EXHIBIT 10.1

 

 

$125,000,000

LOAN AND SECURITY AGREEMENT

among

COOPER-STANDARD HOLDINGS INC.,

as a U.S. Facility Guarantor and a Canadian Facility Guarantor

COOPER-STANDARD AUTOMOTIVE INC.,

as the U.S. Borrower, a U.S. Facility Guarantor and a Canadian Facility
Guarantor

COOPER-STANDARD AUTOMOTIVE CANADA LIMITED,

as the Canadian Borrower and a Canadian Facility Guarantor

THE OTHER GUARANTORS PARTY HERETO,

CERTAIN FINANCIAL INSTITUTIONS,

as Lenders

BANK OF AMERICA, N.A.,

as Agent

and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Syndication Agent

Dated as of May 27, 2010

BANC OF AMERICA SECURITIES LLC,

DEUTSCHE BANK SECURITIES INC.,

UBS SECURITIES LLC,

and

BARCLAYS CAPITAL

as Joint Lead Arrangers and Bookrunners

 

 

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TABLE OF CONTENTS

 

          Page Section 1.    DEFINITIONS; RULES OF CONSTRUCTION    2

1.1

   Definitions    2

1.2

   Accounting Terms    54

1.3

   Uniform Commercial Code    54

1.4

   Certain Matters of Construction    54

1.5

   Interpretation (Quebec)    55 Section 2.    CREDIT FACILITIES    55

2.1

   Commitment    55

2.2

   U.S. Letter of Credit Facility    60

2.3

   Canadian Letter of Credit Facility    64 Section 3.    INTEREST, FEES AND
CHARGES    67

3.1

   Interest    67

3.2

   Fees    70

3.3

   Computation of Interest, Fees, Yield Protection    71

3.4

   Reimbursement Obligations    71

3.5

   Illegality    72

3.6

   Inability to Determine Rates    72

3.7

   Increased Costs; Capital Adequacy    72

3.8

   Mitigation    73

3.9

   Funding Losses    74

3.10

   Maximum Interest    74 Section 4.    LOAN ADMINISTRATION    75

4.1

   Manner of Borrowing and Funding Loans    75

4.2

   Defaulting Lender    78

4.3

   Number and Amount of Interest Period Loans; Determination of Rate    78

4.4

   Loan Party Agent    78

4.5

   One Obligation    79

4.6

   Effect of Termination    79 Section 5.    PAYMENTS    79

5.1

   General Payment Provisions    79

 

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TABLE OF CONTENTS

(continued)

 

          Page

5.2

   Repayment of Obligations    79

5.3

   Payment of Other Obligations    80

5.4

   Marshaling; Payments Set Aside    80

5.5

   Post-Default Allocation of Payments    80

5.6

   Application of Payments    82

5.7

   Loan Account; Account Stated    82

5.8

   Taxes    83

5.9

   Lender Tax Information    84

5.10

   Guarantee by U.S. Facility Loan Parties    85

5.11

   Currency Matters    88

5.12

   Currency Fluctuations    89

Section 6.

   CONDITIONS PRECEDENT    89

6.1

   Conditions Precedent to Initial Loans    89

6.2

   Conditions Precedent to All Credit Extensions    93

Section 7.

   COLLATERAL    93

7.1

   Grant of Security Interest    93

7.2

   Lien on Deposit Accounts; Cash Collateral    94

7.3

   Other Collateral    95

7.4

   No Assumption of Liability    96

7.5

   Further Assurances    96

7.6

   Certain Determinations    96

Section 8.

   COLLATERAL ADMINISTRATION    96

8.1

   Borrowing Base Certificates    96

8.2

   Administration of Accounts    97

8.3

   Administration of Inventory    98

8.4

   Administration of Equipment    99

8.5

   Administration of Deposit Accounts    99

8.6

   General Provisions    100

8.7

   Power of Attorney    101

Section 9.

   REPRESENTATIONS AND WARRANTIES    102

 

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TABLE OF CONTENTS

(continued)

 

          Page

9.1

  

General Representations and Warranties

   102

9.2

  

Complete Disclosure

   109

Section 10.

  

COVENANTS AND CONTINUING AGREEMENTS

   109

10.1

  

Affirmative Covenants

   109

10.2

  

Negative Covenants

   114

10.3

  

Financial Covenant

   124

Section 11.

  

EVENTS OF DEFAULT; REMEDIES ON DEFAULT

   124

11.1

  

Events of Default

   124

11.2

  

Remedies upon Default

   126

11.3

  

License

   127

11.4

  

Setoff

   127

11.5

  

Remedies Cumulative; No Waiver

   127

11.6

  

Judgment Currency

   128

Section 12.

  

AGENT

   128

12.1

  

Appointment, Authority and Duties of Agent

   128

12.2

  

Agreements Regarding Collateral and Field Examination Reports

   130

12.3

  

Reliance By Agent

   131

12.4

  

Action Upon Default

   131

12.5

  

Ratable Sharing

   132

12.6

  

Indemnification of Agent Indemnitees

   132

12.7

  

Limitation on Responsibilities of Agent

   132

12.8

  

Successor Agent and Co-Agents

   133

12.9

  

Due Diligence and Non-Reliance

   133

12.10

  

Replacement of Certain Lenders

   134

12.11

  

Remittance of Payments and Collections

   134

12.12

  

Agent in its Individual Capacity

   135

12.13

  

Agent Titles

   135

12.14

  

No Third Party Beneficiaries

   135

Section 13.

  

BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS

   135

 

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TABLE OF CONTENTS

(continued)

 

          Page

13.1

  

Successors and Assigns

   135

13.2

  

Participations

   136

13.3

  

Assignments

   136

Section 14.

  

MISCELLANEOUS

   138

14.1

  

Consents, Amendments and Waivers

   138

14.2

  

Indemnity

   139

14.3

  

Notices and Communications

   139

14.4

  

Performance of the Loan Parties’ Obligations

   140

14.5

  

Credit Inquiries

   140

14.6

  

Severability

   141

14.7

  

Cumulative Effect; Conflict of Terms

   141

14.8

  

Counterparts

   141

14.9

  

Entire Agreement

   141

14.10

  

Relationship with Lenders

   141

14.11

  

No Advisory or Fiduciary Responsibility

   141

14.12

  

Confidentiality

   142

14.13

  

Certifications Regarding Senior Note Indenture

   142

14.14

  

GOVERNING LAW

   142

14.15

  

Consent to Forum

   142

14.16

  

Waivers by Loan Parties

   143

14.17

  

Patriot Act and PCMLFTA Notice

   144

14.18

  

Reinstatement

   144

14.19

  

Nonliability of Lenders

   144

 

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LIST OF EXHIBITS AND SCHEDULES

 

Exhibit A-1    Form of Canadian Revolver Note Exhibit A-2    Form of U.S.
Revolver Note Exhibit B    Notice of Borrowing Exhibit C    Notice of
Conversion/Continuation Exhibit D    Assignment and Acceptance Exhibit E   
Assignment Notice Exhibit F    Form of Intercompany Note Exhibit G    Form of
Perfection Certificate Exhibit H    Form of Borrowing Base Certificate Exhibit I
   Form of Landlord Waiver Exhibit J    Form of Bailee Letter Schedule 1.1(a)   
Commitments of Lenders Schedule 1.1(b)    Contingent Obligations Schedule 1.1(c)
   Existing Letters of Credit Schedule 1.1(d)    Investments Schedule 6.1   
List of Closing Documents Schedule 8.5    Deposit Accounts Schedule 8.6.1   
Business Locations Schedule 9.1.4    Corporate Names and Capital Structure
Schedule 9.1.5    Prior Corporate Names and Locations Schedule 9.1.11   
Intellectual Property Schedule 9.1.14    Environmental Matters Schedule 9.1.15
   Restrictive Agreements Schedule 9.1.17    Litigation Schedule 9.1.18    ERISA
Matters Schedule 9.1.20    Labor Contracts Schedule 10.2.1(t)    Debt Schedule
10.2.2    Liens Schedule 10.2.5    Loans Schedule 10.1.10    Post-Closing
Matters

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LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) is dated as of May 27, 2010,
among COOPER-STANDARD HOLDINGS INC., a Delaware corporation (“Holdings”) as a
U.S. Facility Guarantor and a Canadian Facility Guarantor (each as defined
herein), COOPER-STANDARD AUTOMOTIVE INC., an Ohio corporation (the “U.S.
Borrower”), COOPER-STANDARD AUTOMOTIVE CANADA LIMITED, an Ontario corporation
(together with its permitted successors, the “Canadian Borrower”, and together
with the U.S. Borrower, the “Borrowers”), the other U.S. Subsidiaries (as
defined herein) of Holdings which are and may hereafter become party to this
Agreement as U.S. Facility Guarantors and Canadian Facility Guarantors, the
other Canadian Subsidiaries (as defined herein) of Holdings which are or may
hereafter become party to this Agreement as Canadian Facility Guarantors, the
financial institutions party to this Agreement from time to time as lenders
(collectively, “Lenders”), and BANK OF AMERICA, N.A., a national banking
association, in its capacity as collateral agent and administrative agent for
itself and the Secured Parties (as defined herein) (together with any successor
agent appointed pursuant to Section 12.8, “Agent”).

R E C I T A L S:

A. On August 3, 2009, Holdings, the then-existing U.S. Domiciled Loan Parties
filed voluntary petitions for reorganization under Chapter 11 of the United
States Bankruptcy Code (11 U.S.C. §§101-1532, as amended, the “U.S. Bankruptcy
Code”) in the United States Bankruptcy Court for the District of Delaware (the
“U.S. Bankruptcy Court”), jointly administered as Case No. 09-12743(PJW) and
continued in the possession of their property and in the management of their
businesses pursuant to Sections 1107 and 1108 of the U.S. Bankruptcy Code (the
“U.S. Bankruptcy Cases”).

B. On August 4, 2009, the Canadian Borrower commenced proceedings, Court File
No. CV-09-8307-00CL (the “Canadian CCAA Case”), in the Ontario Superior Court of
Justice (Commercial List) (the “Canadian CCAA Court”) pursuant to the Canada’s
Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (the “CCAA”).

C. On March 26, 2010, the then-existing U.S. Domiciled Loan Parties filed their
Second Amended Joint Chapter 11 Plan of Reorganization (the “U.S. Plan”) and a
disclosure statement and on April 16, 2010 the Canadian Borrower filed its
Second Amended Plan of Compromise and Arrangement under the CCAA (the “Canadian
Plan”, and together with the U.S. Plan, the “Reorganization Plans”).

D. The U.S. Plan proposes, among other things, to: (i) issue shares of new
common stock, par value $0.001 per share, of Holdings (the “New Common Stock”)
to holders of pre-petition claims with respect to certain senior notes,
(ii) issue shares of new 7% cumulative participating convertible preferred
stock, par value $0.001 per share, of Holdings (the “New Preferred Stock”) to
the Backstop Parties (as defined below), (iii) issue New Common Stock to holders
of pre-petition claims with respect to certain senior subordinated notes and
(iv) offer rights to purchase additional shares to certain eligible claimholders
at a purchase price of $21.54 per Share (the “Rights Offering”).

E. On March 19, 2010, Holdings and the backstop purchasers party thereto (the
“Backstop Parties”) entered into that certain Commitment Agreement pursuant to
which, among

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other things, the Backstop Parties, in order to facilitate the Rights Offering,
agreed to purchase, and Holdings agreed to sell, an aggregate number of shares
of New Common Stock equal to the number of shares that were not validly
subscribed for and purchased pursuant to the Rights Offering by the applicable
claimholders.

F. On May 12, 2010, the U.S. Bankruptcy Court entered the order confirming the
U.S. Plan (the “U.S. Confirmation Order”) pursuant to which, among other things,
the Bankruptcy Court approved the transactions contemplated by the U.S. Plan and
the Rights Offering.

G. On April 16, 2010, the Canadian CCAA Court made an order (the “Canadian
Sanction Order”) sanctioning the Canadian Plan.

H. On the date hereof (the “U.S. Effective Date”), concurrently with the
effectiveness of this Agreement, the U.S. Plan shall become effective in
accordance with its terms.

I. On the date hereof (the “Canadian Effective Date”) concurrently with the
effectiveness of this Agreement, the Canadian Plan shall become effective in
accordance with its terms.

J. In connection with the Transactions contemplated by the Confirmation Order,
the Canadian Sanction Order, the Reorganization Plans and the Rights Offering,
each of the Borrowers has requested that Lenders provide a revolving credit
facility to such Borrower, and Lenders are willing to provide such credit
facilities on the terms and conditions set forth in this Agreement.

K. Each Subsidiary of Holdings which is or hereafter becomes a party hereto as a
U.S. Facility Guarantor is or will be affiliated, is or will be engaged in
interrelated businesses, and is or will derive substantial direct and indirect
benefit from extensions of credit to the U.S. Borrower.

L. Each Subsidiary of Holdings which is or hereafter becomes a party hereto as a
Canadian Facility Guarantor is or will be affiliated, is or will be engaged in
interrelated businesses, and is or will derive substantial direct and indirect
benefit from extensions of credit to the Canadian Borrower.

NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties
agree as follows:

SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION

1.1 Definitions. As used herein, the following terms have the meanings set forth
below:

ABL Priority Collateral: as defined in Section 7.1.

Account: as defined in the UCC and the PPSA, as applicable, including all rights
to payment for goods sold or leased, or for services rendered.

 

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Account Debtor: a Person who is obligated under an Account, Chattel Paper or
General Intangible.

Acquisition: any transaction or series of related contemporaneous transactions
for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of all or
substantially all of any line of business or division of a Person (other than a
Person that is already a Wholly-Owned Subsidiary of Holdings) or other assets or
properties of a Person, (b) the acquisition of all or any portion of the Equity
Interests of any Person (other than a Person that is already a Wholly-Owned
Subsidiary of Holdings), or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is already a
Wholly-Owned Subsidiary of Holdings).

Affiliate: with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified. “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise. “Controlling” and
“Controlled” have correlative meanings.

Agent: as defined in the preamble to this Agreement.

Agent Fee Letter: the agent fee letter agreement between Agent, Holdings and the
Borrowers dated as of April 21, 2010.

Agent Indemnitees: Agent and its officers, directors, employees, Affiliates,
agents and attorneys.

Agent Professionals: attorneys, accountants, appraisers, auditors, business
valuation experts, environmental engineers or consultants, turnaround
consultants, and other professionals and experts retained by Agent.

Allocable Amount: as defined in Section 5.10.3.

Anti-Terrorism Laws: any laws relating to terrorism or money laundering,
including the Patriot Act and the Proceeds of Crime Act.

Applicable Law: all laws, rules and regulations applicable to the Person,
conduct, transaction, agreement or matter in question, including all applicable
statutory law and common law, and all provisions of constitutions, treaties,
statutes, rules, regulations, orders and decrees of Governmental Authorities.

Applicable Lenders: with respect to the U.S. Borrower, U.S. Lenders, and with
respect to the Canadian Borrower, Canadian Lenders.

Applicable Loan Party Group: (i) with respect to the U.S. Borrower, the U.S.
Facility Loan Parties and (ii) with respect to the Canadian Borrower, the
Canadian Facility Loan Parties that are domiciled in Canada and CS Automotive
LLC.

 

3

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Applicable Margin: with respect to any Type of Loan and such other Obligations
specified below, the respective margin set forth below, as determined by
reference to the Average Quarterly Availability:

 

Level

  

Average

Quarterly

Availability

   LIBOR Loans,
Canadian BA Rate
Loans, Letter of Credit
Fees     U.S. Base Rate Loans, Canadian
Base Rate Loans and Canadian
Prime Rate Loans   I   

Greater than

or equal to

$70,000,000

   3.25 %    2.25 %  II   

Greater than

or equal to

$35,000,000

but less than

$70,000,000

   3.50 %    2.50 %  III   

Less than

$35,000,000

   3.75 %    2.75 % 

Until January 1, 2011, margins shall be determined as if Level II were
applicable. Thereafter, the Applicable Margin shall be adjusted quarterly as of
the first (1st) day of each calendar quarter, based upon the Average Quarterly
Availability for the immediately preceding calendar quarter.

Approved Fund: any Person (other than a natural person) that is engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in its ordinary course of activities, has the
capacity to fund Revolver Loans hereunder and is administered or managed by a
Lender, an entity that administers or manages a Lender, or an Affiliate of
either.

Asset Disposition: a sale, lease, license, consignment, transfer or other
disposition of Property of a Loan Party or a Subsidiary, including a disposition
of Property in connection with a sale-leaseback transaction or synthetic lease.

Asset Review and Approval Conditions: with respect to any Acquisition,
amalgamation or merger in respect of which the Accounts or Inventory acquired
therein or thereby are requested to be included in the Canadian Borrowing Base
or U.S. Borrowing Base, Agent shall have completed its review of such assets,
including, without limitation, field examinations, audits, appraisals and other
due diligence as Agent shall in its Permitted Discretion require; it being
acknowledged and agreed that, (1) such additional assets, if any, to be included
in the Canadian Borrowing Base or U.S. Borrowing Base may be subject to
different advance rates or eligibility criteria or may require the imposition of
additional reserves with respect thereto and (2) prior to the inclusion of any
additional assets in the Canadian Borrowing Base or U.S. Borrowing Base, all
actions shall have been taken to ensure that Agent has a perfected and
continuing first priority security interest in and Lien on such assets (to the
extent otherwise required herein).

 

4

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Assignment and Acceptance: an assignment agreement between a Lender and Eligible
Assignee, in the form of Exhibit D.

Assignment of Claims Act: Assignment of Claims Act of 1940, 31 U.S.C. § 3727, 41
U.S.C. § 15, as amended.

Availability: at any time, the sum of the Canadian Availability and the U.S.
Availability, in each case, at such time.

Average Period Availability: for any period, an amount equal to the sum of the
Availability for each day of such period (determined as of the close of business
of each such day) divided by the actual number of days in such period, as
determined by Agent, which determination shall be conclusive absent manifest
error.

Average Quarterly Availability: for any calendar quarter, an amount equal to the
sum of the Availability for each day of such calendar quarter (determined as of
the close of business of each such day) divided by the actual number of days in
such calendar quarter, as determined by Agent, which determination shall be
conclusive absent manifest error.

Backstop Parties: as defined in the Recitals hereto.

Bank of America: Bank of America, N.A., a national banking association, and its
successors and assigns.

Bank of America (Canada): Bank of America, N.A. (acting through its Canada
branch).

Bank of America Indemnitees: Bank of America and its officers, directors,
employees, Affiliates, agents and attorneys.

Bank Product: any of the following products, services or facilities extended to
any Loan Party or Subsidiary by a Lender or any of its Affiliates: (a) Cash
Management Services; (b) products under Hedging Agreements; (c) commercial
credit card and merchant card services; and (d) other banking products or
services as may be requested by any Loan Party or Subsidiary, other than Letters
of Credit and Excluded Products; provided, however, that for any of the
foregoing to be included as an “Obligation” for purposes of a distribution under
Section 5.5.1, the Lender or Affiliate providing such Bank Product and Loan
Party Agent must have previously provided written notice to Agent of (i) the
existence of such Bank Product, (ii) the maximum dollar amount of obligations
arising thereunder to be included as a Canadian Bank Product Reserve or U.S.
Bank Product Reserve, as applicable (“Bank Product Amount”), and (iii) the
methodology to be used by such parties in determining the Bank Product Debt
owing from time to time and if Agent has received no such notice with respect to
any such Bank Product, then Agent shall be permitted to assume that no such Bank
Product is outstanding in connection with making distributions under
Section 5.5.1; provided, however, that no such notice from Loan Party Agent
shall be required with respect to any Bank Products provided by Bank of America
or its Affiliates. The Bank Product Amount may be changed from time to time by
Agent (with respect to Bank Products provided by Bank of America or its
Affiliates) in its Permitted Discretion or upon written notice to Agent by the
Lender or Affiliate providing the related Bank Product and Loan Party Agent. No
additional Bank Product Amount may be voluntarily established or increased by
the Loan Parties at any time that a Default or Event of Default exists, or if a
reserve in such amount would cause an Overadvance.

 

5

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Bank Product Amount: as defined in the definition of Bank Product.

Bank Product Debt: Debt and other obligations of a Loan Party relating to Bank
Products.

Bankruptcy Debtors: the U.S. Domiciled Loan Parties and the Canadian Borrower.

Board of Governors: the Board of Governors of the Federal Reserve System.

Borrowed Money: with respect to any Person, any (a) obligation that (i) arises
from the borrowing of money by such Person (including, for the avoidance of
doubt, arising from any Permitted Securitizations of such Person), (ii) is
evidenced by notes, drafts, bonds, debentures, credit documents or similar
instruments, (iii) accrues interest or is a type upon which interest charges are
customarily paid (excluding trade payables or administrative or general expenses
owing in the Ordinary Course of Business) or (iv) was issued or assumed as full
or partial payment for Property (excluding trade payables owing in the Ordinary
Course of Business); (b) capitalized amount in respect of Capital Leases of such
Person; (c) reimbursement obligations by such Person with respect to letters of
credit issued for the account of such Person; and (d) guarantees by such Person
of any of the foregoing owing by another Person.

Borrowers: as defined in the preamble to this Agreement.

Borrowing: a group of Loans of one Type that are made on the same day or are
converted into Loans of one Type on the same day.

Borrowing Base: the Canadian Borrowing Base and/or the U.S. Borrowing Base, as
the context requires.

Borrowing Base Certificate: a certificate, substantially in the form attached as
Exhibit H or otherwise in form and substance satisfactory to Agent, by which
Loan Party Agent certifies calculation of any Borrowing Base.

Business Day: any day excluding Saturday, Sunday and any other day that is a
legal holiday under the laws of the State of North Carolina or the State of New
York or is a day on which banking institutions located in such States are
closed; and when used with reference to (i) a LIBOR Loan denominated in Dollars,
the term shall also exclude any day on which banks are not open for the
transaction of banking business in London, England, (ii) a LIBOR Loan
denominated in Euros, any fundings, disbursements, settlements and payments in
Euros in respect of any such LIBOR Loan, or any other dealings in Euros to be
carried out pursuant to this Agreement in respect of any such LIBOR Loan, the
term shall also exclude any day that is not a TARGET Day; and (iii) a Canadian
Revolver Loan, the term shall also exclude a day on which banks in Toronto,
Ontario, Canada are not open for the transaction of banking business.

Canadian Auto-Extension Letter of Credit: as defined in Section 2.3.1(e).

Canadian Availability: as of any date of determination, the Canadian Borrowing
Base as of such date of determination plus solely for purposes of calculating
“Availability” in connection with the satisfaction of any Internal Specified
Transaction Conditions, the Canadian Suppressed Amount on such date of
determination plus the Canadian Designated Cash Amount on such date of
determination minus the Canadian Revolver Exposure (calculated without
duplication of any amounts reserved under the Canadian LC Reserve) on such date
of determination.

 

6

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Canadian Availability Reserve: the sum (without duplication) of (a) the
Inventory Reserve with respect to the Canadian Domiciled Loan Parties’
Inventory; (b) the Canadian Rent and Charges Reserve; (c) the Canadian LC
Reserve; (d) the Canadian Bank Product Reserve; (e) the aggregate amount of
liabilities secured by Liens upon any Canadian Facility Collateral that are
senior to Agent’s Liens (but imposition of any such reserve shall not waive an
Event of Default arising therefrom); (f) the Canadian Priority Payables Reserve;
(g) the Wage Earner Protection Act Reserve; and (h) such additional reserves
(including, without limitation, dilution reserves), in such amounts and with
respect to such matters, as Agent in its Permitted Discretion may establish.

Canadian BA Rate: with respect to each Interest Period for a Canadian BA Rate
Loan, the rate of interest per annum equal to the average rate applicable to
Canadian Dollar Bankers’ Acceptances having an identical or comparable term as
the proposed Canadian BA Rate Loan displayed and identified as such on the
display referred to as the “CDOR Page” (or any display substituted therefor) of
Reuter Monitor Money Rates Service as at approximately 10:00 a.m. Toronto time
on such day (or, if such day is not a Business Day, as of 10:00 a.m. Toronto
time on the immediately preceding Business Day), plus five (5) basis points,
provided that if such rate does not appear on the CDOR Page at such time on such
date, the rate for such date will be the annual discount rate (rounded upward to
the nearest whole multiple of 1/100 of 1%) as of 10:00 a.m. Eastern time on such
day at which a Canadian chartered bank listed on Schedule 1 of the Bank Act
(Canada) as selected by Agent is then offering to purchase Canadian Dollar
Bankers’ Acceptances accepted by it having such specified term (or a term as
closely as possible comparable to such specified term), plus five (5) basis
points.

Canadian BA Rate Loan: a Canadian Revolver Loan, or portion thereof, funded in
Canadian Dollars and bearing interest calculated by reference to the Canadian BA
Rate.

Canadian Bank Product Reserve: the aggregate amount of reserves, as established
by Agent from time to time in its Permitted Discretion to reflect the reasonably
anticipated liabilities in respect of the then outstanding Bank Product Debt of
the Canadian Domiciled Loan Parties and their Subsidiaries.

Canadian Base Rate: means, for any day, the rate of interest in effect for such
day as publicly announced from time to time by Bank of America (Canada) in
Toronto, Ontario as its “base rate” (the “base rate” being a rate set by Bank of
America (Canada) based on various factors including costs and desired return of
Bank of America (Canada), general economic conditions and other factors, and
used as a reference point for pricing loans in Dollars made at its “base rate”,
which may be priced at, above or below such announced rate.) Any change in the
“base rate” announced by Bank of America (Canada) shall take effect at the
opening of business on the day specified in the public announcement of such
change. Each interest rate based upon the Canadian Base Rate shall be adjusted
simultaneously with any change in the “base rate”. In the event that Bank of
America (Canada) (including any successor or assignee) does not at any time
publicly announce a “base rate”, then “Canadian Base Rate” shall mean the “base
rate” publicly announced by a Schedule 1 chartered bank in Canada selected by
Agent.

Canadian Base Rate Loan: a Canadian Revolver Loan, or portion thereof, funded in
Dollars and bearing interest calculated by reference to the Canadian Base Rate.

Canadian Borrower: as defined in the preamble to this Agreement.

 

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Canadian Borrowing Base: on any date of determination, an amount equal to the
lesser of (a) the Maximum Canadian Facility Amount minus (x) the Canadian
Priority Payables Reserve minus (y) the Wage Earner Protection Act Reserve minus
(z) the Canadian LC Reserve; and (b) (1) the sum of (x) 85% of the Value of
Eligible Accounts of the Canadian Domiciled Loan Parties; plus (y) the lesser of
(i) 70% of the Value of Eligible Inventory of the Canadian Domiciled Loan
Parties; and (ii) 85% of the NOLV Percentage of the Value of Eligible Inventory
of the Canadian Domiciled Loan Parties, minus (2) the Canadian Availability
Reserve.

Canadian Cash Collateral Account: a demand deposit, money market or other
account established by Agent at Bank of America (Canada) or such other financial
institution as Agent may select in its discretion, which account shall be for
the benefit of the Canadian Facility Secured Parties and shall be subject to
Agent’s Liens securing the Canadian Facility Obligations.

Canadian CCAA Case: as defined in the Recitals hereto.

Canadian CCAA Court: as defined in the Recitals hereto.

Canadian Designated Cash Amount: the aggregate amount of cash of the Canadian
Domiciled Loan Parties deposited in segregated DACA Deposit Accounts with Agent.

Canadian Dollars or Cdn$: the lawful currency of Canada.

Canadian Domiciled Loan Party: each Canadian Subsidiary of Holdings now or
hereafter party hereto as a Loan Party, and “Canadian Domiciled Loan Parties”
means all such Persons, collectively.

Canadian Dominion Account: a special account established by the Canadian
Domiciled Loan Parties at Bank of America (Canada) or another bank reasonably
acceptable to Agent, over which Agent has exclusive control for withdrawal
purposes.

Canadian Effective Date: as defined in the Recitals hereto.

Canadian Employee Plan: any material payroll practice and other material
employee benefit plan, policy, program, agreement or arrangement, including
retirement, pension, profit sharing, employment, individual consultant or other
compensation agreement, bonus or other incentive compensation, retention, stock
purchase, equity or equity-based compensation, deferred compensation, severance,
sick leave, vacation, loans, salary continuation, hospitalization, health, life
insurance, educational assistance or other fringe benefit or perquisite plan,
policy, agreement which is or was sponsored, maintained or contributed to by, or
required to be contributed to by, a Canadian Domiciled Loan Party, or with
respect to which a Canadian Domiciled Loan Party has or could reasonably be
expected to have any obligation or liability, contingent or otherwise, in any
case, that is subject to Canadian law (and not other foreign jurisdictions).

Canadian Facility Collateral: Collateral that now or hereafter secures (or is
intended to secure) any of the Canadian Facility Obligations, including Property
of the U.S. Domiciled Loan Parties pledged to secure their Obligations under
their guarantee of the Canadian Facility Obligations.

 

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Canadian Facility Guarantee: each guarantee agreement (including this Agreement)
at any time executed by a Canadian Facility Guarantor in favor of Agent
guaranteeing all or any portion of the Canadian Facility Obligations.

Canadian Facility Guarantor: Holdings, each Canadian Subsidiary of Holdings, CS
Automotive LLC, each other U.S. Subsidiary of Holdings, and each other Person
(if any) who guarantees payment and performance of any Canadian Facility
Obligations.

Canadian Facility Loan Party: the Canadian Borrower or a Canadian Facility
Guarantor.

Canadian Facility Obligations: all applicable Obligations of the Canadian
Facility Loan Parties (excluding, for the avoidance of doubt, all U.S. Facility
Obligations).

Canadian Facility Secured Parties: Agent, Canadian Issuing Bank, Canadian
Lenders, providers of Bank Products to Canadian Facility Loan Parties and the
Lead Arrangers.

Canadian Issuing Bank: (a) Bank of America (Canada) or an Affiliate of Bank of
America (Canada), as an issuer of Letters of Credit under this Agreement and
(b) Deutsche Bank AG, New York Branch or an Affiliate of Deutsche Bank AG, New
York Branch, as an issuer of Letters of Credit under this Agreement.

Canadian LC Obligations: the sum (without duplication) of (a) all amounts owing
by the Canadian Borrower for any drawings under Letters of Credit; (b) the
stated amount of all outstanding Letters of Credit issued for the account of the
Canadian Borrower; and (c) all fees and other amounts owing with respect to
Letters of Credit issued for the account of the Canadian Borrower.

Canadian LC Reserve: the aggregate of all Canadian LC Obligations, other than
(a) those that have been Cash Collateralized; and (b) if no Default or Event of
Default exists, amounts specified in clause (c) of the definition of Canadian LC
Obligations.

Canadian Lenders: Bank of America (Canada) and each other Lender that has issued
a Canadian Revolver Commitment (provided that such Person or an Affiliate of
such Person also has a U.S. Revolver Commitment), including Bank of America
(Canada) in its capacity as a provider of Canadian Swingline Loans. Each
Canadian Lender shall be a Canadian Qualified Lender.

Canadian Letter of Credit Sublimit: $500,000.

Canadian Letters of Credit: as defined in Section 2.3.1 hereof.

Canadian Multi-Employer Plan: each multi-employer plan, within the meaning of
the Regulations under the Income Tax Act (Canada), but excluding, for greater
certainty, any Multi-Employer Plan.

Canadian Non-Extension Notice Date: as defined in Section 2.3.1(e).

Canadian Overadvance: as defined in Section 2.1.5 hereof.

 

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Canadian Overadvance Loan: a Loan made to the Canadian Borrower when a Canadian
Overadvance exists or is caused by the funding thereof.

Canadian Overadvance Loan Balance: on any date, the amount by which the
aggregate Canadian Revolver Exposure exceeds the amount of the Canadian
Borrowing Base on such date.

Canadian Pension Plan: a “registered pension plan” as defined in the Income Tax
Act (Canada), and any other pension plan maintained or contributed to by, or to
which there is or may be an obligation to contribute by, any Loan Party in
respect of its Canadian employees or former Canadian employees, excluding, for
greater certainty, a Canadian Multi-Employer Plan.

Canadian Plan: as defined in the Recitals hereto.

Canadian Prime Rate: on any date, a fluctuating rate of interest per annum equal
to the rate of interest in effect for such day as publicly announced from time
to time by Bank of America (Canada) as its “Canadian Prime Rate”. The “Canadian
Prime Rate” is a rate set by Bank of America (Canada) based upon various factors
including Bank of America (Canada)’s costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate. Any change
in such rate announced by Bank of America (Canada) shall take effect at the
opening of business on the day specified in the public announcement of such
change.

Canadian Prime Rate Loan: a Canadian Revolver Loan, or portion thereof, funded
in Canadian Dollars and bearing interest calculated by reference to the Canadian
Prime Rate.

Canadian Priority Payables Reserve: on any date of determination, a reserve in
such amount as Agent may reasonably determine in its Permitted Discretion, which
reflects the unpaid (when due) or un-remitted (when due) payroll tax deductions,
unpaid (when due) pension plan contributions, employment insurance premiums,
amounts deducted for vacation pay, wages, workers’ compensation and other unpaid
(when due) or unremitted (when due) amounts by any Canadian Domiciled Loan Party
which would give rise to a Lien with priority under Applicable Law over the Lien
of Agent.

Canadian Qualified Lender: a financial institution that is listed on Schedule I,
II, or III of the Bank Act (Canada) or is not a foreign bank for purposes of the
Bank Act (Canada), and if such financial institution is not resident in Canada
and is not deemed to be resident in Canada with respect to any amounts received
pursuant to this Agreement for purposes of Part XIII of the Income Tax Act
(Canada), that financial institution deals at arm’s length with the Canadian
Borrower for purposes of the Income Tax Act (Canada).

Canadian Reimbursement Date: as defined in Section 2.3.2(a).

Canadian Rent and Charges Reserve: the aggregate of (a) all past due rent and
other past due amounts owing by any Canadian Domiciled Loan Party to any
landlord, warehouseman, processor, repairman, mechanic, shipper, freight
forwarder, broker or other Person who possesses any Canadian Facility Collateral
of any Canadian Domiciled Loan Party or could assert a Lien on such Canadian
Facility Collateral under Applicable Law; plus (b) a reserve at least equal to
three (3) months (or such shorter period as Agent determines in its Permitted
Discretion as it will take to liquidate the ABL Priority Collateral at such
location) rent and other charges that could reasonably be expected to be payable
to any such Person who possesses any

 

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Canadian Facility Collateral of any Canadian Domiciled Loan Party and could
reasonably be expected to assert a Lien on such Canadian Facility Collateral
under Applicable Law, unless, in any such case, such Person has executed a
Collateral Access Agreement.

Canadian Revolver Commitment: for any Canadian Lender, its obligation to make
Canadian Revolver Loans and to issue Canadian Letters of Credit, in the case of
Canadian Issuing Bank, or participate in Canadian LC Obligations (excluding
amounts specified in clause (c) of such definition), in the case of the other
Canadian Lenders, to the Canadian Borrower up to the maximum principal amount
shown on Schedule 1.1(a), or as hereafter determined pursuant to each Assignment
and Acceptance to which it is a party, as such Canadian Revolver Commitment may
be adjusted from time to time in accordance with the provisions of Sections
2.1.4 or 11.2. “Canadian Revolver Commitments” means the aggregate amount of
such commitments of all Canadian Lenders.

Canadian Revolver Commitment Termination Date: the earliest of (a) the U.S.
Revolver Commitment Termination Date (without regard to the reason therefor),
(b) the date on which Loan Party Agent terminates or reduces to zero (0) all of
the Canadian Revolver Commitments pursuant to Section 2.1.4, and (c) the date on
which the Canadian Revolver Commitments are terminated pursuant to Section 11.2.

Canadian Revolver Exposure: on any date, an amount equal to the sum of the
Dollar Equivalent of the Canadian Revolver Loans outstanding on such date plus
the Canadian LC Obligations (excluding amounts specified in clause (c) of such
definition) on such date.

Canadian Revolver Loan: a Revolver Loan made by Canadian Lenders to the Canadian
Borrower pursuant to Section 2.1.1(b), and any Canadian Swingline Loan, which
Revolver Loan shall, if denominated in Canadian Dollars, be either a Canadian BA
Rate Loan or a Canadian Prime Rate Loan and, if denominated in Dollars, shall be
either a Canadian Base Rate Loan or a LIBOR Loan, in each case as selected by
the Canadian Borrower or Loan Party Agent.

Canadian Revolver Notes: collectively, each promissory note, if any, executed by
the Canadian Borrower in favor of a Canadian Lender to evidence the Canadian
Revolver Loans funded from time to time by such Canadian Lender, which shall be
in the form of Exhibit A-1 to this Agreement, together with any replacement or
successor notes therefor.

Canadian Sanction Order: as defined in the Recitals hereto.

Canadian Security Agreement: each general security agreement among any Canadian
Domiciled Loan Party and Agent.

Canadian Subsidiary: a Subsidiary of Holdings incorporated or organized under
the laws of Canada or any province or territory of Canada.

Canadian Suppressed Amount: to the extent that the amount calculated pursuant to
clause (b) of the Canadian Borrowing Base definition exceeds the then-current
Canadian Revolver Commitment as of any date of determination, the amount of any
such excess designated in writing by Loan Party Agent to Agent as “Canadian
Suppressed Amount” under this Agreement; provided, that in no event shall the
Canadian Suppressed Amount exceed $5,000,000 less the U.S. Suppressed Amount as
of such date of determination.

 

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Canadian Swingline Loan: any Borrowing of Canadian Prime Rate Loans made
pursuant to Section 4.1.3(c).

Canadian Unused Line Fee Rate: at any date of determination, a rate per annum
equal to (a) .50% when the Canadian Revolver Exposure is greater than 50% of the
Canadian Revolver Commitments and (b) .75% at all other times.

Capital Expenditures: all liabilities incurred or expenditures made by a Loan
Party or Subsidiary for the acquisition of any fixed assets, or any
improvements, replacements, substitutions or additions thereto with a useful
life of more than one (1) year that would, in any case, in accordance with GAAP,
be included as additions to property, plant and equipment, but excluding (to the
extent that they would otherwise be included): including, for the avoidance of
doubt, any amount included in the calculation of the Fixed Charge Coverage Ratio
(i) any expenditures during such period made for the replacement or restoration
of assets with assets of the same or similar type to the extent paid for by any
identifiable proceeds of casualty insurance or condemnation awards; (ii) the
purchase price of assets purchased during such period to the extent the
consideration therefor consists of the proceeds of a substantially concurrent
sale of assets; (iii) any expenditures for the purchase price of assets acquired
in a Permitted Acquisition during such period; (iv) liabilities incurred or
expenditures made to the extent such Loan Party or Subsidiary has received
reimbursement in cash from a third party during such period; (v) the non-cash
book value of any asset owned by any Loan Party or Subsidiary which is included
as an addition to property, plant and equipment as a result of the reuse of such
asset during such period without a corresponding expenditure actually having
been made or liability incurred in such period; (vi) the non-cash purchase price
of equipment purchased during such period to the extent the consideration
therefor consists of used or surplus equipment traded in at the time of such
purchase; (vii) the non-cash purchase price of equipment that is purchased
during such period and substantially contemporaneously with the trade-in of
existing equipment to the extent that the gross amount of such purchase price is
reduced by the credit granted by the seller of such equipment for the equipment
being traded in at such time; and (viii) any expenditures during such period
made with the proceeds of an issuance of Equity Interests by Holdings with
respect to which: (a) such proceeds shall have been received by Holdings within
one-hundred eighty days (180) of such expenditure, and (b) Agent shall have
received a certificate of a Senior Officer of Loan Party Agent certifying in
reasonable detail as to compliance with preceding clause (a).

Capital Lease: any lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.

Cash Collateral: cash or Cash Equivalents, and any interest or other income
earned thereon, that is delivered to Agent to Cash Collateralize any
Obligations.

Cash Collateral Account: the Canadian Cash Collateral Account and/or the U.S.
Cash Collateral Account, as the context may require.

Cash Collateralize: the delivery of cash to Agent, as security for the payment
of Obligations, in an amount equal to (a) with respect to LC Obligations, 105%
of the aggregate amount of such LC Obligations, and (b) with respect to any
inchoate, contingent or other Obligations (including Obligations arising under
Bank Products), Agent’s good faith estimate of the amount due or to become due,
including all fees and other amounts relating to such Obligations. “Cash
Collateralization” and “Cash Collateralized” have correlative meanings.

 

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Cash Dominion Trigger Period: the period (a) commencing on the day that an Event
of Default occurs, or Average Period Availability (for a one-day period) is less
than the greater of (i) $21,875,000 and (ii) 17.5% of the Commitments at such
time; and (b) continuing until, during the preceding sixty (60) consecutive day
period, no Event of Default has existed and Average Period Availability has been
greater than the greater of (i) $21,875,000 and (ii) 17.5% of the Commitments at
such time.

Cash Equivalents: (a) marketable obligations issued or unconditionally
guaranteed by, and backed by the full faith and credit of, the United States or
Canadian government, maturing within twelve (12) months of the date of
acquisition; (b) certificates of deposit, demand deposits, time deposits and
bankers’ acceptances maturing within twelve (12) months of the date of
acquisition, and overnight bank deposits, in each case which are issued by (i) a
commercial bank organized under the laws of the United States, Canada or any
state or district of the United States or province or territory of Canada, rated
A-1 (or better) by S&P or P-1 (or better) by Moody’s at the time of acquisition,
and not subject to offset rights or (ii) a Lender or any Affiliate of a Lender;
(c) repurchase obligations with a term of not more than thirty (30) days for
underlying investments of the types described in clauses (a) and (b) entered
into with any bank, Lender or any Affiliate of a Lender meeting the
qualifications specified in clause (b); (d) commercial paper rated A-1 (or
better) by S&P or P-1 (or better) by Moody’s, and maturing within nine
(9) months of the date of acquisition; and (e) shares of any money market fund
that has substantially all of its assets invested continuously in the types of
investments referred to above, has net assets of at least $500,000,000 and has
the highest rating obtainable from either Moody’s or S&P.

