronics Limited
  UK   2002-2005   N/A   N/A   French branch 2003
 
                   
Stoneridge Electronics SrL
  IT   2005   N/A   N/A   N/A
 
                   
Stoneridge Asia Holdings Ltd.
  MAURITIUS   2005   N/A   N/A   N/A
 
                   
Stoneridge Asia Pacific Electronics
  CHINA   2005   N/A   N/A   N/A
(Suzhou) Co. Ltd.
                   
 
                   
TED de Mexico
  MEX   2001-2005   N/A   N/A   N/A
 
                   
Alphabet de Mexico
  MEX   2001-2005   N/A   N/A   N/A
 
                   
Alphabet de Mexico de Monclova
  MEX   2001-2005   N/A   N/A   N/A
 
                    Stoneridge Electronics AS is N/A as Estonia does not impose
an income tax

10

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

 

Schedule 5.7
Corporate Names
1. Stoneridge, Inc.: Hi-Stat, Alphabet, Ohio Stoneridge, Inc.
2. Stoneridge Electronics, Inc.: Transportation Electronics Division (TED),
Electronic Products Division (EPD), Pollak TED, Pollak EPD, Stoneridge TED
3. Stoneridge Control Devices, Inc.: Switch Products Division (SPD), Pollak
North America, Joseph Pollak Company
4. Stoneridge-Pollak Limited: Switch Europe
5. Stoneridge Electronics Limited: TVI Europe, Stoneridge Electronics
Aftermarket
6. Stoneridge Far East LLC: None.

11

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

 

Schedule 5.8
O.S.H.A and Environmental Compliance
     None.

12

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

 

Schedule 5.9(b)
Litigation
     [Omitted]

13

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

 

Schedule 5.10
ERISA Compliance
List of Plans Maintained or to Which Contributions are Made
Medical Plans —
Anthem BC/BS
Premium Plan
Core Plan
HSA Plan (HDHP)
Tufts
HMO Plan
Dental Plan — Anthem BC/BS
Vision Care — CompBenefits
Basic Life, AD&D, Optional Life, Optional AD&D, LTD — Prudential
Salary Continuance/Short Term Disability — Prudential
Flexible Spending Accounts — Discovery Benefits
Medical
Dependent Care
401(k) Plans
Stoneridge/Alphabet Division Retirement and 401(k) Plan
Hi-Stat Manufacturing, a Division of Stoneridge, Inc. 401(k) Retirement Plan and
Trust
The Pollak Profit Sharing and 401(k) Retirement Savings Plan
Other Plans
Stoneridge-Pollak Limited Pension Plan
Note: The Stoneridge-Pollak Limited Pension Plan is underfunded by approximately
£2.6 million (as of the filing of Stoneridge Inc.’s Form 10-K for the fiscal
year ended December 31, 2006)

14

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

 

Schedule 5.11
Patents, Trademarks, Copyrights and Licenses
Stoneridge, Inc.

         
a.
  Patents   Registration Number
 
       

EETRES Patent Co Developed with Pollak / Multiple SRI (record owners)
Hi-Stat Lexington

     
4,887,062
  Thermal sensor assembly
4,866,410
  Thermal sensor assembly
 
   
4,551,702
  Thermostatic switch and method of manufacture
4,413,247
  Thermally responsive electrical switch means and method of manufacture
4,343,974
  Multi-circuit electrical switch
4,318,673
  Pressure switch and circuit means
4,256,973
  Pressure switch and circuit means
4,255,630
  Multi-circuit electrical switch
7,159,840
  Solenoid having reduced operating noise

Hi-Stat Sarasota

         
Patents
       
7,147,369
  B2   Temperature Sensor (Plastic Glycol Resistant Coolant Sensor)
5,949,324
      Temperature Responsive Probe Apparatus
6,599,350
  B1   Filtration Device for Use With a Fuel Vapor Recovery System
6,069,783
      Apparatus & Method for Controlling Solenoid Valve
5,423,214
      Variable Fluid & Tilt Level Sensing Probe System
5,823,520
      Mandrel Assembly
5,581,865
      Apparatus for Applying Annular Seals
5,535,725
      Flow Control Solenoid
5,343,754
      Pressure Transducer
5,228,334
      Pressure Transducer
5,026,954
      Liquid Level Sensing Switch Assembly
Patent Applications
       
07/62451
      Horizontal Fluid Sensor
60/823,845
      Sealed Sensor Assembly and Method of Making the Same
06006025.8
      Temperature Sensor (Europe)

15

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

 

         
b.
  Copyrights   Registration Number
 
       
 
       
 
  None.    
 
       
c.
  Trademarks, Trade Name and Service Marks   Registration Number
 
       
 
       
 
  STONERIDGE — Class 35, 40, and 42.    
 
       
 
  ALPHABET — Class 9.    
 
       
 
  S logo — Class 9    
 
       
 
       
 
       

     The following is a list of any brand names used by the Company:
     VGS (Versatile Gauge System)
Stoneridge Electronics Inc.

             
a.
  Patents   Registration Number
 
       
 
           
 
  EETRES (w/ Pollak)   6,550,351      

Stoneridge Control Devices, Inc.
a.
Patents

                      Matter Number/Subcase   Case   Application   Publication  
Patent   Status Country Name   Type   Number/Date   Number/Date   Number/Date  
Expiration Date   PCB103/   ORD   10/384,181       7,213,482   Granted United
States of America       07-Mar-2003       08-May-2007   07-Mar-2023 Title:
Actuator with Internal Drive Train Disconnect
                      PCB105/   ORD   10/601,077   2005-0044979-A1      
Published United States of America       20-Jun-2003   03-Mar-2005        
Title: Park Pawl Actuator
                      PCB107/   CIP   10/625,828   7,134,672       Granted
United States of America       23-Jul-2003   14-Nov-2006       10-Feb-2023
Title: Failsafe Actuator
                      PCB110/1   CIP   10/712,764       7,021,415   Granted
United States of America       13-Nov-2003       04-Apr-2006     Title:
Electro-Mechanical Actuator for an Electrically Actuated Parking Brake
                      PCB112/1   CIP   10/901,454   2005-0050976-A1      
Published United States of America       28-Jul-2004   10-Mar-2005        
Title: Window Lift System and Actuator Including an Internal Drive Train
Disconnect

16

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

 

                      Matter Number/Subcase   Case   Application   Publication  
Patent   Status Country Name   Type   Number/Date   Number/Date   Number/Date  
Expiration Date PCB115/1   ORD   11/108,351   US-2005-0284247-A1   7,197,955  
Allowed United States of America       18-Apr-2005   29-Dec-2005   03-Apr-2007  
03-Aug-2025 Title: Gearbox Shift Actuator
                      PCB116/1   ORD   11/223,435   US-2006-0144184-A1      
Published United States of America       09-Sep-2005   06-Jul-2006        
Title: Steering Shaft Lock Actuator
                      PCB118/1   ORD   11/258,829   US-2006-0169084-A1      
Published United States of America       26-Oct-2005   03-Aug-2006        
Title: Vehicle Gear Box Actuator
                      PCB120/1   ORD   11/366,215   2006-0202676       Published
United States of America       02-Mar-2006   14-Sep-2006         Title: SYSTEM
AND METHOD USING INFLECTION POINT POSITION SENSING
                      PCB121/1   ORD   11/277,702   2006-0217226       Published
United States of America       28-Mar-2006   28-Sep-2006         Title: Park
Inhibit Solenoid Assembly and System Incorporating the Same
                      PCB123/   ORD   PCT/US06/60320   WO2007/051176      
Published Patent Cooperation Treaty       27-Oct-2006   03-May-2007        
Title: Passive Entry Actuator
                      PCB123/1   ORD   11/553,922   2007-0152455       Published
United States of America       27-Oct-2006   05-Jul-2007         Title: Passive
Entry Actuator
                      PCB124/1   ORD   11/564,236           Pending United
States of America       28-Nov-2006             Title: Disconnect Actuator
                      PCC103/   ORD   10/268,623       6,788,048   Granted
United States of America       10-Oct-2002       07-Sep-2004   10-Oct-2022
Title: Multi-Turn Position Sensor
                      PCC104/   ORD   10/038,747       7,009,386   Granted

17

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

 

                      Matter Number/Subcase   Case   Application   Publication  
Patent   Status Country Name   Type   Number/Date   Number/Date   Number/Date  
Expiration Date United States of America       02-Jan-2002       07-Mar-2006  
02-Jan-2022 Title: Non-Contact Position Sensor
                      PCC105/   ORD   10/292,395       6,907,795   Granted
United States of America       12-Nov-2002       21-Jun-2005   12-Nov-2022
Title: Seat Position Sensor
                      PCC107/   ORD   10/314,911       7,098,653   Granted
United States of America       09-Dec-2002       29-Aug-2006   12-Apr-2024
Title: Phase Angle Determining Circuit
                      PCC116/   ORD   10/638,946       6,906,273   Granted
United States of America       11-Aug-2003       14-Jun-2005   11-Aug-2023
Title: Switch Assembly
                      PCC117/   ORD   10/638,966       6,844,510   Granted
United States of America       11-Aug-2003       18-Jan-2005   11-Aug-2023
Title: Stalk Switch
                      PCC118/   ORD   10/638,964       6,900,404 B2   Granted
United States of America       11-Aug-2003       31-May-2005   11-Aug-2023
Title: Switch Assembly and Method of Guiding a Push Button Switch in a Switch
Housing
                      PCC120/CIP   CIP   11/101,379           Pending United
States of America       06-Apr-2005             Title: Trailer Tow Connector
Assembly
                      PCC120/CON1   CON   11/773,236           Pending United
States of America       03-Jul-2007             Title: Trailer Tow Connector
Assembly
                      PCC120/D1   DIV   11/773,008           Pending United
States of America       03-Jul-2007             Title: Trailer Tow Connector
Assembly
                      PCC120/D2   DIV   11/773,228           Pending United
States of America       03-Jul-2007             Title: Trailer Tow Connector
Assembly
                      PCC123/1   CIP   10/753,093   2005-0062467-A1      
Published United States of America       07-Jan-2004   24-Mar-2005        
Title: Rail Activated Position Sensor

18

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

 