Cash Management Services: any services provided from time to time by any Lender
or any of its Affiliates to any Loan Party or Subsidiary in connection with
operating, collections, payroll, trust, or other depository or disbursement
accounts, including automated clearinghouse, e-payable, electronic funds
transfer, wire transfer, controlled disbursement, overdraft, depository,
information reporting, lockbox and stop payment services.

Casualty Event: any involuntary loss of title, any involuntary loss of, damage
to or any destruction of, or any condemnation or other taking (including by any
Governmental Authority) of, any property of any Loan Party or any of its
Subsidiaries. “Casualty Event” shall include but not be limited to any taking of
all or any part of any Real Property of any Person or any part thereof, in or by
condemnation or other eminent domain proceedings pursuant to any Requirement of
Law, or by reason of the temporary requisition of the use or occupancy of all or
any part of any Real Property of any Person or any part thereof by any
Governmental Authority, civil or military, or any settlement in lieu thereof.

CCAA: as defined in the Recitals hereto.

CERCLA: the Comprehensive Environmental Response, Compensation and Liability
Act, as amended (42 U.S.C. § 9601 et seq.).

Change in Law: the occurrence, after the date hereof, of (a) the adoption or
taking effect of any law, rule, regulation or treaty; (b) any change in any law,
rule, regulation or treaty or in the administration, interpretation or
application thereof by any Governmental Authority; or (c) the making or issuance
of any request, guideline or directive (whether or not having the force of law)
by any Governmental Authority.

 

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Change of Control: if on or at any time after the Closing Date: (a) a majority
of the seats (other than vacant seats) on the board of directors of Holdings
shall at any time be occupied by persons who were not (i) members of the board
of directors of Holdings on the Closing Date (or appointed shortly thereafter as
specifically contemplated by the U.S. Plan), (ii) nominated by the board of
directors of Holdings after the Closing Date or (iii) appointed by the directors
referred to in clause (i) or (ii) after the Closing Date, (b) any person or
group (within the meaning of Rule 13d-5 of the Securities and Exchange Act of
1934, as in effect on the date hereof) other than the Permitted Holders shall
own, directly or indirectly, beneficially or of record, shares representing more
than 35% of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of Holdings, (c) Holdings shall cease to own, directly
or indirectly, beneficially and of record, 100% of the issued and outstanding
capital stock of the U.S. Borrower, or (d) the U.S. Borrower shall cease to own,
directly or indirectly, beneficially and of record, 100% of the issued and
outstanding capital stock of the Canadian Borrower.

Claims: all liabilities, obligations, losses, damages, penalties, judgments,
proceedings, interest, costs and expenses of any kind (including remedial
response costs, reasonable attorneys’ fees and Extraordinary Expenses) at any
time (including after Full Payment of the Obligations, resignation or
replacement of Agent, or replacement of any Lender) incurred by or asserted
against any Indemnitee in any way relating to (a) any Loans, Letters of Credit,
Loan Documents, or the use thereof or transactions relating thereto, (b) any
action taken or omitted to be taken by any Indemnitee in connection with any
Loan Documents, (c) the existence or perfection of any Liens, or realization
upon any Collateral, (d) exercise of any rights or remedies under any Loan
Documents or Applicable Law, (e) failure by any Loan Party to perform or observe
any terms of any Loan Document, or (f) any actual or alleged presence or
Environmental Release or threatened Environmental Release of Hazardous Materials
on, at, under or from any real property owned, leased or operated by any Loan
Party or Subsidiary of any Loan Party at any time (other than any such presence,
Environmental Release or threatened Environmental Release resulting solely from
acts or omissions by Persons other than Holdings or any of its Subsidiaries
after Agent sells the applicable Real Estate pursuant to a foreclosure or has
accepted a deed in lieu of foreclosure), or any Environmental Claim related in
any way to any Loan Party or Subsidiary, in each case, including all costs and
expenses relating to any investigation, litigation, arbitration or other
proceeding (including an Insolvency Proceeding or appellate proceedings),
whether or not the applicable Indemnitee is a party thereto.

Closing Date: as defined in Section 6.1.

Code: the Internal Revenue Code of 1986.

Collateral: all of each Loan Party’s right, title and interest in all Property
of such Loan Party, subject to a Lien under, or purported to be subject to a
Lien under, the Security Documents, that, in each case, now or hereafter secures
(or is intended to secure) any of the Obligations.

Collateral Access Agreement: an agreement, in form and substance satisfactory to
Agent, by which (a) for any Collateral located on premises leased by a Loan
Party, the lessor waives or subordinates any Lien it may have on the Collateral,
and agrees to permit Agent to enter upon the premises and remove the Collateral
or to use the premises to store or dispose of the Collateral; (b)

 

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for any Collateral held by a warehouseman, processor, shipper, customs broker or
freight forwarder, such Person waives or subordinates any Lien it may have on
the Collateral, agrees to hold any Documents in its possession relating to the
Collateral as agent for Agent, and agrees to deliver the Collateral to Agent
upon request; (c) for any Collateral held by a repairman, mechanic or bailee,
such Person acknowledges Agent’s Lien, waives or subordinates any Lien it may
have on the Collateral, and agrees to deliver the Collateral to Agent upon
request; and (d) for any Collateral subject to a Licensor’s Intellectual
Property rights, the Licensor grants to Agent the right, vis-à-vis such
Licensor, to enforce Agent’s Liens with respect to the Collateral, including the
right to dispose of it with the benefit of the Intellectual Property, whether or
not a default exists under any applicable License; it being understood that any
“Landlord Waiver” in substantially the form of Exhibit I and any “Bailee Letter”
in substantially the form of Exhibit J, in any case obtained by or on behalf of
any Loan Party, shall be satisfactory to Agent as a Collateral Access Agreement.

Commitment: for any Lender, the aggregate amount of such Lender’s Facility
Commitments. “Commitments” means the aggregate amount of all Facility
Commitments, which amount shall be $125,000,000 on the Closing Date.

Compliance Certificate: a certificate, in form and substance satisfactory to
Agent, by which Loan Party Agent, for and on behalf of the Loan Parties,
certifies compliance with Section 10.3 during a Financial Covenant Trigger
Period, provides a calculation of the Fixed Charge Coverage Ratio as of the last
day of each month regardless of whether or not such month occurs during a
Financial Covenant Trigger Period, and certifies compliance with all provisions
hereof that require satisfaction of the Specified Transaction Conditions
(including the calculations thereof in reasonable detail) and lists all
outstanding Bank Products with Lenders (or their Affiliates) other than Bank of
America (or its Affiliates).

Contingent Obligation: any obligation of a Person arising from a guarantee,
indemnity or other assurance of payment or performance of any indebtedness,
lease, dividend or other obligation (“primary obligations”) of another obligor
(“primary obligor”) in any manner, whether directly or indirectly, including any
obligation of such Person under any (a) guarantee, endorsement, co-making or
sale with recourse of an obligation of a primary obligor; (b) obligation to make
take-or-pay or similar payments regardless of nonperformance by any other party
to an agreement; and (c) arrangement (i) to purchase any primary obligation or
security therefor, (ii) to supply funds for the purchase or payment of any
primary obligation, (iii) to maintain or assure working capital, equity capital,
net worth or solvency of the primary obligor, (iv) to purchase Property or
services for the purpose of assuring the ability of the primary obligor to
perform a primary obligation, or (v) otherwise to assure or hold harmless the
holder of any primary obligation against loss in respect thereof. The amount of
any Contingent Obligation shall be deemed to be the stated or determinable
amount of the primary obligation (or, if less, the maximum amount for which such
Person may be liable under the instrument evidencing the Contingent Obligation)
or, if not stated or determinable, the maximum reasonably anticipated liability
with respect thereto.

Creditor Representative: under any Applicable Law, a receiver, interim receiver,
receiver and manager, trustee (including any trustee in bankruptcy), custodian,
conservator, administrator, examiner, sheriff, monitor, assignee, liquidator,
provisional liquidator, sequestrator or similar officer or fiduciary.

 

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CWA: the Clean Water Act, as amended, (33 U.S.C. §§ 1251 et seq.).

DACA Deposit Account: a Deposit Account subject to a Deposit Account Control
Agreement.

Debt: as applied to any Person, without duplication, (a) all Borrowed Money;
(b) all Contingent Obligations in respect of Borrowed Money; and (c) in the case
of a Loan Party, the Obligations. The Debt of a Person shall include any
recourse indebtedness of any partnership in which such Person is a general
partner or joint venturer, except to the extent the terms of such Debt provide
that (i) such Person shall not be liable therefor or (ii) no default with
respect thereto would permit upon notice, lapse of time or both any holder of
such Debt to declare a default or cause the payment thereof to be accelerated or
payable prior to its stated maturity, and in any case, any recourse indebtedness
shall not exceed the greater of the book value or fair market value of the
properties to which recourse is given, if applicable. In addition, “Debt” shall
not include (i) deferred compensation arrangements, (ii) earn-out obligations
until matured or earned or (iii) non-compete or consulting obligations incurred
in connection with Permitted Acquisitions not evidenced by a promissory note.

Debt to be Repaid: means Borrowed Money of each Loan Party and its Subsidiaries
outstanding immediately before the occurrence of the Closing Date and required
by the Reorganization Plans to be repaid on the Closing Date. For the avoidance
of doubt, the obligations owing under the Existing Letters of Credit do not
constitute “Debt to be Repaid”.

Default: an event or condition that, with the lapse of time or giving of notice,
would constitute an Event of Default.

Default Rate: for any Obligation (including, to the extent permitted by law,
interest not paid when due), 2.00% per annum plus the interest rate otherwise
applicable thereto or if such Obligation does not bear interest, a rate equal to
the U.S. Base Rate, plus 2.00% per annum.

Defaulting Lender: any Lender that (a) fails to make any payment or provide
funds to Agent or any Borrower as required hereunder or fails otherwise to
perform its obligations under any Loan Document, and such failure is not cured
within three (3) Business Days, (b) notified the Loan Party Agent, Agent, any
Issuing Bank or any Lender in writing that it does not intend to comply with any
of its funding obligations under this Agreement or has made a public statement
to the effect that it does not intend to comply with its funding obligations
under this Agreement or generally under other agreements in which it commits to
extend credit, (c) failed, within three (3) Business Days after request by
Agent, to confirm that it will comply with the terms of this Agreement relating
to its obligations to fund prospective Loans and participations in then
outstanding Letters of Credit and Swingline Loans or (d) is the subject of any
Insolvency Proceeding or has a parent company that is the subject of any
Insolvency Proceeding.

Deposit Account: as defined in the UCC (and/or with respect to any Deposit
Account located in Canada, any bank account with a deposit function).

Deposit Account Control Agreements: the deposit account control agreements in
form and substance satisfactory to Agent executed by each lockbox servicer and
financial institution maintaining a lockbox and/or Deposit Account (other than
an Excluded Deposit Account) for a Loan Party, in favor of Agent and meeting the
requirements set forth in Section 8.2.4.

 

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Designated External Acquisition: an Acquisition by an External Subsidiary where:
(a) some or all of the proceeds used to fund such Acquisition were transferred
to such External Subsidiary by a Loan Party, (b) at the time of the transfer,
the applicable Loan Party would have been prohibited by the External Specified
Transaction Conditions from directly investing some or all of the amount
transferred to such External Subsidiary (such amount, the “Excess Amount”),
(c) the transfer was made (i) within ninety (90) days of the applicable
Acquisition and (ii) for the express purpose of funding such Acquisition and
(d) the External Specified Transaction Conditions have been satisfied in
connection therewith as to the Excess Amount.

Designation Date: the first (1st) date after the Closing Date on which there
shall occur (a) any event described in Section 11.1(i) with respect to any
Borrower, or (b) an acceleration of Loans and termination of the Commitments
pursuant to Section 11.2.

DIP Agreement: that certain Debtor-In-Possession Credit Agreement dated as of
December 18, 2009 (as amended, modified or supplemented), among Holdings, the
U.S. Borrower, the Canadian Borrower and Metzeler Automotive Profile Systems
GMBH as borrowers, the lenders party thereto, as lenders, and Deutsche Bank
Trust Company Americas as administrative agent, collateral agent and
documentation agent and Deutsche Bank Securities Inc. as syndication agent, sole
lead bookrunner and sole lead arranger.

Disqualified Equity Interests: Equity Interests that (a) mature or are
mandatorily redeemable or subject to mandatory repurchase or redemption or
repurchase at the option of the holders thereof (including those Equity
Interests that may be required to be redeemed upon the failure to maintain or
achieve any financial performance standards), in each case in whole or in part
and whether upon the occurrence of any event, pursuant to a sinking fund
obligation on a fixed date or otherwise, prior to the date that is one hundred
eighty (180) days after the scheduled Facility Termination Date (other than upon
a “change of control,” provided that any such payment required pursuant to this
parenthetical is contractually subordinated in right of payment to the
Obligations on terms reasonably satisfactory to Agent and such requirement is
applicable only in circumstances that are market on the date of issuance of such
Equity Interests) or (b) are convertible or exchangeable, automatically or at
the option of any holder thereof, into any Debt, other Disqualified Equity
Interests or other assets, in each case, other than Qualified Equity Interests
prior to the date that is one hundred eighty (180) days after the scheduled
Facility Termination Date (other than upon a “change of control”, provided that
any conversion or exchange required pursuant to this parenthetical is
contractually subordinated in right of payment to the Obligations on terms
reasonably satisfactory to Agent and such requirement is applicable only in
circumstances that are market on the date of issuance of such Equity Interests);
it being understood, for the avoidance of doubt, that Equity Interests issued
pursuant to the U.S. Plan do not constitute Disqualified Equity Interests.

Distribution: any declaration or payment of a distribution, interest or dividend
on any Equity Interest (other than payment-in-kind); any distribution, advance
or repayment of Debt to a holder of Equity Interests; or any purchase,
redemption, or other acquisition or retirement for value of any Equity Interest
(other than by issuance of Equity Interests which are not Disqualified Equity
Interests).

Document: as defined in the UCC (and/or with respect to any Document of a
Canadian Domiciled Loan Party, a “document of title” as defined in the PPSA).

 

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Dollar Equivalent: on any date, with respect to any amount denominated in
Dollars, such amount in Dollars, and with respect to any stated amount in a
currency other than Dollars, the amount of Dollars that Agent determines using
the Exchange Rate (which determination shall be conclusive and binding absent
manifest error) would be necessary to be sold on such date at the applicable
Exchange Rate to obtain the stated amount of the other currency.

Dollars or $: lawful money of the United States.

Dominion Account: with respect to the Canadian Domiciled Loan Parties, the
Canadian Dominion Account, and with respect to the U.S. Facility Loan Parties,
the U.S. Dominion Account.

Dutch BV: Cooper-Standard Automotive International Holdings BV.

EBITDA: determined on a consolidated basis for Holdings and its Subsidiaries,
net income plus (a) without duplication and to the extent deducted in
determining net income, the sum of (i) interest expense, (ii) Permitted
Securitization Expenses, (iii) provision for income taxes, (iv) depreciation and
amortization expense, (v) non-cash charges, fees, losses or expenses (but
excluding any non-cash charge, fee, loss or expense that was included in net
income in a prior period and any non-cash charge, fee, loss or expense that
relates to the write-down or write-off of Inventory, other than any write-down
or write-off of Inventory as a result of purchase accounting adjustments in
respect of any Permitted Acquisitions), (vi) cash fees (including legal fees and
other similar advisory and consulting fees, administrative fees, working fees),
charges, payments and expenses accrued or paid in connection with the
consummation of the U.S. Plan in each case prior to December 31, 2010,
(vii) non-cash fees, charges, payments and expenses accrued in connection with
the consummation of the U.S. Plan (including all fresh start accounting
adjustments), (viii) cash and non-cash expenses in connection with facility
closures, severance, relocation, restructuring, integration and other similar
adjustments (“Facility Closings and Severance Expenses”) in any period, (ix) any
losses on the sale of discontinued operations, (x) any losses on business
dispositions or asset dispositions, (xi) any extraordinary charges or losses
during such period (calculated on an “after-tax” basis and in accordance with
GAAP), (xii) earnings of joint ventures to the extent received in cash in any
period, (xiii) non-recurring fees, expenses and charges made or incurred in
respect of professional or financial advisory, investment banking, underwriting
and similar services (including legal, accounting and consulting costs) to the
extent relating to any offering of Equity Interests, Investments, Acquisitions,
divestitures or discontinuations, in each case permitted hereunder and
(xiv) intellectual property royalties to the extent received in cash, minus
(b) without duplication and to the extent included in determining net income,
the sum of (i) any cash payments for Facility Closings and Severance Expenses
paid after the Closing Date in excess of $5,000,000 for the most recent twelve
(12) calendar month period then ended on such date of determination, (ii) any
extraordinary gains and non-cash items of income during such period (calculated
on an “after-tax” basis and in accordance with GAAP), (iii) any gains for the
sale of discontinued operations, (iv) any gains on business dispositions or
asset dispositions (other than sales of inventory in the ordinary course of
business) and (v) any cash payments made in respect of non-cash charges
described in clause (a)(v) taken in a prior period; in each case of clauses
(a) and (b), determined on a consolidated basis in accordance with GAAP. For
purposes of the computation of the Fixed Charge Coverage Ratio, EBITDA for any
period shall be calculated on a Pro Forma Basis to give effect to (i) any Person
or business acquired during such period pursuant to an Acquisition permitted
hereby and not subsequently sold or otherwise disposed of by Holdings or any of
its

 

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Subsidiaries during such period and (ii) any Subsidiary or business disposed of
during such period by Holdings or any of its Subsidiaries. Notwithstanding the
foregoing, for each of the calendar months set forth below, EBITDA shall be
deemed to be the amount set forth opposite such month:

 

Calendar Month

  

EBITDA

May, 2009

   $ 9,396,000

June, 2009

   $ 11,468,000

July, 2009

   $ 5,987,000

August, 2009

   $ 15,858,000

September, 2009

   $ 35,114,000

October, 2009

   $ 31,098,000

November, 2009

   $ 32,935,000

December, 2009

   $ 8,221,000

January, 2010

   $ 19,090,000

February, 2010

   $ 22,364,000

March, 2010

   $ 30,380,000

April, 2010

   $ 24,504,000

Eligible Account: as determined separately for (x) the Canadian Borrower and
(y) the U.S. Borrower, an Account owing to a Borrower (or a member of its
Applicable Loan Party Group) that arises in the Ordinary Course of Business of
such Borrower (or a member of its Applicable Loan Party Group) from the sale of
goods or rendition of services, is payable in Dollars, Canadian Dollars or
Mexican Pesos, and that is deemed by Agent in its Permitted Discretion to be an
Eligible Account. Without limiting the foregoing, no Account shall be an
Eligible Account if:

(a) it is unpaid for more than sixty (60) days after the original due date, or
more than ninety (90) days after the original invoice date;

(b) fifty percent (50%) or more of the Dollar Equivalent amount of all Accounts
owing to such Borrower (or a member of its Applicable Loan Party Group) by the
Account Debtor are not Eligible Accounts under the foregoing clause (a);

(c) except as set forth in clause (d) below, when aggregated with other Accounts
owing to such Borrower (or a member of its Applicable Loan Party Group) by the
Account Debtor, it exceeds ten percent (10%) of the aggregate Eligible Accounts
(or such higher percentage as Agent may establish for the Account Debtor from
time to time) of each such Borrower (or a member of its Applicable Loan Party
Group);

(d) when aggregated with other Accounts owing to the Loan Parties by the
relevant Account Debtor or any of its respective Affiliates, it exceeds
(i) twenty percent (20%) in the case of Chrysler Group, LLC, (ii) 30% in the
case of General Motors Corporation and (iii) forty

 

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percent (40%) in the case of Ford Motor Company, in each case, of the aggregate
Eligible Accounts (or such higher percentage as the Required Lenders may
establish for the Account Debtor from time to time) of the Loan Parties;

(e) it does not conform in any material respect with a covenant or
representation herein;

(f) it is owing by a creditor or supplier who has not entered into an agreement
reasonably satisfactory to Agent waiving applicable rights of set-off, or is
otherwise reasonably determined to be subject to a potential offset,
counterclaim, dispute, deduction, discount, recoupment, reserve, defense,
chargeback, credit or allowance (but ineligibility shall be limited to the
amount thereof), including, without limitation, liabilities related to the “Ford
Electronic Raw Material Acquisition Program” and allowances for long term
agreements;

(g) an Insolvency Proceeding has been commenced by or against the Account
Debtor; or the Account Debtor has failed, has suspended or ceased doing
business, is liquidating, dissolving or winding up its affairs, or is not
Solvent; or such Borrower (or a member of its Applicable Loan Party Group) is
not able to bring suit or enforce remedies against the Account Debtor through
judicial process (unless such Account is guaranteed or supported by a guarantor
or support provider reasonably acceptable to Agent, on such terms as are
reasonably acceptable to Agent);

(h) the Account Debtor is organized or has its principal offices outside the
United States or Canada, unless (i) such Account is contracted with the United
States or Canada (as applicable) operations of such entity or (ii) the United
States or Canada (as applicable) operations of such entity are responsible for
payment thereof;

(i) it is owing by a Government Authority, unless in the case of the Accounts of
the U.S. Borrower or any other U.S. Facility Loan Party, the Account Debtor is
the United States or any department, agency or instrumentality thereof and the
Account has been assigned to Agent in compliance with the Assignment of Claims
Act or, in the case of any Canadian Domiciled Loan Party, the Account Debtor is
the federal government of Canada or any Crown corporation, department, agency or
instrumentality of Canada and the applicable Canadian Domiciled Loan Party has
complied, to the satisfaction of Agent, with the Financial Administration Act;

(j) it is not subject to a duly perfected, first priority Lien in favor of
Agent, or is subject to any other Lien except a Permitted Collateral Lien;

(k) the goods giving rise to it have not been delivered to and accepted by the
Account Debtor, the services giving rise to it have not been accepted by the
Account Debtor, or it otherwise does not represent a final sale;

(l) it is evidenced by Chattel Paper or an Instrument of any kind, or has been
reduced to judgment;

(m) its payment has been extended beyond the periods specified in clause
(a) above, the Account Debtor has made a partial payment, or it arises from a
sale on a cash-on-delivery basis;

(n) it arises from a sale to an Affiliate, from a sale on a bill-and-hold,
guaranteed sale, sale-or-return, sale-on-approval, consignment, or other
repurchase or return basis, or from a sale to a Person for personal, family or
household purposes;

 

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(o) (A) the agreements evidencing such Accounts, in the case of Accounts of the
U.S. Borrower or any other U.S. Facility Loan Party, are not governed by the
laws of any state of the United States or the District of Columbia or Canada or
any province or territory of Canada and (B) the agreements evidencing such
Accounts, in the case of Accounts of any Canadian Domiciled Loan Party, are not
governed by the laws of Canada or any province or territory of Canada, any state
of the United States or the District of Columbia, or the laws of such other
jurisdictions acceptable to Agent;

(p) it represents a progress billing or retainage, or relates to services for
which a performance, surety or completion bond or similar assurance has been
issued;

(q) it includes a billing for interest, fees or late charges, but ineligibility
shall be limited to the extent thereof. In calculating delinquent portions of
Accounts under clauses (a) and (b), credit balances more than ninety (90) days
old will be excluded;

(r) it arises from sales of tooling;

(s) it is owing by NISCO or Nishikawa Rubber Company; or

(t) it is otherwise unacceptable to Agent in its Permitted Discretion.

Eligible Assignee: a Person that is (i) a Lender or a U.S. based Affiliate of a
U.S. Lender, (ii) if such Person is to hold U.S. Facility Obligations, an
Approved Fund; (iii) if such Person is to hold Canadian Facility Obligations, a
Canadian Qualified Lender and a U.S. Lender or an Affiliate of a U.S. Lender ;
(iv) any other financial institution approved by Agent and Loan Party Agent
(which approval by Loan Party Agent shall not be unreasonably withheld or
delayed, and shall be deemed given if no objection is made within five
(5) Business Days after notice of the proposed assignment), that has total
assets in excess of $5 billion and whose becoming an assignee would not
constitute a prohibited transaction under Section 4975 of the Code or any other
Applicable Law; and (v) during the continuance of any Event of Default, any
Person acceptable to Agent in its discretion (excluding any Loan Party or
Affiliate thereof).

Eligible Inventory: as determined separately for (x) the Canadian Borrower and
(y) the U.S. Borrower, Inventory owned by a Borrower (or a member of its
Applicable Loan Party Group) that Agent, in its Permitted Discretion deems to be
Eligible Inventory. Without limiting the foregoing, no Inventory shall be
Eligible Inventory unless it:

(a) is not packaging or shipping materials, labels, samples, display items,
bags, replacement parts or manufacturing supplies;

(b) is not held on consignment, nor subject to any deposit or downpayment;

(c) is in new and saleable condition and is not damaged, defective, shopworn or
otherwise unfit for sale;

(d) is not slow-moving, obsolete or unmerchantable, and does not constitute
returned or repossessed goods;

(e) meets all standards imposed by any Governmental Authority in all material
respects;

 

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(f) conforms in all material respects with the covenants and representations
herein;

(g) is subject to Agent’s duly perfected, first priority Lien, and no other Lien
except a Permitted Collateral Lien;

(h) is located within the continental United States, in the case of Inventory of
the U.S. Borrower or any other U.S. Facility Loan Party, or within Canada, in
the case of Inventory of any Canadian Domiciled Loan Party, and is not consigned
to any Person;

(i) is not in transit (other than, in the case of Inventory of the U.S. Borrower
or any other U.S. Facility Loan Party, in transit between facilities of the U.S.
Facility Loan Parties or from facilities of the Canadian Domiciled Loan Parties
or, in the case of Inventory of any Canadian Domiciled Loan Party in transit
between facilities of the Canadian Domiciled Loan Parties or from facilities of
U.S. Facility Loan Parties);

(j) is not subject to any (i) warehouse receipt unless the warehouseman has
delivered a Collateral Access Agreement or with respect to which an appropriate
U.S. or Canadian Rent and Charges Reserve has been established or
(ii) negotiable Document;

(k) is not subject to any License or other arrangement that restricts such
Borrower’s or Agent’s right to dispose of such Inventory, unless Agent has
received an appropriate Collateral Access Agreement;

(l) is not located on leased premises or in the possession of a warehouseman,
repairman, mechanic, shipper, freight forwarder or other Person, unless the
lessor or such Person has delivered a Collateral Access Agreement or with
respect to which an appropriate U.S. or Canadian Rent and Charges Reserve has
been established;

(m) is not located on leased premises (unless a Collateral Access Agreement has
been obtained with respect to such premises) or in the possession of a
processor;

(n) is reflected in the details of a current perpetual inventory report;

(o) does not constitute the portion of the cost of such Inventory which is
attributable to intercompany profit; and

(p) does not constitute lower cost, market adjustment or reserves.

EMU Legislation: the legislative measures of the European Union for the
introduction of, changeover to or operation of the Euro in one or more member
states of the European Union.

Enforcement Action: any action to enforce any Obligations or Loan Documents or
to realize upon any Collateral (whether by judicial action, self-help,
notification of Account Debtors, exercise of setoff or recoupment, or
otherwise).

Environment: ambient air, indoor air, surface water and groundwater (including
potable water, navigable water and wetlands), the land surface or subsurface
strata or natural resources.

Environmental Claim: any written claim, notice, demand, order, action, suit or
proceeding alleging liability for or obligation with respect to any
investigation, remediation,

 

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removal, cleanup, response, corrective action, damages to natural resources,
personal injury, property damage, fines, penalties or other costs resulting
from, related to or arising out of (i) the presence, Environmental Release or
threatened Environmental Release in or into the Environment of Hazardous
Material at any location or (ii) any violation or alleged violation of any
Environmental Law, and shall include any written claim seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
resulting from, related to or arising out of the presence, Environmental Release
or threatened Environmental Release of Hazardous Material or alleged injury or
threat of injury to health, safety or the Environment.

Environmental Laws: all Applicable Laws relating to protection of human health,
the protection or pollution of the Environment, the Environmental Release or
threatened Environmental Release of Hazardous Material, or occupational safety
or health (to the extent related to exposure to Hazardous Material), including
CERCLA, RCRA and CWA, and any and all Governmental Approvals required under any
Environmental Law.

Environmental Notice: a written notice (including any complaint, summons,
citation, order, claim or demand) from any Governmental Authority or other
Person with respect to (i) any actual or potential noncompliance with,
investigation of an actual or potential violation of, litigation relating to, or
potential fine or liability under any Environmental Law or (ii) any
Environmental Release, environmental pollution or Hazardous Materials.

Environmental Release: any spilling, leaking, seepage, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing, depositing, dispersing, emanating or migrating of any Hazardous
Material in, into, onto or through the Environment.

Equity Interest: with respect to any Person, shares of capital stock of (or
other ownership interests in) such Person, warrants, options or other rights for
the purchase or other acquisition from such Person of shares of capital stock of
(or other ownership interests in) such Person, securities convertible into or
exchangeable for shares of capital stock of (or other ownership interests in)
such Person or warrants, rights or options for the purchase or other acquisition
from such Person of such shares (or such other interests), and other ownership
interests in such Person (including, without limitation, partnership, member or
trust interests therein), whether voting or nonvoting, and whether or not such
shares, warrants, options, rights or other interests are authorized on any date
of determination.

ERISA: the Employee Retirement Income Security Act of 1974.

ERISA Affiliate: any trade or business (whether or not incorporated) under
common control with a Loan Party within the meaning of Section 414(b) or (c) of
the Code (and Sections 414(m) and (o) of the Code which, together with such Loan
Party, is required for purposes of provisions relating to Section 412, 430 or
4980B of the Code or Title IV of ERISA to be treated as a single employer.

ERISA Event: (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by any Loan Party or ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA (other than where
such Pension Plan has been merged with any Plan of a Loan Party or ERISA
Affiliate); (c) a complete or partial withdrawal by any Loan Party or ERISA
Affiliate from a

 

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Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) failure of any Loan Party or ERISA Affiliate to meet the
minimum funding standards under Section 412 of the Code with respect to any
Pension Plan or any Multiemployer Plan, or a request by such Loan Party or ERISA
Affiliate of a minimum funding waiver; (f) an event or condition which
constitutes grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
(g) the imposition of any liability (including, without limitations, any Lien)
under Title IV of ERISA, other than for PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon any Loan Party or ERISA Affiliate;; or (h) the
occurrence of a nonexempt prohibited transaction (within the meaning of
Section 4975 of the Code or Section 406 of ERISA).

Euro or €: the single lawful currency of the European Union as constituted by
the treaty establishing the European Community being the Treaty of Rome, as
amended from time to time and as referred to in the EMU Legislation.

Event of Default: as defined in Section 11.

Excess Amount: as defined in Section 5.12.

Exchange Rate: on any date, (i) with respect to Canadian Dollars in relation to
Dollars, the spot rate as quoted by Bank of America as its noon spot rate at
which Dollars are offered on such date for Canadian Dollars, (ii) with respect
to Dollars in relation to Canadian Dollars, the spot rate as quoted by Bank of
America as its noon spot rate at which Canadian Dollars are offered on such date
for Dollars, (iii) with respect to Euros in relation to Dollars, the spot rate
as quoted by Bank of America as its noon spot rate at which Dollars are offered
on such date for Euros, (iv) with respect to Dollars in relation to Euros, the
spot rate as quoted by Bank of America as its noon spot rate at which Euros are
offered on such date for Dollars, (v) with respect to Sterling in relation to
Dollars, the spot rate as quoted by Bank of America as its noon spot rate at
which Dollars are offered on such date for Sterling and (vi) with respect to
Dollars in relation to Sterling, the spot rate as quoted by Bank of America as
its noon spot rate at which Sterling are offered on such date for Dollars.

Excluded Contracts: any rights or interest of a Loan Party in, to or under any
agreement, contract, license, instrument, document or other general intangible
(referred to solely for purposes of this definition as a “Contract”) to the
extent that such Contract, by the express terms of a valid and enforceable
restriction in favor of a Person who is not a Loan Party or any of its
Subsidiaries, (i) prohibits, or requires any consent or establishes any other
condition for, an assignment thereof or a grant of a security interest therein
by a Loan Party or (ii) would give any party to such Contract other than a Loan
Party or any of its Subsidiaries an enforceable right to terminate its
obligations thereunder, provided, however, that such security interest shall
attach immediately at such time as the condition causing such abandonment,
invalidation, unenforceability or breach or termination, as the case may be,
shall be remedied and, to the extent severable, shall attach immediately to any
portion of such Contracts that does not result in any of the consequences
specified in the immediately preceding clauses (i) or (ii) including, without
limitation, any proceeds of such Contracts.

 

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Excluded Deposit Accounts: the following Deposit Accounts: (A) Deposit Accounts
of any Loan Party exclusively used for payroll, payroll taxes or employee
benefits, (B) cash accounts of any Loan Party the average daily balance in any
month which does not exceed more than the Dollar Equivalent of $10,000 at any
time for any single account, and not more than $50,000 for all accounts in the
aggregate at any time and (C) accounts solely containing identifiable proceeds
of assets of Holdings or any Subsidiary not constituting ABL Priority
Collateral.

Excluded Products: investments held by any Lender or its Affiliates, including
cash, Cash Equivalents and other products which do not constitute a monetary
obligation in favor of such institution.

Excluded Tax: with respect to any Tax Indemnitee, (a) any Tax imposed on or
measured by its overall net income (however denominated), franchise taxes
imposed on it (in lieu of net income taxes imposed on overall net income), and
branch profits taxes imposed on it, 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 Office is located; (b) any Taxes imposed, deducted or
withheld at the time the Lender becomes a Lender under the Agreement (or
designates a new Lending Office), except, in the case of a Lender that becomes a
Lender as a result of an assignment, to the extent that the assignor was
entitled, at the time of the assignment, to receive additional amounts from the
applicable Borrower with respect to such payments or such Lender becomes a
Lender (or designates a new Lending Office) after a Designation Date pursuant to
the Reallocation Agreement; (c) any Taxes imposed, deducted or withheld by
reason of a present or former connection between such Tax Indemnitee and the
jurisdiction imposing such Taxes (other than solely on account of the execution
and performance of, the enforcement of any right under or the receipt of any
payment under, this Agreement or any of the other Loan Documents); (d) any Taxes
imposed, deducted or withheld which are attributable to a Lender’s failure or
inability, including an inability under Applicable Law, (other than as a result
of a Change in Law but not including (A) any change to the extent that such
change does not result in additional withholding being imposed but results in
withholding being performed by a different withholding agent, and (B) in the
case of any Tax Indemnitee providing a Form W-8IMY, any change that would result
in no additional withholding if the Person or Persons with respect to which such
Tax Indemnitee acted as an intermediary in providing the Form W-8IMY provided
directly to Loan Party Agent or Agent the applicable Forms W-8 (or successor
forms) certifying such Person’s or Persons’ entitlement to a complete exemption
from or reduction in U.S. withholding tax), to comply with Section 5.9; or
(e) any Taxes imposed, deducted or withheld under FATCA.

Existing Letters of Credit: means the letters of credit set forth on Schedule
1.1(c).

External Specified Transaction: any of the following: (a) a Permitted
Acquisition, (b) an Investment to the extent and on the terms permitted pursuant
to clause (k) of the definition of “Restricted Investment”, (c) a Contingent
Obligation to the extent and on the terms permitted pursuant to clause (j) of
the definition of “Permitted Contingent Obligation”, (d) a loan to a Person that
is not a Subsidiary of Holdings to the extent and on the terms permitted
pursuant to Section 10.2.5(f), (e) an Upstream Payment to the extent and on the
terms permitted pursuant to clause (iv) of the definition of “Upstream Payment”,
(f) any payment with respect to any Debt, as specified in Section 10.2.6(b)(ii),
(c)(ii), (d)(ii) or (e)(ii), or (g) the incurrence of unsecured Debt to the
extent and on the terms permitted pursuant to Section 10.2.1(n) and (h) a
Designated External Acquisition.

 

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External Specified Transaction Conditions: with respect to the permissibility
hereunder of any External Specified Transaction, the satisfaction of the
following conditions (except as indicated): (a) no Default or Event of Default
exists at the time of or would result from the making of such External Specified
Transaction, (b) immediately after giving effect to such External Specified
Transaction, Holdings and its Subsidiaries shall, on a consolidated basis, have
a Fixed Charge Coverage Ratio of not less than 1.10:1.00 as calculated on a Pro
Forma Basis for the Fixed Charge Coverage Ratio Test Period then most recently
ending, (c) immediately after giving effect to such External Specified
Transaction (except with respect to the External Specified Transaction specified
in clause (g) thereof), Availability (on the date of such action or proposed
action) and Average Period Availability (for the 30-day period ending on the
date of such action or proposed action) as calculated on a Pro Forma Basis,
shall not be less than the greater of (i) $31,250,000 and (ii) 25% of the
Commitments at such time and (d) Agent shall have received a certificate of a
Senior Officer of Loan Party Agent certifying as to compliance with preceding
clauses (a) through (c) and demonstrating (in reasonable detail) the
calculations required by preceding clauses (b) and (c): (1) with respect to
External Specified Transactions involving less than $5,000,000 (whether as part
of the same transaction or a series of related transactions), concurrently with
delivery of the applicable financial information required pursuant to Sections
10.1.2(a), (b) or (c), as applicable and (2) for all other External Specified
Transactions, not less than five (5) days prior to the effectiveness of the
applicable transaction.

External Subsidiary: a Wholly-Owned Foreign Subsidiary (or any Subsidiary
thereof) of Holdings which is not a Loan Party.

Extraordinary Expenses: all costs, expenses or advances that Agent may incur
during a Default or Event of Default, or during the pendency of an Insolvency
Proceeding of a Loan Party, including those relating to (a) any audit,
inspection, repossession, storage, repair, appraisal, insurance, manufacture,
preparation or advertising for sale, sale, collection, or other preservation of
or realization upon any Collateral; (b) any action, arbitration or other
proceeding (whether instituted by or against Agent, any Lender, any Loan Party,
any representative of creditors of a Loan Party or any other Person) in any way
relating to any Collateral (including the validity, perfection, priority or
avoidability of Agent’s Liens with respect to any Collateral), Loan Documents,
Letters of Credit or Obligations, including any lender liability or other
Claims; (c) the exercise, protection or enforcement of any rights or remedies of
Agent in, or the monitoring of, any Insolvency Proceeding; (d) settlement or
satisfaction of any taxes, charges or Liens with respect to any Collateral;
(e) any Enforcement Action; (f) negotiation and documentation of any
modification, waiver, workout, restructuring or forbearance with respect to any
Loan Documents or Obligations; and (g) Protective Advances. Such costs, expenses
and advances include transfer fees, Other Taxes, storage fees, insurance costs,
permit fees, utility reservation and standby fees, legal fees, appraisal fees,
brokers’ fees and commissions, auctioneers’ fees and commissions, accountants’
fees, environmental consultants’ fees, wages and salaries paid to employees of
any Loan Party or independent contractors in liquidating any Collateral, and
travel expenses.

Facility Commitment: with respect to the commitment of a U.S. Lender, its U.S.
Revolver Commitment and, with respect to a Canadian Lender, its Canadian
Revolver Commitment; and the term “Facility Commitments” means, collectively,
the Facility Commitments of U.S. Lenders and the Facility Commitments of
Canadian Lenders. To the extent any Lender has both a U.S. Revolver Commitment
and a Canadian Revolver Commitment, such Commitments shall be considered as
separate Commitments for purposes of this definition.

 

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Facility Commitment Increase Effective Date: as defined in Section 2.1.4(f).

Facility Termination Date: May 27, 2014.

FATCA: Sections 1471 through 1474 of the Code and any regulations thereunder or
official governmental interpretations thereof.

Federal Funds Rate: for any date, (a) the weighted average of interest rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers on the applicable Business Day (or on the
preceding Business Day, if the applicable day is not a Business Day), as
published by the Federal Reserve Bank of New York on the next Business Day; or
(b) if no such rate is published on the next Business Day, the average rate
(rounded up, if necessary, to the nearest 1/100 of 1%) charged to Bank of
America on the applicable day on such transactions, as determined by Agent.

Financial Administration Act: Financial Administration Act (Canada) and all
regulations and schedules thereunder.

Financial Covenant Trigger Period: the period (a) commencing on the day that an
Event of Default occurs, or Average Period Availability (for a one-day period)
is less than the greater of (i) $18,750,000 and (ii) 15% of the Commitments at
such time; and (b) continuing until, during the preceding sixty (60) consecutive
days, no Event of Default has existed and Average Period Availability has been
greater than the greater of (i) $18,750,000 and (ii) 15% of the Commitments at
such time.

Fiscal Quarter: each period of three (3) calendar months, commencing on the
first (1st) day of a Fiscal Year.

Fiscal Year: the fiscal year of each of the Loan Parties for accounting and tax
purposes, in each case, ending on December 31 of each year.

 

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Fixed Charge Coverage Ratio: for Holdings and its Subsidiaries on any date of
determination, the ratio, determined on a consolidated basis for the most recent
twelve (12) calendar month period then ended on such date of determination, of
(a) EBITDA minus Capital Expenditures (except those financed with Borrowed Money
other than Revolver Loans), and cash taxes paid (net of cash tax refunds
received during such period, which total shall not be less than $0), in each
case during such period to (b) Fixed Charges during such period; provided, that,
for each month set forth in the table below, Capital Expenditures (except those
financed with Borrowed Money other than Revolver Loans) and cash taxes paid (net
of cash tax refunds received during such period, which total shall not be less
than $0) shall, in each case, be deemed to be the amount set forth below
opposite such month:

 

Calendar Month

   Capital Expenditures
(except those financed with
Borrowed Money  other than
Revolver Loans)    Cash Taxes Paid (net of
cash tax refunds received
in such  period, which total
shall not be less than $0)  

May, 2009

   $ 1,168,000    $ 367,000   

June, 2009

   $ 2,717,000    $ (3,149,000 ) 

July, 2009

   $ 2,540,000    $ (77,502,000 ) 

August, 2009

   $ 3,827,000    $ 1,290,000   

September, 2009

   $ 4,827,000    $ 1,496,000   

October, 2009

   $ 5,015,000    $ (544,000 ) 

November, 2009

   $ 4,867,000    $ 3,239,000   

December, 2009

   $ 10,705,000    $ 6,041,000   

January, 2010

   $ 2,597,000    $ 3,460,000   

February, 2010

   $ 4,033,000    $ 24,350,000   

March, 2010

   $ 5,392,000    $ 1,562,000   

April, 2010

   $ 6,653,000    $ 4,102,000   

Fixed Charge Coverage Ratio Test Period: with respect to each calendar month,
the immediately preceding twelve (12) calendar month period ending on the last
day of the prior calendar month.

Fixed Charges: for any period and for Holdings and its Subsidiaries included in
any applicable calculation of Fixed Charge Coverage Ratio, the sum of
(calculated on a consolidated basis solely with respect to those Persons
specified to be included in such calculation), without duplication:

(a) cash interest expense (net of any interest income);

(b) Permitted Securitization Expenses;

(c) scheduled principal payments in respect of Borrowed Money, as determined on
the first day of the applicable period (or if such Debt was incurred on a
subsequent date, on such date); but excluding, for the avoidance of doubt,
(i) payments made on Revolving Loans and Swingline Loans during such period and
(ii) voluntary prepayments constituting External Specified Transactions pursuant
to clause (f) of the definition of External Specified Transactions;

(d) all regularly scheduled Distributions made by Holdings in cash; and

(e) cash contributions made to any Pension Plan less (without duplication) the
profit and loss statement charge (or benefit with respect to such pension
funding obligations for such period);

 

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provided that, for each month set forth in the table below, the amounts
referenced in clauses (a) through (e) above shall, in each case, be deemed to be
the amount set forth below opposite such month:

 

Calendar Month

   Cash
Interest
Expense (net
of any
interest
income)     Permitted
Securitization
Expenses     Scheduled
Principal
Payments  Made
in respect of
Borrowed
Money    Regularly
Scheduled
Distributions
Made by
Holdings in
cash    Cash
Contributions
Made to any
Pension Plan,
less profit and
loss statement
charges  

May, 2009

   $ (158,000 )    $ 235,000      $ 0    $ 0    $ (158,000 ) 

June, 2009

   $ 8,035,000      $ 178,000      $ 4,611,000    $ 0    $ (153,000 ) 

July, 2009

   $ 112,000      $ 126,000      $ 0    $ 0    $ 1,220,000   

August, 2009

   $ (440,000 )    $ 2,000      $ 0    $ 0    $ (190,000 ) 

September, 2009

   $ 1,750,000      $ (92,000 )    $ 1,535,000    $ 0    $ 1,865,000   

October, 2009

   $ 81,000      $ 126,000      $ 0    $ 0    $ 1,219,000   

November, 2009

   $ 106,000      $ 94,000      $ 0    $ 0    $ (85,000 ) 

December, 2009

   $ 5,788,000      $ 157,000      $ 0    $ 0    $ (562,000 ) 

January, 2010

   $ 7,000      $ 37,000      $ 0    $ 0    $ 873,000   

February, 2010

   $ 10,000      $ 88,000      $ 0    $ 0    $ (554,000 ) 

March, 2010

   $ 2,965,000      $ 78,000      $ 1,567,000    $ 0    $ 2,680,000   

April, 2010

   $ 92,000      $ 77,000      $ 0    $ 0    $ 1,077,000   

Floating Rate Loan: a U.S. Base Rate Loan, a Canadian Prime Rate Loan or a
Canadian Base Rate Loan.

FLSA: the Fair Labor Standards Act of 1938.

Foreign Lender: a Lender that is (i) in the case of the Canadian Borrower
resident in a jurisdiction other than Canada or a province or territory thereof,
and (ii) in the case of the U.S. Borrower, resident in or organized under the
laws of a jurisdiction other than a state of the United States or the District
of Columbia.

 

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Foreign Plan: any material employee benefit plan or arrangement (a) maintained
or contributed to by any Loan Party or Affiliate that is not subject to the laws
of the United States or Canada; or (b) mandated by a government other than the
United States or Canada for employees of any Loan Party or Affiliate.

Foreign Subsidiary: a Subsidiary of a U.S. Domiciled Loan Party that is a
“controlled foreign corporation” under Section 957 of the Code or any Subsidiary
of such a Foreign Subsidiary.

FSCO: The Financial Services Commission of Ontario or like body in any other
province of Canada with whom a Canadian Pension Plan is registered in accordance
with Applicable Law and any other Governmental Authority succeeding to the
functions thereof.

Full Payment: with respect to any Obligations (other than indemnity obligations
that are not currently due and payable): (a) the full and indefeasible cash
payment thereof in the applicable currency required hereunder, including any
interest, fees and other charges accruing during an Insolvency Proceeding
(whether or not allowed in the proceeding) and (b) if such Obligations are LC
Obligations consisting of undrawn Letters of Credit, Cash Collateralization
thereof (or delivery of a standby letter of credit acceptable to Agent in its
discretion, in the amount of required Cash Collateral). No Loans shall be deemed
to have been paid in full until all Commitments related to such Loans have
expired or been terminated.

GAAP: generally accepted accounting principles in effect in the United States
or, in the case of Canadian Domiciled Loan Parties, Canada, in each case, from
time to time, applied consistently.

General Intangibles: as defined in the UCC (and/or with respect to any General
Intangible of a Canadian Facility Loan Party, an “intangible” as defined in the
PPSA).

Governmental Approvals: all authorizations, consents, approvals, licenses and
exemptions of, registrations and filings with, all Governmental Authorities.

Governmental Authority: any federal, state, provincial, municipal, foreign or
other governmental department, agency, commission, board, bureau, court,
tribunal, instrumentality, political subdivision, or other entity or officer
exercising executive, legislative, judicial, regulatory or administrative
functions for or pertaining to any government or court, in each case whether it
is or is not associated with the United States, a state, district or territory
thereof, Canada, a province or territory thereof.

Guarantor Payment: as defined in Section 5.10.3.

Guarantee: each guarantee agreement (including this Agreement and the Canadian
Facility Guarantee) executed by a Guarantor in favor of Agent guaranteeing all
or any portion of any Canadian Facility Obligation or U.S. Facility Obligation.

Guarantors: Canadian Facility Guarantors, U.S. Facility Guarantors, and each
other Person (if any) who guarantees payment or performance of any Obligations.

Hazardous Materials: hazardous substances; hazardous wastes; polychlorinated
biphenyls (“PCBs”) or any substance or compound containing PCBs; exposed friable
asbestos;

 

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radon or any other radioactive materials including any source, special nuclear
or by-product material; petroleum, crude oil or any fraction thereof; and any
other pollutant or contaminant or chemicals, wastes, materials, compounds,
constituents or substances, subject to regulation or which can give rise to
liability under any Environmental Laws.

Hedging Agreement: an agreement relating to any swap, cap, floor, collar,
option, forward (excluding contracts for the acquisition of raw materials in the
Ordinary Course of Business), cross right or obligation, or combination thereof
or similar transaction, with respect to interest rate, foreign exchange,
currency, commodity, credit or equity risk.

Holdings: as defined in the preamble to this Agreement.

Indemnified Taxes: Taxes other than Excluded Taxes.

Indemnitees: Agent Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees and
Bank of America Indemnitees.

Insolvency Proceeding: any case or proceeding or proposal commenced by or
against a Person under any state, provincial, federal or foreign law for, or any
agreement of such Person to, (a) the entry of an order for relief under the U.S.
Bankruptcy Code, or any other insolvency, debtor relief, bankruptcy,
receivership, debt adjustment law or other similar law (whether state,
provincial, federal or foreign), including the Bankruptcy and Insolvency Act
(Canada) and the CCAA; (b) the appointment of a Creditor Representative or other
custodian for such Person or any part of (i) the ABL Priority Collateral or
(ii) any material potion of its Property not constituting ABL Priority
Collateral; or (c) an assignment or trust mortgage for the benefit of creditors.

Insurance Assignment: each collateral assignment of insurance pursuant to which
a Loan Party assigns to Agent such Loan Party’s rights under any insurance
policies as Agent deems appropriate, as security for the Obligations.

Intellectual Property: all intellectual property rights and similar Property of
a Person, including inventions, designs, patents, copyrights, trademarks,
service marks, trade names, domain names, trade secrets, confidential or
proprietary information, customer lists, know-how, software and databases, all
embodiments or fixations of any of the foregoing; all related documentation; all
applications and registrations thereof; and all licenses or other rights to use,
or otherwise relating to, any of the foregoing; and all books and records
relating to any of the foregoing.

Intellectual Property Claim: any claim or assertion (whether in writing, by suit
or otherwise) that a Loan Party’s or Subsidiary’s ownership, use, marketing,
sale or distribution of any Inventory, Equipment, Intellectual Property or other
Property violates another Person’s Intellectual Property.

Intercompany Equity Investments: Investments consisting of cash capital
contributions made by Holdings and its Wholly-Owned Subsidiaries to their
respective Wholly-Owned Subsidiaries, and capitalizations or forgiveness of any
Debt owed to them by a Wholly-Owned Foreign Subsidiary and outstanding under
Section 10.2.5(e); provided that at no time shall any such contributions,
capitalizations and forgiveness be made by the Loan Parties to External
Subsidiaries unless the Specified Transaction Conditions applicable to such
Investment shall have been satisfied in connection therewith.

 

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Intercompany Loans: as defined in Section 10.2.5(e).

Intercompany Note: a promissory note evidencing Intercompany Loans, duly
executed and delivered substantially in the form of Exhibit F, with blanks
completed in conformity herewith.

Interest Period: as defined in Section 3.1.4.

Interest Period Loan: a LIBOR Loan or a Canadian BA Rate Loan.

Internal Specified Transaction: any of the following: (a) a Contingent
Obligation to the extent and on the terms permitted pursuant to clause (i)(z) of
the definition of “Permitted Contingent Obligation”, (b) an Intercompany Equity
Investment (other than any investment in any Loan Party, or any investment by an
External Subsidiary in another External Subsidiary) and (c) an Intercompany Loan
(other than any Intercompany Loan to any Loan Party, or any Intercompany Loan by
an External Subsidiary to another External Subsidiary); and it being understood
for the avoidance of doubt that any transfer made by Holdings or any of its
Subsidiaries to any Subsidiary as payment for goods and services in the Ordinary
Course of Business shall not be an “Internal Specified Transaction”.

Internal Specified Transaction Conditions: with respect to the permissibility
hereunder of any Internal Specified Transaction, the satisfaction of the
following conditions: (a) no Default or Event of Default exists at the time of
or would result from the making of such Internal Specified Transaction,
(b) immediately after giving effect to such Internal Specified Transaction,
Holdings and its Subsidiaries shall, on a consolidated basis, have a Fixed
Charge Coverage Ratio of not less than 1.10:1.00 as calculated on a Pro Forma
Basis for the Fixed Charge Coverage Ratio Test Period then most recently ending
and (c) immediately after giving effect to such Internal Specified Transaction,
Availability (on the date of such action or proposed action) and Average Period
Availability (for the 30-day period ending on the date of such action or
proposed action) as calculated on a Pro Forma Basis, shall not be less than the
greater of (i) $25,000,000 and (ii) 20% of the Commitments at such time;
provided, that such Internal Specified Transaction shall be permitted
irrespective of clause (b) of this definition so long as Availability (on the
date of such action or proposed action) and Average Period Availability (for the
30-day period ending on the date of such action or proposed action) as
calculated on a Pro Forma Basis, shall not be less than the greater of
(i) $43,750,000 and (ii) 35% of the Commitments at such time.

Inventory: as defined in the UCC and the PPSA, as applicable, including all
goods intended for sale, lease, display or demonstration; all work in process;
and all raw materials, and other materials and supplies of any kind that are or
could be used in connection with the manufacture, printing, packing, shipping,
advertising, sale, lease or furnishing of such goods, or otherwise used or
consumed in a Borrower’s business (but excluding equipment).

Inventory Reserve: reserves established by Agent in its Permitted Discretion, to
reflect factors that may negatively impact the Value of Inventory, including
change in salability, obsolescence, seasonality, theft, shrinkage, imbalance,
change in composition or mix, markdowns and vendor chargebacks.

 

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Investment: any acquisition of all or substantially all assets of a Person; any
acquisition of record or beneficial ownership of any Debt or Equity Interests of
a Person; any loan, advance or capital contribution to or other investment in a
Person; any guarantee (or other similar arrangement having the effect of a
guarantee) of any payment of amounts owing by any Person; or any purchase or
ownership of a Hedging Agreement.

IRS: the United States Internal Revenue Service.

Issuing Bank Indemnitees: Issuing Banks and their officers, directors,
employees, Affiliates, agents and attorneys.

Issuing Banks: U.S. Issuing Bank and Canadian Issuing Bank.

Joint Commitment Letter: the joint commitment letter agreement among the Lead
Arrangers (other than Barclays Capital), Bank of America, Deutsche Bank Trust
Company Americas, UBS Loan Finance LLC, Barclays Bank PLC, Holdings and the
Borrowers dated as of April 21, 2010.

Joint Fee Letter: the joint fee letter agreement among the Lead Arrangers (other
than Barclays Capital), Bank of America, Deutsche Bank Trust Company Americas,
UBS Loan Finance LLC, Barclays Bank PLC, Holdings and the Borrowers dated as of
April 21, 2010.

LC Application: an application by Loan Party Agent on behalf of a Borrower to an
Issuing Bank for issuance of a Letter of Credit, in form and substance
satisfactory to such Issuing Bank.

LC Conditions: the following conditions necessary for the issuance of a Letter
of Credit: (a) each of the conditions set forth in Section 6.2 (or with respect
to Letters of Credit issued on the Closing Date, in Section 6.1); (b) after
giving effect to the issuance of a Letter of Credit for the account of the U.S.
Borrower, total U.S. LC Obligations (excluding amounts specified in clause
(c) of such definition) do not exceed the U.S. Letter of Credit Sublimit and no
U.S. Overadvance exists or would result therefrom; (c) after giving effect to
the issuance of a Letter of Credit for the account of the Canadian Borrower,
total Canadian LC Obligations (excluding amounts specified in clause (c) of such
definition) do not exceed the Canadian Letter of Credit Sublimit and no Canadian
Overadvance exists or would result therefrom; (d) the expiration date of such
Letter of Credit is (i) no more than three hundred sixty five (365) days from
issuance, in the case of standby Letters of Credit; provided that such Letters
of Credit may contain automatic extension provisions in accordance with
Section 2.2.1(e) or Section 2.3.1(e), as applicable, (ii) no more than one
hundred twenty (120) days from issuance, in the case of documentary Letters of
Credit, and (iii) at least fifteen (15) Business Days prior to the Facility
Termination Date; (e) with respect the issuance of Letters of Credit for the
account of the U.S. Borrower, the Letter of Credit and payments thereunder are
denominated in Dollars, Euros or Sterling; (f) with respect to the issuance of
Letters of Credit for the account of the Canadian Borrower, the Letter of Credit
and payments thereunder are denominated in Dollars or Canadian Dollars; and
(g) the form of the proposed Letter of Credit is reasonably satisfactory to
Agent and the applicable Issuing Bank in their discretion.

LC Documents: all documents, instruments and agreements (including LC Requests
and LC Applications) delivered by Loan Party Agent on behalf of a Borrower or by
any other Person to an Issuing Bank or Agent in connection with issuance,
amendment or renewal of, or payment under, any Letter of Credit.

 

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LC Obligations: U.S. LC Obligations and Canadian LC Obligations.

LC Request: a request for issuance of a Letter of Credit, to be provided by Loan
Party Agent on behalf of a Borrower to an Issuing Bank, in form satisfactory to
Agent and such Issuing Bank.

Lead Arrangers: Banc of America Securities LLC, Deutsche Bank Securities Inc.,
UBS Securities LLC and Barclays Capital.

Lender Indemnitees: Lenders and their officers, directors, employees,
Affiliates, agents and attorneys.

Lenders: as defined in the preamble to this Agreement and shall include Agent in
its capacity as a provider of Swingline Loans and U.S. Lenders and Canadian
Lenders and their respective permitted successors and assigns and, where
applicable, Issuing Banks, and any other Person who hereafter becomes a “Lender”
pursuant to an Assignment and Acceptance or a joinder agreement entered into
pursuant to Section 2.1.4.

Lending Office: the office designated as such by the applicable Lender at the
time it becomes party to this Agreement or thereafter by notice to Agent and
Loan Party Agent.

Letter of Credit: any U.S. Letters of Credit or Canadian Letters of Credit; and
each Existing Letter of Credit shall be deemed to be a “Letter of Credit” for
all purposes of this Agreement.

LIBOR: for any Interest Period with respect to a LIBOR Loan, the per annum rate
of interest (rounded up, if necessary, to the nearest 1/100th of 1%), determined
by Agent at approximately 11:00 a.m. (London time) two (2) Business Days prior
to commencement of such Interest Period, for a term comparable to such Interest
Period, equal to (a) the British Bankers Association LIBOR Rate (“BBA LIBOR”),
as published by Reuters (or other commercially available source designated by
Agent); or (b) if BBA LIBOR is not available for any reason, the interest rate
at which Dollar deposits in the approximate amount of the LIBOR Loan would be
offered by Bank of America’s London branch to major banks in the London
interbank Eurodollar market. If the Board of Governors imposes a Reserve
Percentage with respect to LIBOR deposits, then LIBOR shall be the foregoing
rate, divided by one (1) minus the Reserve Percentage.

LIBOR Loan: each set of LIBOR Revolver Loans having a common length and
commencement of Interest Period.

LIBOR Revolver Loan: a Revolver Loan that bears interest based on LIBOR;
provided, however, that a U.S. Base Rate Loan bearing interest as set forth in
clause (c) of the definition of U.S. Base Rate shall not constitute a LIBOR
Revolver Loan.

License: any license or agreement under which a Loan Party or Subsidiary is
authorized to use Intellectual Property in connection with any manufacture,
marketing, distribution or disposition of Collateral, any use of Property or any
other conduct of its business.

 

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Licensor: any Person from whom a Loan Party or Subsidiary obtains the right to
use any Intellectual Property.

Lien: any Person’s interest in Property securing an obligation owed to, or a
claim by, such Person, whether such interest is based on common law, statute or
contract, including liens, security interests, pledges, security transfers,
security assignments, hypothecations, secured claims, statutory trusts, deemed
trusts, reservations of title, exceptions, encroachments, easements, servitudes,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Property, but excluding for the avoidance
of doubt, any licenses granted with respect to Intellectual Property.

List of Closing Documents: the List of Closing Documents attached hereto as
Schedule 6.1.

Loan: a Revolver Loan.

Loan Account: the loan account established by each Lender on its books pursuant
to Section 5.7.

Loan Documents: this Agreement, the Other Agreements and the Security Documents.

Loan Parties: the Canadian Facility Loan Parties and the U.S. Facility Loan
Parties, collectively and “Loan Party” means any of the Loan Parties,
individually.

Loan Party Agent: as defined in Section 4.4.

Loan Party Group: a group consisting of (i) Canadian Facility Loan Parties or
(ii) U.S. Facility Loan Parties.

Loan Party Group Obligations: with respect to the Canadian Borrower and the
other Canadian Facility Loan Parties, the Canadian Facility Obligations, and
with respect to the U.S. Borrower and the other U.S. Facility Loan Parties, the
U.S. Facility Obligations.

Loan Year: each twelve (12) month period commencing on the Closing Date and on
each anniversary of the Closing Date.

Margin Stock: as defined in Regulation U of the Board of Governors.

Material Adverse Effect: (A) a material adverse effect on, the operations,
business, assets, properties, liabilities (actual or contingent) or condition
(financial or otherwise) of Holdings and its Subsidiaries, taken as a whole;
(B) a material impairment of the rights and remedies of Agent or any Lender
under any Loan Document; (C) a material impairment of the ability of the Loan
Parties, taken as a whole, to perform their material obligations under the Loan
Documents, taken as a whole; or (D) a material adverse effect on the value of
any substantial portion of the ABL Priority Collateral.

Material Contract: any agreement or arrangement to which a Loan Party or
Subsidiary is party (other than the Loan Documents) (a) that is deemed to be a
material contract in respect of Holdings and its Subsidiaries, taken as a whole,
under any securities law applicable to such Loan Party or Subsidiary, including
the Securities Act of 1933; or (b) for which breach, termination, nonperformance
or failure to renew could reasonably be expected to have a Material Adverse
Effect.

 

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Maximum Canadian Facility Amount: on any date of determination, the lesser of
(i) the Canadian Revolver Commitments on such date and (ii) $25,000,000 (or such
greater or lesser amount after giving effect to any increases or reductions in
the Commitments pursuant to Section 2.1.4); it being acknowledged and agreed
that at no time can the sum of the Maximum Canadian Facility Amount plus the
Maximum U.S. Facility Amount exceed the Maximum Facility Amount in effect at
such time.

Maximum Facility Amount: $125,000,000, or such greater or lesser amount as shall
then be in effect after giving effect to any increase or reduction in the
Commitments pursuant to Section 2.1.4.

Maximum U.S. Facility Amount: on any date of determination, the lesser of
(i) the U.S. Revolver Commitments on such date and (ii) $100,000,000 (or such
greater or lesser amount after giving effect to any increases or reductions in
the Commitments pursuant to Section 2.1.4; it being acknowledged and agreed that
at no time can the sum of the Maximum U.S. Facility Amount plus the Maximum
Canadian Facility Amount exceed the Maximum Facility Amount in effect at such
time.

Moody’s: Moody’s Investors Service, Inc., and its successors.

Multiemployer Plan: any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which any Loan Party or ERISA Affiliate makes or
is obligated to make contributions, or during the preceding five (5) plan years,
has made or been obligated to make contributions, but excluding, for greater
certainty, any Canadian Multi-Employer Plan.

Net Proceeds: with respect to an Asset Disposition, proceeds (including, when
received, any deferred or escrowed payments) received by a Loan Party or
Subsidiary in cash from such disposition, net of (a) reasonable and customary
costs and expenses actually incurred in connection therewith, including legal
fees and sales commissions; (b) amounts applied to repayment of Debt secured by
a Permitted Lien senior to Agent’s Liens on Collateral sold; (c) transfer or
similar taxes; and (d) reserves and escrows for indemnities and any other
contingent liabilities, until such reserves are no longer needed (after which,
any such amounts previously held as reserves or escrows shall become Net
Proceeds when received).

New Common Stock: as defined in the Recitals hereto.

New Preferred Stock: as defined in the Recitals hereto.

NOLV Percentage: the net orderly liquidation value of Inventory, expressed as a
percentage of the Value of Inventory expected to be realized at an orderly,
negotiated sale held within a reasonable period of time, net of all liquidation
expenses, as determined from the most recent appraisal of the Loan Parties’
Inventory performed by an appraiser and on terms reasonably satisfactory to
Agent; it being acknowledged that there may be different NOLV Percentages for
different segments of Inventory (e.g., raw materials, intermediate goods,
finished goods).

 

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Notes: each Revolver Note or other promissory note executed by a Borrower to
evidence any Obligations.

Notice of Borrowing: a Notice of Borrowing to be provided by Loan Party Agent to
request a Borrowing of Loans, in the form attached hereto as Exhibit B or
otherwise in form satisfactory to Agent.

Notice of Conversion/Continuation: a Notice of Conversion/Continuation to be
provided by Loan Party Agent to request a conversion or continuation of any
Loans as LIBOR Loans or Canadian BA Rate Loans, in the form attached hereto as
Exhibit C or otherwise in form satisfactory to Agent.

Obligations: all (a) principal of and premium, if any, on the Loans, (b) U.S. LC
Obligations and other obligations of the U.S. Facility Loan Parties with respect
to Letters of Credit issued for the account of the U.S. Borrower, (c) Canadian
LC Obligations and other obligations of the Canadian Facility Loan Parties with
respect to Letters of Credit issued for the account of the Canadian Borrower,
(d) interest, expenses, fees and other sums payable by the Loan Parties under
the Loan Documents, (e) obligations of the Loan Parties under any indemnity for
Claims, (f) Extraordinary Expenses, (g) Bank Product Debt, and (h) other Debts,
obligations and liabilities of any kind owing by the Loan Parties pursuant to
the Loan Documents, whether now existing or hereafter arising, whether evidenced
by a note or other writing, whether allowed in any Insolvency Proceeding,
whether arising from an extension of credit, issuance of a letter of credit,
acceptance, loan, guarantee, indemnification or otherwise, and whether direct or
indirect, absolute or contingent, due or to become due, primary or secondary, or
joint or several.

Ordinary Course of Business: the ordinary course of business of any Person,
consistent with past practices or reasonable extensions thereof, and undertaken
in good faith.

Organic Documents: with respect to any Person, its charter, certificate or
articles of incorporation, bylaws, articles of organization, limited liability
agreement, operating agreement, members agreement, shareholders agreement,
partnership agreement, certificate of partnership, certificate of formation,
memorandum of association, voting trust agreement, or similar agreement or
instrument governing the formation or operation of such Person.

OSHA: the Occupational Safety and Hazard Act of 1970.

Other Agreement: each: Note; LC Document; Fee Letter; Collateral Access
Agreement; Permitted Senior Secured Debt Intercreditor Agreement (if any);
Borrowing Base Certificate, Compliance Certificate; or other document or
agreement (other than this Agreement or a Security Document) now or hereafter
delivered by or on behalf of a Loan Party or other Person to Agent or a Lender
in connection with any transactions relating hereto.

Other Taxes: all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment
made under any Loan Document or from the execution, delivery or enforcement of,
or otherwise with respect to, any Loan Document.

Overadvance: a Canadian Overadvance or U.S. Overadvance, as the context
requires.

 

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Overadvance Loan: a Canadian Overadvance Loan and/or a U.S. Overadvance Loan, as
the context requires.

Participant: as defined in Section 13.2.1.

Patriot Act: the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L.
No. 107-56, 115 Stat. 272 (2001).

Payment Item: each check, draft or other item of payment payable to a Loan
Party, including those constituting proceeds of any Collateral.

PBA: the Pensions Benefits Act (Ontario) or any other Canadian federal or
provincial pension benefit standards legislation pursuant to which any Canadian
Pension Plan is registered.

PBGC: the Pension Benefit Guaranty Corporation.

Pension Plan: any employee pension benefit plan (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to
Title IV of ERISA and is sponsored or maintained by any Loan Party or ERISA
Affiliate or to which the Loan Party or ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time during
the preceding five (5) plan years, and, for greater certainty, excludes any
Canadian Pension Plan or any Canadian Multi-Employer Plan.

Perfection Certificate: a certificate in the form of Exhibit G or any other form
approved by Agent.

Permitted Acquisition: any Acquisition by a Loan Party which is consented to by
Agent and Required Lenders or where:

(i) the business, division or operating units or other assets or properties
acquired are for use, or the Person acquired is engaged, in the same or
substantially similar businesses or manufacturing processes (or reasonable
extensions thereof or incidental thereto) engaged in by such Borrower or
Subsidiary on such date;

(ii) the External Specified Transaction Conditions shall have been satisfied in
connection therewith;

(iii) in the case of the Acquisition of any Person, the board of directors or
similar governing body of such Person has approved such Acquisition and such
Person shall not have announced that it will oppose such Acquisition or shall
not have commenced any action which alleges that such Acquisition will violate
any Applicable Law;

(iv) reasonably prior to such Acquisition, Agent shall have received an
acquisition summary with respect to the Person and/or business or division to be
acquired, such summary to include a reasonably detailed description thereof
(including financial statements for the most recent twelve (12) month period for
which they are available and as otherwise available), including the basic terms
and conditions of the proposed Acquisition;

 

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(v) if such Acquisition is of 100% of the Equity Interests of a Person
(including via merger or consolidation) organized under the laws of Canada or
any province or territory thereof or the laws of the United States or any state
or district hereof, the provisions of Section 10.1.9 shall have been fully
satisfied with respect to such acquired Person;

(vi) if the assets acquired in such Acquisition are intended to be included in
the U.S. Borrowing Base or the Canadian Borrowing Base, prior to any such
inclusion, (1) Agent and the Applicable Lenders shall be provided with such
information as they shall reasonably request to complete their evaluation of any
such Collateral and (2) the Asset Review and Approval Conditions shall have been
satisfied;

(vii) if the Acquisition is structured as a merger or amalgamation involving a
Loan Party, or, to the extent permitted pursuant to Section 10.2.7(a), a
Borrower, such Loan Party (unless such Loan Party is a newly formed inactive
merger Subsidiary formed for purposes of effecting such Acquisition) or, if
applicable, such Borrower, shall be the surviving entity and such merger or
amalgamation is permitted pursuant to Section 10.2.7(a); and

(viii) no Loan Party or Affiliate thereof shall, in connection with any such
Acquisition, assume or remain liable with respect to any Debt or other liability
(including any material tax liability or liability with respect to any Pension
Plan, a Plan providing for post-employment medical or life insurance benefits,
Foreign Plan or Canadian Pension Plan) of the seller or the business, person or
properties acquired, except to the extent permitted by Section 10.2.1(f).

Permitted Collateral Liens: the Liens described in Section 10.2.2(a), (c), (d),
(f), (g), (i), (j), (n), (p), (q), (r), (s), (z), (aa) and (bb).

Permitted Contingent Obligations: Contingent Obligations (a) arising from
endorsements of Payment Items for collection or deposit in the Ordinary Course
of Business; (b) arising from Hedging Agreements permitted hereunder;
(c) existing on the Closing Date and set forth on Schedule 1.1(b), and any
extension or renewal thereof that does not increase the amount of such
Contingent Obligation when extended or renewed and otherwise satisfies the
Refinancing Condition; (d) incurred in the Ordinary Course of Business with
respect to surety, appeal or performance bonds, or other similar obligations;
(e) arising from customary indemnification obligations in favor of purchasers in
connection with dispositions of Property permitted hereunder; (f) arising under
the Loan Documents; (g) arising under the Senior Note Documents to the extent
the underlying Senior Note Debt is otherwise permitted pursuant to
Section 10.2.1(i); (h) arising under the Permitted Senior Secured Debt Documents
to the extent the underlying Permitted Senior Secured Debt is otherwise
permitted pursuant to Section 10.2.1(l); (i) consisting of guarantees (x) by the
Loan Parties of each other’s Debt and lease and other contractual obligations
permitted under this Agreement and (y) by External Subsidiaries of each other’s
and each Loan Party’s Debt and lease and other contractual obligations permitted
under this Agreement or (z) by any Loan Party of any Debt and lease and other
contractual obligations permitted under this Agreement of any External
Subsidiary; provided that at no time shall any Contingent Obligations under this
sub-clause (z) be incurred unless the Specified Transaction Conditions
applicable to the incurrence of such Contingent Obligations shall have been
satisfied in connection therewith; and (j) consisting of Contingent Obligations
of a type not described in clauses (a) through (i) of this definition and not
otherwise prohibited by the terms of this Agreement or the other Loan Documents
so long as the Specified Transaction Conditions applicable to the incurrence of
such Contingent Obligations shall have been satisfied in connection therewith.

 

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Permitted Discretion: a determination made in good faith and in the exercise of
reasonable (from the perspective of a secured asset-based lender) business
judgment, following either (x) consultation with the Loan Party Agent or (y) two
(2) Business Days’ advance notice to the Borrowers.

Permitted Lien: as defined in Section 10.2.2.

Permitted Holders: Barclays Bank PLC and its subsidiaries and any funds or
accounts managed by Capital Research and Management Company, Lord, Abbott & Co.,
Oak Hill Advisors, L.P., Silver Point Capital, L.P., TCW Asset Management
Company and TD Asset Management Inc.

Permitted Purchase Money Debt: Purchase Money Debt of the Loan Parties and
Subsidiaries that is unsecured or secured only by a Purchase Money Lien, as long
as the aggregate amount does not exceed $50,000,000.

Permitted Securitization: means any transaction or series of transactions that
may be entered into by any External Subsidiary pursuant to which it may sell,
convey, contribute to capital or otherwise transfer (which sale, conveyance,
contribution to capital or transfer may include or be supported by the grant of
a security interest) accounts receivable or interests therein and all collateral
securing such receivables, all contracts and contract rights, purchase orders,
security interests, financing statements or other documentation in respect of
such receivables, any guarantees, indemnities, warranties or other obligations
in respect of such receivables, any other assets that are customarily
transferred or in respect of which security interests are customarily granted in
connection with asset securitization transactions involving receivables similar
to such receivables and any collections or proceeds of any of the foregoing
(collectively, the “Related Assets”) (i) to a trust, partnership, corporation or
other Person (other than Holdings or any Subsidiary, other than a Subsidiary
formed solely for the purpose of, and that engages only in, Permitted
Securitizations, an “SPE Subsidiary”), which transfer is funded in whole or in
part, directly or indirectly, by the incurrence or issuance by the transferee or
any successor transferee of Debt, fractional undivided interests or other
securities that are to receive payments from, or that represent interests in,
the cash flow derived from such receivables and Related Assets or interests in
such receivables and Related Assets, or (ii) directly to one or more investors
or other purchasers (other than Holdings or any Subsidiary), it being understood
that a Permitted Securitization may involve (A) one or more sequential transfers
or pledges of the same receivables and Related Assets, or interests therein
(such as a sale, conveyance or other transfer to an SPE Subsidiary followed by a
pledge of the transferred receivables and Related Assets to secure Debt incurred
by the SPE Subsidiary), and all such transfers, pledges and Debt incurrences
shall be part of and constitute a single Permitted Securitization, and
(B) periodic transfers or pledges of receivables and/or revolving transactions
in which new receivables and Related Assets, or interests therein, are
transferred or pledged upon collection of previously transferred or pledged
receivables and Related Assets, or interests therein, provided that any such
transactions shall provide for recourse to such External Subsidiary (other than
any SPE Subsidiary) only in respect of the cash flows in respect of such
receivables and Related Assets and to the extent of other customary
securitization undertakings (as determined in good faith by the board of
directors of the appropriate External Subsidiary) in the jurisdiction relevant
to such

 

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transactions (such undertakings, “Standard Securitization Undertakings”);
provided that, for the avoidance of doubt, (1) no portion of the Debt or any
other obligations (contingent or otherwise) of any External Subsidiary or SPE
Subsidiary is guaranteed by any Loan Party, is recourse to or obligates any Loan
Party, or subjects any property or asset of any Loan Party, directly or
indirectly (other than with respect to its equity ownership interest in any
External Subsidiary), contingently or otherwise, to the satisfaction of
obligations incurred in such transactions; and (2) no Loan Party has any
obligation to maintain or preserve the financial condition of an SPE Subsidiary
or cause such entity to achieve certain levels of operating results. The
“amount” or “principal amount” of any Permitted Securitization shall be deemed
at any time to be (1) the aggregate principal or stated amount of the Debt,
fractional undivided interests (which stated amount may be described as a “net
investment” or similar term reflecting the amount invested in such undivided
interest) or other securities incurred or issued pursuant to such Permitted
Securitization, in each case outstanding at such time, or (2) in the case of any
Permitted Securitization in respect of which no such Debt, fractional undivided
interests or securities are incurred or issued, the cash purchase price paid by
the buyer in connection with its purchase of receivables less the amount of
collections received in respect of such receivables and paid to such buyer,
excluding any amounts applied to purchase fees or discount or in the nature of
interest.

Permitted Securitization Expenses: commissions, discounts, yield, other fees and
charges, and any other amounts during any applicable period comparable to or in
the nature of interest, in each case accrued during any applicable period in
connection with Permitted Securitizations.

Permitted Senior Secured Debt: one or more issues of secured Debt incurred by
any Loan Party or any of its Subsidiaries pursuant to Section 10.2.1(l) and
designated as Permitted Senior Secured Debt by written notice to Agent so long
as (i) any such Debt of a U.S. Domiciled Loan Party and/or a Canadian Domiciled
Loan Party does not have a maturity prior to May 27, 2015 and (ii) in case such
debt is incurred by a U.S. Domiciled Loan Party and/or a Canadian Domiciled Loan
Party, such Loan Party shall have delivered such collateral documents as Agent
has reasonably requested in connection with the incurrence of such Debt in order
to grant to Agent a perfected second priority security interest in the
Collateral other than the ABL Priority Collateral of the U.S. Domiciled Loan
Parties and/or Canadian Domiciled Loan Parties, as applicable, and such
documents shall be in full force and effect and (iii) in case such debt is
incurred by a U.S. Domiciled Loan Party and/or a Canadian Domiciled Loan Party,
the Permitted Senior Secured Debt Intercreditor Agreement is entered into and in
full force and effect and, to the extent the Permitted Senior Secured Debt
Collateral Agent in respect of such Debt is not a party thereto (in its capacity
as Permitted Senior Secured Debt Collateral Agent in respect of such Debt), such
Permitted Senior Secured Debt Collateral Agent shall become a party to the
Permitted Senior Secured Debt Intercreditor Agreement on or before entering into
the Permitted Senior Secured Debt Documents in respect of such Debt by executing
and delivering a joinder thereto, in the form specified therein.

Permitted Senior Secured Debt Collateral Agent: each relevant Person that acts
as a collateral agent, collateral trustee or in a similar capacity under the
Permitted Senior Secured Debt Documents in respect of an issuance of Permitted
Senior Secured Debt (and its successors and assigns in such capacity).

Permitted Senior Secured Debt Documents: all loan agreements, indentures,
purchase agreements, notes, guarantees, security documents and other documents
executed and delivered

 

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with respect to any Permitted Senior Secured Debt, as in effect on the date of
first incurrence of such Permitted Senior Secured Debt and as the same may be
amended, modified and/or supplemented from time to time in accordance with the
terms hereof and the Permitted Senior Secured Debt Intercreditor Agreement.

Permitted Senior Secured Debt Intercreditor Agreement: a lien subordination and
intercreditor agreement, in form and substance acceptable to the Lead Arrangers
on prevailing market terms for similar transactions (as reasonably determined by
the Lead Arrangers in their discretion), among Agent, the Loan Parties party to
any Permitted Senior Secured Debt Document and the Permitted Senior Secured Debt
Collateral Agent, as amended, modified or supplemented from time to time in
accordance with the terms thereof and hereof.

Permitted Senior Secured Debt Priority Collateral: any and all Collateral other
than the ABL Priority Collateral.

Permitted Senior Secured Debt Security Documents: the “Security Documents” (or
similar term) as defined in the Permitted Senior Secured Debt Documents.

Person: any individual, corporation, limited liability company, unlimited
liability company, partnership, joint venture, joint stock company, land trust,
business trust, unincorporated organization, Governmental Authority or other
entity.

Plan Documents: the U.S. Confirmation Order, the Canadian Sanction Order and the
Reorganization Plans.

Plan: any material “employee benefit plan” (as defined in Section 3(3) of
ERISA), and any material payroll practice and other material employee benefit
plan, policy, program, agreement or arrangement, including retirement, pension,
profit sharing, employment, individual consulting or other compensation
agreement, collective bargaining agreement, bonus or other incentive
compensation, retention, stock purchase, equity or equity-based compensation,
deferred compensation, change of control, severance, sick leave, vacation,
loans, salary continuation, hospitalization, health, life insurance, educational
assistance, or other fringe benefit or perquisite plan, policy, agreement which
is or was sponsored, maintained or contributed to by, or required to be
contributed to by, any Loan Party or Affiliate thereof or with respect to which
a Loan Party or ERISA Affiliate has or could have any obligation or liability,
contingent or otherwise, in any case, that is subject to U.S. law (and not other
foreign jurisdictions) and excluding, for greater certainty, Canadian Employee
Plans and Foreign Plans.

PPSA: the Personal Property Security Act (Ontario) and the regulations
thereunder; provided, however, if validity, perfection and effect of perfection
and non-perfection of Agent’s security interest in and Lien on any Collateral of
any Canadian Domiciled Loan Party are governed by the personal property security
laws of any jurisdiction other than Ontario, PPSA shall mean those personal
property security laws (including the Civil Code of Quebec) in such other
jurisdiction for the purposes of the provisions hereof relating to such
validity, perfection, and effect of perfection and non-perfection and for the
definitions related to such provisions, as from time to time in effect.