                      Matter Number/Subcase   Case   Application   Publication  
Patent   Status Country Name   Type   Number/Date   Number/Date   Number/Date  
Expiration Date PCC124/   ORD   10/761,129       7,119,671   Granted United
States of America       20-Jan-2004       10-Oct-2006   30-Mar-2024 Title: Seat
Buckle Sensor
                      PCC125/   ORD   10/761,134       6,978,687   Granted
United States of America       20-Jan-2004       27-Dec-2005   20-Jan-2024
Title: Seat Belt Tension Sensor
                      PCC133/1   ORD   11/089,042   2005-0225317   7,193,412  
Granted United States of America       24-Mar-2005   13-Oct-2005   20-Mar-2007  
24-Mar-2025 Title: Target Activated Sensor
                      PCC136/1   ORD   11/219,534   US-2006-0158141-A1      
Published United States of America       02-Sep-2005   20-Jul-2006        
Title: Low Power Solid State Brake Switch
                      PCC137/1   ORD   11/235,677   US-2006-0176050-A1      
Published United States of America       26-Sep-2005   10-Aug-2006        
Title: Rotary Position Sensor
                      PCC138/1   ORD   11/265,524   US-2006-0163048-A1      
Published United States of America       02-Nov-2005   27-Jul-2006        
Title: Sealed Exterior Switch
                      PCC139/1   PCT   11/719,005           Pending United
States of America       10-May-2007             Title: Torque Sensor Assembly
                      PCC140/1   ORD   11/311,432   US-2006-0177212-A1      
Published United States of America       19-Dec-2005   10-Aug-2006        
Title: Touch Sensor System and Method
                      PCC142/1   ORD   11/357,355   2006-0197520       Published
United States of America       17-Feb-2006   07-Sep-2006         Title: SEAT
BELT TENSION SENSOR
                      PCC143/1   ORD   11/419,632   2007-0012118       Published
United States of America       22-May-2006   18-Jan-2007         Title: Linear
Position Sensor
                      PCC147/1   ORD   11/463,522   2007-0080679       Published
United States of America       09-Aug-2006   12-Apr-2007         Title: Rotary
Sensor

19

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

 

                      Matter Number/Subcase   Case   Application   Publication  
Patent   Status Country Name   Type   Number/Date   Number/Date   Number/Date  
Expiration Date PCC152/   ORD   PCT/US06/60169   WO2007/048143       Published
Patent Cooperation Treaty       23-Oct-2006   26-Apr-2007         Title: Sensor
System Including a Magnetized Shaft
                      PCC152/   PRO   60/729,383           Pending United States
of America       21-Oct-2005           21-Oct-2006 Title: Sensor System
Including a Magnetized Shaft
                      PCC152/1   PRI   11/270,049   2007-0113683       Published
United States of America       09-Nov-2005   24-May-2007         Title: Sensor
System Including a Magnetized Shaft
                      PCC152/C1   ORD   11/552,120   2007-0089539      
Published United States of America       23-Oct-2006   26-Apr-2007        
Title: Sensor System Including a Magnetized Shaft
                      PCC154/   ORD   PCT/US07/67706           Pending Patent
Cooperation Treaty       27-Apr-2007             Title: Steering Shaft Lock
Actuator
                      PCC154/1   ORD   11/741,656           Pending United
States of America       27-Apr-2007             Title: Steering Shaft Lock
Actuator                       PCC157/   PRO   60/829,773           Pending
United States of America       17-Oct-2006           17-Oct-2007 Title:
Non-Contact Engine Parameter Sensor
                      PCC159/   PRO   60/869,805           Pending United States
of America       13-Dec-2006           13-Dec-2007 Title: Cylinder Position
Sensor
                      PCC159/P2   PRO   60/871,622           Pending United
States of America       22-Dec-2006           22-Dec-2007 Title: Cylinder
Position Sensor
                      PCC159/P3   PRO   60/916,000           Pending United
States of America       04-May-2007           04-May-2008 Title: Cylinder
Position Sensor
                      PCC161/   PRO   60/896,395           Pending United States
of America       22-Mar-2007           22-Mar-2008 Title: Trailer Tow Connector
Assembly

20

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

 