Prepetition Agreement: that certain Credit Agreement dated as of December 23,
2004 (as amended, modified or supplemented), among Holdings, the U.S. Borrower,
the Canadian

 

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Borrower and Cooper-Standard Automotive International Holdings B.V. as
borrowers, the lenders party thereto, as lenders, and Deutsche Bank Trust
Company Americas as administrative agent, Lehman Commercial Paper Inc., as
syndication agent, Goldman Sachs Credit Partners L.P., UBS Securities LLC and
The Bank of Nova Scotia, as co-documentation agents, and Deutsche Bank
Securities Inc. and Lehman Brothers Inc., as joint lead arrangers and book
runners.

Pro Forma Basis: in connection with any calculation of compliance with any
financial covenant or financial term under this Agreement, (a) such compliance
with the Fixed Charge Coverage Ratio shall be calculated giving effect to any
Specified Transaction as if such Specified Transaction (and all other Specified
Transactions consummated or made since the first (1st) day of the Fixed Charge
Coverage Ratio Test Period most recently ended) happened on the first (1st) day
of the Fixed Charge Coverage Ratio Test Period most recently ended, including
(i) the incurrence of any Debt by any Loan Party or any of their Subsidiaries in
connection with any such Specified Transaction, (ii) any repayment or redemption
of other Debt of any Loan Party or any of their Subsidiaries in connection with
any such Specified Transaction and (iii) the making of any Distribution by any
Loan Party or any of their Subsidiaries in connection with any such Specified
Transaction, (b) determinations of EBITDA shall be made giving pro forma effect
to any Acquisition consummated since the first (1st) day of the Fixed Charge
Coverage Ratio Test Period most recently ended, with such EBITDA to be
determined as if such Acquisition was consummated on the first (1st) day of the
Fixed Charge Coverage Ratio Test Period most recently ended, and (c) maintenance
of Availability shall be calculated giving effect to such Specified Transaction,
including (i) any disposition of Collateral in any such Specified Transaction
and (ii) the acquisition of any additional Collateral in any such Specified
Transaction which is approved by Agent for inclusion in the calculation of the
Canadian Borrowing Base or the U.S. Borrowing Base, to the extent applicable. In
calculating interest expense on Debt incurred under clause (a) (i) of the
immediately preceding sentence, such Debt shall be deemed to have borne interest
(a) in the case of fixed rate Debt, at the rate applicable thereto or (b) in the
case of floating rate Debt, at the rates which were or would have been
applicable thereto during the period when such Debt was or was deemed to be
outstanding, in each case as reasonably calculated by Loan Party Agent.

Pro Rata: (a) when used with reference to a Lender’s (i) share on any date of
(A) the total Facility Commitments to a Borrower or (B) Loans to be made to a
Borrower, (ii) participating interests in LC Obligations (excluding amounts
specified in clause (c) of such definition) to such Borrower, (iii) share of
payments made by such Borrower with respect to such Borrower’s Obligations,
(iv) increases or reductions to the Canadian Revolver Commitments or the U.S.
Revolver Commitments pursuant to Section 2.1.4, and (v) obligation to pay or
reimburse Agent for Extraordinary Expenses owed by or in respect of such
Borrower or to indemnify any Indemnitees for Claims relating to such Borrower, a
percentage (expressed as a decimal, rounded to the ninth decimal place) derived
by dividing the amount of the Facility Commitment of such Lender to such
Borrower on such date by the aggregate amount of the Facility Commitments of all
Lenders to such Borrower on such date (or if such Facility Commitments have been
terminated, by reference to the respective Facility Commitments as in effect
immediately prior to the termination thereof) or (b) when used for any other
reason, a percentage (expressed as a decimal, rounded to the ninth (9th) decimal
place) derived by dividing the aggregate amount of Lender’s Commitments on such
date by the aggregate amount of the Commitments of all Lenders on such date (or
if any such Commitments have been terminated, such Commitments as in effect
immediately prior to the termination thereof).

 

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Proceeds of Crime Act: the Proceeds of Crime (Money Laundering) and Terrorist
Financing Act (Canada) (or any successor statute), as amended from time to time,
and includes all regulations thereunder.

Properly Contested: with respect to any obligation of any Person, (a) the
obligation is subject to a bona fide dispute regarding amount or such Person’s
liability to pay; (b) the obligation is being properly contested in good faith
by appropriate proceedings promptly instituted and diligently pursued;
(c) appropriate reserves have been established in accordance with GAAP; and
(d) if the obligation results from entry of a judgment or other order, such
judgment or order is stayed pending appeal or other judicial review or covered
by insurance.

Property: any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible.

Protective Advances: as defined in Section 2.1.6.

Purchase Money Debt: (a) Debt (other than the Obligations, the Senior Note Debt
and the Permitted Senior Secured Debt) for payment of any of the purchase price
of fixed assets or the costs of improvement or construction thereof; (b) Debt
(other than the Obligations, the Senior Note Debt and the Permitted Senior
Secured Debt) incurred within one-hundred eighty (180) days before or after
acquisition of any fixed assets, for the purpose of financing any of the
purchase price, improvement or construction thereof; (c) any renewals,
extensions or refinancings thereof; provided that the Refinancing Conditions are
satisfied with respect thereto; and (d) to the extent not covered above,
obligations under Capital Leases permitted hereunder.

Purchase Money Lien: a Lien that secures Purchase Money Debt, encumbering only
the fixed assets acquired, constructed or improved with such Debt.

RCRA: the Resource Conservation and Recovery Act, as amended, (42 U.S.C. §§
6991-6991i).

RDPRM: Quebec Register of Personal and Movable Real Rights or Registre des
droits personnels et reels mobiliers du Quebec.

Real Estate: all right, title and interest (whether as owner, lessor or lessee)
in any real Property or any buildings, structures, parking areas or other
improvements thereon.

Reallocation Agreement: the reallocation agreement dated as of the date hereof
among Agent, the Lenders and each Issuing Bank transferring ownership of debt
among the Lenders after a Designation Date, as amended, modified or supplemented
from time to time.

Refinancing Conditions: the following conditions for Refinancing Debt: (a) it is
in an aggregate principal amount that does not exceed the principal amount of
the Debt being extended, refinanced or renewed, except by an amount equal to a
reasonable premium or other reasonable amounts paid, and fees and expenses
reasonably incurred in connection with such extension, refinancing or renewal,
and by an amount equal to any existing commitments unutilized thereunder or as
otherwise permitted hereunder; (b) it has a final maturity no sooner than, and a
weighted average life no less than, the Debt being extended, refinanced or
renewed; (c) it is subordinated to the Obligations at least to the same extent,
if any, as the Debt being extended, refinanced or renewed; (d) the
representations, covenants and defaults applicable to it, taken as a

 

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whole, are no less favorable to the Loan Parties than those applicable to the
Debt being extended, refinanced or renewed; (e) no additional Lien is granted to
secure it; (f) no additional Person is obligated on such Debt, except with
respect to any additional guarantees given by additional Loan Parties hereunder;
and (g) upon giving effect to it, no Default or Event of Default exists or would
result therefrom.

Refinancing Debt: Debt that is the result of an extension, renewal, or
refinancing of Debt permitted under Section 10.2.1 (b), (d), (f), (h), (i) or
(t).

Reorganization Plans: as defined in the Recitals hereto.

Report: as defined in Section 12.2.3.

Reportable Event: any of the events set forth in Section 4043(b) or (c) of ERISA
and regulations thereunder, excluding, however, such events as to which the PBGC
by regulations has waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event.

Required Facility Lenders: at any date of determination thereof, Lenders having
Facility Commitments to a Borrower representing more than 50% of the aggregate
Facility Commitments to such Borrower at such time; provided, however, that if
and for so long as any such Lender shall be a Defaulting Lender, the term
“Required Facility Lenders” shall mean Lenders (excluding each Defaulting
Lender) having Facility Commitments to such Borrower representing more than 50%
of the aggregate Facility Commitments to such Borrower (excluding the Facility
Commitments of each Defaulting Lender) at such time; provided further, however,
that if all of the Facility Commitments to such Borrower have been terminated,
the term “Required Facility Lenders” shall mean Lenders to such Borrower holding
Revolver Loans to, and participating interest in LC Obligations (excluding
amounts specified in clause (c) of such definition) owing by, such Borrower
representing more than 50% of the aggregate outstanding principal amount of
Revolver Loans and LC Obligations (excluding amounts specified in clause (c) of
such definition) owing by such Borrower at such time.

Required Lenders: at any date of determination thereof, Lenders having Facility
Commitments representing more than 50% of the aggregate Facility Commitments at
such time; provided, however, that for so long as any Lender shall be a
Defaulting Lender, the term “Required Lenders” shall mean Lenders (excluding
such Defaulting Lender) having Commitments representing more than 50% of the
aggregate Commitments (excluding the Commitments of each Defaulting Lender) at
such time; provided further, however, that if any of the Facility Commitments
have been terminated, the term “Required Lenders” shall be calculated using
(x) in lieu of such Lender’s terminated Facility Commitment, the outstanding
principal amount of the Revolver Loans by such Lender to, and participation
interests in LC Obligations (excluding amounts specified in clause (c) of such
definition) owing by, such Borrower and (y) in lieu of the aggregate Commitments
under such terminated Facility Commitment, the aggregate outstanding Revolver
Loans to, and LC Obligations (excluding amounts specified in clause (c) of such
definition) owing by such Borrower.

Reserve Percentage: the reserve percentage (expressed as a decimal, rounded up
to the nearest 1/100th of 1%) applicable to member banks under regulations
issued from time to time by the Board of Governors for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently referred to
as “Eurocurrency liabilities”).

 

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Restricted Investment: any Investment by a Loan Party or Subsidiary, other than:
(a) Investments existing on the Closing Date, and other Investments, in each
case set forth on Schedule 1.1(d); (b) cash and Cash Equivalents; (c) loans and
advances permitted under Section 10.2.5; (d) Investments by the U.S. Borrower or
any of its Subsidiaries in payroll, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the Ordinary Course of
Business; (e) Investments constituting (i) Acquisitions by External Subsidiaries
(so long as, with respect to any Designated External Acquisition, the External
Specified Transaction Conditions applicable to such Acquisition shall have been
satisfied in connection therewith) and (ii) Permitted Acquisitions; (f) Hedging
Agreements entered into in the Ordinary Course of Business of such Loan Party or
Subsidiary and for nonspeculative purposes (determined as of the date such
Hedging Agreement was entered into by such Loan Party or Subsidiary) to the
extent that entry into such Hedging Agreement is permitted by Sections 10.2.1(e)
and 10.2.13 hereof; (g) Permitted Contingent Obligations; (h) Intercompany
Equity Investments; (i) Investments arising or made under Permitted
Securitizations; (j) Investments of any Person existing at the time such Person
is merged into, amalgamated or consolidated with a Loan Party or any of its
Subsidiaries, or becomes a Subsidiary, in each case as permitted under
Section 10.2.1(f); provided that any such Investments were not made in
contemplation of such merger, amalgamation, consolidation or acquisition;
(k) other Investments of a type not described in clauses (a) through (j) or
(l) of this definition and not otherwise prohibited by the terms of this
Agreement or the other Loan Documents so long as the Specified Transaction
Conditions applicable to such Investments shall have been satisfied in
connection therewith and the Loan Parties shall have complied with the
collateral requirements (if any) of this Agreement (including, without
limitation, those contained in Section 7 and Section 10.1.9) in connection with
such Investment; and (l) Investments consisting of Equity Interests,
obligations, securities or other property received in settlement of delinquent
accounts of and disputes with customers and suppliers in the Ordinary Course of
Business and owing to the U.S. Borrower or any of its Subsidiaries or in
satisfaction of judgments.

Restrictive Agreement: an agreement that conditions or restricts the right of
any Loan Party or Subsidiary to grant Liens on any assets securing the
Obligations or to declare or make Distributions.

Revolver Loan: a loan made pursuant to Section 2.1, and any Swingline Loan,
Overadvance Loan or Protective Advance.

Revolver Notes: collectively, the U.S. Revolver Notes and the Canadian Revolver
Notes.

Rights Offering: as defined in the Recitals hereto.

Royalties: all royalties, fees, expense reimbursement and other amounts payable
by a Loan Party or a Subsidiary under a License.

S&P: Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and its successors.

 

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Secured Parties: Canadian Facility Secured Parties and/or U.S. Facility Secured
Parties, as the context requires.

Security Documents: this Agreement, the Guarantees, Insurance Assignments,
Canadian Security Agreements, Deposit Account Control Agreements and all other
documents, instruments and agreements now or hereafter securing (or given with
the intent to secure) any Obligations.

Senior Officer: the chairman of the board, president, chief executive officer,
chief financial officer or treasurer (or, in each case, with respect to any
External Subsidiary, any similarly designated officer or director under local
practice).

Senior Note Debt: the Debt of the U.S. Domiciled Loan Parties outstanding under
and pursuant to the Senior Note Documents, to the extent permitted hereunder.

Senior Note Documents: the Senior Notes, the Senior Note Indenture and all other
documents executed and delivered with respect to the Senior Notes, in each case
as in effect on the Closing Date and as the same may be modified or amended from
time to time in accordance with the terms hereof.

Senior Note Indenture: the Indenture dated as of May 11, 2010 among CSA Escrow
Corporation, the U.S. Borrower and the other parties thereto, as in effect on
the Closing Date and as the same may be modified or amended from time to time in
accordance with the terms hereof.

Senior Noteholders: the “Holders” as defined in the Senior Note Indenture.

Senior Notes: the U.S. Borrower’s 8-1/2% Senior Notes due 2018, issued pursuant
to the Senior Note Indenture, as in effect on the Closing Date and as the same
may be modified or amended from time to time in accordance with the terms
hereof.

Settlement Report: a report delivered by Agent to the Applicable Lenders
summarizing the Loans and, if applicable, participations in U.S. LC Obligations
(excluding amounts specified in clause (c) of such definition) of the U.S.
Borrower and Canadian LC Obligations (excluding amounts specified in clause
(c) of such definition) of the Canadian Borrower outstanding as of a given
settlement date, allocated to the Applicable Lenders on a Pro Rata basis in
accordance with their Commitments.

Solvent: as to any Person, such Person (a) owns Property whose fair salable
value is greater than the amount required to pay all of its debts (including
contingent, subordinated, unmatured and unliquidated liabilities); (b) owns
Property whose present fair salable value (as defined below) is greater than the
probable total liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of such Person as they become absolute and matured;
(c) is able to pay all of its debts as they mature; (d) has capital that is not
unreasonably small for the business in which it is engaged or about to engage;
(e) is not “insolvent” within the meaning of Section 101(32) of the U.S.
Bankruptcy Code; (f) has not incurred (by way of assumption or otherwise) any
obligations or liabilities (contingent or otherwise) or made any conveyance in
connection therewith, with actual intent to hinder, delay or defraud either
present or future creditors of such Person or any of its Affiliates; and (g) as
to any Person incorporated or organized under the laws of Canada or any province
or territory of Canada, is not an “insolvent person” as defined in the
Bankruptcy and Insolvency Act (Canada). “Fair salable value” means

 

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the amount that could be obtained for assets within a reasonable time, either
through collection or through sale under ordinary selling conditions by a
capable and diligent seller to an interested buyer who is willing (but under no
compulsion) to purchase.

Specified Transaction Conditions: the External Specified Transaction Conditions
or the Internal Specified Transaction Conditions, as applicable.

Specified Transactions: an External Specified Transaction and/or an Internal
Specified Transaction, as applicable.

Sterling or £: the lawful currency of the United Kingdom of Great Britain and
Northern Ireland.

Subordinated Debt: Debt incurred by a Loan Party or Subsidiary that is expressly
subordinate and junior in right of payment to Full Payment of all Obligations,
and is on subordination terms reasonably satisfactory to Agent.

Subsidiary: any entity more than 50% of whose voting securities or Equity
Interests is owned by any Loan Party or any combination of the Loan Parties
(including indirect ownership by any Loan Party through other entities in which
any Loan Party directly or indirectly owns 50% of the voting securities or
Equity Interests). Unless the context otherwise requires, each reference to
Subsidiaries herein shall be a reference to Subsidiaries of Holdings.

Supermajority Required Facility Lenders: at any date of determination thereof,
Lenders having Facility Commitments to a Borrower representing more than 66 2/3%
of the aggregate Facility Commitments to such Borrower at such time; provided,
however, that if and for so long as any such Lender shall be a Defaulting
Lender, the term “Supermajority Required Facility Lenders” shall mean Lenders
(excluding each Defaulting Lender) having Facility Commitments to such Borrower
representing more than 66 2/3% of the aggregate Facility Commitments to such
Borrower (excluding the Facility Commitments of each Defaulting Lender) at such
time; provided further, however, that if all of the Facility Commitments to such
Borrower have been terminated, the term “Supermajority Required Facility
Lenders” shall mean Lenders to such Borrower holding Revolver Loans to, and
participating interest in LC Obligations (excluding amounts specified in clause
(c) of such definition) owing by, such Borrower representing at least 66 2/3% of
the aggregate outstanding principal amount of Revolver Loans and LC Obligations
(excluding amounts specified in clause (c) of such definition) owing by such
Borrower at such time.

Swingline Loan: a U.S. Swingline Loan or a Canadian Swingline Loan, as
applicable.

TARGET Day: any day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer (TARGET) payment system (or, if such payment system
ceases to be operative, such other payment system (if any) determined by Agent
to be a suitable replacement) is open for the settlement of payments in Euros.

Taxes: all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

 

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Termination Event: (a) the voluntary full or partial wind up of a Canadian
Pension Plan by a Canadian Facility Loan Party; (b) the institution of
proceedings by any Governmental Authority to terminate in whole or in part or
have a trustee appointed to administer a Canadian Pension Plan; or (c) any other
event or condition which might constitute grounds for the termination of,
winding up or partial termination of winding up or the appointment of trustee to
administer, any Canadian Pension Plan.

Total Revolver Exposure: as of any date of determination the sum of the Canadian
Revolver Exposure and the U.S. Revolver Exposure on such date of determination.

Transactions: collectively, (a) the consummation of the Reorganization Plans and
the other transactions contemplated by the Plan Documents to be consummated on
the Closing Date, (b) the entering into by the Loan Parties of the Loan
Documents and the Senior Note Documents to which they are or are intended to be
a party, and the borrowings hereunder and thereunder on the Closing Date and
application of the proceeds as contemplated hereby and thereby, (c) the issuance
of the New Common Stock and New Preferred Stock, (d) the Full Payment and
termination of all Debt to be Repaid and (e) the payment of the fees and
expenses incurred in connection with the consummation of the foregoing that are
required to be paid on the Closing Date.

Transferee: any actual or potential Eligible Assignee, Participant or other
Person acquiring an interest in any Obligations.

Type: any type of a Loan (i.e., U.S. Base Rate Loan, LIBOR Loan, Canadian BA
Rate Loan, Canadian Base Rate Loan, or Canadian Prime Rate Loan).

UCC: the Uniform Commercial Code as in effect in the State of New York or, when
the laws of any other jurisdiction govern the creation, perfection, priority or
enforcement of any Lien, the Uniform Commercial Code of such jurisdiction.

Unfunded Pension Liability: as of any date, the excess of the present value of a
Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA determined
on a plan termination basis in accordance with actuarial assumptions at such
time consistent with those prescribed by the PBGC for purposes of Section 4044
of ERISA, over the current value of that Pension Plan’s assets, and includes any
unfunded going-concern deficit or solvency deficiency as identified in an
actuarial valuation report prepared for the purposes of the PBA and filed with
any applicable Governmental Authority in respect of any Canadian Pension Plan.

Upstream Payment: any of the following Distributions by a Person to any holder
of its Equity Interests:

(i) a Distribution by a Subsidiary of a Loan Party (other than Holdings) to such
Loan Party;

(ii) a Distribution by Holdings to its then existing shareholders paid solely in
Equity Interests (other than Disqualified Equity Interests);

(iii) a Distribution by a Loan Party (other than Holdings) or a Subsidiary
ratably to such Person’s then existing shareholders paid solely in Equity
Interests (other than Disqualified Equity Interests); and

 

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(iv) a Distribution by a Borrower to Holdings or a Subsidiary of a Borrower to
its Loan Party parent and, ultimately, to Holdings to the extent promptly used
by Holdings for any purpose not otherwise prohibited by the terms of this
Agreement or the other Loan Documents, including to pay cash dividends to its
shareholders, so long as the External Specified Transaction Conditions
applicable to such Upstream Payment shall have been satisfied in connection
therewith.

U.S. Auto-Extension Letter of Credit: as defined in Section 2.2.1(e).

U.S. Availability: as of any date of determination, the U.S. Borrowing Base as
of such date of determination plus solely for purposes of calculating
“Availability” in connection with the satisfaction of any Internal Specified
Transaction Conditions, the U.S. Suppressed Amount on such date of determination
plus the U.S. Designated Cash Amount on such date of determination minus the
U.S. Revolver Exposure (calculated without duplication of any amounts reserved
under the U.S. LC Reserve) on such date of determination.

U.S. Availability Reserve: the sum (without duplication) of (a) the Inventory
Reserve with respect to the U.S. Borrower’s Inventory; (b) the U.S. Rent and
Charges Reserve; (c) the U.S. LC Reserve; (d) the U.S. Bank Product Reserve;
(e) the aggregate amount of liabilities secured by Liens upon the U.S. Facility
Collateral that are senior to Agent’s Liens (but imposition of any such reserve
shall not waive an Event of Default arising therefrom); (f) the Canadian
Overadvance Loan Balance, if any, outstanding on such date; and (g) such
additional reserves (including, without limitation, dilution reserves), in such
amounts and with respect to such matters, as Agent in its Permitted Discretion
may establish.

U.S. Bank Product Reserve: the aggregate amount of reserves, as established by
Agent from time to time in its Permitted Discretion to reflect the reasonably
anticipated liabilities in respect of the then outstanding Bank Product Debt of
the U.S. Facility Loan Parties and their Subsidiaries.

U.S. Bankruptcy Cases: as defined in the Recitals hereto.

U.S. Bankruptcy Code: as defined in the Recitals hereto.

U.S. Bankruptcy Court: as defined in the Recitals hereto.

U.S. Base Rate: for any day, a per annum rate equal to the greater of (a) the
U.S. Prime Rate for such day; (b) the Federal Funds Rate for such day, plus
0.50%; or (c) LIBOR for a thirty (30) day interest period as determined on such
day, plus 1.0%.

U.S. Base Rate Loan: any Loan that bears interest based on the U.S. Base Rate.

U.S. Borrower: as defined in the preamble to this Agreement.

U.S. Borrowing Base: on any date of determination, an amount equal to the lesser
of (a) the Maximum U.S. Facility Amount minus (x) the Canadian Overadvance Loan
Balance, if any, outstanding on such date minus (y) the U.S. LC Reserve; and
(b) (1) the sum of (x) 85% of the Value of Eligible Accounts of the U.S.
Borrower; plus (y) the lesser of (i) 70% of the Value of Eligible Inventory of
the U.S. Borrower; and (ii) 85% of the NOLV Percentage of the Value of Eligible
Inventory of the U.S. Borrower, minus (2) the U.S. Availability Reserve.

 

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U.S. Cash Collateral Account: a demand deposit, money market or other account
established by Agent at Bank of America or such other financial institution as
Agent may select in its discretion, which account shall be for the benefit of
the Secured Parties and shall be subject to Agent’s Liens securing the
Obligations.

U.S. Confirmation Order: as defined in the Recitals hereto.

U.S. Designated Cash Amount: the aggregate amount of cash of the U.S. Domiciled
Loan Parties deposited in segregated DACA Deposit Accounts with Agent (excluding
any portion thereof which is subject to a Lien in favor of a Person other than
Agent or is otherwise restricted).

U.S. Domiciled Loan Party: Holdings and each U.S. Subsidiary of Holdings (other
than CS Automotive LLC), in each case, now or hereafter party hereto as a Loan
Party; and “U.S. Domiciled Loan Parties” means all such Persons, collectively.

U.S. Dominion Account: a special account established by the U.S. Facility Loan
Parties at Bank of America or another bank reasonably acceptable to Agent, over
which Agent has exclusive control for withdrawal purposes.

U.S. Effective Date: as defined in the Recitals hereto.

U.S. Facility Collateral: Collateral that now or hereafter secures (or is
intended to secure) any of the U.S. Facility Obligations.

U.S. Facility Guarantee: each guarantee agreement (including this Agreement) at
any time executed by a U.S. Facility Guarantor in favor of Agent guaranteeing
all or any portion of the U.S. Facility Obligations.

U.S. Facility Guarantor: each U.S. Domiciled Loan Party (excluding CS Automotive
LLC) and each other Person (if any) who guarantees payment and performance of
any U.S. Facility Obligations.

U.S. Facility Loan Party: the U.S. Borrower and each U.S. Facility Guarantor.

U.S. Facility Obligations: all applicable Obligations of the U.S. Facility Loan
Parties (including, for the avoidance of doubt, the Obligations of the U.S.
Domiciled Loan Parties as guarantors of the Canadian Facility Obligations).

U.S. Facility Secured Parties: Agent, U.S. Issuing Bank, U.S. Lenders, providers
of Bank Products to U.S. Facility Loan Parties and the Lead Arrangers.

U.S. Issuing Bank: (a) Bank of America or an Affiliate of Bank of America, as an
issuer of Letters of Credit under this Agreement, (b) Deutsche Bank AG, New York
Branch or an Affiliate of Deutsche Bank AG, New York Branch, as an issuer of
Letters of Credit under this Agreement, and (c) Deutsche Bank Trust Company
Americas, in its capacity as the issuer of the Existing Letters of Credit. With
respect to any Letter of Credit, “U.S. Issuing Bank” shall mean the issuer
thereof.

 

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U.S. LC Obligations: the sum (without duplication) of (a) all amounts owing by
the U.S. Borrower for any drawings under Letters of Credit; (b) the stated
amount of all outstanding Letters of Credit issued for the account of the U.S.
Borrower; and (c) all fees and other amounts owing with respect to Letters of
Credit issued for the account of the U.S. Borrower.

U.S. LC Reserve: the aggregate of all U.S. LC Obligations, other than (a) those
that have been Cash Collateralized; and (b) if no Default or Event of Default
exists, amounts specified in clause (c) of the definition of U.S. LC
Obligations.

U.S. Lenders: Bank of America and each other Lender (other than Canadian
Lenders) party hereto, including Agent in its capacity as a provider of U.S.
Swingline Loans.

U.S. Letter of Credit Sublimit: $44,500,000; provided, however, that the
aggregate amount of U.S. LC Obligations that may be denominated in Euros and
Sterling shall not exceed the Dollar Equivalent of $10,000,000 less the Dollar
Equivalent of the outstanding U.S. Revolver Loans denominated in Euros.

U.S. Letters of Credit: as defined in Section 2.2.1 hereof.

U.S. Non-Extension Notice Date: as defined in Section 2.2.1(e).

U.S. Overadvance: as defined in Section 2.1.5 hereof.

U.S. Overadvance Loan: a U.S. Base Rate Loan made to the U.S. Borrower when a
U.S. Overadvance exists or is caused by the funding thereof.

U.S. Plan: as defined in the Recitals hereto.

U.S. Prime Rate: the rate of interest announced by Bank of America from time to
time as its U.S. prime rate. Such rate is set by Bank of America on the basis of
various factors, including its costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above or below such rate. Any change in such rate
announced by Bank of America shall take effect at the opening of business on the
day specified in the public announcement of such change.

U.S. Reimbursement Date: as defined in Section 2.2.2(a).

U.S. Rent and Charges Reserve: the aggregate of (a) all past due rent and other
past due amounts owing by any U.S. Facility Loan Party to any landlord,
warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker
or other Person who possesses any U.S. Facility Collateral or could assert a
Lien on any such U.S. Facility Collateral; plus (b) a reserve at least equal to
three (3) months (or such shorter period as Agent determines in its Permitted
Discretion as it will take to liquidate the ABL Priority Collateral at such
location) rent and other charges that could reasonably be expected to be payable
to any such Person who possesses any U.S. Facility Collateral or could
reasonably be expected to assert a Lien thereon under Applicable Law, unless, in
any such case, such Person has executed a Collateral Access Agreement.

U.S. Revolver Commitment: for any U.S. Lender, its obligation to make U.S.
Revolver Loans and to issue U.S. Letters of Credit, in the case of U.S. Issuing
Bank, or participate in U.S.

 

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LC Obligations (excluding amounts specified in clause (c) of such definition),
in the case of the other U.S. Lenders, to the U.S. Borrower up to the maximum
principal amount, in each case, shown on Schedule 1.1(a), or as hereafter
determined pursuant to each Assignment and Acceptance to which it is a party, as
such U.S. Revolver Commitment may be adjusted from time to time in accordance
with the provisions of Section 2.1.4 or 11.2. “U.S. Revolver Commitments” means
the aggregate amount of such commitments of all U.S. Lenders.

U.S. Revolver Commitment Termination Date: the earliest of (a) the Facility
Termination Date, (b) the date on which Loan Party Agent terminates or reduces
to zero (0) the U.S. Revolver Commitments pursuant to Section 2.1.4, and (c) the
date on which the U.S. Revolver Commitments are terminated pursuant to
Section 11.2.

U.S. Revolver Exposure: on any date, an amount equal to the sum of the Dollar
Equivalent of the U.S. Revolver Loans outstanding on such date plus the U.S. LC
Obligations (excluding amounts specified in clause (c) of such definition) on
such date.

U.S. Revolver Loan: a Revolver Loan made by a U.S. Lender to the U.S. Borrower
pursuant to Section 2.1.1(a), and any U.S. Swingline Loan, which Loan shall be
denominated in Dollars and shall be either a U.S. Base Rate Loan or a LIBOR
Loan, in each case as selected by Agent or Loan Party Agent.

U.S. Revolver Notes: collectively, each promissory note, if any, executed by the
U.S. Borrower in favor of a U.S. Lender to evidence the U.S. Revolver Loans
funded from time to time by such U.S. Lender, which shall be in the form of
Exhibit A-2 to this Agreement, together with any replacement or successor notes
therefor.

U.S. Subsidiary: a Subsidiary of Holdings that is organized under the laws of a
state of the United States or the District of Columbia and is not a Foreign
Subsidiary.

U.S. Suppressed Amount: to the extent that the amount calculated pursuant to
clause (b) of the U.S. Borrowing Base definition exceeds the then-current U.S.
Revolver Commitment as of any date of determination, the amount of any such
excess designated in writing by Loan Party Agent to Agent as “U.S. Suppressed
Amount” under this Agreement; provided, that in no event shall the U.S.
Suppressed Amount exceed $5,000,000 less the Canadian Suppressed Amount as of
such date of determination.

U.S. Swingline Loan: any Borrowing of Base Rate U.S. Revolver Loans made
pursuant to Section 4.1.3(a).

U.S. Unused Line Fee Rate: a rate per annum equal to (a) .50% when the U.S.
Revolver Exposure is greater than 50% of the U.S. Revolver Commitments and
(b) .75% at all other times.

Value: without duplication of any item enumerated in the definition of Eligible
Inventory or Eligible Account: (a) for Inventory, its Dollar Equivalent value
determined on the basis of the lower of cost or market, calculated on a
first-in, first-out basis, and excluding any portion of cost attributable to
intercompany profit among the Borrowers, the other Loan Parties and their
Affiliates; and (b) for an Account, its Dollar Equivalent face amount, net of
any returns, rebates, discounts (calculated on the shortest terms), credits,
allowances or Taxes (including sales, excise or other taxes) that have been or
could be claimed by the Account Debtor or any other Person.

 

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Wage Earner Protection Act Reserve: on any date of determination, a reserve
established from time to time by Agent in its Permitted Discretion in such
amount as Agent determines reflects the amounts that may become due under the
Wage Earner Protection Program Act with respect to the employees of any Loan
Party employed in Canada which would give rise to a Lien with priority under
Applicable Law over the Lien of Agent.

Wholly-Owned Subsidiary: with respect to any Person at any time, any Subsidiary,
100% of whose Equity Interests (other than, in the case of any Foreign
Subsidiary, nominal directors’ qualifying shares) are at such time owned,
directly or indirectly, by such Person.

1.2 Accounting Terms. Under the Loan Documents (except as otherwise specified
herein), all accounting terms shall be interpreted, all accounting
determinations shall be made, and all financial statements shall be prepared, in
accordance with GAAP applied on a basis consistent with the most recent audited
financial statements of the Loan Parties delivered to Agent before the Closing
Date and using the same inventory valuation method as used in such financial
statements, except for any change required or permitted by GAAP if the Loan
Parties’ certified public accountants concur in such change and the change is
disclosed to Agent. The Loan Party Agent, Lenders and Agent shall negotiate in
good faith to amend Section 10.3 to preserve the original intent in light of
such change in GAAP; provided, that until so amended Section 10.3 shall continue
to be computed in accordance with GAAP prior to such change therein.

1.3 Uniform Commercial Code/PPSA. As used herein, the following terms are
defined in accordance with the UCC in effect in the State of New York from time
to time: “Chattel Paper,” “Commercial Tort Claim,” “Equipment,” “Goods,”
“Instrument,” “Investment Property,” “Letter-of-Credit Right” and “Supporting
Obligation” and, as such terms relate to any such Property of any Canadian
Domiciled Loan Party, such terms shall refer to such Property as defined in the
PPSA. In addition, other terms relating to Collateral used and not otherwise
defined herein that are defined in the UCC and/or the PPSA shall have the
meanings set forth in the UCC and/or the PPSA, as applicable

1.4 Certain Matters of Construction. The terms “herein,” “hereof,” “hereunder”
and other words of similar import refer to this Agreement as a whole and not to
any particular section, paragraph or subdivision. Any pronoun used shall be
deemed to cover all genders. In the computation of periods of time from a
specified date to a later specified date, “from” means “from and including,” and
“to” and “until” each mean “to but excluding.” The terms “including” and
“include” shall mean “including, without limitation” and, for purposes of each
Loan Document, the parties agree that the rule of ejusdem generis shall not be
applicable to limit any provision. Section titles appear as a matter of
convenience only and shall not affect the interpretation of any Loan Document.
All references to (a) laws or statutes include all related rules, regulations,
interpretations, amendments and successor provisions; (b) any document,
instrument or agreement includes any amendments, waivers and other
modifications, extensions or renewals (to the extent not prohibited by the Loan
Documents); (c) any section mean, unless the context otherwise requires, a
section of this Agreement; (d) any exhibits or schedules mean, unless the
context otherwise requires, exhibits and schedules attached hereto, which are
hereby incorporated by reference; (e) any Person includes its successors and
assigns; (f) time of day mean time of day at Agent’s notice address under
Section 14.3.1; or (g) except as expressly provided, discretion of Agent,
Issuing Bank or any Lender mean the sole and absolute discretion of such Person.
All calculations of Value, fundings of Loans, issuances of Letters of Credit and

 

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payments of Obligations shall be in Dollars (except as otherwise expressly
provided herein) and, unless the context otherwise requires, all determinations
(including calculations of Borrowing Base and financial covenants) made from
time to time under the Loan Documents shall be made in light of the
circumstances existing at such time. Borrowing Base calculations shall be
consistent with historical methods of valuation and calculation, and otherwise
satisfactory to Agent (and not necessarily calculated in accordance with GAAP).
The Loan Parties shall have the burden of establishing any alleged negligence,
misconduct or lack of good faith by Agent, any Issuing Bank or any Lender under
any Loan Documents. No provision of any Loan Documents shall be construed
against any party by reason of such party having, or being deemed to have,
drafted the provision. Whenever the phrase “to the best of a Loan Parties’
knowledge” or words of similar import are used in any Loan Documents, it means
actual knowledge of a Senior Officer of a Loan Party. Whenever any payment,
certificate, notice or other delivery shall be stated to be due on a day other
than a Business Day, the due date for such payment or delivery shall be extended
to the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of interest or fees, as the case may be;
provided, however, that if such extension would cause payment of interest on or
principal of any LIBOR Loan to be made in the next calendar month, such payment
shall be made on the immediately preceding Business Day.

1.5 Interpretation (Quebec). For purposes of any Collateral located in the
Province of Quebec or charged by any deed of hypothec (or any other Loan
Document) and for all other purposes pursuant to which the interpretation or
construction of a Loan Document may be subject to the laws of the Province of
Quebec or a court or tribunal exercising jurisdiction in the Province of Québec,
(q) “personal property” shall be deemed to include “movable property”, (r) “real
property” shall be deemed to include “immovable property”, (s) “tangible
property” shall be deemed to include “corporeal property”, (t) “intangible
property” shall be deemed to include “incorporeal property”, (u) “security
interest” and “mortgage” shall be deemed to include a “hypothec”, (v) all
references to filing, registering or recording under the UCC or the PPSA shall
be deemed to include publication under the Civil Code of Québec, (w) all
references to “perfection” of or “perfected” Liens shall be deemed to include a
reference to the “opposability” of such Liens to third parties, (x) any “right
of offset”, “right of setoff” or similar expression shall be deemed to include a
“right of compensation”, (y) “goods” shall be deemed to include “corporeal
movable property” other than chattel paper, documents of title, instruments,
money and securities, and (z) an “agent” shall be deemed to include a
“mandatory”.

SECTION 2. CREDIT FACILITIES

2.1 Commitment.

2.1.1 Revolver Loans.

(a) U.S. Revolver Loans to the U.S. Borrower. Each U.S. Lender agrees, severally
and not jointly with the other U.S. Lenders, upon the terms and subject to the
conditions set forth herein, to make U.S. Revolver Loans to the U.S. Borrower on
any Business Day during the period from the Closing Date to the U.S. Revolver
Commitment Termination Date, not to exceed in aggregate principal amount
outstanding at any time such U.S. Lender’s U.S. Revolver Commitment at such
time, which U.S. Revolver Loans may be repaid and reborrowed in accordance with
the provisions of this Agreement; provided, however, that such U.S. Lenders
shall have no obligation to the U.S. Borrower whatsoever to honor any request
for a U.S.

 

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Revolver Loan on or after the U.S. Revolver Commitment Termination Date or if
the amount of the proposed U.S. Revolver Loan exceeds U.S. Availability on the
proposed funding date for such U.S. Revolver Loan. Each Borrowing of U.S.
Revolver Loans shall be funded by U.S. Lenders on a Pro Rata basis. The U.S.
Revolver Loans shall bear interest as set forth in Section 3.1. Each U.S.
Revolver Loan shall, at the option of the U.S. Borrower, be made or continued
as, or converted into, part of one or more Borrowings that, unless specifically
provided herein, shall consist entirely of U.S. Base Rate Loans or LIBOR Loans.
The U.S. Revolver Loans shall be repaid in accordance with the terms of this
Agreement and shall be secured by all of the U.S. Facility Collateral. Each U.S.
Revolver Loan shall be funded in Dollars or, at the option of the U.S Borrower,
Euros and repaid in the same currency as the underlying U.S. Revolver Loan was
made; provided, however, that the aggregate amount of U.S. Revolver Loans that
may be denominated in Euros shall not exceed the Dollar Equivalent of
$10,000,000 less the Dollar Equivalent of the outstanding U.S. LC Obligations
(excluding amounts specified in clause (c) of such definition) denominated in
Euros and Sterling; provided, further, however, U.S. Revolver Loans denominated
in Euros shall consist entirely of LIBOR Loans.

(b) Canadian Revolver Loans to Canadian Borrower. Each Canadian Lender agrees,
severally and not jointly with the other Canadian Lenders, upon the terms and
subject to the conditions set forth herein, to make Canadian Revolver Loans to
the Canadian Borrower on any Business Day during the period from the Closing
Date to the Canadian Revolver Commitment Termination Date, not to exceed in
aggregate principal amount outstanding at any time, such Canadian Lender’s
Canadian Revolver Commitment at such time, which Canadian Revolver Loans may be
repaid and reborrowed in accordance with the provisions of this Agreement;
provided, however, that Canadian Lenders shall have no obligation to the
Canadian Borrower whatsoever to honor any request for a Canadian Revolver Loan
on or after the Canadian Revolver Commitment Termination Date or if the amount
of the proposed Canadian Revolver Loan exceeds Canadian Availability on the
proposed funding date for such Canadian Revolver Loan. Each Borrowing of
Canadian Revolver Loans shall be funded by Canadian Lenders on a Pro Rata basis.
The Canadian Revolver Loans shall bear interest as set forth in Section 3.1.
Each Canadian Revolver Loan shall, at the option of the Canadian Borrower, be
made or continued as, or converted into, part of one or more Borrowings that,
unless specifically provided herein, shall consist entirely of Canadian Prime
Rate Loans or Canadian BA Rate Loans if denominated in Canadian Dollars, or
Canadian Base Rate Loans or LIBOR Loans if denominated in Dollars. The Canadian
Revolver Loans shall be repaid in accordance with the terms of this Agreement
and shall be secured by all of the Canadian Facility Collateral. Each Canadian
Revolver Loan shall be funded in Canadian Dollars or, at the option of the
Canadian Borrower, Dollars and repaid in the same currency as the underlying
Canadian Revolver Loan was made.

(c) Cap on Total Revolver Exposure. Notwithstanding anything to the contrary
contained in this Section 2.1.1, in no event shall any Borrower be entitled to
receive a Revolver Loan if at the time of the proposed funding of such Loan (and
after giving effect thereto and the application of the proceeds thereof and all
pending requests for Loans), the Total Revolver Exposure exceeds (or would
exceed) the lesser of the Maximum Facility Amount and the Commitments.

2.1.2 Revolver Notes. The Revolver Loans made by each Lender and interest
accruing thereon shall be evidenced by the records of Agent and such Lender. At
the request of any Lender, the Borrower to which such Lender has extended
Commitments shall deliver a Revolver Note to such Lender in the amount of such
Lender’s aggregate U.S. or Canadian Revolver Commitment, as applicable.

 

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2.1.3 Use of Proceeds. The proceeds of Revolver Loans shall be used by the
Borrowers solely (a) to repay, in combination with other cash of the Borrowers,
the Borrowers’ and the other Bankruptcy Debtors’ existing indebtedness
outstanding on the Closing Date, including the outstanding obligations under the
Prepetition Agreement and the DIP Agreement (in each case, to the extent
required under the Reorganization Plans), (b) to otherwise enable the Borrowers
to consummate the U.S. Plan on the U.S. Effective Date, and the Canadian
Borrower to consummate the Canadian Plan on the Canadian Effective Date, (c) to
pay certain unsecured claims, administrative expenses and administrative claims
as contemplated by the Reorganization Plans, (d) to fund certain fees and
expenses associated with the consummation of the U.S. Plan and the Canadian
Plan, including those relating to the credit facilities provided by the Lenders
pursuant to this Agreement and the other Loan Documents, (e) to issue standby or
commercial letters of credit, and (f) to finance ongoing working capital needs
and other lawful general corporate purposes of the Borrowers and their
Subsidiaries.

2.1.4 Reduction or Termination of Commitments; Increase of Commitments.

(a) The Canadian Revolver Commitments shall terminate on the Canadian Revolver
Commitment Termination Date and the U.S. Revolver Commitments shall terminate on
the U.S. Revolver Commitment Termination Date, in each case, unless sooner
terminated in accordance with this Agreement. Upon at least three (3) Business
Days’ prior written notice to Agent from Loan Party Agent, (i) the U.S. Borrower
may, at its option, terminate the U.S. Revolver Commitments and this credit
facility and/or (ii) the Canadian Borrower may, at its option, terminate the
Canadian Revolver Commitment, in each case, without premium or penalty (other
than funding losses payable pursuant to Section 3.9). If the U.S. Borrower
elects to reduce to zero (0) or terminate the U.S. Revolver Commitments pursuant
to the previous sentence, the Canadian Revolver Commitments shall automatically
terminate concurrently with the termination of the U.S. Revolver Commitments.
Any notice of termination given by the Borrowers pursuant to this Section 2.1.4
shall be irrevocable; provided, however, that notice may be contingent on the
occurrence of a refinancing or the consummation of a sale, transfer, lease or
other disposition of assets and may be revoked or the termination date deferred
if the refinancing or sale, transfer, lease or other disposition of assets does
not occur. On the Canadian Revolver Commitment Termination Date, the Canadian
Borrower (and other Canadian Facility Loan Parties, if applicable) shall make
Full Payment of all Canadian Facility Obligations. On the U.S. Revolver
Commitment Termination Date, the U.S. Borrower (and other U.S. Facility Loan
Parties, if applicable) shall make Full Payment of all U.S. Facility
Obligations.

(b) So long as (i) no Default or Event of Default then exists or would result
therefrom, (ii) no U.S. Overadvance or Canadian Overadvance then exists or would
result therefrom, and (iii) after giving effect thereto, U.S. Availability would
exceed $10,000,000, Loan Party Agent may permanently and irrevocably reduce the
Maximum Facility Amount by giving Agent at least three (3) Business Days’ prior
irrevocable written notice thereof from a Senior Officer of Loan Party Agent,
which notice shall (1) specify the date (which shall be a Business Day) and
amount of such reduction (which shall be in a minimum amount of $5,000,000 and
increments of $1,000,000 in excess thereof), (2) specify the allocation of such
reduction to, and the corresponding reductions of, each of the Maximum Canadian
Facility Amount and/or the

 

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Maximum U.S. Facility Amount (and the respective Canadian Revolver Commitments
and the U.S. Revolver Commitments in respect thereof, each of which shall be
allocated to Lenders among the Borrowers on a Pro Rata basis at the time of such
reduction) and (3) certify the satisfaction of the conditions specified in the
foregoing clauses (i) and (ii) and this clause (iii) (including calculations
thereof in reasonable detail) as of the effective date of any such proposed
reduction; provided, however, that such notice may be contingent on the
occurrence of a refinancing or incurrence of Debt permitted under Section 10.2.1
or consummation of a sale, transfer, lease or other disposition of assets and
may be revoked or the reduction date deferred if the refinancing, incurrence or
sale, transfer, lease or other disposition of assets does not occur. Without
limiting the foregoing, (A) each reduction in the Maximum Canadian Facility
Amount and the Canadian Revolver Commitments shall in no event exceed Canadian
Availability and be in a minimum amount of $5,000,000, and (B) each reduction in
the Maximum U.S. Facility Amount and the U.S. Revolver Commitments shall in no
event exceed U.S. Availability and be in a minimum amount of $5,000,000.

(c) Provided no Default or Event of Default then exists or would result
therefrom, upon notice to Agent (which shall promptly notify all Applicable
Lenders), the Loan Party Agent may from time to time, request an increase in the
U.S. Revolver Commitments or the Canadian Revolver Commitments, as applicable,
by an amount not exceeding $25,000,000 in the aggregate (resulting in maximum
total Facility Commitments of $150,000,000) during the term of this Agreement;
provided that (i) any such request for an increase shall be in a minimum amount
of $5,000,000 and (ii) the Loan Party Agent may make a maximum of two (2) such
requests in the aggregate (resulting in a maximum of two (2) total increases)
during the term of this Agreement. At the time of sending such notice, a
requesting Borrower (in consultation with Agent) shall specify the time period
within which the Applicable Lenders are requested to respond (which shall in no
event be less than ten (10) Business Days from the date of delivery of such
notice to such Lenders).

(d) Each Applicable Lender shall notify Agent within such time period whether or
not it agrees to increase its Facility Commitment to the Loan Party Agent and,
if so, whether by an amount equal to, greater than, or less than its Pro Rata
Share of such requested increase. Any Applicable Lender not responding within
such time period shall be deemed to have declined to increase its Facility
Commitment.

(e) Agent shall notify the Loan Party Agent and each Applicable Lender of such
Applicable Lenders’ responses to each request made hereunder. To achieve the
full amount of a requested increase, and subject to the approval of Agent and
the applicable Issuing Bank (which approvals, so long as no Event of Default
shall have occurred and be continuing, shall not be unreasonably withheld), the
Loan Party Agent may also invite additional Eligible Assignees to become Lenders
pursuant to a joinder agreement in form and substance reasonably satisfactory to
Agent and its counsel.

(f) If the U.S. Revolver Commitments or the Canadian Revolver Commitments are
increased in accordance with this Section, Agent and the Loan Party Agent shall
determine the effective date (the “Facility Commitment Increase Effective Date”)
and the final allocation of such increase. Agent shall promptly notify the Loan
Party Agent and the Applicable Lenders (and any additional Lender added pursuant
to Section 2.1.4(e)) of the final allocation of such increase and the Facility
Commitment Increase Effective Date.

 

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(g) As a condition precedent to such increase, the Loan Party Agent shall
deliver to Agent a certificate of each Loan Party dated as of the Facility
Commitment Increase Effective Date (in sufficient copies for each Lender) signed
by a Senior Officer of such Loan Party (i) certifying and attaching the
resolutions adopted by such Loan Party approving or consenting to such increase,
and (ii) in the case of the Borrowers, certifying that, before and after giving
effect to such increase, (A) the representations and warranties contained in
Section 9 and the other Loan Documents are true and correct in all material
respects (or, with respect to representations and warranties qualified by
materiality, in all respects) on and as of the Facility Commitment Increase
Effective Date (except for representations and warranties that expressly relate
to an earlier date, in which case such representations and warranties shall be
true and correct in all material respects (or, with respect to representations
and warranties qualified by materiality, in all respects) as of such earlier
date), and except that for purposes of this Section 2.1.4, the representations
and warranties contained in Section 9.1.8(a) shall be deemed to refer to the
most recent statements furnished pursuant to clauses (a) and (b) of
Section 10.1.2, and (B) no Default exists. The requesting Borrower shall prepay
any Revolving Loans of such Borrower outstanding on the Facility Commitment
Increase Effective Date (and pay any additional amounts required pursuant to
Section 3.9) to the extent necessary to keep the outstanding Revolving Loans of
such Borrower ratable with any revised Pro Rata Share arising from any
nonratable increase in the Facility Commitments under this Section.

(h) No consent shall be required of any Lender not increasing its Facility
Commitments in connection with an increase of the Facility Commitments in
accordance with this Section 2.1.4, and the Borrowers, Agent and each Lender
shall enter into such amendments to the Loan Documents as may be reasonably
requested by the Loan Party Agent and Agent to make conforming changes
consistent with this Section 2.1.4.

(g) This Section shall supersede any provisions in Section 14.1 to the contrary.

2.1.5 Overadvances.

(a) If at any time (a) the Canadian Revolver Exposure exceeds the Canadian
Borrowing Base (a “Canadian Overadvance”) or (b) the U.S. Revolver Exposure
exceeds the U.S. Borrowing Base (a “U.S. Overadvance”), the excess amount shall,
subject to Section 5.2 and this Section 2.1.5, be immediately due and payable by
the Canadian Borrower or the U.S. Borrower, as applicable on demand by Agent.
Unless its authority has been revoked in writing by Required Lenders, Agent may
require the Applicable Lenders to honor requests for Overadvance Loans and to
forbear from requiring the applicable Borrower to cure an Overadvance, (a) when
no Event of Default is known to Agent, as long as (i) the Overadvance does not
continue for more than thirty (30) consecutive days (and no Overadvance may
exist for at least five (5) consecutive days thereafter before further
Overadvance Loans are required), and (ii) the Overadvance is not known by Agent
to exceed $2,500,000, with respect to the Canadian Borrower, or $5,000,000, with
respect to the U.S. Borrower; and (b) regardless of whether an Event of Default
exists, if Agent discovers an Overadvance not previously known by it to exist,
as long as from the date of such discovery the Overadvance (i) is not increased
by more than $2,500,000, with respect to the Canadian Borrower, or $5,000,000,
with respect to the U.S. Borrower, and (ii) does not continue for more than
thirty (30) consecutive days. In no event shall Overadvance Loans be required
that would cause (i) the Canadian Revolver Exposure to exceed the aggregate
Canadian Revolver Commitments or (ii) the U.S. Revolver Exposure to exceed the
aggregate U.S. Revolver Commitments. All Canadian Overadvance Loans shall

 

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constitute Canadian Facility Obligations secured by the Canadian Facility
Collateral and shall be entitled to all benefits of the Loan Documents. All U.S.
Overadvance Loans shall constitute U.S. Facility Obligations secured by the U.S.
Facility Collateral and shall be entitled to all benefits of the Loan Documents.
No Overadvance shall result in an Event of Default due to a Borrower’s failure
to comply with Section 2.1.1 for so long as such Overadvance remains outstanding
in accordance with the terms of this paragraph, but solely with respect to the
amount of such Overadvance. In no event shall any Borrower or other Loan Party
be deemed a beneficiary of this Section nor authorized to enforce any of its
terms. Agent agrees to use its commercially reasonable best efforts to promptly
notify the Lenders of the issuance of an Overadvance Loan; provided, that Agent
shall have no liability for any failure to provide any such notice.

2.1.6 Protective Advances. Agent shall be authorized, in its discretion, at any
time that any conditions in Section 6 are not satisfied, to make U.S. Base Rate
Revolver Loans and Canadian Prime Rate Loans, as applicable (each a “Protective
Advance”) (a) up to an aggregate amount of $2,500,000, with respect to the
Canadian Borrower, or $5,000,000, with respect to the U.S. Borrower, outstanding
at any time, if Agent deems such Loans necessary or desirable to preserve or
protect Collateral, or to enhance the collectability or repayment of
Obligations; or (b) to pay any other amounts chargeable to the Loan Parties
under any Loan Documents, including costs, fees and expenses. Each Applicable
Lender shall participate in each Protective Advance on a Pro Rata basis. In no
event shall Protective Advances be required that would cause (x) the outstanding
U.S. Revolver Loans and U.S. LC Obligations to exceed the aggregate U.S.
Commitments or (y) the outstanding Canadian Revolver Loans and Canadian LC
Obligations to exceed the aggregate Canadian Commitments. Required Facility
Lenders may at any time revoke Agent’s authority to make further Protective
Advances to the applicable Borrower by written notice to Agent. Absent such
revocation, Agent’s determination that funding of a Protective Advance is
appropriate shall be conclusive. All Protective Advances made by Agent with
respect to U.S. Facility Loan Parties shall be U.S. Facility Obligations,
secured by the U.S. Facility Collateral and shall be treated for all purposes as
Extraordinary Expenses and all Protective Advances made by Agent with respect to
Canadian Facility Loan Parties shall be Canadian Facility Obligations, secured
by the Canadian Facility Collateral and shall be treated for all purposes as
Extraordinary Expenses. Agent agrees to use its commercially reasonable best
efforts to promptly notify the Lenders of the extension of a Protective Advance;
provided, that Agent shall have no liability for any failure to provide any such
notice.

2.2 U.S. Letter of Credit Facility.

2.2.1 Issuance of Letters of Credit. U.S. Issuing Bank agrees to issue Letters
of Credit for the account of the U.S. Borrower (“U.S. Letters of Credit”) from
time to time until fifteen (15) days prior to the Facility Termination Date (or
until the U.S. Revolver Commitment Termination Date, if earlier), on the terms
set forth herein, including the following:

(a) U.S. Borrower acknowledges that U.S. Issuing Bank’s willingness to issue any
U.S. Letter of Credit is conditioned upon U.S. Issuing Bank’s receipt of an LC
Application with respect to the requested U.S. Letter of Credit, as well as such
other instruments and agreements as U.S. Issuing Bank may customarily require
for issuance of a letter of credit of similar type and amount. U.S. Issuing Bank
shall have no obligation to issue any U.S. Letter of Credit unless (i) U.S.
Issuing Bank receives an LC Request and LC Application at least three (3)

 

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Business Days prior to the requested date of issuance; (ii) each LC Condition is
satisfied; and (iii) if a Defaulting Lender that is a U.S. Lender exists, such
Defaulting Lender or the U.S. Borrower have entered into arrangements
satisfactory to Agent and U.S. Issuing Bank to eliminate any funding risk
associated with such Defaulting Lender (it being understood that Cash
Collateralization of a Defaulting Lender’s Pro Rata share of the requested U.S.
Letter of Credit is satisfactory to Agent and U.S. Issuing Bank). If U.S.
Issuing Bank receives written notice from a U.S. Lender at least five
(5) Business Days before issuance of a U.S. Letter of Credit that any LC
Condition has not been satisfied, U.S. Issuing Bank shall have no obligation to
issue the requested U.S. Letter of Credit (or any other) until such notice is
withdrawn in writing by that Lender or until the Required Facility Lenders have
waived such condition in accordance with this Agreement. Prior to receipt of any
such notice, U.S. Issuing Bank shall not be deemed to have knowledge of any
failure of LC Conditions.

(b) Letters of Credit may be requested by the U.S. Borrower only (i) to support
obligations of a Loan Party or Subsidiary incurred in the Ordinary Course of
Business; or (ii) for other purposes as Agent may approve from time to time in
writing. The renewal or extension of any U.S. Letter of Credit shall be treated
as the issuance of a new U.S. Letter of Credit, except that delivery of a new LC
Application may be required at the discretion of U.S. Issuing Bank.

(c) The U.S. Borrower assumes all risks of the acts, omissions or misuses by the
beneficiary of any U.S. Letter of Credit. In connection with issuance of any
U.S. Letter of Credit, none of Agent, U.S. Issuing Bank or any U.S. Lender shall
be responsible for the existence, character, quality, quantity, condition,
packing, value or delivery of any goods purported to be represented by any
Documents; any differences or variation in the character, quality, quantity,
condition, packing, value or delivery of any goods from that expressed in any
Documents; the form, validity, sufficiency, accuracy, genuineness or legal
effect of any Documents or of any endorsements thereon; the time, place, manner
or order in which shipment of goods is made; partial or incomplete shipment of,
or failure to ship, any goods referred to in a U.S. Letter of Credit or
Documents; any deviation from instructions, delay, default or fraud by any
shipper or other Person in connection with any goods, shipment or delivery; any
breach of contract between a shipper or vendor and the U.S. Borrower; errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise;
errors in interpretation of technical terms; the misapplication by a beneficiary
of any U.S. Letter of Credit or the proceeds thereof; or any consequences
arising from causes beyond the control of U.S. Issuing Bank, Agent or any U.S.
Lender, including any act or omission of a Governmental Authority. The rights
and remedies of U.S. Issuing Bank under the Loan Documents shall be cumulative.
U.S. Issuing Bank shall be fully subrogated to the rights and remedies of each
beneficiary whose claims against the U.S. Borrower are discharged with proceeds
of any U.S. Letter of Credit issued for the account of the U.S. Borrower.

(d) In connection with its administration of and enforcement of rights or
remedies under any Letters of Credit or LC Documents, U.S. Issuing Bank shall be
entitled to act, and shall be fully protected in acting, upon any certification,
documentation or communication in whatever form believed by U.S. Issuing Bank,
in good faith, to be genuine and correct and to have been signed, sent or made
by a proper Person. U.S. Issuing Bank may consult with and employ legal counsel,
accountants and other experts to advise it concerning its obligations, rights
and remedies, and shall be entitled to act upon, and shall be fully protected in
any action

 

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taken in good faith reliance upon, any advice given by such experts. U.S.
Issuing Bank may employ agents and attorneys-in-fact in connection with any
matter relating to Letters of Credit or LC Documents, and shall not be liable
for the negligence or misconduct of agents and attorneys-in-fact selected with
reasonable care.

(e) If the U.S. Borrower so requests in any applicable Letter of Credit
application, U.S. Issuing Bank may, in its discretion, agree to issue a Letter
of Credit that has automatic extension provisions (each, a “U.S. Auto-Extension
Letter of Credit”); provided that any such U.S. Auto-Extension Letter of Credit
must permit U.S. Issuing Bank to prevent any such extension at least once in
each twelve-month period (commencing with the date of issuance of such Letter of
Credit) by giving prior notice to the beneficiary thereof not later than a day
(the “U.S. Non-Extension Notice Date”) in each such twelve-month period to be
agreed upon at the time such Letter of Credit is issued. Unless otherwise
directed by U.S. Issuing Bank, the U.S. Borrower shall not be required to make a
specific request to the Issuing Bank for any such extension. Once a U.S.
Auto-Extension Letter of Credit has been issued, the U.S. Lenders shall be
deemed to have authorized (but may not require) U.S. Issuing Bank to permit the
extension of such Letter of Credit at any time to an expiry date at least 15
Business Days prior to the Facility Termination Date; provided, however, that
U.S. Issuing Bank shall not permit any such extension if (A) U.S. Issuing Bank
has determined that it would not be permitted, or would have no obligation at
such time to issue such Letter of Credit in its revised form (as extended) under
the terms hereof, or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is seven Business Days before the U.S.
Non-Extension Notice Date (1) from Agent that the Required Lenders have elected
not to permit such extension or (2) from Agent, any Lender or the U.S. Borrower
that one or more of the applicable conditions specified in Section 6.2 is not
then satisfied, and in each such case directing U.S. Issuing Bank not to permit
such extension.

(f) By their execution of this Agreement, the parties hereto agree that on the
Closing Date (without any further action by any Person), the Existing Letters of
Credit as listed on Schedule 1(c) shall be deemed to have been issued by U.S.
Issuing Bank under this Agreement and the rights and obligations of U.S. Issuing
Bank and the account party thereunder shall be subject to the terms hereof.

2.2.2 U.S. Letters of Credit: Reimbursement and Participations.

(a) If U.S. Issuing Bank honors any request for payment under a U.S. Letter of
Credit, the U.S. Borrower shall pay to U.S. Issuing Bank, on the same day (“U.S.
Reimbursement Date”), the amount paid by U.S. Issuing Bank under such U.S.
Letter of Credit, together with interest at the interest rate for U.S. Base Rate
Loans from the U.S. Reimbursement Date until payment by the U.S. Borrower. The
obligation of the U.S. Borrower to reimburse U.S. Issuing Bank for any payment
made under a U.S. Letter of Credit shall be absolute, unconditional and
irrevocable, and shall be paid without regard to any lack of validity or
enforceability of any such U.S. Letter of Credit or the existence of any claim,
setoff, defense or other right that the U.S. Borrower or any other U.S.
Domiciled Loan Parties may have at any time against the beneficiary. Whether or
not Loan Party Agent submits a Notice of Borrowing, the U.S. Borrower shall be
deemed to have requested a Borrowing of U.S. Base Rate Loans in an amount
necessary to pay all amounts due U.S. Issuing Bank on any U.S. Reimbursement
Date and each U.S. Lender agrees to fund its Pro Rata share of such Borrowing
whether or not the U.S. Revolver Commitments have terminated, any U.S.
Overadvance exists or is created thereby, or the conditions in Section 6 are
satisfied.

 

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(b) Upon issuance of a U.S. Letter of Credit, or in the case of the Existing
Letters of Credit, on the Closing Date, each U.S. Lender shall be deemed to have
irrevocably and unconditionally purchased from U.S. Issuing Bank, without
recourse or warranty, an undivided Pro Rata interest and participation in all
U.S. LC Obligations (excluding amounts specified in clause (c) of such
definition) relating to such U.S. Letter of Credit. If U.S. Issuing Bank makes
any payment under a U.S. Letter of Credit for the account of the U.S. Borrower
and the U.S. Borrower does not reimburse such payment on the U.S. Reimbursement
Date, Agent shall promptly notify U.S. Lenders and each U.S. Lender shall
promptly (within one (1) Business Day) and unconditionally pay to Agent, for the
benefit of U.S. Issuing Bank, such U.S. Lender’s Pro Rata share of such payment.
Upon request by a U.S. Lender, U.S. Issuing Bank shall furnish copies of any
Letters of Credit and LC Documents in its possession at such time.

(c) The obligation of each U.S. Lender to make payments to Agent for the account
of U.S. Issuing Bank in connection with U.S. Issuing Bank’s payment under a U.S.
Letter of Credit shall be absolute, unconditional and irrevocable, not subject
to any counterclaim, setoff, qualification or exception whatsoever, and shall be
made in accordance with this Agreement under all circumstances, irrespective of
any lack of validity or unenforceability of any Loan Documents; any draft,
certificate or other document presented under a U.S. Letter of Credit having
been determined to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect; or the
existence of any setoff or defense that any Loan Party may have with respect to
any Obligations. U.S. Issuing Bank does not assume any responsibility for any
failure or delay in performance or any breach by the U.S. Borrower or any other
Person of any obligations under any LC Documents. U.S. Issuing Bank does not
make to U.S. Lenders any express or implied warranty, representation or
guarantee with respect to the U.S. Facility Collateral, LC Documents or any U.S.
Facility Loan Party. U.S. Issuing Bank shall not be responsible to any U.S.
Lender for any recitals, statements, information, representations or warranties
contained in, or for the execution, validity, genuineness, effectiveness or
enforceability of any LC Documents; the validity, genuineness, enforceability,
collectability, value or sufficiency of any U.S. Facility Collateral or the
perfection of any Lien therein; or the assets, liabilities, financial condition,
results of operations, business, creditworthiness or legal status of any U.S.
Facility Loan Party.

(d) No Issuing Bank Indemnitee shall be liable to any Loan Party or other Person
for any action taken or omitted to be taken in connection with any LC Documents
except as a result of U.S. Issuing Bank’s actual gross negligence or willful
misconduct, as determined by a final, non-appealable judgment of a court of
competent jurisdiction. U.S. Issuing Bank shall not have any liability to any
U.S. Lender if U.S. Issuing Bank refrains from any action under any U.S. Letter
of Credit or LC Documents until it receives written instructions from Required
Facility Lenders of the U.S. Borrower.

2.2.3 Cash Collateral. If any U.S. LC Obligations, whether or not then due or
payable, shall for any reason be outstanding at any time (a) that an Event of
Default exists, (b) that a U.S. Overadvance exists, (c) after the U.S. Revolver
Commitment Termination Date, or (d) within twenty (20) Business Days prior to
the Facility Termination Date, then the U.S. Borrower shall, at U.S. Issuing
Bank’s or Agent’s request, Cash Collateralize the stated amount of all
outstanding Letters of Credit issued for the account of the U.S. Borrower and
pay to U.S. Issuing

 

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Bank the amount of all other U.S. LC Obligations. The U.S. Borrower shall, on
demand by U.S. Issuing Bank or Agent from time to time, Cash Collateralize the
U.S. LC Obligations of any Defaulting Lender that is a U.S. Lender. If the U.S.
Borrower fails to provide any Cash Collateral as required hereunder, U.S.
Lenders may (and shall upon direction of Agent) advance, as U.S. Revolver Loans,
the amount of the Cash Collateral required (whether or not the U.S. Revolver
Commitments have terminated, any U.S. Overadvance exists or is created thereby
or the conditions in Section 6 are satisfied).

2.3 Canadian Letter of Credit Facility.

2.3.1 Issuance of Letters of Credit. Canadian Issuing Bank agrees to issue
Letters of Credit for the account of the Canadian Borrower (“Canadian Letters of
Credit”) from time to time until fifteen (15) days prior to the Facility
Termination Date (or until the Canadian Revolver Commitment Termination Date, if
earlier), on the terms set forth herein, including the following:

(a) The Canadian Borrower acknowledges that Canadian Issuing Bank’s willingness
to issue any Canadian Letter of Credit is conditioned upon Canadian Issuing
Bank’s receipt of an LC Application with respect to the requested Canadian
Letter of Credit, as well as such other instruments and agreements as Canadian
Issuing Bank may customarily require for issuance of a letter of credit of
similar type and amount. Canadian Issuing Bank shall have no obligation to issue
any Canadian Letter of Credit unless (i) Canadian Issuing Bank receives an LC
Request and LC Application at least three (3) Business Days prior to the
requested date of issuance; (ii) each LC Condition is satisfied; and (iii) if a
Defaulting Lender that is a Canadian Lender exists, such Defaulting Lender or
the Canadian Borrower have entered into arrangements satisfactory to Agent and
Canadian Issuing Bank to eliminate any funding risk associated with such
Defaulting Lender (it being understood that Cash Collateralization of a
Defaulting Lender’s Pro Rata share of the requested Canadian Letter of Credit is
satisfactory to Agent and Canadian Issuing Bank). If Canadian Issuing Bank
receives written notice from a Canadian Lender at least five (5) Business Days
before issuance of a Canadian Letter of Credit that any LC Condition has not
been satisfied, Canadian Issuing Bank shall have no obligation to issue the
requested Canadian Letter of Credit (or any other) until such notice is
withdrawn in writing by that Lender or until the Required Facility Lenders have
waived such condition in accordance with this Agreement. Prior to receipt of any
such notice, Canadian Issuing Bank shall not be deemed to have knowledge of any
failure of LC Conditions.

(b) Letters of Credit may be requested by Loan Party Agent for the account of
Canadian Borrower only (i) to support obligations of a Loan Party or Subsidiary
incurred in the Ordinary Course of Business; or (ii) for other purposes as Agent
may approve from time to time in writing. The renewal or extension of any
Canadian Letter of Credit shall be treated as the issuance of a new Canadian
Letter of Credit, except that delivery of a new LC Application may be required
at the discretion of Canadian Issuing Bank.

(c) The Canadian Borrower assumes all risks of the acts, omissions or misuses by
the beneficiary of any Canadian Letter of Credit. In connection with issuance of
any Canadian Letter of Credit, none of Agent, Canadian Issuing Bank or any
Canadian Lender shall be responsible for the existence, character, quality,
quantity, condition, packing, value or delivery of any goods purported to be
represented by any Documents; any differences or variation in the character,
quality, quantity, condition, packing, value or delivery of any goods from that

 

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expressed in any Documents; the form, validity, sufficiency, accuracy,
genuineness or legal effect of any Documents or of any endorsements thereon; the
time, place, manner or order in which shipment of goods is made; partial or
incomplete shipment of, or failure to ship, any goods referred to in a Canadian
Letter of Credit or Documents; any deviation from instructions, delay, default
or fraud by any shipper or other Person in connection with any goods, shipment
or delivery; any breach of contract between a shipper or vendor and the Canadian
Borrower; errors, omissions, interruptions or delays in transmission or delivery
of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone
or otherwise; errors in interpretation of technical terms; the misapplication by
a beneficiary of any Canadian Letter of Credit or the proceeds thereof; or any
consequences arising from causes beyond the control of Canadian Issuing Bank,
Agent or any Canadian Lender, including any act or omission of a Governmental
Authority. The rights and remedies of Canadian Issuing Bank under the Loan
Documents shall be cumulative. Canadian Issuing Bank shall be fully subrogated
to the rights and remedies of each beneficiary whose claims against the Canadian
Borrower are discharged with proceeds of any Canadian Letter of Credit issued
for the account of the Canadian Borrower.

(d) In connection with its administration of and enforcement of rights or
remedies under any Letters of Credit or LC Documents, Canadian Issuing Bank
shall be entitled to act, and shall be fully protected in acting, upon any
certification, documentation or communication in whatever form believed by
Canadian Issuing Bank, in good faith, to be genuine and correct and to have been
signed, sent or made by a proper Person. Canadian Issuing Bank may consult with
and employ legal counsel, accountants and other experts to advise it concerning
its obligations, rights and remedies, and shall be entitled to act upon, and
shall be fully protected in any action taken in good faith reliance upon, any
advice given by such experts. Canadian Issuing Bank may employ agents and
attorneys-in-fact in connection with any matter relating to Letters of Credit or
LC Documents, and shall not be liable for the negligence or misconduct of agents
and attorneys-in-fact selected with reasonable care.

(e) If the Canadian Borrower so requests in any applicable Letter of Credit
application, Canadian Issuing Bank may, in its discretion, agree to issue a
Letter of Credit that has automatic extension provisions (each, a “Canadian
Auto-Extension Letter of Credit”); provided that any such Canadian
Auto-Extension Letter of Credit must permit Canadian Issuing Bank to prevent any
such extension at least once in each twelve-month period (commencing with the
date of issuance of such Letter of Credit) by giving prior notice to the
beneficiary thereof not later than a day (the “Canadian Non-Extension Notice
Date”) in each such twelve-month period to be agreed upon at the time such
Letter of Credit is issued. Unless otherwise directed by Canadian Issuing Bank,
the Canadian Borrower shall not be required to make a specific request to the
Issuing Bank for any such extension. Once a Canadian Auto-Extension Letter of
Credit has been issued, the Canadian Lenders shall be deemed to have authorized
(but may not require) Canadian Issuing Bank to permit the extension of such
Letter of Credit at any time to an expiry date at least 15 Business Days prior
to the Facility Termination Date; provided, however, that Canadian Issuing Bank
shall not permit any such extension if (A) Canadian Issuing Bank has determined
that it would not be permitted, or would have no obligation at such time to
issue such Letter of Credit in its revised form (as extended) under the terms
hereof, or (B) it has received notice (which may be by telephone or in writing)
on or before the day that is seven Business Days before the Canadian
Non-Extension Notice Date (1) from Agent that the Required Lenders have elected
not to permit such extension or (2) from Agent, any Lender or the Canadian
Borrower that one or more of the applicable conditions specified in Section 6.2
is not then satisfied, and in each such case directing Canadian Issuing Bank not
to permit such extension.

 

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2.3.2 Canadian Letters of Credit: Reimbursement and Participations.

(a) If Canadian Issuing Bank honors any request for payment under a Canadian
Letter of Credit, the Canadian Borrower shall pay to Canadian Issuing Bank, on
the same day (“Canadian Reimbursement Date”), the amount paid by Canadian
Issuing Bank under such Canadian Letter of Credit, together with interest at the
interest rate for Canadian Base Rate Loans from the Canadian Reimbursement Date
until payment by the Canadian Borrower. The obligation of the Canadian Borrower
to reimburse Canadian Issuing Bank for any payment made under a Canadian Letter
of Credit shall be absolute, unconditional and irrevocable, and shall be paid
without regard to any lack of validity or enforceability of any Canadian Letter
of Credit or the existence of any claim, setoff, defense or other right that the
Canadian Borrower or the Canadian Domiciled Loan Parties may have at any time
against the beneficiary. Whether or not Loan Party Agent submits a Notice of
Borrowing, the Canadian Borrower shall be deemed to have requested a Borrowing
of Canadian Base Rate Loans in an amount necessary to pay all amounts due
Canadian Issuing Bank on any Canadian Reimbursement Date and each Canadian
Lender agrees to fund its Pro Rata share of such Borrowing whether or not the
Canadian Revolver Commitments have terminated, any Canadian Overadvance exists
or is created thereby, or the conditions in Section 6 are satisfied.

(b) Upon issuance of a Canadian Letter of Credit, each Canadian Lender shall be
deemed to have irrevocably and unconditionally purchased from Canadian Issuing
Bank, without recourse or warranty, an undivided Pro Rata interest and
participation in all Canadian LC Obligations (excluding amounts specified in
clause (c) of such definition) relating to such Canadian Letter of Credit. If
Canadian Issuing Bank makes any payment under a Canadian Letter of Credit for
the account of the Canadian Borrower and the Canadian Borrower does not
reimburse such payment on the Canadian Reimbursement Date, Agent shall promptly
notify Canadian Lenders and each Canadian Lender shall promptly (within one
(1) Business Day) and unconditionally pay to Agent, for the benefit of Canadian
Issuing Bank, such Canadian Lender’s Pro Rata share of such payment. Upon
request by a Canadian Lender, Canadian Issuing Bank shall furnish copies of any
Letters of Credit and LC Documents in its possession at such time.

(c) The obligation of each Canadian Lender to make payments to Agent for the
account of Canadian Issuing Bank in connection with Canadian Issuing Bank’s
payment under a Canadian Letter of Credit shall be absolute, unconditional and
irrevocable, not subject to any counterclaim, setoff, qualification or exception
whatsoever, and shall be made in accordance with this Agreement under all
circumstances, irrespective of any lack of validity or unenforceability of any
Loan Documents; any draft, certificate or other document presented under a
Canadian Letter of Credit having been determined to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or the existence of any setoff or defense that any
Loan Party may have with respect to any Obligations. Canadian Issuing Bank does
not assume any responsibility for any failure or delay in performance or any
breach by the Canadian Borrower or any other Person of any obligations under any
LC Documents. Canadian Issuing Bank does not make to Canadian Lenders any
express or implied warranty, representation or guarantee with respect to the
Canadian Facility Collateral, LC Documents or any Canadian Facility Loan Party.
Canadian Issuing Bank shall

 

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not be responsible to any Canadian Lender for any recitals, statements,
information, representations or warranties contained in, or for the execution,
validity, genuineness, effectiveness or enforceability of any LC Documents; the
validity, genuineness, enforceability, collectability, value or sufficiency of
any Canadian Facility Collateral or the perfection of any Lien therein; or the
assets, liabilities, financial condition, results of operations, business,
creditworthiness or legal status of any Canadian Facility Loan Party.

(d) No Issuing Bank Indemnitee shall be liable to any Loan Party or other Person
for any action taken or omitted to be taken in connection with any LC Documents
except as a result of Canadian Issuing Bank’s actual gross negligence or willful
misconduct, as determined by a final, non-appealable judgment of a court of
competent jurisdiction. Canadian Issuing Bank shall not have any liability to
any Canadian Lender if Canadian Issuing Bank refrains from any action under any
Canadian Letter of Credit or LC Documents until it receives written instructions
from Required Facility Lenders of the Canadian Borrower.

2.3.3 Cash Collateral. If any Canadian LC Obligations, whether or not then due
or payable, shall for any reason be outstanding at any time (a) that an Event of
Default exists, (b) that a Canadian Overadvance exists, (c) after the Canadian
Revolver Commitment Termination Date, or (d) within 20 Business Days prior to
the Facility Termination Date, then the Canadian Borrower shall, at Canadian
Issuing Bank’s or Agent’s request, Cash Collateralize the stated amount of all
outstanding Letters of Credit issued for the account of Canadian Borrower and
pay to Canadian Issuing Bank the amount of all other Canadian LC Obligations.
The Canadian Borrower shall, on demand by Canadian Issuing Bank or Agent from
time to time, Cash Collateralize the Canadian LC Obligations of any Defaulting
Lender that is a Canadian Lender. If the Canadian Borrower fails to provide any
Cash Collateral as required hereunder, Canadian Lenders may (and shall upon
direction of Agent) advance, as Canadian Revolver Loans, the amount of the Cash
Collateral required (whether or not the Canadian Revolver Commitments have
terminated, any Canadian Overadvance exists or is created thereby or the
conditions in Section 6 are satisfied).

SECTION 3. INTEREST, FEES AND CHARGES

3.1 Interest.

3.1.1 Rates and Payment of Interest.

(a) The Obligations (excluding Obligations of the type specified in clause
(g) of such definition) shall bear interest (i) if a U.S. Base Rate Loan, at the
U.S. Base Rate in effect from time to time, plus the Applicable Margin; (ii) if
a LIBOR Loan, at LIBOR for the applicable Interest Period, plus the Applicable
Margin; (iii) if a Canadian Prime Rate Loan, at the Canadian Prime Rate in
effect from time to time, plus the Applicable Margin, (iv) if a Canadian Base
Rate Loan, at the Canadian Base Rate in effect from time to time, plus the
Applicable Margin, (v) if a Canadian BA Rate Loan, at the Canadian BA Rate for
the applicable Interest Period, plus the Applicable Margin, (vi) if any other
U.S. Facility Obligation that is then due and payable (including, to the extent
permitted by law, interest not paid when due), at the U.S. Base Rate in effect
from time to time, plus the Applicable Margin for U.S. Base Rate Loans; and
(vii) if any other Canadian Facility Obligation that is then due and payable
(including, to the extent permitted by law, interest not paid when due), at the
Canadian Prime Rate in effect from time to time, plus the Applicable Margin for
Canadian Prime Rate Loans.

 

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Interest shall accrue from the date the Loan is advanced or the Obligation is
incurred or payable, until paid by the applicable Borrower. If a Loan is repaid
on the same day made, one (1) day’s interest shall accrue.

(b) Interest on the Revolver Loans shall be payable in the currency (i.e.,
Dollars, Canadian Dollars or Euros, as the case may be) of the underlying
Revolver Loan.

(c) Overdue principal, interest and other amounts not paid when due shall bear
interest at the Default Rate; provided, however, that during the continuation of
any Event of Default, if Required Lenders in their discretion so elect, all
Obligations shall bear interest at the Default Rate (whether before or after any
judgment); provided further, however, that upon the occurrence and during the
continuance of an Event of Default under Section 11.1(a) or 11.1(i), the Default
Rate shall become immediately applicable to all Obligations without any election
of the Required Lenders. Each Loan Party acknowledges that the cost and expense
to Agent and Lenders due to an Event of Default are difficult to ascertain and
that the Default Rate is a fair and reasonable estimate to compensate Agent and
Lenders therefor.

(d) Interest accrued on the Loans shall be due and payable in arrears, (i) for
any U.S. Base Rate Loan, Canadian Base Rate Loan or Canadian Prime Rate Loan, on
the first (1st) day of each month; (ii) for any LIBOR Loan or Canadian BA Rate
Loan, on the last day of its Interest Period and (iii) on any date of
prepayment, with respect to the principal amount of Loans being prepaid. In
addition, interest accrued on the Canadian Revolver Loans shall be due and
payable in arrears on the Canadian Revolver Commitment Termination Date and
interest accrued on the U.S. Revolver Loans shall be due and payable in arrears
on the U.S. Revolver Commitment Termination Date. Interest accrued on any other
Obligations shall be due and payable as provided in the Loan Documents and, if
no payment date is specified, shall be due and payable on demand.
Notwithstanding the foregoing, interest accrued at the Default Rate shall be due
and payable on demand.

3.1.2 Application of LIBOR to Outstanding Loans.

(a) Each Borrower may on any Business Day, subject to delivery of a Notice of
Conversion/Continuation and the other terms hereof, elect to convert any portion
of the U.S. Base Rate Loans or the Canadian Base Rate Loans, as applicable to,
or to continue any LIBOR Loan at the end of its Interest Period as, a LIBOR
Loan. During the continuance of any Event of Default, Agent may (and shall at
the direction of Required Facility Lenders of the applicable Borrower) declare
that no Loan may be made, converted or continued as a LIBOR Loan.

(b) Whenever a Borrower shall desire to convert or continue Loans as LIBOR
Loans, Loan Party Agent shall give Agent a Notice of Conversion/Continuation, no
later than 11:00 a.m. at least three (3) Business Days prior to the requested
conversion or continuation date. Promptly after receiving any such notice, Agent
shall notify each Applicable Lender thereof. Each Notice of
Conversion/Continuation shall be irrevocable, and shall specify the amount of
Loans to be converted or continued, the conversion or continuation date (which
shall be a Business Day), and the duration of the Interest Period (which shall
be deemed to be one (1) month if not specified). If, upon the expiration of any
Interest Period in respect of any LIBOR Loans, Loan Party Agent shall have
failed to deliver a Notice of Conversion/Continuation with respect thereto as
required above, the applicable Borrower shall be deemed to have elected to
convert such Loans into U.S. Base Rate Loans (if owing by the U.S. Borrower) or
Canadian Base Rate Loans (if owing by the Canadian Borrower).

 

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3.1.3 Application of Canadian BA Rate to Outstanding Loans.

(a) The Canadian Borrower may on any Business Day, subject to delivery of a
Notice of Conversion/Continuation and the other terms hereof, elect to convert
any portion of the Canadian Prime Rate Loans, or to continue any Canadian BA
Rate Loan at the end of its Interest Period as a Canadian BA Rate Loan;
provided, however that such Canadian BA Rate Loans may only be so converted at
the end of the Interest Period applicable thereto. During the continuance of any
Default or Event of Default, Agent may (and shall at the direction of Required
Facility Lenders of the Canadian Borrower) declare that no Loan may be made,
converted or continued as a Canadian BA Rate Loan.