                      Matter Number/Subcase   Case   Application   Publication  
Patent   Status Country Name   Type   Number/Date   Number/Date   Number/Date  
Expiration Date PCC163/   PRO   Unfiled             United States of America    
                Title: Lever Assembly Interchangeability
                      PCC164/   PRO   Unfiled             United States of
America                     Title: Integrated Module with Interchangeable Lever
Assemblies
                      Pol00.02/   ORD   09/765,899       6,889,578   Granted
United States of America       18-Jan-2001       10-May-2005   18-Jan-2021
Title: Electro-Mechanical Actuator
                      Pol00.02/CON1   CON   10/995,712   US/2005/0072049  
7,140,151   Granted United States of America       23-Nov-2004   07-Apr-2005  
28-Nov-2006   18-Jan-2021 Title: Electro-Mechanical Actuator
                      Pol00.03/   ORD   09/804,731       6,408,901   Granted
United States of America       13-Mar-2001       25-Jun-2002     Title: Actuator
with Anti-Pinch Feature and Integrated Position Control
                      Pol00.04/C1   CPA   09/497,936       6,413,101   Granted
United States of America       04-Feb-2000       02-Jul-2002     Title: Power
Outlet Adapter
                      Pol00.07/   ORD   09/898,579       6,739,633   Granted
United States of America       03-Jul-2001       25-May-2004   03-Jul-2021
Title: Fuel Door Lock Actuator
                      Pol00.08/   ORD   09/632,769       6,550,351   Granted
United States of America       04-Aug-2000       22-Apr-2003   04-Aug-2020
Title: Transmission Range Selector System
                      POL00.10/   ORD   09/836,033       6,557,688   Granted
United States of America       17-Apr-2001       06-May-2003     Title:
Electro-Mechanical Actuator and Clutch
                      POL01.01/   ORD   10/061,940       6,736,233 B2   Granted
United States of America       01-Feb-2002       18-May-2004     Title:
Electro-Mechanical Actuator for an Adjustable Pedal System
                      POL01.03/   ORD   10/099,919       6,806,664 B2   Granted
United States of America       15-Mar-2002       19-Oct-2004   15-Mar-2022
Title: Electro-Mechanical Actuator Including Brushless DC Motor for Providing
Pinch Protection

21

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

 

                      Matter Number/Subcase   Case   Application   Publication  
Patent   Status Country Name   Type   Number/Date   Number/Date   Number/Date  
Expiration Date   Pol01.04/   ORD   10/267,090       6,942,227   Granted United
States of America       19-Jul-2002       13-Sep-2005   19-Jul-2022 Title:
Failsafe Actuator
                      Pol01.04/D1   DIV   10/770,430       6,994,357   Granted
United States of America       03-Feb-2004       07-Feb-2006     Title: Failsafe
Actuator
                      Pol01.05/CON1   CON   10/714,456       6,846,012 B2  
Granted United States of America       14-Nov-2003       25-Jan-2005     Title:
Child Seat Sensor and System Using the Same
                      Pol98.01/   ORD   09/329,847       6,067,826   Granted
United States of America       11-Jun-1999       30-May-2000     Title: Door
Lock Actuator
                      POL98.02/   ORD   09/306,146       6,298,741 B1   Granted
United States of America       06-May-1999       09-Oct-2001     Title: ACTUATOR
WITH DUAL OPERATING OUTPUTS
                      POL99.01/   ORD   09/621,406       6,318,771 B1   Granted
United States of America       21-Jul-2000       20-Nov-2001     Title: Fuel
Filler Door Actuator
                      POL99.05/   ORD   860,173       5,237,133    Granted
United States of America       30-Mar-1992       17-Aug-1993     Title: SAFETY
IGNITION SWITCH
                      POL99.06/   ORD   823,787       5,777,285   Granted United
States of America       24-Mar-1997       07-Jul-1998   24-Mar-2017 Title:
AUTOMOTIVE INERTIA SWITCH
                      POL99.10/   ORD   89/378,327       4,964,678   Granted
United States of America       11-Jul-1989       23-Oct-1990     Title:
UNIVERSAL ANTI-LOCK BRAKE SWITCH LINKAGE
                      POL99.11/   ORD   630,757       5,672,823   Granted United
States of America       10-Apr-1996       30-Sep-1997     Title:
FRONT-REMOVEABLE GAUGE
                      POL99.12/   ORD   782,215       5,889,246   Granted United
States of America       13-Jan-1997       30-Mar-1999     Title: AUTOMOTIVE
BRAKE SWITCH

22

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

 

                      Matter Number/Subcase   Case   Application   Publication  
Patent   Status Country Name   Type   Number/Date   Number/Date   Number/Date  
Expiration Date POL99.13/   ORD   97/986,582       5,873,752   Granted United
States of America       08-Dec-1997       23-Feb-1999     Title: TOW SOCKET
CONNECTOR HAVING SEALANT
                      POL99.14/   ORD   96/599,577       5,800,188   Granted
United States of America       09-Feb-1996       01-Sep-1998     Title: DIRECT
CONNECT TRAILER TOW INTERCONNECTOR
                      POL99.15/   ORD   679,298       5,788,008   Granted United
States of America       12-Jul-1996       04-Aug-1998     Title: ACTUATOR FOR
4-WHEEL DRIVE VEHICLE
                      02111   ORD   08/366866       5,584,515   Granted United
States of America       30-Dec-1994       17-Dec-1996   30-Dec-2014 Title: Door
Lock Actuator with Double Lock
                      02318   ORD   08/130061       5,503,441   Granted United
States of America       30-Sep-1993       02-Apr-1996   ___ Title: Modular
Actuator
                      02372   ORD   08/137448       5,474,339   Granted United
Kingdom       15-Oct-1993       12-Dec-1995   (US lapsed) Title: Latchuator
                      02792   ORD   08/405477       5,577,583   Granted United
States of America       16-Mar-1995       26-Nov-1996   16-Mar-2015 Title: Free
Wheel Double Lock Clutch
                      02794   ORD   08/282131       5,498,040   Granted United
States of America       28-Jul-1994       12-Mar-1996   ___ Title: Deck Lid
Latch & Actuator
                      02795   Des Pat   29/022202       D358543   Granted United
States of America       29-Apr-1994       23-May-1995   23-May-2009 Title:
Key-Design

23

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

 

Matter Number/Subcase   Case   Application   Publication   Patent   Status
Country Name   Type   Number/Date   Number/Date   Number/Date   Expiration Date
03312   Des Pat   29/041274       D374599   Granted United States of America    
  11-Jul-1995       15-Oct-1996   ___ Title: Adjunct Actuator Design
                      03675   ORD   08/570537       5,577,782   Granted United
States of America       11-Dec-1995       26-Nov-1996   11-Dec-2015 Title:
Second Generation Latchuator
                      20265   Des Pat   29/088359       D412825   Granted United
States of America       21-May-1998       17-Aug-1999   17-Aug-2013 Title:
Actuator Housing (Design)
                      PCB107/   PCT   2,493,666           Pending Canada      
23-Jul-2003             Title: Failsafe Actuator
                      PCB110/   PCT   03786694.4   1578633       Published
European Patent Convention       13-Nov-2003   28-Sep-2005         Title:
Electro-Mechanical Actuator for an Electrically Actuated Parking Brake
                      PCB116/   PCT   05795134.5   1 799 528       Published
European Patent Convention       09-Sep-2005   27-Jun-2007         Title:
Steering Shaft Lock Actuator
                      PCB118/   PCT   112005002663.9           Pending Germany  
    26-Apr-2007             Title: Vehicle Gear Box Actuator
                      PCB118/   PCT               Pending Japan      
26-Apr-2007             Title: Vehicle Gear Box Actuator
                      PCC124/   ORD   04703658.7   1587709       Published
European Patent Convention           26-Oct-2005         Title: Seat Buckle
Sensor
                      PCC138/   ORD   PCT/US05/40254   WO2006/050528      
Published Patent Cooperation Treaty       02-Nov-2005   11-May-2006        
Title: Sealed Exterior Switch

24

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

 

                      Matter Number/Subcase   Case   Application   Publication  
Patent   Status Country Name   Type   Number/Date   Number/Date   Number/Date  
Expiration Date PCC138/   PCT   05 816 994.7           Pending European Patent
Convention       08-May-2007             Title: Sealed Exterior Switch
                      PCC138/   PCT   2007120471           Pending Russian
Federation       01-Jun-2007             Title: Sealed Exterior Switch
                      PCC139/   PCT   05849175.4           Pending European
Patent Convention       22-May-2007             Title: Torque Sensor Assembly
                      PCC139/   PCT               Pending Japan      
11-May-2007             Title: Torque Sensor Assembly
                      PCC140/   PCT   11 2005 003 178.0           Pending
Germany       18-Jun-2007             Title: Touch Sensor System and Method
                      Pol00.02/1   ORD   1904958.4       1 250 507   Granted
European Patent Convention       18-Jan-2001       18-Oct-2006   18-Jan-2021
Title: Electro-Mechanical Actuator
                      Pol00.02/1   EPC   601 23 923.7           Published
Germany       18-Jan-2001           06-Jun-2007 Title: Electro-Mechanical
Actuator
                      Pol00.07/   ORD   01950896.9           Pending European
Patent Convention                     Title: Fuel Door Lock Actuator
                      POL99.01/   ORD   00948896.6       EP 1208280 A1   Granted
European Patent Convention       21-Jul-2000       29-May-2002     Title: Fuel
Filler Door Actuator
                      POL99.06/   ORD   98302017.3       0867904   Granted
European Patent Convention       18-Mar-1998       18-Mar-1998   18-Mar-2018
Title: AUTOMOTIVE INERTIA SWITCH

25

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

 

                      Matter Number/Subcase   Case   Application   Publication  
Patent   Status Country Name   Type   Number/Date   Number/Date   Number/Date  
Expiration Date POL99.06/   EPC   98302017.3       0867904   Granted Germany    
  18-Mar-1998       18-Mar-1998   18-Mar-2018 Title: AUTOMOTIVE INERTIA SWITCH
                      POL99.06/   EPC   98302017.3       0867904   Granted
United Kingdom       18-Mar-1998       18-Mar-1998   18-Mar-2018 Title:
AUTOMOTIVE INERTIA SWITCH
                      02372   ORD   08/137448       5,474,339   Granted United
Kingdom       15-Oct-1993       12-Dec-1995   (US lapsed) Title: Latchuator
                      02792   ORD   08/405477       5,577,583   Granted United
Kingdom       16-Mar-1995       26-Nov-1996   16-Mar-2015 Title: Free Wheel
Double Lock Clutch

Stoneridge Electronics Limited
     The following is a list of any brand names used by the Company:
          OPTAC

26

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Schedule 5.15
Labor Contracts
None.

27

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Schedule 5.22
Business Activities
The Loan Parties and Subsidiaries thereof are engaged in the design and
manufacture of highly engineered electrical and electronic components, modules
and systems for the automotive, medium- and heavy-duty truck, agricultural and
off-highway vehicle markets. The custom-engineered products of the Loan Parties
and their Subsidiaries are predominantly sold on a sole-source basis and consist
of application-specific control devices, sensors, vehicle management electronics
and power and signal distribution systems.