(b) Whenever the Canadian Borrower desires to convert or continue Loans as
Canadian BA Rate Loans, Loan Party Agent shall give Agent a Notice of
Conversion/Continuation, no later than 11:00 a.m. at least three (3) Business
Days prior to the requested conversion or continuation date. Promptly after
receiving any such notice, Agent shall notify each Canadian Lender thereof. Each
Notice of Conversion/Continuation shall be irrevocable, and shall specify the
amount of Loans to be converted or continued, the conversion or continuation
date (which shall be a Business Day), and the duration of the Interest Period
(which shall be deemed to be one (1) month if not specified). If, upon the
expiration of any Interest Period in respect of any Canadian BA Rate Loans, Loan
Party Agent shall have failed to deliver a Notice of Conversion/Continuation
with respect thereto as required above, the Canadian Borrower shall be deemed to
have elected to convert such Loans into Canadian Prime Rate Loans.

3.1.4 In connection with the making, conversion or continuation of any LIBOR
Loans or Canadian BA Rate Loans, Loan Party Agent, on behalf of the applicable
Borrower, shall select an interest period to apply (the “Interest Period”),
which interest period shall be thirty (30), sixty (60) or ninety (90) days;
provided, however, that:

(a) the Interest Period shall commence on the date the Loan is made or continued
as, or converted into, a LIBOR Loan or Canadian BA Rate Loan, and shall expire
on the numerically corresponding day in the calendar month at its end;

(b) if any Interest Period commences on a day for which there is no
corresponding day in the calendar month at its end or if such corresponding day
falls after the last Business Day of such month, then the Interest Period shall
expire on the last Business Day of such month;

(c) if any Interest Period would expire on a day that is not a Business Day, the
period shall expire on the next Business Day; and

(d) no Interest Period shall extend beyond the Facility Termination Date (or, in
the case of any Loan owing by the Canadian Borrower, the Canadian Revolver
Commitment Termination Date, if earlier).

3.1.5 Interest Rate Not Ascertainable. If Agent shall determine that on any date
for determining LIBOR, due to any circumstance affecting the London interbank
market,

 

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adequate and fair means do not exist for ascertaining such rate on the basis
provided herein, then Agent shall immediately notify Borrower of such
determination. Until Agent notifies Borrower that such circumstance no longer
exists, the obligation of Lenders to make LIBOR Loans shall be suspended, and no
further Loans may be converted into or continued as LIBOR Loans.

3.2 Fees.

3.2.1 Unused Line Fee.

(a) The Canadian Borrower shall pay to Agent, for the Pro Rata benefit of
Canadian Lenders, a fee equal to the Canadian Unused Line Fee Rate times the
average daily amount by which the Canadian Revolver Commitments exceed the
Canadian Revolver Exposure during any month. Such fee shall be payable in
arrears, on the first (1st) day of each month and on the Canadian Revolver
Commitment Termination Date.

(b) The U.S. Borrower shall pay to Agent, for the Pro Rata benefit of U.S.
Lenders, a fee equal to the U.S. Unused Line Fee Rate times the average daily
amount by which the U.S. Revolver Commitments exceed the U.S. Revolver Exposure
during any month. Such fee shall be payable in arrears, on the first (1st) day
of each month and on the U.S. Revolver Commitment Termination Date.

3.2.2 U.S. LC Facility Fees. The U.S. Borrower shall pay (a) to Agent, for the
Pro Rata benefit of U.S. Lenders, a fee equal to the per annum rate of the
Applicable Margin in effect for LIBOR Loans times the average daily stated
amount of U.S. Letters of Credit, which fee shall be payable monthly in arrears,
on the first (1st) day of each month; (b) to the applicable U.S. Issuing Bank,
for its own account, a fronting fee equal to .125% per annum on the stated
amount of each U.S. Letter of Credit issued by such U.S. Issuing Bank, which fee
shall be payable monthly in arrears, on the first (1st) day of each month; and
(c) to the applicable U.S. Issuing Bank, for its own account, all customary
charges associated with the issuance, amending, negotiating, payment,
processing, transfer and administration of U.S. Letters of Credit, which charges
shall be paid as and when incurred; provided that, for the avoidance of doubt,
all amounts payable pursuant to this clause (c) with respect to the Existing
Letters of Credit shall be determined in accordance with the applicable
documentation thereto. During an Event of Default, if the Required Lenders so
elect (pursuant to Section 3.1.1(c)) the fee payable under clause (a) shall be
increased by 2% per annum.

3.2.3 Canadian LC Facility Fees. The Canadian Borrower shall pay (a) to Agent,
for the Pro Rata benefit of Canadian Lenders, a fee equal to the per annum rate
of the Applicable Margin in effect for LIBOR Loans times the average daily
stated amount of Canadian Letters of Credit, which fee shall be payable monthly
in arrears, on the first (1st) day of each month; (b) to the applicable Canadian
Issuing Bank, for its own account, a fronting fee equal to .125% per annum on
the stated amount of each Canadian Letter of Credit issued by such Canadian
Issuing Bank, which fee shall be payable monthly in arrears, on the first
(1st) day of each month; and (c) to the applicable Canadian Issuing Bank, for
its own account, all customary charges associated with the issuance, amending,
negotiating, payment, processing, transfer and administration of Canadian
Letters of Credit, which charges shall be paid as and when incurred. During an
Event of Default if the Required Lenders so elect (pursuant to
Section 3.1.1(c)), the fee payable under clause (a) shall be increased by 2% per
annum.

 

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3.2.4 Other Fees. The Borrowers shall pay such other fees as described in the
Agent Fee Letter.

3.3 Computation of Interest, Fees, Yield Protection. All interest, as well as
fees and other charges calculated on a per annum basis, shall be computed for
the actual days elapsed, based on a year of three hundred sixty (360) days, or,
in the case of interest based on the Canadian Prime Rate or Canadian BA Rate, on
the basis of a three hundred sixty five (365) day year. Each determination by
Agent of any interest, fees or interest rate hereunder shall be final,
conclusive and binding for all purposes, absent manifest error. All fees shall
be fully earned when due and shall not be subject to rebate, refund or
proration. All fees payable under Section 3.2 are compensation for services and
are not, and shall not be deemed to be, interest or any other charge for the
use, forbearance or detention of money. A certificate setting forth in
reasonable detail amounts payable by any Borrower under Section 3.4, 3.7, 3.9,
5.8.2 or 10.1.1(b), submitted to Loan Party Agent by Agent or the affected
Lender or affected Issuing Bank, as applicable, shall be final, conclusive and
binding for all purposes, absent manifest error, and the applicable Borrower
shall pay such amounts to the appropriate party within ten (10) days following
receipt of the certificate. For the purposes of the Interest Act (Canada), the
yearly rate of interest to which any rate calculated on the basis of a period of
time different from the actual number of days in the year (three hundred sixty
(360) days, for example) is equivalent is the stated rate multiplied by the
actual number of days in the year (three hundred sixty five (365) or three
hundred sixty six (366), as applicable) and divided by the number of days in the
shorter period (three hundred sixty (360) days, in the example), and the parties
hereto acknowledge that there is a material distinction between the nominal and
effective rates of interest and that they are capable of making the calculations
necessary to compare such rates and that the calculations herein are to be made
using the nominal rate method and not on any basis that gives effect to the
principle of deemed reinvestment of interest.

3.4 Reimbursement Obligations. Each Borrower shall reimburse Agent for all
Extraordinary Expenses incurred by Agent in reference to such Borrower or its
related Loan Party Group Obligations or Collateral of its related Loan Party
Group. In addition to such Extraordinary Expenses, each Borrower shall also
reimburse Agent for all legal, accounting, appraisal, consulting, and other
fees, costs and expenses incurred by it in connection with (a) negotiation and
preparation of any Loan Documents, including any amendment or other modification
thereof; (b) administration of and actions relating to any Collateral for its
Obligations, Loan Documents and transactions contemplated thereby, including any
actions taken to perfect or maintain priority of Agent’s Liens on any such
Collateral, to maintain any insurance required hereunder or to verify such
Collateral; and (c) each inspection, audit or appraisal with respect to any Loan
Party within such Borrower’s related Loan Party Group or Collateral securing
such Loan Party Group’s Obligations, whether prepared by Agent’s personnel or a
third party (subject to Section 10.1.1(b)). If, for any reason (including
inaccurate reporting on financial statements or a Compliance Certificate), it is
determined that a higher Applicable Margin should have applied to a period than
was actually applied, then the proper margin shall be applied retroactively and
the Borrowers shall pay to Agent, for the Pro Rata benefit of Lenders, an amount
equal to the difference between the amount of interest and fees that would have
accrued using the proper margin and the amount actually paid. All amounts
payable by the Borrowers under this Section 3.4 shall be due and payable in
accordance with Section 3.3.

 

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3.5 Illegality. If any Lender determines that any Applicable Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Interest Period Loans, or to determine or charge interest rates based upon LIBOR
or the Canadian BA Rate, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, Dollars in the London interbank market, or Canadian Dollars through
bankers’ acceptances then, on notice thereof by such Lender to Agent, any
obligation of such Lender to make or continue Interest Period Loans or to
convert Floating Rate Loans to Interest Period Loans shall be suspended until
such Lender notifies Agent that the circumstances giving rise to such
determination no longer exist. Upon delivery of such notice, the affected
Borrower shall prepay or, if applicable, convert all Interest Period Loans of
such Lender to Floating Rate Loans, either on the last day of the Interest
Period therefor, if such Lender may lawfully continue to maintain such Interest
Period Loans to such day, or immediately, if such Lender may not lawfully
continue to maintain such Interest Period Loans. Upon any such prepayment or
conversion, the affected Borrower shall also pay accrued interest on the amount
so prepaid or converted.

3.6 Inability to Determine Rates. If Required Lenders notify Agent for any
reason in connection with a request for a Borrowing of, or conversion to or
continuation of, an Interest Period Loan that (a) Dollar deposits or bankers’
acceptances are not being offered to, as regards LIBOR, banks in the London
interbank Eurodollar market or, as regards Canadian BA Rate, Persons in Canada,
for the applicable amount and Interest Period of such Loan, (b) adequate and
reasonable means do not exist for determining LIBOR or the Canadian BA Rate for
the requested Interest Period, or (c) LIBOR or the Canadian BA Rate for the
requested Interest Period does not adequately and fairly reflect the cost to
such Lenders of funding such Loan, then Agent will promptly so notify Loan Party
Agent and each Applicable Lender. Thereafter, the obligation of the Applicable
Lenders to make or maintain affected Interest Period Loans, shall be suspended
until Agent (upon instruction by Required Lenders) revokes such notice. Upon
receipt of such notice, Loan Party Agent may revoke any pending request for a
Borrowing of, conversion to or continuation of an Interest Period Loan or,
failing that, will be deemed to have submitted a request for a Floating Rate
Loan.

3.7 Increased Costs; Capital Adequacy.

3.7.1 Change in Law. If any Change in Law shall:

(a) impose modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement reflected in LIBOR or the Canadian BA Rate) or
any Issuing Bank;

(b) subject any Lender or any Issuing Bank to any Tax with respect to any Loan,
Loan Document, Letter of Credit or participation in LC Obligations, or change
the basis of taxation of payments to such Lender or such Issuing Bank in respect
thereof (except for Indemnified Taxes or Other Taxes covered by Section 5.8 and
the imposition of, or any change in the rate of, any Excluded Tax payable by
such Lender or such Issuing Bank); or

 

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(c) impose on any Lender or any Issuing Bank or the London interbank market any
other condition, cost or expense affecting any Loan, Loan Document, Letter of
Credit or participation in LC Obligations;

and the result thereof shall be to increase the cost to such Lender of making or
maintaining any Interest Period Loan (or of maintaining its obligation to make
any such Loan), or to increase the cost to such Lender or such Issuing Bank of
participating in, issuing or maintaining any Letter of Credit (or of maintaining
its obligation to participate in or to issue any Letter of Credit), or to reduce
the amount of any sum received or receivable by such Lender or such Issuing Bank
hereunder (whether of principal, interest or any other amount) then, upon
request of such Lender or such Issuing Bank, the Borrower to which such Lenders
or such Issuing Bank has a Commitment shall pay to such Lender or such Issuing
Bank, as applicable, such additional amount or amounts as will compensate such
Lender or such Issuing Bank, as applicable, for such additional costs incurred
or reduction suffered, in each case, in accordance with Section 3.3.

3.7.2 Capital Adequacy. If any Lender or any Issuing Bank determines that any
Change in Law affecting such Lender or such Issuing Bank or any Lending Office
of such Lender or such Lender’s or such Issuing Bank’s holding company, if any,
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s, such Issuing Bank’s or holding company’s capital as
a consequence of this Agreement, or such Lender’s or such Issuing Bank’s
Commitments, Loans, Letters of Credit or participations in LC Obligations, to a
level below that which such Lender, such Issuing Bank or holding company could
have achieved but for such Change in Law (taking into consideration such
Lender’s, such Issuing Bank’s and holding company’s policies with respect to
capital adequacy), then from time to time the Borrower to which such Lenders or
such Issuing Bank has a Commitment will pay to such Lender or such Issuing Bank,
as the case may be, such additional amount or amounts as will compensate it or
its holding company for any such reduction suffered, in each case, in accordance
with Section 3.3.

3.7.3 Compensation. Failure or delay on the part of any Lender or any Issuing
Bank to demand compensation pursuant to this Section 3.7 shall not constitute a
waiver of its right to demand such compensation, but a Borrower shall not be
required to compensate a Lender to such Borrower or Issuing Bank to such
Borrower for any increased costs incurred or reductions suffered more than nine
(9) months prior to the date that such Lender or Issuing Bank notifies Loan
Party Agent of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s or such Issuing Bank’s intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine (9) month period
referred to above shall be extended to include the period of retroactive effect
thereof).

3.8 Mitigation. If any Lender gives a notice under Section 3.5 or requests
compensation under Section 3.7, or if a Borrower is required to pay additional
amounts or make indemnity payments with respect to a Lender under Section 5.8,
then such Lender shall use reasonable efforts to designate a different Lending
Office or to assign its rights and obligations hereunder to another of its
offices, branches or Affiliates, if, in the judgment of such Lender, such
designation or assignment (a) would eliminate the need for such notice or reduce
amounts payable or to be withheld in the future, as applicable; and (b) in each
case, would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be materially disadvantageous to such Lender. The affected
Borrower shall pay all reasonable costs and expenses (including all Indemnified
Taxes and Other Taxes) incurred by any Lender that has issued a Commitment to
such Borrower in connection with any such designation or assignment.

 

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3.9 Funding Losses. If for any reason (other than default by a Lender) (a) any
Borrowing of, or conversion to or continuation of, an Interest Period Loan does
not occur on the date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation (whether or not withdrawn), (b) any repayment or
conversion of an Interest Period Loan occurs on a day other than the end of its
Interest Period, or (c) any Borrower fails to repay an Interest Period Loan when
required hereunder, then such Borrower shall pay to Agent its customary
administrative charge and to each Lender all losses and expenses that it
sustains as a consequence thereof, including loss of anticipated profits and any
loss or expense arising from liquidation or redeployment of funds or from fees
payable to terminate deposits of matching funds. All amounts payable by the
Borrowers under this Section 3.9 shall be due and payable in accordance with
Section 3.3. Lenders shall not be required to purchase Dollar deposits in the
London interbank market or any other offshore Dollar market to fund any LIBOR
Loan, but the provisions hereof shall be deemed to apply as if each Lender had
purchased such deposits to fund its LIBOR Loans.

3.10 Maximum Interest. Notwithstanding anything to the contrary contained in any
Loan Document, the interest paid or agreed to be paid under the Loan Documents
shall not exceed the maximum rate of non-usurious interest permitted by
Applicable Law (“maximum rate”). If Agent or any Lender shall receive interest
in an amount that exceeds the maximum rate, the excess interest shall be applied
to the principal of the Obligations of the Borrower to which such excess
interest relates or, if it exceeds such unpaid principal, refunded to such
Borrower. In determining whether the interest contracted for, charged or
received by Agent or a Lender exceeds the maximum rate, such Person may, to the
extent permitted by Applicable Law, (a) characterize any payment that is not
principal as an expense, fee or premium rather than interest; (b) exclude
voluntary prepayments and the effects thereof; and (c) amortize, prorate,
allocate and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations hereunder. Without limiting
the generality of the foregoing provisions of this Section 3.10, if any
provision of any of the Loan Documents would obligate any Canadian Domiciled
Loan Party to make any payment of interest with respect to the Canadian Facility
Obligations in an amount or calculated at a rate which would be prohibited by
Applicable Law or would result in the receipt of interest with respect to the
Canadian Facility Obligations at a criminal rate (as such terms are construed
under the Criminal Code (Canada)), then notwithstanding such provision, such
amount or rates shall be deemed to have been adjusted with retroactive effect to
the maximum amount or rate of interest, as the case may be, as would not be so
prohibited by law or so result in a receipt by the applicable recipient of
interest with respect to the Canadian Facility Obligations at a criminal rate,
such adjustment to be effected, to the extent necessary, as follows: (i) first,
by reducing the amount or rates of interest required to be paid by the Canadian
Facility Loan Parties to the applicable recipient under the Loan Documents; and
(ii) thereafter, by reducing any fees, commissions, premiums and other amounts
required to be paid by the Canadian Facility Loan Parties to the applicable
recipient which would constitute interest with respect to the Canadian Facility
Obligations for purposes of Section 347 of the Criminal Code (Canada).
Notwithstanding the foregoing, and after giving effect to all adjustments
contemplated thereby, if the applicable recipient shall have received an amount
in excess of the maximum permitted by that section of the Criminal Code
(Canada), then Canadian Facility Loan Parties shall be entitled, by notice in
writing to Agent, to obtain reimbursement from the applicable recipient in an
amount equal to such excess, and pending such

 

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reimbursement, such amount shall be deemed to be an amount payable by the
applicable recipient to the applicable Canadian Facility Loan Party. Any amount
or rate of interest with respect to the Canadian Facility Obligations referred
to in this Section 3.10 shall be determined in accordance with generally
accepted actuarial practices and principles as an effective annual rate of
interest over the term that any Canadian Revolver Loans to the Canadian Borrower
remains outstanding on the assumption that any charges, fees or expenses that
fall within the meaning of “interest” (as defined in the Criminal Code (Canada))
shall, if they relate to a specific period of time, be pro rated over that
period of time and otherwise be pro rated over the period from the Closing Date
to the date of Full Payment of the Canadian Facility Obligations, and, in the
event of a dispute, a certificate of a Fellow of the Canadian Institute of
Actuaries appointed by Agent shall be conclusive for the purposes of such
determination.

SECTION 4. LOAN ADMINISTRATION

4.1 Manner of Borrowing and Funding Loans.

4.1.1 Notice of Borrowing.

(a) Whenever a Borrower desires funding of a Borrowing of Revolver Loans, Loan
Party Agent shall give Agent a Notice of Borrowing. Such notice must be received
by Agent (i) on the Business Day of the requested funding date, in the case of
Floating Rate Loans to the U.S. Borrower, (ii) at least one (1) Business Day
prior to the requested funding date, in the case of Floating Rate Loans to the
Canadian Borrower, (iii) at least three (3) Business Days prior to the requested
funding date, in the case of LIBOR Loans, and (iv) at least three (3) Business
Days prior to the requested funding date, in the case of Canadian BA Rate Loans.
Notices received after 11:00 a.m. shall be deemed received on the next Business
Day. Each Notice of Borrowing shall be irrevocable and shall specify (A) the
Borrower, and the amount of the Borrowing, (B) the requested funding date (which
must be a Business Day), (C) whether the Borrowing is to be made as a U.S. Base
Rate Loan or a LIBOR Revolver Loan, in the case of the U.S. Borrower, or a
Canadian Base Rate Loan, LIBOR Revolver Loan, Canadian Prime Rate Loan or
Canadian BA Rate Loan, in the case of the Canadian Borrower, (D) in the case of
Interest Period Loans, the duration of the applicable Interest Period (which
shall be deemed to be one month if not specified), (E) if such Borrowing is
requested for the U.S. Borrower, whether such Loan is to be denominated in
Dollars or Euros and (F) if such Borrowing is requested for the Canadian
Borrower, whether such Loan is to be denominated in Dollars or Canadian Dollars.

(b) Unless payment is otherwise timely made by a Borrower, the becoming due of
any amount required to be paid with respect to any of the Obligations of the
Loan Party Group to which such Borrower belongs (whether principal, interest,
fees or other charges, including Extraordinary Expenses, LC Obligations, Cash
Collateral and Bank Product Debt) shall be deemed to be a request for Revolver
Loans by such Borrower on the due date, in the amount of such Obligations and
shall bear interest at the per annum rate applicable hereunder to U.S. Base Rate
Loans, in the case of such Obligations owing by any U.S. Facility Loan Party, or
to Canadian Prime Rate Loans, in the case of such Obligations owing by a
Canadian Domiciled Loan Party. The proceeds of such Revolver Loans shall be
disbursed as direct payment of the relevant Obligation. In addition, Agent may,
at its option, charge such Obligations of a Loan Party Group against any
operating, investment or other account of a Loan Party within such Loan Party
Group maintained with Agent or any of its Affiliates.

 

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(c) If a Borrower establishes a controlled disbursement account with Bank of
America or any branch or Affiliate of Bank of America, then the presentation for
payment of any check or other item of payment drawn on such account at a time
when there are insufficient funds to cover it shall be deemed to be a request
for Revolver Loans by such Borrower on the date of such presentation, in the
amount of the check and items presented for payment, and shall bear interest at
the per annum rate applicable hereunder to U.S. Base Rate Loans, in the case of
insufficient funds owing by any U.S. Facility Loan Party, or to Canadian Prime
Rate Loans, in the case of insufficient funds owing by a Canadian Facility Loan
Party. The proceeds of such Revolver Loans may be disbursed directly to the
controlled disbursement account or other appropriate account.

4.1.2 Fundings by Lenders. Each Applicable Lender shall timely honor its
Facility Commitment by funding its Pro Rata share of each Borrowing of Revolver
Loans under such Facility Commitment that is properly requested hereunder;
provided, however that, except as set forth in Section 2.1.5, no Lender shall be
required to honor its Facility Commitment by funding its Pro Rata share of any
Borrowing that would cause the U.S. Revolver Exposure to exceed the U.S.
Borrowing Base or the Canadian Revolver Exposure to exceed the Canadian
Borrowing Base, as applicable. Except for Borrowings to be made as Swingline
Loans, Agent shall use its commercially reasonable best efforts to notify the
Applicable Lenders of each Notice of Borrowing (or deemed request for a
Borrowing) by 12:00 noon on the proposed funding date for Floating Rate Loans or
by 11:00 a.m. at least two (2) Business Days before any proposed funding of
Interest Period Loans. Each Applicable Lender shall fund to Agent such Lender’s
Pro Rata share of the Borrowing to the account specified by Agent in immediately
available funds not later than 2:00 p.m. on the requested funding date, unless
Agent’s notice is received after the times provided above, in which event each
Applicable Lender shall fund its Pro Rata share by 11:00 a.m. on the next
Business Day. Subject to its receipt of such amounts from the Applicable
Lenders, Agent shall disburse the proceeds of the Revolver Loans as directed by
Loan Party Agent. Unless Agent shall have received (in sufficient time to act)
written notice from an Applicable Lender that it does not intend to fund its Pro
Rata share of a Borrowing or of any settlement pursuant to Section 4.1.3(b),
Agent may assume that such Applicable Lender has deposited or promptly will
deposit its share with Agent, and Agent may disburse a corresponding amount to
such Borrower. If an Applicable Lender’s share of any Borrowing is not received
by Agent, then such Borrower agrees to repay to Agent on demand the amount of
such share, together with interest thereon from the date disbursed until repaid,
at the rate applicable to such Borrowing.

4.1.3 Swingline Loans; Settlement.

(a) Agent may, but shall not be obligated to, advance U.S. Swingline Loans to
the U.S. Borrower, up to an aggregate outstanding amount of $17,500,000, unless
the funding is specifically required to be made by all U.S. Lenders hereunder.
Each U.S. Swingline Loan shall constitute a U.S. Revolver Loan for all purposes,
except that payments thereon shall be made to Agent for its own account. The
obligation of the U.S. Borrower to repay U.S. Swingline Loans shall be evidenced
by the records of Agent and need not be evidenced by any promissory note. All
U.S. Swingline Loans shall be denominated in Dollars and shall be U.S. Base Rate
Loans.

(b) To facilitate administration of the U.S. Revolver Loans, U.S. Lenders and
Agent agree (which agreement is solely among them, and not for the benefit of or
enforceable by any Borrower) that settlement among them with respect to U.S.
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Revolver Loans may take place on a date determined from time to time by Agent,
which shall occur at least once each week. On each settlement date, settlement
shall be made with each U.S. Lender in accordance with the Settlement Report
delivered by Agent to U.S. Lenders. Between settlement dates, Agent may in its
discretion apply payments on U.S. Revolver Loans to U.S. Swingline Loans,
regardless of any designation by the U.S. Borrower or any provision herein to
the contrary. Each U.S. Lender’s obligation to make settlements with Agent is
absolute and unconditional, without offset, counterclaim or other defense, and
whether or not the U.S. Revolver Commitments have terminated, a U.S. Overadvance
exists or the conditions in Section 6 are satisfied. If, due to an Insolvency
Proceeding with respect to the U.S. Borrower or otherwise, any U.S. Swingline
Loan may not be settled among U.S. Lenders hereunder, then each U.S. Lender
shall be deemed to have purchased from Agent a Pro Rata participation in each
unpaid U.S. Swingline Loan and shall transfer the amount of such participation
to Agent, in immediately available funds, within one (1) Business Day after
Agent’s request therefor.

(c) Agent may, but shall not be obligated to, request that Bank of America
(Canada) advance Canadian Swingline Loans to the Canadian Borrower, up to an
aggregate outstanding amount of the Dollar Equivalent of $2,500,000, unless the
funding is specifically required to be made by all Canadian Lenders hereunder.
Each Canadian Swingline Loan shall constitute a Canadian Revolver Loan for all
purposes, except that payments thereon shall be made to Agent for Bank of
America (Canada)’s account. The obligation of the Canadian Borrower to repay
Canadian Swingline Loans shall be evidenced by the records of Agent and need not
be evidenced by any promissory note. All Canadian Swingline Loans shall be
denominated in Canadian Dollars and shall be a Canadian Prime Rate Loan.

(d) To facilitate administration of the Canadian Revolver Loans, Canadian
Lenders and Agent, on behalf of Bank of America (Canada), agree (which agreement
is solely among them, and not for the benefit of or enforceable by any Borrower)
that settlement among them with respect to Canadian Swingline Loans and other
Canadian Revolver Loans may take place on a date determined from time to time by
Agent, which shall occur at least once each week. On each settlement date,
settlement shall be made with each Canadian Lender in accordance with the
Settlement Report delivered by Agent to Canadian Lenders. Between settlement
dates, Agent may in its discretion apply payments on Canadian Revolver Loans to
Canadian Swingline Loans, regardless of any designation by the Canadian Borrower
or any provision herein to the contrary. Each Canadian Lender’s obligation to
make settlements with Agent, on behalf of Bank of America (Canada), is absolute
and unconditional, without offset, counterclaim or other defense, and whether or
not the Canadian Revolver Commitments have terminated, a Canadian Overadvance
exists or the conditions in Section 6 are satisfied. If, due to an Insolvency
Proceeding with respect to the Canadian Borrower or otherwise, any Canadian
Swingline Loan may not be settled among Canadian Lenders hereunder, then each
Canadian Lender shall be deemed to have purchased from Agent a Pro Rata
participation in each unpaid Canadian Swingline Loan and shall transfer the
amount of such participation to Agent, in immediately available funds, within
one (1) Business Day after Agent’s request therefor.

4.1.4 Notices. Each Borrower authorizes Agent and Lenders to extend, convert or
continue Loans, effect selections of interest rates, and transfer funds to or on
behalf of applicable Borrowers based on telephonic or e-mailed instructions by
Loan Party Agent to Agent. Loan Party Agent shall confirm each such request by
prompt delivery to Agent of a Notice of Borrowing or Notice of
Conversion/Continuation, if applicable, but if it differs in any material
respect from the action taken by Agent or Lenders, the records of Agent and
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shall govern. Neither Agent nor any Lender shall have any liability for any loss
suffered by a Borrower as a result of Agent or any Lender acting upon its
understanding of telephonic or e-mailed instructions from a person believed in
good faith by Agent or any Lender to be a person authorized to give such
instructions on Loan Party Agent’s behalf.

4.2 Defaulting Lender. Agent may (but shall not be required to), in its
discretion, retain any payments or other funds received by Agent that are to be
provided to a Defaulting Lender hereunder, and may apply such funds to such
Lender’s defaulted obligations, or readvance the funds to a Borrower to which
such Lender has issued a Facility Commitment in accordance with this Agreement.
The failure of any Lender to fund a Loan, to make any payment in respect of LC
Obligations or to otherwise perform its obligations hereunder shall not relieve
any other Lender of its obligations, and no Lender shall be responsible for
default by another Lender. Lenders and Agent agree (which agreement is solely
among them, and not for the benefit of or enforceable by any Borrower) that,
solely for purposes of determining a Defaulting Lender’s right to vote on
matters relating to the Loan Documents and to share in payments, fees and
Collateral proceeds thereunder, a Defaulting Lender shall not be deemed to be a
“Lender” and shall not cease to be a “Defaulting Lender” until all its defaulted
obligations have been cured; provided that (i) such Defaulting Lender’s
Commitment may not be increased or extended without its consent and (ii) the
principal amount of, or interest or fees payable on, Loans or LC Obligations,
subject to the first sentence of this Section 4.2, may not be reduced or excused
or the scheduled date of payment may not be postponed as to such Defaulting
Lender without such Defaulting Lender’s consent.

4.3 Number and Amount of Interest Period Loans; Determination of Rate. For ease
of administration, all Interest Period Loans of the same Type to a Borrower
having the same length and beginning date of their Interest Periods and the same
currency shall be aggregated together, and such Loans shall be allocated among
the Applicable Lenders on a Pro Rata basis. With respect to the U.S. Borrower,
no more than six (6) Borrowings of LIBOR Loans may be outstanding at any time,
and each Borrowing of LIBOR Loans when made, continued or converted shall be in
a minimum amount of the Dollar Equivalent of $1,000,000 or an increment of the
Dollar Equivalent of $500,000, in excess thereof. With respect to the Canadian
Borrower, no more than four (4) Borrowings of Interest Period Loans may be
outstanding at any time, and each Borrowing of Interest Period Loans when made,
continued or converted shall be in a minimum amount of $1,000,000 (or, in the
case of Canadian BA Rate Loans, Cdn$1,000,000) or an increment of $500,000 (or,
in the case of Canadian BA Rate Loans, Cdn$500,000), in excess thereof. Upon
determining LIBOR or the Canadian BA Rate for any Interest Period requested by a
Borrower, Agent shall promptly notify Loan Party Agent thereof by telephone or
electronically and, if requested by Loan Party Agent, shall confirm any
telephonic notice in writing.

4.4 Loan Party Agent. Each Loan Party hereby designates Cooper-Standard
Automotive Inc. (“Loan Party Agent”) as its representative and agent for all
purposes under the Loan Documents, including requests for Loans and Letters of
Credit, designation of interest rates, delivery or receipt of communications,
preparation and delivery of Borrowing Base and financial reports, receipt and
payment of Obligations, requests for waivers, amendments or other
accommodations, actions under the Loan Documents (including in respect of
compliance with covenants), and all other dealings with Agent, any Issuing Bank
or any Lender. Loan Party Agent hereby accepts such appointment. Agent and
Lenders shall be entitled to rely upon, and shall be fully protected in relying
upon, any notice or communication (including any Notice of Borrowing) delivered
by Loan Party Agent on behalf of any Loan Party. Agent and Lenders

 

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may give any notice or communication with a Loan Party hereunder to Loan Party
Agent on behalf of such Loan Party. Each of Agent, Issuing Banks and Lenders
shall have the right, in its discretion, to deal exclusively with Loan Party
Agent for any or all purposes under the Loan Documents. Each Loan Party agrees
that any notice, election, communication, representation, agreement or
undertaking made on its behalf by Loan Party Agent shall be binding upon and
enforceable against it.

4.5 One Obligation. Without in any way limiting the Obligations of any U.S.
Facility Loan Party with respect to its Guarantee of the Obligations of the
Canadian Facility Loan Parties, the Loan Party Group Obligations owing by each
Loan Party Group shall constitute one (1) general obligation of the Loan Parties
within such Loan Party Group and (unless otherwise expressly provided in any
Loan Document) shall be secured by Agent’s Lien upon all Collateral of each
member of such Loan Party Group; provided, however, that each Secured Party
shall be deemed to be a creditor of, and the holder of a separate claim against,
each Loan Party to the extent of any Obligations owed by such Loan Party to such
Secured Party.

4.6 Effect of Termination. On the effective date of any termination of any of
the Commitments, all undertakings of the Loan Parties contained in the Loan
Documents shall survive, and Agent shall retain its Liens in the Collateral and
all of its rights and remedies under the Loan Documents until Full Payment of
the Obligations. Sections 2.2, 2.3, 3.4, 3.6, 3.7, 3.9, 5.4, 5.8, 5.9, 12, 14.2
and this Section 4.6, and the obligation of each Loan Party and Lender with
respect to each indemnity given by it in any Loan Document, shall survive Full
Payment of the Obligations and any release relating to this credit facility.

SECTION 5. PAYMENTS

5.1 General Payment Provisions. All payments of Obligations shall be made
without offset, counterclaim or defense of any kind, and in immediately
available funds, not later than 12:00 noon on the due date. Any payment after
such time shall be deemed made on the next Business Day. If any payment under
the Loan Documents shall be stated to be due on a day other than a Business Day,
the due date shall be extended to the next Business Day and such extension of
time shall be included in any computation of interest and fees. Any payment of
an Interest Period Loan prior to the end of its Interest Period shall be
accompanied by all amounts due under Section 3.9. Any prepayment of Loans by a
Borrower shall be applied first to Floating Rate Loans of such Borrower and then
to Interest Period Loans of such Borrower. All payments with respect to any U.S.
Facility Obligations shall be made in Dollars or, if any portion of such U.S.
Facility Obligations is denominated in Euros, then in Euros or, if any portion
of such U.S. Facility Obligations is denominated in Sterling, then in Sterling.
All payments with respect to any Canadian Facility Obligations shall be made in
Canadian Dollars or, if any portion of such Canadian Facility Obligations is
denominated in Dollars, then in Dollars.

5.2 Repayment of Obligations. All Canadian Facility Obligations shall be
immediately due and payable in full on the Canadian Revolver Commitment
Termination Date and all U.S. Facility Obligations shall be immediately due and
payable in full on the U.S. Revolver Commitment Termination Date, in each case,
unless payment of such Obligations is sooner required hereunder. Revolver Loans
may be prepaid from time to time, without penalty or premium, subject to, in the
case of Interest Period Loans, the payment of costs set forth in Section 3.9. If
any Asset Disposition (other than sales of Inventory in the Ordinary Course of
Business) by any Loan Party constitutes the disposition of ABL Priority
Collateral resulting in

 

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Net Proceeds received in any single transaction of greater than $10,000,000,
then Net Proceeds equal to the greater of (a) the net book value of the
applicable Accounts and Inventory, or (b) the reduction in the Borrowing Base of
the applicable Borrower upon giving effect to such Asset Disposition, shall be
applied to the Revolver Loans of such Borrower; provided, that, at the election
of the applicable Loan Party (as notified by the Loan Party Agent to Agent on or
prior to the date of the receipt of such Net Proceeds), and so long as no
Default shall have occurred and be continuing, the applicable Loan Party may
reinvest all or any portion of such Net Proceeds in operating assets so long as
within 360 days after the receipt of such Net Proceeds, such purchase shall have
been consummated (as certified by the Loan Party Agent in writing to Agent); and
provided further, however, that any Net Proceeds not so reinvested shall be
immediately applied as otherwise set forth in this Section 5.2. Notwithstanding
anything herein to the contrary, if an Overadvance exists (including as the
result of any Asset Disposition as specified in the preceding sentence), the
Borrower owing such Overadvance shall, on the sooner of Agent’s demand or the
first (1st) Business Day after such Borrower has knowledge thereof, repay the
outstanding Loans in an amount sufficient to reduce the principal balance of the
related Overadvance Loan to zero.

5.3 Payment of Other Obligations. Obligations shall be paid by the Borrowers as
provided in the Loan Documents or, if no payment date or time for payment is
specified, on demand.

5.4 Marshaling; Payments Set Aside. None of Agent or Lenders shall be under any
obligation to marshal any assets in favor of any Loan Party or against any
Obligations. If any payment by or on behalf of the Borrowers is made to Agent,
any Issuing Bank or any Lender, or Agent, any Issuing Bank or any Lender
exercises a right of setoff, and such payment or the proceeds of such setoff or
any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by Agent, such Issuing Bank or such Lender in its discretion) to be
repaid to a Creditor Representative or any other Person, then to the extent of
such recovery, the Obligation originally intended to be satisfied, and all
Liens, rights and remedies relating thereto, shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred.

5.5 Post-Default Allocation of Payments.

5.5.1 Allocation. Notwithstanding anything herein to the contrary, during the
continuance of an Event of Default, Agent shall apply and allocate monies to the
Obligations, whether arising from payments by or on behalf of any Loan Party,
realization on Collateral, setoff or otherwise, as follows:

(a) with respect to monies, payments, Property or Collateral of or from any U.S.
Facility Loan Parties:

(i) first, to all U.S. Facility Obligations consisting of costs and expenses,
including Extraordinary Expenses, owing to Agent;

(ii) second, to all amounts owing to Agent on U.S. Swingline Loans;

(iii) third, to all amounts owing to U.S. Issuing Bank on U.S. LC Obligations;

(iv) fourth, to all U.S. Facility Obligations constituting fees (excluding
amounts relating to Bank Products) owing by the U.S. Facility Loan Parties
(exclusive of any amounts guaranteed by the U.S. Domiciled Loan Parties in
respect of Canadian Facility Obligations);

 

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(v) fifth, to all U.S. Facility Obligations constituting interest (excluding
amounts relating to Bank Products) owing by the U.S. Facility Loan Parties
(exclusive of any amounts guaranteed by the U.S. Domiciled Loan Parties in
respect of Canadian Facility Obligations);

(vi) sixth, to provide Cash Collateral for outstanding U.S. Letters of Credit;

(vii) seventh, to all other U.S. Facility Obligations (exclusive of any amounts
guaranteed by the U.S. Domiciled Loan Parties in respect of Canadian Facility
Obligations), including Bank Product Debt; provided, that amounts constituting
Bank Product Debt shall only be repayed to the extent (x) proper notice of such
amounts has been provided pursuant to clause (d) of the definition of Bank
Product Debt and (y) an appropriate Reserve shall have been established with
respect thereto;

(viii) eighth, to be applied in accordance with clause (b) below, to the extent
there are insufficient funds for the Full Payment of all Obligations owing by
the Canadian Domiciled Loan Parties; and

(ix) ninth, after Full Payment of all Obligations, the remainder to Loan Party
Agent for the benefit of the U.S. Domiciled Loan Parties or such other Person(s)
as shall be legally entitled thereto.

(b) with respect to monies, payments, Property or Collateral of or from any
Canadian Domiciled Loan Parties, together with any allocations pursuant to
subclause (viii) of clause (a) above:

(i) first, to all Canadian Facility Obligations consisting of costs and
expenses, including Extraordinary Expenses, owing to Agent, to the extent owing
by any Canadian Domiciled Loan Party;

(ii) second, to all amounts owing to Agent on Canadian Swingline Loans;

(iii) third, to all amounts owing to Canadian Issuing Bank on Canadian LC
Obligations;

(iv) fourth, to all Canadian Facility Obligations constituting fees (excluding
amounts relating to Bank Products);

(v) fifth, to all Canadian Facility Obligations constituting interest (excluding
amounts relating to Bank Products);

(vi) sixth, to provide Cash Collateral for outstanding Canadian Letters of
Credit;

(vii) seventh, to all other Canadian Facility Obligations, including Bank
Product Debt; provided, that amounts constituting Bank Product Debt shall only
be repayed to the extent (x) proper notice of such amounts has been provided
pursuant to clause (d) of the definition of Bank Product Debt and (y) an
appropriate Reserve shall have been established with respect thereto;

 

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(viii) eighth, after Full Payment of all Canadian Facility Obligations, the
remainder to Loan Party Agent for the benefit of the Canadian Domiciled Loan
Parties or such other Person(s) as shall be legally entitled thereto.

Amounts shall be applied to each category of Obligations set forth above until
Full Payment thereof and then to the next category. If amounts are insufficient
to satisfy a category, they shall be applied on a pro rata basis among the
Obligations in the category. Amounts distributed with respect to any Bank
Product Debt shall be the actual Bank Product Debt as calculated by the
methodology reported to Agent for determining the amount due. Agent shall have
no obligation to calculate the amount to be distributed with respect to any Bank
Product Debt, but may rely upon written notice of the amount (setting forth a
reasonably detailed calculation) from Lender or Affiliate thereof providing the
related Bank Product. In the absence of such notice, Agent may assume the amount
to be distributed is the Bank Product Amount last reported to it. The
allocations set forth in this Section 5.5.1 are solely to determine the rights
and priorities of Agent and Lenders as among themselves, and may be changed by
agreement among them without the consent of any Loan Party. This Section is not
for the benefit of or enforceable by any Borrower.