28

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Schedule 5.23
Locations

                          Primary Lease                 Terms (if       Landlord
Contact Location   Leased/Owned   Applicable)   Value of Collateral  
Information
9400 E. Market St.,
  Owned   N/A   N/A   N/A
Warren, OH 44484
               
 
               
729226th Ct.E.,
  Owned   N/A   N/A   N/A
Sarasota, FL 34243
               
 
               
345 S. Mill St.,
  Owned   N/A   N/A   N/A
Lexington, OH 44904
               
 
               
700 Industrial Dr.,
  Owned   N/A   N/A   N/A
Portland, IN 47371
               
 
               
300 Dan Rd., Canton,
  Owned   N/A   N/A   N/A
MA 02021
               
 
               
345 South Mill St.,
  Leased   Month-to-month   $50,000   Phyllis F. Hire,
Lexington, OH 44904
      lease for       Trustee Under
 
      approximately       Agreement Dated
 
      15,000 sq. ft.       March 3, 1988, as
 
              amended, 26 East
 
              Main St., Suite 2,
 
              Lexington, OH 44904
 
               
275 Dan Rd., Canton,
  Leased   3-year lease for   $11,200,000   DIV Enterprise,
MA 02021
      approximately       LLC, c/o the Davis
 
      58,000 sq. ft.       Companies, 1
 
      expiring on 1/31/08       Appleton St.,
 
              Boston, MA 02116
 
               
#6 Butterfield Trail
  Leased   5-year lease for   $350,000   Distribution I
Blvd., El Paso, TX
      approximately       Owner Corp., c/o
79906
      80,000 sq. ft.       Falcon Real Estate
 
      expiring 4/30/09       Investment Co., 150
 
              N. Michigan Ave.,
 
              Suite 2700,
 
              Chicago, IL 60601
 
               
8640 E. Market St.,
  Leased   10-year lease for   $5,800,000   Hunters Square
Warren, OH 44484
      approximately       Inc., P.O. Box
 
      24,500 sq. ft.       8827, Warren, OH
 
      expiring 12/31/09       44484
 
               
Haggerty Corporate
  Leased   Lease for   $300,000   Haggerty Corporate
Center II, 28000
      approximately 8300       Office Centre II,
Cabot Dr. Suite 100,
      sq. ft.; originally       LLC, 39000 Country
Novi, MI 48331
      with 7-year term       Club Dr.,
 
      but extended an       Farmington Hills,
 
      additional five       MI 48331
 
      years and five        
 
      months to expire        
 
      10/31/13        
 
               
Buildings 33 and 34,
  Leased   15-year lease for   $29,000,000   Vantage Point
Adelante House,
      undisclosed number       Business Village
Vantage Point
      of sq. ft. expiring       Limited, Building 7
Business, Village,
      on November 30,       Floor 4, Vantage
Mitcheldean,
      2019       Point Business,
Gloucestershire,
              Village,
GL180DD
              Mitcheldean,
 
              Gloucestershire,
 
              GL180DD
 
               
Unit R, Claverhouse
  Leased   22-year lease for   $6,300,000   Dundee City Council,
Industrial Park East,
      approximately       3 City Square,
Dundee, Scotland
      undisclosed number       Dundee, Scotland

29

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                          Primary Lease                 Terms (if       Landlord
Contact Location   Leased/Owned   Applicable)   Value of Collateral  
Information
 
      of sq. ft. expiring        
 
      3/__/25 (22 years        
 
      from the date of        
 
      entry, which is not        
 
      provided)        

Collateral in the Possession of a Bailee, Warehouseman, Processor or Consignee

                 
C-Plastics, LLC
  N/A   N/A   $10,700 HPT bezel   N/A
243 Whitney Street
          tool held by one of    
Leominster MA 01453
          Stoneridge    
 
          Electronics, Inc.'s    
 
          suppliers    

30

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Schedule 5.25
Material Business Agreements
Lease Agreement between Stoneridge, Inc. and Hunters Square, Inc., with respect
to the Company’s division headquarters for Alphabet.
Indenture dated as of May 1, 2002 among Stoneridge, Inc. as Issuer, Stoneridge
Control Devices, Inc. and Stoneridge Electronics, Inc., as Guarantors, and Fifth
Third Bank, as trustee (note: these are the previously disclosed $200 million
senior notes).
Purchase Agreement dated as of May 1, 2002 among Stoneridge Inc., Stoneridge
Control Devices Inc., Stoneridge Electronics Inc. and Deutsche Bank Securities
Inc., J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated and NatCity
Investments Inc.
Registration Rights Agreement dated as of May 1, 2002 among Stoneridge Inc.,
Stoneridge Control Devices Inc., Stoneridge Electronics Inc. and Deutsche Bank
Securities Inc., J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated
and NatCity Investments Inc.
Form of Tax Indemnification Agreement (with pre-IPO shareholders).
Form of Change in Control Agreement (senior level employees).
Director Share Option Plan.
Form of Long-Term Incentive Plan Share Option Agreement (senior level
employees).
Form of Directors’ Share Option Plan Share Option Agreement (outside directors).
Form of Long-Term Incentive Plan Restricted Shares Grant Agreement (senior level
employees).
Director’s Restricted Shares Plan (outside directors).
Form of Director’s Restricted Shares Plan Agreement (outside directors).
Form of Long-Term Incentive Plan Restricted Shares Grant Agreement including
Performance and Time-Based Restricted Shares (senior level employees).
Amendment to Restricted Shares Grant Agreement (senior level employees).
Amended and Restated Long-Term Incentive Plan.
Outside Directors’ Deferred Compensation Plan.
Employees’ Deferred Compensation Plan.
Employment Agreement between the Company and John C. Corey.
Form of 2006 Restricted Shares Grant Agreement (senior level employees).
Form of 2006 Directors’ Restricted Shares Grant Agreement (outside directors).
Annual Incentive Plan.
Partnership Interest Purchase Agreement for the Sale of Company’s partnership
interest in Industrial Development Associates Limited, dated December 29, 2006.
Severance Agreement and Release, by and between Stoneridge, Inc. and Edward F.
Mosel.

31

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

 

Aircraft Purchase and Sale Agreement, by and between Stoneridge, Inc. and
N384JW, LLC.
Quotaholders’ Agreement, among Marcos Ferretti, Sergio de Cerqueira Leite,
Stoneridge, Inc. and PST Industria Electronica Da Amazonia Ltda., dated
October 29, 1997.
Supply Agreement, between International Truck and Engine Corporation and
Alphabet Division of Stoneridge, Inc., dated July 1, 2005.
Lease Agreement between Stoneridge-Pollak Limited, Stoneridge Inc. and Vantage
Point Business Village Limited, with respect to Stoneridge-Pollak Limited’s
facility.
Schedule 7.1
Sale of Assets

1.   Learjet 60, Serial Number 130, Registration Number N90MC.

32

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

 

Schedule 7.2
Permitted Encumbrances
1. Floating lien by Bank of Scotland on assets of Stoneridge Electronics
Limited.
Stoneridge, Inc.

                      Jurisdiction   Secured Party   File Number   Collateral  
Date FL — Secured Transaction Registry: UCC Debtor   GECC  
200303448995
  Equipment and battery/charger   3/10/03        
 
                     (continuation to above)  
200706789359
  —   10/16/07        
 
                CIT Bank  
200500267721
  Computer equipment   7/26/05        
 
            FL — Sarasota County Circuit Court: Local Judgment   Plaintiff:
Montgomery Ward Credit Corporation
Defendant: Albert Rhodes, Jr.
Garnishee: Stoneridge, Inc. d/b/a Hi-Stat Manufacturing Company  
2006014887
  $2,640.32   1/24/06        
 
            MI — Secretary of State: UCC Debtor   Dane Systems, LLC  
2005190821-1
  Cable Process Machine   11/2/05        
 
            Ohio Secretary of State: UCC Debtor   FirstMerit Bank N.A.  
AP0123380
  Aircraft   2/12/99        
 
                     (continuation to above)  
20032870356
  —   10/14/03        
 
                Dell Financial Services, L.P.  
OH00039864883
  Leased computer equipment   10/15/01        
 
                     (continuation to above)  
20062680402
  —   9/25/06        
 
                Dell Financial Services, L.P.  
OH00048302187
  Leased computer equipment   4/23/02        
 
                     (continuation to above)  
20070800858
  —   3/21/07        
 
                American Express Business
Finance Corporation  
OH00048508496
  Leased equipment from Genisys Corp.   4/29/02        
 
                     (continuation to above)  
20070920556
  —   4/2/07        
 
                National City Bank, as
Collateral Agent  
OH00048730801
  Blanket   5/2/02        
 
                     (continuation to above)  
20071020468
  —   4/11/07        
 
                American Express Business
Finance Corporation  
OH00049646873
  Leased computer equipment   5/21/02        
 
                     (continuation to above)  
20071240570
  —   5/4/07        
 
                Dell Financial Services, L.P.  
OH00050199605
  Leased computer equipment   6/6/02        
 
                     (continuation to above)  
20071240752
  —   5/4/07        
 
                Dell Financial Services, L.P.  
OH00050199827
  Leased computer equipment   6/6/02        
 
                     (continuation to above)  
20071240804
  —   5/4/07        
 
                Dell Financial Services, L.P.  
OH00050200074
  Leased computer equipment   6/6/02        
 
                     (continuation to above)  
20071240754
  —   5/4/07        
 
                Dell Financial Services, L.P.  
OH00050200630
  Leased computer equipment   6/6/02

33

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

 

                      Jurisdiction   Secured Party   File Number   Collateral  
Date          (continuation to above)  
20071240694
  —   5/4/07        
 
                Dell Financial Services, L.P.  
OH0052569187
  Leased computer equipment   7/30/02        
 
                Dell Financial Services  
OH00055304524
  Leased computer equipment   10/15/02        
 
                     (continuation to above)  
20071700722
  —   6/19/07        
 
                Longshore Systems, Inc.  
OH00057420532
  Leased equipment, computer hardware and software, and prepaid service  
12/5/02        
 
                Yale Financial Services, Inc.  
OH00058893817
  (“in lieu”) Forklift   1/10/03        
 
                Yale Financial Services, Inc.  
OH00058905298
  (“in lieu”) Forklift   1/10/03        
 
                The Savings Bank of Manchester  
OH00059222009
  Leased equipment, computer hardware and software, and prepaid service  
1/21/03        
 