5.5.2 Erroneous Application. Agent shall not be liable for any application of
amounts made by it in good faith and, if any such application is subsequently
determined to have been made in error, the sole recourse of any Lender or other
Person to which such amount should have been made shall be to recover the amount
from the Person that actually received it (and, if such amount was received by
any Lender, such Lender hereby agrees to return it).

5.6 Application of Payments. The ledger balance in the main Dominion Account of
each Borrower as of the end of a Business Day shall be applied to the Loan Party
Group Obligations of such Borrower at the beginning of the next Business Day
during any Cash Dominion Trigger Period. If, as a result of such application, a
credit balance exists, the balance shall not accrue interest in favor of the
applicable Borrower and shall be made available to such Borrower as long as no
Event of Default exists. Each Borrower irrevocably waives the right to direct
the application of any payments or Collateral proceeds made pursuant to
Section 5.5, and agrees that Agent shall have the continuing, exclusive right to
apply and reapply same against the Obligations, in such manner as Agent deems
advisable.

5.7 Loan Account; Account Stated.

5.7.1 Loan Account. Agent shall maintain in accordance with its usual and
customary practices an account or accounts (“Loan Account”) evidencing the
obligations of each Borrower resulting from each Loan made to such Borrower or
issuance of a Letter of Credit for the account of such Borrower from time to
time. Any failure of Agent to record anything in the Loan Account, or any error
in doing so, shall not limit or otherwise affect the obligation of the Borrowers
to pay any amount owing hereunder. Agent may maintain a single Loan Account in
the name of Loan Party Agent, and each Borrower confirms that such arrangement
shall have no effect on the joint and several character of its liability for the
Obligations of its Loan Party Group or, in the case of the U.S. Borrower, its
guarantee of the Obligations of the Canadian Borrower.

 

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5.7.2 Entries Binding. Entries made in the Loan Account shall constitute
presumptive evidence of the information contained therein. If any information
contained in the Loan Account is provided to or inspected by any Person, then
such information shall be conclusive and binding on such Person for all purposes
absent manifest error, except to the extent such Person notifies Agent in
writing within thirty (30) days after receipt or inspection that specific
information is subject to dispute.

5.8 Taxes.

5.8.1 Payments Free of Taxes. All payments by or on behalf of any Loan Party to
Agent, Issuing Bank or any Lender (each a “Tax Indemnitee”) with respect to any
Obligation shall be free and clear of and without reduction for any Taxes. If
Applicable Law requires any Loan Party or Agent to withhold or deduct any Taxes,
the withholding or deduction shall be based on information provided pursuant to
Section 5.9 and the applicable Loan Party or Agent shall pay the amount withheld
or deducted to the relevant Governmental Authority. If the withholding or
deduction is made on account of Indemnified Taxes or Other Taxes, the sum
payable by the Borrowers shall be increased so that the relevant Tax Indemnitee,
as applicable, receives an amount equal to the sum it would have received if no
such withholding or deduction (including deductions applicable to additional
sums payable under this Section 5.8.1) had been made. Without limiting the
foregoing, the Borrowers shall timely pay all Other Taxes to the relevant
Governmental Authorities.

5.8.2 Payment. The Borrowers shall indemnify, hold harmless and reimburse the
applicable Tax Indemnitee within thirty (30) days after written demand therefor
(which written demand shall be made within sixty (60) days of the date the
applicable Tax Indemnitee receives written demand for payment of any Indemnified
Taxes or Other Taxes from the relevant Governmental Authority, provided,
however, that a failure to provide such written demand shall not relieve the
Borrowers of their obligation to indemnify, hold harmless and reimburse the
applicable Tax Indemnitee, and shall not constitute a waiver of, a Tax
Indemnitee’s right to be indemnified, held harmless or reimbursed hereunder),
for the full amount of any Indemnified Taxes or Other Taxes (including those
attributable to amounts payable under this Section 5.8) withheld or deducted by
any Borrower or Agent, or paid by the applicable Tax Indemnitee, with respect to
any Obligations of such Borrower, Letters of Credit or Loan Documents, whether
or not such Taxes were properly asserted by the relevant Governmental Authority,
and including all penalties, interest and reasonable out-of-pocket expenses
relating thereto. A certificate setting forth in reasonable detail the amount
and basis for calculation of any such payment or liability delivered to Loan
Party Agent by the applicable Tax Indemnitee (with a copy to Agent), shall be
conclusive, absent manifest error. As soon as practicable after any payment of
Taxes by a Borrower, Loan Party Agent shall deliver to Agent a receipt from the
Governmental Authority or other evidence of payment reasonably satisfactory to
Agent.

5.8.3 Tax Refunds. If a Loan Party makes a payment of Indemnified Taxes or Other
Taxes to a Tax Indemnitee under Section 5.8.2 of this Agreement and either
(i) the applicable Loan Party determines that there is a reasonable basis for
asserting that such Indemnified Taxes or Other Taxes were not correctly or
legally imposed or asserted by the relevant Governmental Authority, unless the
relevant Tax Indemnitee reasonably disagrees with such determination or (ii) the
applicable Tax Indemnitee has actual knowledge that such Indemnified Taxes or
Other Taxes are refundable to such Tax Indemnitee by the relevant Governmental
Authority (in which case such Tax Indemnitee shall within a reasonable period of

 

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time provide written notice to the applicable Loan Party of such refundable
Indemnified Taxes or Other Taxes) then, in each case, at the applicable Loan
Party’s written request and at the applicable Loan Party’s cost and expense,
such Tax Indemnitee shall make a claim for refund of such Indemnified Taxes or
Other Taxes (and any interest and penalties arising therefrom or with respect
thereto) to such Governmental Authority in the manner prescribed by Applicable
Law and shall take such other reasonable necessary actions as required by the
applicable Loan Party in pursuit of such refund claim. To the extent a Tax
Indemnitee actually realizes a refund for an Indemnified Tax or Other Tax, the
Tax Indemnitee shall pay such refund (net of out of pocket expenses incurred to
obtain such refund) to the relevant Loan Party, provided (i) no Tax Indeminitee
shall be obligated to make a payment to the extent it would result in the Tax
Indemnitee and its Affiliates being in a worse after Tax position than the Tax
Indemnitee would have been had no Indeminified Tax or Other Tax been incurred
and (ii) each Loan Party agrees to repay to the Tax Indemnitee the amount of the
refund paid over (plus any penalties, interest, or other charges imposed by a
Governmental Authority) in the event the Tax Indemnitee is required to repay the
refund to the Governmental Authority. Nothing contained in this Section 5.8.3
shall interfere with the right of a Tax Indemnitee to arrange its tax affairs in
whatever manner it thinks fit nor oblige any Lender or Agent or other Tax
Indemnitee to claim any Tax refund that would cause a detriment to such Tax
Indemnitee or to make available its tax returns or disclose any information
relating to its Tax affairs or any computations in respect thereof or require
any Tax Indemnitee to take any other action that would prejudice its ability to
benefit from any other refunds, credits, reliefs, remissions or repayments to
which it may be entitled.

5.9 Lender Tax Information.

5.9.1 Generally. Any Lender that is entitled to an exemption from or reduction
in the rate of the imposition, deduction or withholding of any Indemnified Tax
or Other Tax under the law of the jurisdiction in which a Loan Party is resident
for tax purposes, or any treaty to which such jurisdiction is a party, with
respect to payments under any Loan Document shall deliver to Agent and Loan
Party Agent, in the manner and at the time or times prescribed by Applicable Law
or reasonably requested by Agent or Loan Party Agent (other than if such Lender
is not entitled under Applicable Law to do so), such properly completed and
executed documentation prescribed by Applicable Law as will permit such payments
to be made without the imposition, deduction or withholding of such Indemnified
Tax or Other Tax or at a reduced rate. In addition, any Lender, if requested by
Agent or Loan Party Agent, shall deliver such other documentation prescribed by
Applicable Law or reasonably requested by Agent or Loan Party Agent as will
enable Agent and Loan Party Agent to determine whether or not such Lender is
subject to backup withholding or information reporting requirements.

5.9.3 U.S. Borrower. Without limiting the generality of the foregoing, if a
Borrower is resident for tax purposes in the United States (i), any Lender that
is a “United States person” within the meaning of section 7701(a)(30) of the
Code shall deliver to Agent and Loan Party Agent IRS Form W-9 or such other
documentation or information prescribed by Applicable Law or reasonably
requested by Agent or Loan Party Agent certifying that such Lender is exempt
from United States backup withholding and information reporting requirements,
(ii) any Lender that is not a “United States person” within the meaning of
section 7701(a)(30) of the Code, shall deliver to Agent and Loan Party Agent, on
or prior to the date on which it becomes a party hereunder (and from time to
time thereafter upon request by Agent or Loan Party Agent or upon expiration or
invalidity of such Form, but only if such Lender is entitled to do so under
Applicable Law), (a) IRS Form W-8BEN claiming eligibility for benefits

 

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of an income tax treaty to which the United States is a party; (b) IRS Form
W-8ECI; (c) IRS Form W-8IMY and all required supporting documentation; (d) in
the case of a Lender claiming the benefits of the exemption for portfolio
interest under section 881(c) of the Code, IRS Form W-8BEN and a certificate
showing such Lender is not (i) a “bank” within the meaning of section
881(c)(3)(A) of the Code, (ii) a “10 percent shareholder” of any Loan Party
within the meaning of section 881(c)(3)(B) of the Code, or (iii) a “controlled
foreign corporation” described in section 881(c)(3)(C) of the Code; and/or
(e) any other form prescribed by Applicable Law as a basis for claiming
exemption from or a reduction in withholding tax, together with such
supplementary documentation as may be necessary to allow Agent and the U.S.
Borrower to determine the withholding or deduction required to be made, or
(iii) if a payment made to a Tax Indemnitee under any Loan Document would be
subject to U.S. withholding Tax imposed by FATCA if such Tax Indemnittee fails
to comply with the applicable reporting requirements of FATCA, such Tax
Indemnitee shall deliver to Agent and Loan Party Agent (A) a certification
signed by the chief financial officer, principal accounting officer, treasurer
or controller and (B) other documentation reasonably requested by Agent or Loan
Party Agent sufficient for Agent or Loan Party Agent to comply with its
obligations under FATCA and to determine that such Tax Indemnitee has complied
with such applicable reporting requirements.

5.9.4 Lender Obligations. Each Applicable Lender and each applicable Issuing
Bank shall promptly notify Loan Party Agent and Agent of any change in
circumstances that would change any claimed Tax exemption or reduction. Each
Applicable Lender and each applicable Issuing Bank, in each case, severally and
not jointly with any other Applicable Lender and/or applicable Issuing Bank,
shall indemnify, hold harmless and reimburse (within ten (10) days after demand
therefor) Agent for any Taxes, losses, claims, liabilities, penalties, interest
and expenses (including reasonable attorneys’ fees) incurred by or asserted
against Agent by any Governmental Authority due to such Applicable Lender’s or
such applicable Issuing Bank’s failure to deliver, or inaccuracy or deficiency
in, any documentation required to be delivered by it pursuant to this Section.
Each Applicable Lender and each applicable Issuing Bank authorizes Agent to set
off any amounts due to Agent under this Section against any amounts payable to
such Applicable Lender or such applicable Issuing Bank under any Loan Document.

5.10 Guarantee by U.S. Facility Loan Parties.

5.10.1 Joint and Several Liability. Each U.S. Domiciled Loan Party agrees that
it is jointly and severally liable for, and absolutely and unconditionally
guarantees to Agent and Lenders the prompt payment and performance of, all
Obligations and all agreements of each other Loan Party under the Loan
Documents. Each U.S. Domiciled Loan Party which is a U.S. Facility Guarantor
agrees that its guarantee obligations as a U.S. Facility Guarantor and as a
Canadian Facility Guarantor hereunder constitute a continuing guarantee of
payment and not of collection, that such guarantee obligations shall not be
discharged until Full Payment of the Obligations, and that such guarantee
obligations are absolute and unconditional, irrespective of (a) the genuineness,
validity, regularity, enforceability, subordination or any future modification
of, or change in, any Obligations or Loan Document, or any other document,
instrument or agreement to which any Loan Party is or may become a party or be
bound; (b) the absence of any action to enforce this Agreement (including this
Section 5.10) or any other Loan Document, or any waiver, consent or indulgence
of any kind by Agent or any Lender with respect thereto; (c) the existence,
value or condition of, or failure to perfect a Lien or to preserve rights
against, any security or guarantee for the Obligations or any action, or the
absence of any action, by Agent or any Lender in respect thereof (including the
release of any security or guarantee); (d) the

 

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insolvency of any Loan Party; (e) any election by Agent or any Lender in an
Insolvency Proceeding for the application of Section 1111(b)(2) of the U.S.
Bankruptcy Code; (f) any borrowing or grant of a Lien by any other Loan Party,
as debtor-in-possession under Section 364 of the U.S. Bankruptcy Code or
otherwise; (g) the disallowance of any claims of Agent or any Lender against any
Loan Party for the repayment of any Obligations under Section 502 of the U.S.
Bankruptcy Code or otherwise; or (h) any other action or circumstances that
might otherwise constitute a legal or equitable discharge or defense of a surety
or guarantor, except Full Payment of all Obligations.

5.10.2 Waivers.

(a) Each U.S. Domiciled Loan Party hereby expressly waives all rights that it
may have now or in the future under any statute, at common law, in equity or
otherwise, to compel Agent or Lenders to marshal assets or to proceed against
any Loan Party, other Person or security for the payment or performance of any
Obligations before, or as a condition to, proceeding against such Loan Party.
Each U.S. Domiciled Loan Party waives all defenses available to a surety,
guarantor or accommodation co-obligor other than Full Payment of all
Obligations. It is agreed among each U.S. Domiciled Loan Party, Agent and
Lenders that the provisions of this Section 5.10 are of the essence of the
transaction contemplated by the Loan Documents and that, but for such
provisions, Agent and Lenders would decline to make Loans and issue Letters of
Credit. Each U.S. Domiciled Loan Party acknowledges that its guarantee pursuant
to this Section is necessary to the conduct and promotion of its business, and
can be expected to benefit such business.

(b) Agent and Lenders may, in their discretion, pursue such rights and remedies
as they deem appropriate, including realization upon the Collateral by judicial
foreclosure or non-judicial sale or enforcement without affecting any rights and
remedies under this Section 5.10. If, in taking any action in connection with
the exercise of any rights or remedies, Agent or any Lender shall forfeit any
other rights or remedies, including the right to enter a deficiency judgment
against any U.S. Domiciled Party or other Person, whether because of any
Applicable Laws pertaining to “election of remedies” or otherwise, each U.S.
Domiciled Loan Party consents to such action and waives any claim based upon it,
even if the action may result in loss of any rights of subrogation that any U.S.
Domiciled Loan Party might otherwise have had. Any election of remedies that
results in denial or impairment of the right of Agent or any Lender to seek a
deficiency judgment against any U.S. Domiciled Loan Party shall not impair any
other U.S. Domiciled Loan Party’s obligation to pay the full amount of the
Obligations. Each U.S. Domiciled Loan Party waives all rights and defenses
arising out of an election of remedies, such as nonjudicial foreclosure with
respect to any security for the Obligations, even though that election of
remedies destroys such U.S. Domiciled Loan Party’s rights of subrogation against
any other Person. Agent may bid all or a portion of the Obligations at any
foreclosure or trustee’s sale or at any private sale, and the amount of such bid
need not be paid by Agent but shall be credited against the Obligations. The
amount of the successful bid at any such sale, whether Agent or any other Person
is the successful bidder, shall be conclusively deemed to be the fair market
value of the Collateral, and the difference between such bid amount and the
remaining balance of the Obligations shall be conclusively deemed to be the
amount of the Obligations guaranteed under this Section 5.10, notwithstanding
that any present or future law or court decision may have the effect of reducing
the amount of any deficiency claim to which Agent or any Lender might otherwise
be entitled but for such bidding at any such sale.

 

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5.10.3 Extent of Liability; Contribution.

(a) Notwithstanding anything herein to the contrary (other than as specified in
Section 5.10.6), each U.S. Domiciled Loan Party’s liability under this
Section 5.10 shall be limited to the greater of (i) all amounts for which such
U.S. Domiciled Loan Party is primarily liable, as described below, and (ii) such
U.S. Domiciled Loan Party’s Allocable Amount.

(b) If any U.S. Domiciled Loan Party makes a payment under this Section 5.10 of
any Obligations (other than amounts for which such U.S. Domiciled Loan Party is
primarily liable) (a “Guarantor Payment”) that, taking into account all other
Guarantor Payments previously or concurrently made by any other U.S. Domiciled
Loan Party, exceeds the amount that such U.S. Domiciled Loan Party would
otherwise have paid if each U.S. Domiciled Loan Party had paid the aggregate
Obligations satisfied by such Guarantor Payments in the same proportion that
such U.S. Domiciled Loan Party’s Allocable Amount bore to the total Allocable
Amounts of all U.S. Domiciled Loan Parties, then such U.S. Domiciled Loan Party
shall be entitled to receive contribution and indemnification payments from, and
to be reimbursed by, each other U.S. Domiciled Loan Party for the amount of such
excess, pro rata based upon their respective Allocable Amounts in effect
immediately prior to such Guarantor Payment. The “Allocable Amount” for any U.S.
Domiciled Loan Party shall be the maximum amount that could then be recovered
from such U.S. Domiciled Loan Party under this Section 5.10 without rendering
such payment voidable under Section 548 of the U.S. Bankruptcy Code or under any
applicable state fraudulent transfer or conveyance act, or similar statute or
common law.

(c) Nothing contained in this Section 5.10 (other than as specified in
Section 5.10.6) shall limit the liability of any Loan Party to pay Loans made
directly or indirectly to that Loan Party (including Loans advanced to any other
Loan Party and then re-loaned or otherwise transferred to, or for the benefit
of, such Loan Party), LC Obligations relating to Letters of Credit issued to
support such Loan Party’s business, and all accrued interest, fees, expenses and
other related Obligations with respect thereto, for which such Loan Party shall
be primarily liable for all purposes hereunder.

5.10.4 Joint Enterprise. Each Borrower has requested that Agent and Lenders make
this credit facility available to the Borrowers in order to finance the
Borrowers’ business most efficiently and economically. The Borrowers and
Guarantors make up a related organization of various entities constituting a
single economic and business enterprise so that the Borrowers and Guarantors
share an identity of interests such that any benefit received by any one of them
benefits the others. The Borrowers and Guarantors render services to or for the
benefit of the other Borrowers and/or Guarantors, as the case may be, purchase
or sell and supply goods to or from or for the benefit of the others, make
loans, advances and provide other financial accommodations to or for the benefit
of the other Borrowers and Guarantors (including inter alia, the payment by
the Borrowers and Guarantors of creditors of the other Borrowers or Guarantors
and guarantees by the Borrowers and Guarantors of indebtedness of the
other Borrowers and Guarantors and provide administrative, marketing, payroll
and management services to or for the benefit of the other Borrowers and
Guarantors). The Borrowers and Guarantors have centralized accounting and legal
services and certain common officers and directors. The Borrowers acknowledge
and agree that Agent’s and Lenders’ willingness to extend credit to the
Borrowers and to administer the Collateral, as set forth herein, is done solely
as an accommodation to the Borrowers and at the Borrowers’ request.

 

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5.10.5 Subordination. Each Loan Party hereby subordinates any claims, including
any rights at law or in equity to payment, subrogation, reimbursement,
exoneration, contribution, indemnification or set off, that it may have at any
time against any other Loan Party, howsoever arising, to the Full Payment of all
Obligations.

5.10.6 Exclusion. Notwithstanding anything to the contrary herein or in any
other Loan Document, CS Automotive LLC shall not be liable for, and does not and
shall not in any manner guarantee in any respect, any Obligations of the U.S.
Borrower or any other U.S. Domiciled Loan Party arising hereunder or under any
of the other Loan Documents.

5.11 Currency Matters. Dollars are the currency of account and payment for each
and every sum at any time due from the Borrowers hereunder unless otherwise
specifically provided in this Agreement, any other Loan Document or otherwise
agreed to by Agent.

5.11.1 Each repayment of a Revolver Loan or LC Obligation or a part thereof
shall be made in the currency in which such Revolver Loan or LC Obligation is
denominated at the time of that repayment;

5.11.2 Each payment of interest shall be made in the currency in which the
principal or other sum in respect of which such interest is denominated;

5.11.3 Each payment of fees by the U.S. Borrower pursuant to Section 3.2 shall
be in Dollars;

5.11.4 Each payment of fees by the Canadian Borrower pursuant to Section 3.2
shall be in Dollars;

5.11.5 Each payment in respect of Extraordinary Expenses and any other costs,
expenses and indemnities shall be made in the currency in which the same were
incurred by the party to whom payment is to be made;

5.11.6 Any amount expressed to be payable in Canadian Dollars shall be paid in
Canadian Dollars; and

5.11.7 Any amount expressed to be payable in Euros shall be paid in Euros.

5.11.8 Any amount expressed to be payable in Sterling shall be paid in Sterling.

No payment to any Secured Party (whether under any judgment or court order or
otherwise) shall discharge the obligation or liability of the Loan Party in
respect of which it was made unless and until such Secured Party shall have
received Full Payment in the currency in which such obligation or liability is
payable pursuant to the above provisions of this Section 5.11. To the extent
that the amount of any such payment shall, on actual conversion into such
currency, fall short of such obligation or liability actual or contingent
expressed in that currency, such Loan Party (together with the other Loan
Parties within its Loan Party Group or other obligors pursuant to any Guarantee
of the Obligations of such Loan Party Group) agrees to indemnify and hold
harmless such Secured Party, with respect to the amount of the shortfall with
respect to amounts payable by such Loan Party hereunder, with such indemnity
surviving the termination of this Agreement and any legal proceeding, judgment
or court order pursuant to which the original payment was made which resulted in
the shortfall. To the extent that the amount of any

 

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such payment to a Secured Party shall, upon an actual conversion into such
currency, exceed such obligation or liability, actual or contingent, expressed
in that currency, such Secured Party shall return such excess to the affected
Loan Party.

5.12 Currency Fluctuations. On each Business Day or such other date determined
by Agent, which date with respect to Letters of Credit issued by Deutsche Bank
Trust Company Americas in currencies other than Dollars shall be the first
Business Day of each calendar month (the “Calculation Date”), Agent shall
determine the Exchange Rate as of such date. The Exchange Rate so determined
shall become effective on the first (1st) Business Day immediately following
such determination (a “Reset Date”) and shall remain effective until the next
succeeding Reset Date. On each Reset Date, Agent shall determine the Dollar
Equivalent of the Canadian Revolver Exposure and the U.S. Revolver Exposure. If,
on any Reset Date, (x) the Total Revolver Exposure exceeds the total amount of
the Commitments on such date or (y) the Canadian Revolver Exposure on such date
exceeds the Canadian Borrowing Base on such date or (z) the U.S. Revolver
Exposure on such date exceeds the U.S. Borrowing Base on such date (the amount
of any such excess referred to herein as the “Excess Amount”) then (i) Agent
shall give notice thereof to the applicable Borrower and Applicable Lenders and
(ii) within two (2) Business Days thereafter, the applicable Borrower shall
cause such excess to be eliminated, either by repayment of Revolver Loans or
depositing of Cash Collateral with Agent with respect to LC Obligations and
until such Excess Amount is repaid, the Applicable Lenders shall not have any
obligation to make any Loans.

SECTION 6. CONDITIONS PRECEDENT

6.1 Conditions Precedent to Initial Loans. In addition to the conditions set
forth in Section 6.2, Lenders shall not be required to fund any requested Loan,
issue any Letter of Credit, or otherwise extend credit to the Borrowers
hereunder, until the date (“Closing Date”) that each of the following conditions
has been satisfied (and with respect to deliveries of Loan Documents, each such
delivery shall be fully-executed (where applicable) and in form and substance
satisfactory to Agent and its counsel) (subject to Section 10.1.10):

(a) Notes shall have been executed by each Borrower and delivered to each
Applicable Lender that requests issuance of a Note. Each other Loan Document set
forth on the List of Closing Documents shall have been duly executed (where
applicable) by each of the signatories thereto and delivered to Agent, and each
Loan Party shall be in compliance with all terms thereof. Each other instrument,
document or agreement set forth on the List of Closing Documents shall have been
executed (where applicable) and delivered to Agent.

(b) Agent shall have received (i) satisfactory evidence that Agent shall have a
valid and perfected first priority Lien, security interest in the ABL Priority
Collateral (including delivery to Agent of all instruments needed for filings or
recordations necessary to perfect its Liens in the Collateral) and
(ii) releases, satisfactions and payoff letters terminating all other Liens on
the Collateral (including all such releases, satisfactions and payoff letters
relating to the Prepetition Agreement and the DIP Agreement), other than
Permitted Liens.

(c) Agent shall have received UCC, PPSA, and Lien searches and other evidence
satisfactory to Agent that its Liens are the only Liens upon the ABL Priority
Collateral, except Permitted Liens.

 

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(d) All filing and recording fees and taxes shall have been duly paid or
arrangements satisfactory to Agent shall have been made for the payment thereof.

(e) Agent shall have received certificates, in form and substance satisfactory
to it, from a Senior Officer of each Loan Party certifying that, after giving
effect to the Transactions and the initial Loans and transactions hereunder,
(i) the Canadian Facility Loan Parties (excluding the U.S. Facility Loan
Parties), taken as a whole, and the U.S. Facility Loan Parties, in each case
taken as a whole, are Solvent; (ii) no Default or Event of Default exists;
(iii) the representations and warranties set forth in Section 9 with respect to
such Loan Party are true and correct in all material respects (or, with respect
to representations and warranties qualified by materiality, in all respects)
(except for representations and warranties that expressly relate to an earlier
date, in which case such representations and warranties shall be true and
correct in all material respects (or, with respect to representations and
warranties qualified by materiality, in all respects) as of such earlier date);
(iv) the Availability condition set forth in Section 6.1(n) is satisfied, and
(v) such Loan Party has complied with all agreements and conditions to be
satisfied by it under the Loan Documents.

(f) Agent shall have received a certificate of a duly authorized officer of each
Loan Party, certifying (i) that attached copies of such Loan Party’s Organic
Documents are true and complete, and in full force and effect, without amendment
except as shown; (ii) that an attached copy of resolutions authorizing execution
and delivery of the Loan Documents to which such Loan Party is a party is true
and complete, and that such resolutions are in full force and effect, were duly
adopted, have not been amended, modified or revoked, and constitute all
resolutions adopted with respect to this credit facility; (iii) all governmental
and other third party approvals and consents, if any, with respect to the
Reorganization Plans, this Agreement, the other Transactions and each other Loan
Document have been obtained and are in effect; and (iv) to the title, name and
signature of each Person authorized to sign the Loan Documents to which such
Loan Party is a party. Agent may conclusively rely on this certificate until it
is otherwise notified by the applicable Loan Party in writing.

(g) Agent shall have received satisfactory opinions of counsel to the Loan
Parties, in each case, customary for transactions of this type (which shall
cover, among other things, authority, legality, validity, binding effect and
enforceability of the Loan Documents) and of appropriate local counsel
(including Ontario counsel).

(h) Agent shall have received copies of the charter documents of each Loan
Party, certified by the Secretary of State or other appropriate official of such
Loan Party’s jurisdiction of organization.

(i) Agent shall have received good standing certificates for each Loan Party,
issued by the Secretary of State or other appropriate official of such Loan
Party’s jurisdiction of organization.

(j) Since December 31, 2009 no change, occurrence or development shall have
occurred or become known to the Lead Arrangers that could reasonably be expected
to have a Material Adverse Effect (other than any effect of the type that
customarily occurs as a result of the commencement of a proceeding under Chapter
11 of the U.S. Bankruptcy Code or a proceeding under the CCAA).

 

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(k) Agent shall be satisfied with the amount, types and terms and conditions of
all insurance maintained by the Loan Parties and their Subsidiaries; and Agent
shall have received short form (if available) (i) certificates of insurance with
respect to each Loan Parties’ property and liability insurance, and
(ii) endorsements naming Agent as an additional insured or lender’s loss payee
or mortgagee, as the case may be and as its interests may appear, under all
casualty and business interruption insurance policies to be maintained with
respect to the properties of the Loan Parties forming part of the Collateral, in
each case, in form and substance reasonably satisfactory to Agent.

(l) No action, suit, investigation, litigation or proceeding pending or
threatened in any court or before any arbitrator or Governmental Authority that
in the Lenders’ judgment (a) could reasonably be expected to have a Material
Adverse Effect (other than any effect of the type that customarily occurs as a
result of the commencement of a proceeding under Chapter 11 of the U.S.
Bankruptcy Code or a proceeding under the CCAA); or (b) could reasonably be
expected to materially and adversely affect the credit facilities or
transactions contemplated hereby.

(m) All accrued fees and expenses of the Secured Parties (including the fees and
expenses of counsel (including any local counsel) for such Secured Parties) due
from the Loan Parties on or prior to the Closing Date under the Joint Commitment
Letter, the Joint Fee Letter and/or the Agent Fee Letter, as applicable, shall
have been paid in full in cash.

(n) Agent shall have received a satisfactory final pre-closing field examination
conducted by Agent and/or a third party for the purpose of preparing a Closing
Date Borrowing Base Certificate. Agent shall have received a Borrowing Base
Certificate with respect to each of the Canadian Borrowing Base and the U.S.
Borrowing Base, in each case, prepared as of May 27, 2010 and reflecting
Inventory data as of April 25, 2010. Upon giving effect to the initial funding
of Loans and issuance of Letters of Credit, and the payment by the Borrowers of
all fees and expenses incurred in connection herewith and due on the Closing
Date, as well as the amount of any payables stretched beyond their customary
payment practices, (i) Availability (calculated without inclusion of the
Canadian Designated Cash Amount or the U.S. Designated Cash Amount) shall be at
least $45,000,000 and (ii) the Loan Parties and Subsidiaries shall have cash on
hand of at least $45,000,000.

(o) Agent shall have received: (i) the annual (or other audited) financial
statements of the Subsidiaries for the fiscal years ended 2008 and 2009;
(ii) the most recent interim financial statements of Holdings and its
Subsidiaries (separately for (i) the U.S. Borrower and its Subsidiaries that are
U.S. Domiciled Loan Parties, (ii) the Canadian Borrower and its Subsidiaries
that are Canadian Domiciled Loan Parties and CS Automotive LLC and (iii) the
External Subsidiaries) as of a date not more than thirty (30) days (or such
other date as Agent may agree) prior to the Closing Date; and (iii) copies of
monthly 2010 projections prepared by the U.S. Borrower, which projections shall
be substantially in the form of and materially consistent with the projections
previously delivered to Agent and shall evidence the Loan Parties’ ability to
comply with the covenants set forth in this Agreement.

(p) Agent shall have received (i) an updated sources and uses statement,
including payment of all amounts under the Prepetition Agreement and the DIP
Agreement (except, with respect to both the Prepetition Agreement and the DIP
Agreement, as expressly set forth herein with respect to the deemed re-issuance
of the Existing Letters of Credit), and all agreements

 

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related thereto, cure payments, professional fees, critical vendor payments,
trustee fees, advisory fees and success payment, claims, administrative expenses
and any and all other amounts to be paid under the U.S. Plan and the Canadian
Plan on the respective effective dates thereunder, and fees and expenses payable
to the Secured Parties on the Closing Date and (ii) evidence that all
outstanding non-contingent obligations under the DIP Agreement and the
Prepetition Agreement have been repaid in full in cash (to the extent
contemplated by the Reorganization Plans) and the DIP Agreement and the
Prepetition Agreement have been terminated.

(q) All conditions precedent to the issuance of the Senior Note Debt shall have
been satisfied on terms reasonably acceptable to the Lenders in accordance with
the Senior Note Documents and the Senior Note Debt, in principal amount of
$450,000,000, shall have been issued, and the net proceeds thereof received by
the U.S. Borrower, in accordance with the terms of the U.S. Plan and evidenced
by the Senior Note Documents. Agent shall have received a certificate of a
Senior Officer of Loan Party Agent certifying copies of the material Senior Note
Documents attached thereto to be true, correct and complete copies thereof (such
certification to be included in the certificate delivered under clause (h) or
(i) of this Section).

(r) No amendment or other modification of or to either of the Reorganization
Plans shall be filed or proposed since the date the U.S. Confirmation Order and
the Canadian Sanction Order was originally entered which, in either case,
contains modifications that are material and adverse to any of the U.S.
Domiciled Loan Parties, the Canadian Borrower, any of the Loan Parties, Agent
and/or Lenders (as determined by the Lead Arrangers).

(s) The U.S. Bankruptcy Court shall have entered the U.S. Confirmation Order,
which shall be (i) in form and substance satisfactory to the Lead Arrangers, and
(ii) in full force and effect and shall not have been reversed or modified and
not be stayed or subject to a motion to stay or subject to appeal or petition
for review, rehearing or certiorari and the time to appeal the U.S. Confirmation
Order or to seek review, rehearing, or certiorari with respect to the U.S.
Confirmation Order has expired.

(t) The Canadian Sanction Order shall be in full force and effect and shall not
have been reversed or modified and not be stayed or subject to a motion to stay
or subject to appeal or petition for review, rehearing or certiorari, and the
time to appeal the Canadian Sanction Order or to seek review, rehearing, or
certiorari with respect to the Canadian Sanction Order shall have expired.

(u) All actions by or on behalf of the U.S. Domiciled Loan Parties, the Canadian
Borrower and the Reorganized Debtors (as defined in the U.S. Plan), which are
necessary or appropriate to implement the Reorganization Plans and all other
transactions contemplated to be taken on or prior to the Effective Date by the
U.S. Plan, the U.S. Confirmation Order, the Canadian Plan and the Canadian
Sanction Order shall have been effected in accordance in all respects with the
terms thereof. All conditions precedent to the confirmation, consummation and
effectiveness of the Reorganization Plans (other than the closing of the credit
facility provided hereby) shall have been satisfied in the judgment of Agent.
Concurrently with the closing of the credit facility provided hereby, each of
the U.S. Plan and the Canadian Plan shall have become effective (and the U.S.
Effective Date and Canadian Effective Dates shall have occurred) in accordance
in all material respects with the terms of the U.S. Plan, the Canadian Plan, the
U.S. Confirmation Order and the Canadian Sanction Order.

 

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(v) The U.S. Borrower shall have received gross proceeds in an amount not less
than $355,000,000 from the Rights Offering (as defined in the U.S. Plan), and
Agent shall have received copies certified by a Senior Officer of Loan Party
Agent as being true, correct and complete copies thereof, of the executed New
Capital Warrant Agreement and the executed Registration Rights Agreement (each
as defined in the U.S. Plan and in the form attached to the U.S. Plan as in
effect on May 27, 2010, with no changes therefrom that are material and adverse
to the Bankruptcy Debtors, the Loan Parties or any Secured Party unless
consented thereto by Agent) (such certification to be included in the
certificate delivered under clause (h) or (i) of this Section).

6.2 Conditions Precedent to All Credit Extensions. Agent, Issuing Banks and
Lenders shall not be required to fund any Loans or arrange for issuance of any
Letters of Credit to or for the benefit of the Borrowers (including the initial
Loans and Letters of Credit on the Closing Date), unless the following
conditions are satisfied:

(a) No Default or Event of Default shall exist at the time of, or result from,
such funding or issuance;

(b) The representations and warranties of each Loan Party in the Loan Documents
shall be true and correct in all material respects (or, with respect to
representations and warranties qualified by materiality, in all respects) on the
date of, and upon giving effect to, such funding, issuance or grant (except for
representations and warranties that expressly relate to an earlier date, in
which case such representations and warranties shall be true and correct in all
material respects (or, with respect to representations and warranties qualified
by materiality, in all respects) as of such earlier date);

(c) Both immediately before and immediately after giving effect thereto, no
Canadian Overadvance or U.S. Overadvance shall exist or would result therefrom
and the Total Exposure would not exceed the Maximum Facility Amount; and

(d) With respect to issuance of a Letter of Credit, the LC Conditions shall be
satisfied.

Each request (or deemed request, except a deemed request in connection with an
Overadvance or a Protective Advance or pursuant to Section 2.2.2(a) or
Section 2.3.2(a)) by Loan Party Agent or any Borrower for funding of a Loan or
issuance of a Letter of Credit shall constitute a representation by all
Borrowers that the foregoing conditions are satisfied on the date of such
request and on the date of such funding or issuance.

SECTION 7. COLLATERAL

7.1 Grant of Security Interest. (a) To secure the prompt payment and performance
of all of its Obligations (including, without limitation, all Obligations of the
Guarantors), each Loan Party hereby grants to Agent, for the benefit of the
Secured Parties, a continuing security interest in and Lien upon the following
Property of such Loan Party, whether now owned or hereafter acquired, and
wherever located (the “ABL Priority Collateral”):

(i) all Accounts;

(ii) all Inventory;

 

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(iii) all Chattel Paper, including electronic chattel paper, Documents,
Instruments and General Intangibles arising out of the property described in
clauses (i) and (ii) above;

(iv) all Deposit Accounts, securities accounts and all money and Investment
Property deposited therein or credited thereto;

(v) all letters of credit, Letter-of-Credit Rights and Supporting Obligations
relating to any of the foregoing;

(vi) all Commercial Tort Claims shown on Schedule 9.1.16 (as the same may be
amended or deemed amended from time to time), relating to any of the foregoing;

(vii) all Investment Property (other than Equity Interests of the Borrowers and
their Subsidiaries) and all payment intangibles (including intercompany loans);

(viii) all money, whether or not in the possession or under the control of
Agent, a Lender, or a bailee or Affiliate of Agent or a Lender, including any
Cash Collateral;

(ix) all accessions to, substitutions for, and all replacements, products, and
cash and non-cash proceeds of the foregoing, including proceeds of and unearned
premiums with respect to insurance policies, and claims against any Person for
loss, damage or destruction of any of foregoing; and

(x) all books and records (including customer lists, files, correspondence,
tapes, computer programs, print-outs and computer records), contracts and
contract rights pertaining to the foregoing;

provided however the ABL Priority Collateral shall not include any Excluded
Deposit Accounts or Excluded Contracts.

(b) No Canadian Facility Loan Party or any Foreign Subsidiary shall give any
security interest or guarantee in support of any Obligation of the U.S. Borrower
or a U.S. Facility Guarantor. This provision is meant to comply with Section 956
of the Code and shall be interpreted in accordance therewith.

7.2 Lien on Deposit Accounts; Cash Collateral.

7.2.1 Deposit Accounts. (a) To further secure the prompt payment and performance
of all of its Obligations (including, without limitation, all of the Obligations
of the Guarantors), each U.S. Domiciled Loan Party hereby grants to Agent, for
the benefit of the Secured Parties, and (b) to further secure the prompt payment
and performance of all Canadian Facility Obligations (including, without
limitation, all Canadian Facility Obligations of each Canadian Facility
Guarantor), each Canadian Domiciled Loan Party hereby grants to Agent, for the
benefit of the Canadian Facility Secured Parties, in each case, a continuing
security interest in and Lien on all amounts credited to any DACA Deposit
Account of such Loan Party, including any sums in any blocked or lockbox
accounts or in any accounts into which such sums are swept. Each Loan Party
hereby authorizes and directs each bank or other depository to deliver to Agent,
upon request, all balances in any DACA Deposit Account maintained by such Loan
Party, without inquiry into the authority or right of Agent to make such
request.

 

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7.2.2 Cash Collateral. Any Cash Collateral may be invested, at Agent’s
discretion, in Cash Equivalents, but Agent shall have no duty to do so,
regardless of any agreement or course of dealing with any Loan Party, and shall
have no responsibility for any investment or loss. To further secure the prompt
payment and performance of all of its Obligations (including, without
limitation, all Obligations of the Guarantors), each U.S. Domiciled Loan Party
hereby grants to Agent, for the benefit of the Secured Parties, and to further
secure the prompt payment and performance of all Canadian Facility Obligations,
each Canadian Domiciled Loan Party hereby grants to Agent, for the benefit of
the Canadian Facility Secured Parties, in each case, a continuing security
interest in and Lien on all Cash Collateral held by such Loan Party from time to
time and all proceeds thereof, whether such Cash Collateral is held in a Cash
Collateral Account or elsewhere. Subject to Section 5.6, Agent may apply Cash
Collateral of a U.S. Domiciled Loan Party to the payment of any Obligations, and
may apply Cash Collateral of a Canadian Domiciled Loan Party to the payment of
any Canadian Facility Obligations, in each case, in such order as Agent may
elect, as they become due and payable. Each Cash Collateral Account and all Cash
Collateral shall be under the sole dominion and control of Agent. No U.S.
Domiciled Loan Party or other Person claiming through or on behalf of any U.S.
Domiciled Loan Party shall have any right to any Cash Collateral, until Full
Payment of all Obligations, unless if the condition for establishing Cash
Collateral hereunder or under any other Loan Document is in any manner satisfied
or the amount of required Cash Collateral reduced, the applicable Cash
Collateral (or portion thereof) relating to such condition shall at such time be
paid by Agent to the Loan Party Agent. No Canadian Domiciled Loan Party or other
Person claiming through or on behalf of any Canadian Domiciled Loan Party shall
have any right to any Cash Collateral, until Full Payment of all Canadian
Facility Obligations, unless if the condition for establishing Cash Collateral
hereunder or under any other Loan Document is in any manner satisfied or the
amount of required Cash Collateral reduced, the applicable Cash Collateral (or
portion thereof) relating to such condition shall at such time be paid by Agent
to the Loan Party Agent.