                American Express Business
Finance Corporation  
OH00059515050
  Leased Printer   1/30/03        
 
                Forsythe Technology, Inc.  
OH0066296104
  Computer, data processing, telecom and other equip.   7/15/03        
 
                GATX Technology Services
Corporation  
OH0072861040
  Leased software licensing   1/13/04        
 
            *Note: Debtor listed as: Stone Ridge, Inc.   General Electric
Capital
Corporation  
OH00074127783
  Computer equipment and cartridges   2/20/04        
 
                U.S. BANCORP OLIVER-ALLEN TECHNOLOGY LEASING  
OH00075432670
  Leased equipment and other personal property   3/29/04        
 
                Cisco Systems Capital
Corporation  
OH00075965134
  All leased Cisco equipment, insurance, books.   4/12/04        
 
                GATX Technology Services
Corporation  
OH00077434383
  Leased computer equipment and software   5/19/04        
 
                Relational, LLC  
OH00080528034
  Leased goods from Relational, LLC, assigned by Longshore Systems, Inc.  
8/13/04        
 
                Dane Systems, LLC  
OH00095036816
  Cable Process Machine   11/2/05        
 
                US BANCORP  
OH00109965559
  Copiers   12/17/06        
 
                US BANCORP  
OH00110100479
  Copier Accessory   12/20/06        
 
                US BANCORP  
OH00110097086
  Copier Accessory   12/20/06

34

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

 

                      Jurisdiction   Secured Party   File Number   Collateral  
Date     US Bancorp  
OH00115026496
  Copiers   5/11/07        
 
                Crown Credit Company  
OH00115640418
  Crown Lift Truck   5/29/07        
 
                US Bancorp  
OH00116956195
  Copiers   7/6/07        
 
            TX — El Paso District Court: Local Defendant   Plaintiff: Elizabeth
Lopez (et. al) Defendant: Stoneridge, Inc. (et. al)  
2002-2252
          6/7/02

Stoneridge Control Devices, Inc.

                  Jurisdiction   Secured Party   File Number   Collateral   Date
MA — Secretary of the Commonwealth UCC Debtor Search   National City Bank, as
Collateral Agent  
200211308870
  Blanket lien   5/3/02        
 
            National City Bank, as
Collateral Agent  
200756043670 (Continuation to above UCC)
  —   4/11/07

Stoneridge Electronics, Inc.

                  Jurisdiction   Secured Party   File Number       Date TX —
SOS: UCC Debtor Search   National City Bank, as
Collateral Agent  
02-0028677183
  Blanket   5/3/02        
 
                 (continuation of above)  
07-00120346
  —   4/11/07        
 
            C Leasing Company,
subsidiary of Bank of the West  
04-0092272985
  Digital Imager   12/22/04

Stoneridge Far East LLC

                  Jurisdiction   Secured Party   File Number       Date None.  
   
 
       

35

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

 

Schedule 7.3
Permitted Guarantees
Stoneridge, Inc. guarantees the lease for the land on which its UK facility
operates. It has also provided a letter of comfort to its UK pension advisors
that Stoneridge, Inc. will “make up” the difference for incentive calculations
for buyouts.

36

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

 

Schedule 7.4
Permitted Investments
Minda Instruments Joint Venture (Stoneridge, Inc. owns a 49% equity interest in
this joint venture in India)
PST Industria Electronica Da Amazonia Ltda. Joint Venture (Stoneridge, Inc. owns
a 50% equity interest in this joint venture in Brazil)
All America Shares, issued by the Allmerica Financial Corporation (now part of
the Hanover Insurance Group). Stoneridge, Inc. holds a certificate for 5,864
shares worth approximately $250,000. The shares are publicly traded under the
symbol “THG.”

37

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

 

Schedule 7.5
Extensions of Credit
1. Loan Agreement, by and between Stoneridge International Financial Services
Company (as lender) and Stoneridge Pollak Holdings Ltd. (as borrower), dated
May 24, 2000, for an aggregate principal amount up to $9,500,000.
2. Revolving Credit Facility Agreement, by and between Stoneridge International
Financial Services Company (as lender) and Stoneridge-Pollak Limited (as
borrower), dated December 2, 2004, for an aggregate principal amount up to
£13,000,000.
3. Loan Agreement, by and between Stoneridge International Financial Services
Company (as lender) and Stoneridge Electronics AB (as borrower), dated
February 27, 2004, for an aggregate principal amount up to SEK (Swedish Kronor)
23,525,929.

38

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

 

Schedule 7.8
Permitted Indebtedness
1. Stoneridge, Inc. $200 million senior notes due May 1, 2012.
2. Revolving Credit Facility Agreement, as amended, dated as of December 2,
2004, by and between Stoneridge International Financial Services Company and
Stoneridge-Pollak Limited in the principal amount of £13,000,000.
3. Loan Agreement, by and between Stoneridge International Financial Services
Company (as lender) and Stoneridge Pollak Holdings Ltd. (as borrower), dated
May 24, 2000, for an aggregate principal amount up to $9,500,000.

39