7.3 Other Collateral.

7.3.1 Commercial Tort Claims. Loan Party Agent shall each month, concurrently
with the delivery of financial information required pursuant to
Section 10.1.2(b), notify Agent in writing if any Loan Party has obtained during
the preceding month a Commercial Tort Claim arising out of the ABL Priority
Collateral in respect of which any complaint or similar filing shall have been
made (other than, as long as no Event of Default exists, a Commercial Tort Claim
for less than $1,000,000), and Schedule 9.1.16 shall at such time be deemed
automatically amended to include such claim, and Loan Party Agent shall also
take such actions as Agent deems appropriate to subject such claim to a duly
perfected, first priority Lien in favor of Agent (for the benefit of Secured
Parties).

7.3.2 Certain After-Acquired Collateral. Loan Party Agent shall each month,
concurrently with the delivery of financial information required pursuant to
Section 10.1.2(b), notify Agent in writing if any Loan Party obtains any
interest in any additional ABL Priority Collateral not otherwise subject to the
Lien hereunder and/or requiring additional action by Agent in order to perfect
its Liens thereon, and, upon Agent’s request, shall promptly take such actions
as Agent reasonably deems appropriate to effect Agent’s duly perfected, first
priority Lien upon such additional ABL Priority Collateral, including obtaining
any appropriate possession, control agreement or Collateral Access Agreement (it
being understood that there shall be no requirement to obtain Collateral Access
Agreements not obtainable with

 

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commercially reasonable efforts), as appropriate and/or executing such
additional Security Documents as may be reasonably requested by Agent. If any
ABL Priority Collateral is in the possession of a third party, at Agent’s
request, the applicable Loan Party having rights in such ABL Priority Collateral
shall obtain a Collateral Access Agreement with respect thereto, it being
understood that there shall be no requirement to obtain Collateral Access
Agreements not obtainable with commercially reasonable efforts and, subject in
any event to Agent’s discretion, as provided in this Agreement, including making
cost/benefit determinations, to determine eligibility of the related Collateral
or to impose reserves with respect thereto if such ABL Priority Collateral
consists of Eligible Accounts or Eligible Inventory. Notwithstanding the
immediately preceding two (2) sentences, Agent shall not require any Loan Party
to establish Agent’s control over any Excluded Deposit Account or deliver
Collateral Access Agreements not obtainable with commercially reasonable
efforts.

7.4 No Assumption of Liability. The Lien on Collateral granted hereunder is
given as security only and shall not subject Agent or any Lender to, or in any
way modify, any obligation or liability of the Loan Parties relating to any
Collateral.

7.5 Further Assurances. Promptly upon request, and subject to the other
provisions of this Section 7, Loan Party Agent shall deliver such instruments,
assignments, title certificates, or other documents or agreements, and shall
take such actions, as Agent deems appropriate under Applicable Law to evidence
or perfect its Lien on any Collateral, or otherwise to give effect to the intent
of this Agreement. Each Loan Party authorizes Agent to file any financing
statement that indicates the Collateral in a manner consistent with this
Agreement, and ratifies any action taken by Agent before the Closing Date to
effect or perfect its Lien on any Collateral.

7.6 Certain Determinations. Notwithstanding anything to the contrary contained
herein or in any other Loan Document, this Section 7 shall not require the
creation or perfection of any collateral security interests or Liens in any
Property of any Loan Party if and for so long as Agent, in consultation with the
Loan Party Agent, reasonably determines that the cost of creating or perfecting
such security interests or Liens shall be excessive in view of the benefits to
be obtained by the Secured Parties therefrom, including, without limitation,
requiring delivery of physical possession of de minimis amounts of money held
and used by Holdings and its Subsidiaries in the Ordinary Course of Business.

SECTION 8. COLLATERAL ADMINISTRATION

8.1 Borrowing Base Certificates. By the twentieth (20th) day of each month (or,
during the Cash Dominion Trigger Period, by Wednesday of each week), or in any
such case if such day is not a Business Day, on the next succeeding Business
Day, Loan Party Agent shall deliver to Agent (and Agent shall promptly deliver
same to Lenders) a Borrowing Base Certificate with respect to each Borrower, in
each case, prepared as of the close of business of the previous month (or, if
applicable, previous week), and, if a Default or an Event of Default has
occurred and is continuing, at more frequent times as Agent may request. All
calculations of the applicable Borrowing Base in any Borrowing Base Certificate
shall originally be made by Loan Party Agent and certified by a Senior Officer
of Loan Party Agent, provided that Agent may from time to time in its Permitted
Discretion, review and adjust any such calculation to (a) reflect its reasonable
estimate of declines in value of any Collateral, due to collections received in
the Dominion Account or otherwise; (b) to adjust advance rates to reflect
changes in dilution, quality, mix and other factors affecting Collateral; and
(c) to the extent the calculation is not

 

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made in accordance with this Agreement or does not accurately reflect the U.S.
Availability Reserve and/or the Canadian Availability Reserve. Each Borrowing
Base Certificate shall set forth the calculation of the U.S. Borrowing Base in
Dollars and of the Canadian Borrowing Base in the Dollar Equivalent.

8.2 Administration of Accounts.

8.2.1 Records and Schedules of Accounts. Each Loan Party shall keep accurate and
complete records, in all material respects, of its Accounts, including all
payments and collections thereon, and shall submit to Agent sales, collection,
reconciliation and other reports in form satisfactory to Agent, on such periodic
basis as Agent may reasonably request. Loan Party Agent shall also provide to
Agent, on or before the twentieth (20th) day of each month and, if a Default or
an Event of Default has occurred and is continuing, at more frequent times as
Agent may request, a detailed aged trial balance of all Accounts of each
Borrower as of the end of the preceding month (or shorter applicable period),
specifying, to the extent requested by Agent, each Account’s Account Debtor name
and address, amount, invoice date and due date, showing any discount, allowance,
credit, authorized return or dispute, and including such proof of delivery,
copies of invoices and invoice registers, copies of related documents, repayment
histories, status reports and other information as Agent may reasonably request.
If Accounts of any Borrower in an aggregate face amount of $5,000,000 or more
cease to be Eligible Accounts (other than as a result of the payment thereof),
Loan Party Agent shall notify Agent of such occurrence promptly after any Loan
Party has knowledge thereof.

8.2.2 Taxes. If an Account of any Loan Party includes a charge for any Taxes,
Agent is authorized, in its discretion, to pay the amount thereof to the proper
Governmental Authority for the account of such Loan Party and to charge the Loan
Party Agent therefor; provided, however, that neither Agent nor Lenders shall be
liable for any Taxes that may be due from the Loan Parties or with respect to
any Collateral.

8.2.3 Account Verification. Agent shall have the right during normal business
hours and with reasonable frequency, in coordination and together with the Loan
Party Agent, in the name of Loan Party Agent, to verify the validity, amount or
any other matter relating to any material Accounts of the Loan Parties by mail,
telephone or otherwise, and the Loan Party Agent shall cooperate fully with
Agent in an effort to facilitate and promptly conclude any such verification
process. If a Default or Event of Default has occurred and is continuing, Agent
shall have the right at any time to conduct such verifications, in the name of
Agent, Loan Party Agent or any Loan Party.

8.2.4 Maintenance of DACA Deposit Accounts and Dominion Accounts. The Canadian
Domiciled Loan Parties shall establish a Canadian Dominion Account (including by
designating an existing Deposit Account as a “Canadian Dominion Account”). The
U.S. Facility Loan Parties shall establish the U.S. Dominion Account (including
by designating an existing Deposit Account as a “U.S. Dominion Account”). The
Loan Parties shall (i) require each lockbox servicer of each of any Loan Party’s
lockboxes (if any) to deposit all Payment Items received therein directly to a
Deposit Account (other than an Excluded Deposit Account) at the related
financial institution, and (ii) maintain each such Deposit Account, together
with all other Deposit Accounts of the Loan Parties (other than Excluded Deposit
Accounts) as DACA Deposit Accounts by obtaining an executed Deposit Account
Control Agreement from each such lockbox servicer and each financial institution
which maintains Deposit Accounts (other than any

 

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Excluded Deposit Accounts) for any Loan Party, which Deposit Account Control
Agreement (a) establishes Agent’s dominion and control over the subject
lockbox(es), if any, and/or DACA Deposit Account(s) of the Loan Parties
maintained with such servicer or institution, which may be exercised by Agent
during any during any Cash Dominion Trigger Period, (b) requires daily
application of amounts on deposit in the subject DACA Deposit Account to a
Dominion Account at Bank of America as directed by Agent during any Cash
Dominion Trigger Period, and (c) waives offset rights of such servicer or bank,
except for customary administrative charges; it being understood that, with
respect to any Deposit Account which does not at any time comply with the
foregoing requirements specified in this sentence (other than those required to
be delivered on the Closing Date), no funds contained therein shall be treated
as either Canadian Designated Cash Amount or U.S. Designated Cash Amount for
purposes of this Agreement and the Loan Party Agent shall, at Agent’s request,
within thirty (30) days, in coordination with Agent, cause replacement
arrangements to be implemented with respect to the applicable accounts which are
reasonably satisfactory to Agent. Neither Agent nor Lenders assume any
responsibility to the Loan Parties for any lockbox arrangement, DACA Deposit
Account or Dominion Account, including any claim of accord and satisfaction or
release with respect to any Payment Items accepted by any bank.

8.2.5 Proceeds of Collateral; Payment Items Received. Loan Party Agent shall
take all commercially reasonable steps to ensure that all payments on Accounts
included in the ABL Priority Collateral or otherwise relating to ABL Priority
Collateral are made directly to a DACA Deposit Account (or a lockbox relating to
a DACA Deposit Account) or, during a Cash Dominion Trigger Period, a Dominion
Account. If any Loan Party or Subsidiary receives cash or Payment Items with
respect to any ABL Priority Collateral or any Payment Item not properly
deposited by a lockbox servicer in accordance with the requirements set forth in
Section 8.2.4, it shall hold same in trust for Agent and promptly deposit same
into a DACA Deposit Account or, during a Cash Dominion Trigger Period, a
Dominion Account for application to the Obligations in accordance with
Section 5.5 or 5.6, as applicable.

8.3 Administration of Inventory.

8.3.1 Records and Reports of Inventory. Each Loan Party shall keep accurate and
complete records of its Inventory in the United States and Canada consistent in
all material respects with historical practices, and shall submit to Agent
inventory and reconciliation reports (which reports shall set forth the
Inventory information by location) in form reasonably satisfactory to Agent, on
such periodic basis as Agent may reasonably request. Loan Party Agent shall
conduct (or shall cause to be conducted) a physical inventory in the United
States and Canada at least once per calendar year (and on a more frequent basis
if requested by Agent when an Event of Default exists) and periodic cycle counts
consistent with historical practices, and shall provide to Agent a report based
on each such inventory and count promptly upon completion thereof, together with
such supporting information as Agent may reasonably request. Agent may
participate in and observe each physical count.

8.3.2 Returns of Inventory. No Loan Party shall return any Inventory to a
supplier, vendor or other Person, whether for cash, credit or otherwise, unless
(a) such return is in the Ordinary Course of Business; (b) no Default, Event of
Default or Overadvance exists or would result therefrom; (c) Agent is promptly
notified if the aggregate Value of all Inventory returned in any month exceeds
$5,000,000, in aggregate; and (d) any payment received by a Loan Party for a
return is promptly deposited to a DACA Deposit Account or a Dominion Account.

 

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8.3.3 Acquisition, Sale and Maintenance. With respect to Inventory that has been
included in the calculation of the U.S. Borrowing Base or Canadian Borrowing
Base, no Loan Party shall acquire or accept any such Inventory on consignment or
approval and the Loan Parties shall take all commercially reasonable steps to
assure that all Inventory is produced in accordance with Applicable Law,
including the FLSA; except in any such case where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect. The Loan Parties
shall use, store and maintain all Inventory with reasonable care and caution, in
accordance with historical practices and in conformity in all material respects
with all Applicable Law, and shall make current rent payments (within applicable
grace periods provided for in leases) at all locations where any material ABL
Priority Collateral is located.

8.4 Administration of Equipment.

8.4.1 Records and Schedules of Equipment. Each Loan Party shall keep accurate
and complete records of its Equipment in all material respects, consistent with
historical practices.

8.4.2 Condition of Equipment. Each Loan Party shall keep its Equipment in good
operating condition and repair, and shall make all necessary replacements and
repairs so that the value and operating efficiency of the Equipment is preserved
at all times in all material respects, reasonable wear and tear excepted, in
each case in a manner consistent with historical practices.

8.5 Administration of Deposit Accounts. Schedule 8.5 sets forth all lockbox
arrangements and Deposit Accounts (including Dominion Accounts) maintained by
the Loan Parties in the United States and Canada as of the Closing Date. Each
Loan Party shall take all commercially reasonable actions necessary to establish
Agent’s control of each such Deposit Account (other than Excluded Deposit
Accounts) by causing the related deposit account bank to enter into a Deposit
Account Control Agreement; it being understood that, with respect to any Deposit
Account which does not at any time comply with the foregoing requirements
specified in this sentence (other than those required to be delivered on the
Closing Date), no funds contained therein shall be treated as either Canadian
Designated Cash Amount or U.S. Designated Cash Amount for purposes of this
Agreement and the Loan Party Agent shall within thirty (30) days, in
coordination with Agent, cause replacement arrangements to be implemented with
respect to the applicable accounts which are reasonably satisfactory to Agent.
The sole account holder of each Deposit Account shall be a single Loan Party and
the Loan Parties shall not allow any other Person (other than Agent and, subject
to any Permitted Senior Secured Debt Intercreditor Agreement, the agent
specified therein) to have control (as contemplated by the UCC and the PPSA)
over a DACA Deposit Account or any Property deposited therein. Each Loan Party
shall promptly notify Agent of any opening or closing of a Deposit Account and,
concurrently with the opening thereof, shall ensure such account (other than
accounts excluded from the operation of this paragraph above) is subject to a
fully executed Deposit Account Control Agreement, an original copy of which has
been delivered to Agent.

 

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8.6 General Provisions.

8.6.1 Location of Collateral. All material amounts of tangible items of ABL
Priority Collateral, other than Inventory in transit, shall at all times be kept
by the Loan Parties at the Borrowers’ business locations set forth in Schedule
8.6.1, except that the Loan Parties may (a) make sales or other dispositions of
Collateral in the Ordinary Course of Business; (b) in the case of any U.S.
Facility Loan Party, move Collateral to another location in the continental
United States (so long as notice of such move is provided to Agent concurrently
with delivery of the applicable financial information required pursuant to
Sections 10.1.2(a), (b) or (c), as applicable) or Canada (upon thirty (30) days’
(or such lesser time as Agent shall agree in writing) prior written notice to
Agent), so long as all actions shall have been taken prior to such move to
ensure that Agent has a perfected first priority Lien upon all the ABL Priority
Collateral and (c) in the case of a Canadian Domiciled Loan Party, move
Collateral to another location in Canada (upon thirty (30) days’ (or such lesser
time as Agent shall agree in writing) prior written notice to Agent) or the
United States (so long as notice of such move is provided to Agent concurrently
with delivery of the applicable financial information required pursuant to
Sections 10.1.2(a), (b) or (c), as applicable), so long as all actions shall
have been taken prior to such move to ensure that Agent has a perfected first
priority security interest in and Lien upon all the ABL Priority Collateral,
provided, however, that with respect to the foregoing clauses (b) and (c), if
such Collateral is to be in the possession of a third party at a location not
set forth on Schedule 8.6.1, the applicable Loan Party having rights in such
Collateral shall use commercially reasonable efforts to obtain a Collateral
Access Agreement with respect thereto.

8.6.2 Insurance of Collateral; Condemnation Proceeds.

(a) (1) Each Loan Party shall maintain insurance with respect to the Collateral,
covering casualty, hazard, theft, malicious mischief, flood and other risks, in
amounts, with endorsements and with insurers (with a Best Rating of at least A7,
unless otherwise approved by Agent) reasonably satisfactory to Agent. Proceeds
under each policy in excess of $5,000,000 per claim shall be payable to Agent
(for application by Agent (i) to payment of the Revolver Loans of the applicable
Borrower or (ii) in accordance with Section 5.5 or 5.6, if applicable) to the
extent arising out of the ABL Priority Collateral. (2) From time to time upon
request, Loan Party Agent shall deliver to Agent the originals or certified
copies of its insurance policies. Unless Agent shall agree otherwise, each
policy shall include satisfactory endorsements (i) showing Agent and its
successors as lender’s loss payee, as its interests may appear; (ii) requiring
at least thirty (30) days prior written notice to Agent in the event of
cancellation of the policy for any reason whatsoever; and (iii) specifying that
the interest of Agent shall not be impaired or invalidated by any act or neglect
of any Loan Party or the owner of the Property, nor by the occupation of the
premises for purposes more hazardous than are permitted by the policy. If any
Loan Party fails to provide and pay for any insurance, Agent may in consultation
with the Loan Party Agent, but shall not be required to, procure the insurance
and charge the Loan Parties therefor. Loan Party Agent agrees to deliver to
Agent, promptly as rendered, copies of all material reports made to insurance
companies. While no Event of Default exists, the Loan Parties may settle, adjust
or compromise any insurance claim relating to the ABL Priority Collateral, as
long as the proceeds in excess of $5,000,000 per claim are delivered to Agent
(for application by Agent (i) to payment of the Revolver Loans of the applicable
Borrower or (ii) in accordance with Section 5.5 or 5.6, if applicable). If an
Event of Default exists, only Agent shall be authorized to settle, adjust and
compromise claims in excess of $500,000 in the aggregate related to the ABL
Priority Collateral.

 

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(b) Any proceeds of insurance (other than proceeds from workers’ compensation or
D&O insurance) and any awards arising from condemnation of, in each case, any
ABL Priority Collateral, or any proceeds or awards that relate to Inventory
included in the ABL Priority Collateral, in any such case in excess of
$5,000,000 per claim, to the extent received by any Loan Party, shall be paid to
Agent (for application by Agent (i) to payment of the Revolver Loans of the
applicable Borrower, with any excess amounts returned to the Loan Party Agent,
or (ii) in accordance with Section 5.5 or 5.6, if applicable).

8.6.3 Protection of Collateral. All expenses of protecting, storing,
warehousing, insuring, handling, maintaining and shipping any Collateral of a
Loan Party Group, all Taxes payable with respect to any Collateral of a Loan
Party Group (including any sale thereof), and all other payments required to be
made by Agent to any Person to realize upon any Collateral of a Loan Party
Group, shall be borne and paid by the Loan Parties of such Loan Party Group.
Agent shall not be liable or responsible in any way for the safekeeping of any
Collateral, for any loss or damage thereto (except for reasonable care in its
custody while Collateral is in Agent’s actual possession), for any diminution in
the value thereof, or for any act or default of any warehouseman, carrier,
forwarding agency or other Person whatsoever, but the same shall be at the Loan
Parties’ sole risk.

8.6.4 Defense of Title to Collateral. Each Loan Party shall at all times defend
in a commercially reasonable manner its title to Collateral and Agent’s Liens
therein against all Persons, claims and demands whatsoever, except Permitted
Liens.

8.7 Power of Attorney. Each Loan Party hereby irrevocably constitutes and
appoints Agent (and all Persons designated by Agent) as such Loan Party’s true
and lawful attorney (and agent-in-fact), coupled with an interest, for the
purposes and during the times provided in this Section. Agent, or Agent’s
designee, may, without notice and in either its or a Loan Party’s name, but at
the cost and expense of the Loan Parties within such Loan Party’s Loan Party
Group:

(a) Endorse a Loan Party’s name on any Payment Item or other proceeds of
Collateral (including proceeds of insurance) that come into Agent’s possession
or control; and

(b) After an Event of Default has occurred and is continuing, (i) notify any
Account Debtors of the assignment of their Accounts, demand and enforce payment
of Accounts by legal proceedings or otherwise, and generally exercise any rights
and remedies with respect to Accounts; (ii) settle, adjust, modify, compromise,
discharge or release any Accounts or other Collateral, or any legal proceedings
brought to collect Accounts or Collateral; (iii) sell or assign any Accounts and
other Collateral upon such terms, for such amounts and at such times as Agent
deems advisable; (iv) collect, liquidate and receive balances in DACA Deposit
Accounts or investment accounts, and take control, in any manner, of proceeds of
Collateral; (v) prepare, file and sign a Loan Party’s name to a proof of claim
or other document in a bankruptcy of an Account Debtor, or to any notice,
assignment or satisfaction of Lien or similar document; (vi) receive, open and
dispose of mail addressed to a Loan Party, and notify postal authorities to
deliver any such mail to an address designated by Agent; (vii) endorse any
Chattel Paper, Document, Instrument, bill of lading, or other document or
agreement relating to any Accounts, Inventory or other Collateral; (viii) use a
Loan Party’s stationery and sign its name to verifications of Accounts and
notices to Account Debtors; (ix) use information contained in any data
processing, electronic or information systems relating to Collateral; (x) make
and adjust

 

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claims under insurance policies; (xi) take any action as may be necessary or
appropriate to obtain payment under any letter of credit, banker’s acceptance or
other instrument constituting Collateral for which a Loan Party is a
beneficiary; and (xii) take all other actions as Agent deems appropriate to
fulfill any Loan Party’s obligations under the Loan Documents.

SECTION 9. REPRESENTATIONS AND WARRANTIES

9.1 General Representations and Warranties. To induce Agent and Lenders to enter
into this Agreement and to make available the Commitments, Loans and Letters of
Credit, each Loan Party hereby jointly and severally with the other Loan Parties
represents and warrants that:

9.1.1 Organization and Qualification. Each Loan Party and Subsidiary is duly
organized, validly existing and in good standing (or equivalent) under the laws
of the jurisdiction of its organization. Each Loan Party and Subsidiary is duly
qualified, authorized to do business and in good standing as a foreign or extra
provincial, as the case may be, corporation, limited liability company, exempted
company or other entity in each jurisdiction, except where failure to be so
qualified, authorized or in good standing could not reasonably be expected to
result in a Material Adverse Effect.

9.1.2 Power and Authority. Each Loan Party is duly authorized to execute,
deliver and perform the Loan Documents to which it is a party. The execution,
delivery and performance by each Loan Party of the Loan Documents to which it is
a party have been duly authorized by all necessary corporate (or equivalent)
action of such Loan Party, and do not (a) require any consent or approval of any
holders of Equity Interests of such Loan Party or any Governmental Authority, in
each case, other than those already obtained; (b) contravene the Organic
Documents of such Loan Party; (c) violate or cause a default under any material
Applicable Law binding on such Loan Party or Material Contract of such Loan
Party, except, with respect to Material Contracts, which could not reasonably be
expected to result in a Material Adverse Effect; (d) require any registration or
filing with, or any other action by, any Governmental Authority, except (i) such
as have been obtained or made and are in full force and effect, (ii) filings
necessary to perfect Liens created by the Loan Documents and (iii) consents,
approvals, registrations, filings, permits or actions the failure to obtain or
perform which could not reasonably be expected to result in a Material Adverse
Effect; or (e) result in or require the imposition of any Lien (other than
Permitted Liens) on any Property of any Loan Party or Subsidiary.

9.1.3 Enforceability. Each Loan Document is a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against such Loan Party
in accordance with its terms, subject to bankruptcy, insolvency or similar laws
affecting the enforcement of creditors’ rights generally and general principles
of equity, regardless of whether considered in a proceeding in law or in equity.

9.1.4 Corporate Names; Capital Structure. Schedule 9.1.4 shows, for each Loan
Party and Subsidiary, its name, its jurisdiction of organization, its issued
Equity Interests, the holders of its Equity Interests (other than in respect of
Holdings), in each case, as of the Closing Date.

 

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9.1.5 Locations. As of the Closing Date, the chief executive offices and other
places of business of the Loan Parties are shown on Schedule 8.6.1.

9.1.6 Title to Properties; Priority of Liens. Each Loan Party and Subsidiary has
good and marketable title to (or valid leasehold interests in) all of its Real
Estate, and good title to, or rights in, all of its personal tangible Property,
in each case with respect to such Real Estate and personal Property which is
material to its business, including all Property reflected in any financial
statements delivered to Agent or Lenders, in each case free of Liens except
Permitted Liens. Each Loan Party and Subsidiary has paid and discharged all
lawful claims that, if unpaid, could become a Lien on a material portion of its
Properties, other than Permitted Liens. Each Loan Party has paid and discharged
all lawful claims that, if unpaid, could reasonably be expected to become a Lien
on its ABL Priority Collateral, other than (x) Permitted Collateral Liens and
(y) Liens permitted by Section 10.2.2(y) securing Debt in an aggregate amount
not in excess of $5,000,000 so long as the applicable ABL Priority Collateral is
not included in the Borrowing Base. Upon the filing of financing statements
against the Loan Parties in the form approved by Loan Party Agent, and, with
respect to any ABL Priority Collateral in which a security interest may only be
perfected by possession or control, the taking and retention of possession or
control of such ABL Priority Collateral by Agent, duly endorsed (including
executed powers of transfer) where applicable, all Liens of Agent in the ABL
Priority Collateral will be duly perfected, first priority Lien upon all the ABL
Priority Collateral, subject only to Permitted Collateral Liens.

9.1.7 Accounts and Inventory. (a) Agent may rely, in determining which Accounts
are Eligible Accounts, on all statements and representations made by or on
behalf of the Borrowers with respect thereto. All Accounts included in the
calculation of Eligible Accounts in any Borrowing Base Certificate are Eligible
Accounts as of the date of such Borrowing Base Certificate. Borrowers warrant,
with respect to each Account at the time it is shown as an Eligible Account in a
Borrowing Base Certificate, that:

(i) it is genuine and in all respects what it purports to be, and is not
evidenced by a judgment;

(ii) it arises out of a completed, bona fide sale and delivery of goods or
rendition of services in the Ordinary Course of Business, and substantially in
accordance with any purchase order, contract or other document relating thereto;

(iii) it is for a sum certain, maturing as stated in the invoice covering such
sale or rendition of services, a copy of which has been furnished or is
available to Agent on request;

(iv) it is not subject to any offset, Lien (other than Permitted Collateral
Liens), deduction, ongoing defense, dispute or counterclaim, except as arising
in the Ordinary Course of Business or otherwise disclosed to Agent; and it is
absolutely owing by the Account Debtor, without contingency in any respect;

(v) no purchase order, agreement, document or Applicable Law restricts
assignment of the Account to Agent (regardless of whether, under the UCC or the
PPSA, the restriction is ineffective), and the applicable Borrower is the sole
payee or remittance party shown on the invoice;

 

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(vi) no extension, compromise, settlement, modification, credit, deduction or
return has been authorized with respect to the Account, except (i) discounts or
allowances granted in the Ordinary Course of Business for prompt payment that
are reflected on the face of the invoice related thereto and in the reports
submitted to Agent hereunder or (ii) other discounts or allowances reflected in
the Value of such Account; and

(vii) to the best of the applicable Borrower’s knowledge, (A) there are no facts
or circumstances that are reasonably likely to impair the enforceability or
collectability of such Account, (B) the Account Debtor had the capacity to
contract when the Account arose, continues to meet the applicable Borrower’s
customary credit standards, is Solvent, is not contemplating or subject to an
Insolvency Proceeding, and has not failed, or suspended or ceased doing
business; and (C) there are no proceedings or actions threatened or pending
against any Account Debtor that could reasonably be expected to have a material
adverse effect on the Account Debtor’s financial condition.

(b) Agent may rely, in determining which Inventory is Eligible Inventory, on all
statements and representations made by or on behalf of the Borrowers with
respect thereto. All Inventory included in the calculation of Eligible Inventory
in any Borrowing Base Certificate is Eligible Inventory as of the date of such
Borrowing Base Certificate.

9.1.8 Financial Statements; Solvency; Material Adverse Effect.

(a) The consolidated balance sheets, and related statements of income, cash flow
and shareholder’s equity, of the Loan Parties that have been and are hereafter
delivered to Agent and Lenders, and the separate consolidating balance sheets,
and related statements of income, cash flow and shareholder’s equity, of the
U.S. Borrower and its Subsidiaries that are U.S. Domiciled Loan Parties, the
Canadian Borrower and its Subsidiaries that are Canadian Domiciled Loan Parties
and CS Automotive LLC, and the External Subsidiaries, respectively, that have
been and are hereafter delivered to Agent and Lenders, in each case, are and
will be prepared in accordance with GAAP, and fairly present the financial
positions and results of operations of such Persons at the dates and for the
periods indicated, subject to year-end audit adjustments and the absence of
footnotes in the case of statements prepared other than at year-end. All
projections delivered from time to time to Agent and Lenders by or on behalf of
the Loan Parties and Subsidiaries have been prepared in good faith, based on
assumptions believed by Loan Party Agent to be reasonable at the time delivered
to Agent, in light of the circumstances at such time.

(b) Since December 31, 2009, there has been no change in the condition,
financial or otherwise, of Holdings and its subsidiaries, taken as a whole, that
could reasonably be expected to have a Material Adverse Effect (other than with
respect to the U.S. Bankruptcy Cases and the Canadian CCAA Case, any effect of
the type that customarily occurs as a result of the commencement of a proceeding
under Chapter 11 of the U.S. Bankruptcy Code or a proceeding under the CCAA).

(c) No financial statement delivered to Agent or Lenders by or on behalf of any
of the Loan Parties and Subsidiaries at any time contains any untrue statement
of a material fact or omits any material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they are made, not misleading as of the time when made or delivered.

 

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(d) After giving effect to the Transactions, the Canadian Facility Loan Parties
(excluding the U.S. Facility Loan Parties), taken as a whole, and the U.S.
Facility Loan Parties, in each case taken as a whole, are Solvent

9.1.9 Taxes. Except to the extent it could reasonably be expected to not have a
Material Adverse Effect, each Loan Party has timely filed all federal and state
income tax returns, and all local and provincial income tax returns and other
reports that it is required by law to file, and has timely paid, or made
provision for the payment of, all federal and state Taxes upon it and all local
and provincial and other Taxes upon it, and its income and its Properties that
are due and payable, except to the extent being Properly Contested. Each
Subsidiary that is not a Loan Party has timely filed all material federal,
state, local and provincial income tax returns and other reports that it is
required by law to file, and has timely paid, or made provision for the payment
of, all material federal, state, local and provincial and other Taxes upon it,
its income and its Properties that are due and payable, except to the extent
being Properly Contested.

9.1.10 Brokers. There are no brokerage commissions, finder’s fees or investment
banking fees payable in connection with any transactions contemplated by (i) the
Transactions (except as disclosed in the U.S. Plan or Canadian Plan), or
(ii) the Loan Documents.

9.1.11 Intellectual Property. Except as could not reasonably be expected to have
a Material Adverse Effect, each Loan Party and Subsidiary owns or has the lawful
right to use all Intellectual Property used in the conduct of its business,
without conflict with any rights of others. No Intellectual Property owned or
used by a Loan Party or Subsidiary which is material to the operations or
business of any Loan Party has been adjudged invalid or unenforceable by a court
of competent jurisdiction or been cancelled, in whole or in part, except where
such judgment or cancellation could not reasonably be expected to have a
Material Adverse Effect. There is no pending or, to any Loan Party’s knowledge,
threatened Intellectual Property Claim with respect to any Loan Party, any
Subsidiary or any of their Property (including any Intellectual Property),
except as could not reasonably be expected to have a Material Adverse Effect.
All Intellectual Property owned, used or licensed by, or otherwise subject to
any interests of, any Loan Party or Subsidiary on the Closing Date is shown on
Schedule 9.1.11.

9.1.12 Governmental Approvals. Each Loan Party and Subsidiary has, is in
compliance with, and is in good standing with respect to, all Governmental
Approvals necessary to conduct its business and to own, lease and operate its
Properties, except as could not reasonably be expected to have a Material
Adverse Effect. All necessary import, export or other licenses, permits or
certificates for the import or handling of any goods or other Collateral have
been procured and are in effect, and the Loan Parties and Subsidiaries have
complied with all foreign and domestic laws with respect to the shipment and
importation of any goods or Collateral, except where such noncompliance could
not reasonably be expected to have a Material Adverse Effect.

9.1.13 Compliance with Laws. Each Loan Party and Subsidiary has duly complied,
and its Properties and business operations are in compliance, in each case in
all respects, with all Applicable Laws (including Environmental Laws), except
where noncompliance could not reasonably be expected to have a Material Adverse
Effect. There have been no citations, notices or orders relating to
noncompliance issued to any Loan Party or Subsidiary under any Applicable Law,
except where such noncompliance could not reasonably be expected to have a
Material Adverse Effect. No Inventory has been produced in violation of the
FLSA, except where such violation could not reasonably be expected to have a
Material Adverse Effect.

 

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9.1.14 Compliance with Environmental Laws. Except as disclosed on Schedule
9.1.14 or would not have and could not reasonably be expected to have a Material
Adverse Effect, (i) no Loan Party’s or Subsidiary’s present or, to its
knowledge, former operations, Real Estate or other Properties are subject to any
federal, state or local investigation to determine whether any remedial action
is needed to address any environmental pollution, Hazardous Material or
environmental clean-up, (ii) no Loan Party or Subsidiary has received any
Environmental Notice and (iii) no Loan Party or Subsidiary has, to its
knowledge, any contingent liability with respect to any Environmental Release,
environmental pollution or Hazardous Material on any Real Estate now or
previously owned, leased or operated by it.

9.1.15 Burdensome Contracts. No Loan Party or Subsidiary is a party or subject
to any contract, agreement or charter restriction that has resulted in or could
reasonably be expected to have a Material Adverse Effect. No Loan Party or
Subsidiary is party or subject to any Restrictive Agreement (other than
(s) agreements to which an External Subsidiary is party to the extent that the
restrictions or conditions therein are imposed only on such External Subsidiary
and other Subsidiaries that are not Loan Parties, (t) the Loan Documents,
(u) the Senior Note Documents (as in effect on the Closing Date), (v) the
Permitted Senior Secured Debt Documents, (w) customary non-assignment provisions
with respect to leases or licensing agreements entered into by the Loan Parties
or any of their Subsidiaries in the Ordinary Course of Business, (x) any
restriction or encumbrance with respect to any asset of the Loan Parties or any
of their Subsidiaries imposed pursuant to an agreement which has been entered
into for the sale or disposition of such assets otherwise permitted under this
Agreement, (y) customary provisions in joint venture agreements and other
similar agreements entered into in the Ordinary Course of Business,
(z) customary restrictions in connection with Permitted Securitizations), except
as shown on Schedule 9.1.15 and (aa) Restrictive Agreements permitted under
Section 10.2.12. No Restrictive Agreement prohibits the execution, delivery or
performance of any Loan Document by a Loan Party or Subsidiary.

9.1.16 Litigation. Except as shown on Schedule 9.1.16, there are no proceedings
or investigations pending or, to any Loan Party’s knowledge, threatened against
any Loan Party or Subsidiary, or any of their businesses, operations,
Properties, prospects or conditions, that (a) relate to any Loan Documents or
transactions contemplated thereby; or (b) have resulted in or could reasonably
be expected to have a Material Adverse Effect. Except as shown on such Schedule,
as amended from time to time, no Loan Party has a Commercial Tort Claim (other
than, as long as no Default or Event of Default exists, a Commercial Tort Claim
for less than $1,000,000). No Loan Party or Subsidiary is in default with
respect to any order, injunction or judgment of any Governmental Authority that
could reasonably be expected to have a Material Adverse Effect.

9.1.17 No Defaults. No event or circumstance has occurred or exists that
constitutes a Default or Event of Default. No Loan Party or Subsidiary is in
default, and no event or circumstance has occurred or exists that with the
passage of time or giving of notice would constitute a default by any Loan Party
or Subsidiary, under any Material Contract that could reasonably be expected to
have a Material Adverse Effect.

 

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9.1.18 ERISA.

(a) Schedule 9.1.18 sets forth all Plans, (including, for the avoidance of doubt
and without limitation, all Pension Plans and Canadian Employee Plans) in
existence as of the date hereof.

(b) Except as could not reasonably be expected to result in a Material Adverse
Effect, each Plan is in compliance in all respects with the applicable
provisions of ERISA, the Code, and other Applicable Laws. Except as disclosed on
Schedule 9.1.18(b), as of the Closing Date, each Plan that is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the IRS for the period for which the remedial amendment period
(within the meaning of Code Section 401(b) and IRS guidance) has expired or,
with respect to a new Plan or a period for which the remedial amendment period
has not expired, an application for such a letter is currently being processed
by the IRS with respect thereto and, to the knowledge of the Loan Parties,
nothing has occurred which would prevent, or cause the loss of, such
qualification. Except as could not reasonably be expected to result in a
Material Adverse Effect, each Loan Party and ERISA Affiliate has made all
required contributions to each Plan subject to Section 412 or 430 of the Code,
and no application for a funding waiver or an extension of any amortization
period pursuant to Section 412 of the Code has been made with respect to any
Plan.

(c) There are no pending or, to the knowledge of the Loan Parties, threatened
claims, actions or lawsuits, or action by any Governmental Authority with
respect to any Plan that could reasonably be expected to result in a Material
Adverse Effect. There has been no non-exempt prohibited transaction under
Section 406 of ERISA or 4975 of the Code or violation of the fiduciary
responsibility rules of ERISA with respect to any Plan that has resulted in or
could reasonably be expected to result in a Material Adverse Effect.

(d) Except as disclosed on Schedule 9.1.18(d) or could not reasonably be
expected to result in a Material Adverse Effect, (i) no ERISA Event has occurred
and no ERISA Event could reasonably be expected to occur; (ii) (x) no Pension
Plan had any Unfunded Pension Liability as of December 31, 2009, and (y) no
Pension Plan has increased the amount of its Unfunded Pension Liability between
December 31, 2009 and any subsequent date as of which the representations in
this Section 9 are made or deemed made; (iii) no Loan Party or ERISA Affiliate
has incurred any liability that remains outstanding, and no Loan Party or ERISA
Affiliate could reasonably be expected to incur any liability, under Title IV of
ERISA with respect to any Pension Plan (other than premiums due and not
delinquent under Section 4007 of ERISA); (iv) no Loan Party or ERISA Affiliate
has incurred any liability (other than a liability that has been satisfied in
full), no Loan Party or ERISA Affiliate could reasonably be expected to incur
any liability, and no event has occurred which, with the giving of notice under
Section 4219 of ERISA would result in liability, under Section 4201 or 4243 of
ERISA with respect to a Multiemployer Plan; and (v) no Loan Party or ERISA
Affiliate has engaged in a transaction that could be subject to Section 4069 or
4212(c) of ERISA.

(e) With respect to any Foreign Plan, except as could not reasonably be expected
to result in a Material Adverse Effect, (i) all employer and employee
contributions required by law or by the terms of the Foreign Plan have been
made, or, if applicable, accrued, in accordance with applicable accounting
practices and (ii) it has been registered as required and has been maintained in
good standing with applicable Governmental Authorities.

 

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(f) Except as could not reasonably be expected to result in a Material Adverse
Effect, (i) the Canadian Domiciled Loan Parties are in compliance in all
material respects with the requirements of the PBA with respect to each Canadian
Pension Plan and in compliance with any FSCO order directed specifically at a
Canadian Pension Plan; (ii) except as disclosed on Schedule 9.1.18(f), no
Canadian Pension Plan has any Unfunded Pension Liability as of January 1, 2009
with respect to the Retirement Benefit Agreement between Cooper-Standard
Automotive Canada Limited and the National Automobile, Aerospace, Transportation
and General Workers Union of Canada (C.A.W.) Local 876 and as of January 1, 2007
with respect to the Pension Plan for Salaried Employees of Cooper-Standard
Automotive Canada Limited; (iii) no Canadian Pension Plan shall have increased
its Unfunded Pension Liability, if any, between the Closing Date and any
subsequent date as of which the representations in this Section 9 are deemed
made; (iv); no fact or situation that may reasonably be expected to result in a
Material Adverse Effect exists in connection with any Canadian Pension Plan;
(v) no Termination Event has occurred; (vi) all contributions required to be
made by any Canadian Domiciled Loan Party or Subsidiary to any Canadian Pension
Plan have been made in a timely fashion in accordance with the terms of such
Canadian Pension Plan and the PBA; and (vii) no Lien has arisen, choate or
inchoate, in respect of any Canadian Domiciled Loan Party or their property in
connection with any Canadian Pension Plan (save for contribution amounts not yet
due).

9.1.19 Trade Relations. There exists no actual or, to the knowledge of any Loan
Party, threatened termination, limitation or modification of any business
relationship between any Loan Party or Subsidiary, on the one hand, and any
customer or supplier, or any group of customers or suppliers, which individually
or in the aggregate could reasonably be expected to result in a Material Adverse
Effect. There exists no condition or circumstance that has materially impaired
or could reasonably be expected to materially impair the ability of any Loan
Party or Subsidiary to conduct its business at any time hereafter in
substantially the same manner as conducted on the Closing Date.

9.1.20 Labor Relations. Except as described on Schedule 9.1.20, on the Closing
Date no Loan Party or Subsidiary is party to or bound by any collective
bargaining agreement, management agreement or consulting agreement within the
United States or Canada. Except as could not reasonably be expected to have a
Material Adverse Effect, within the United States or Canada, there are no
material grievances, unfair labor practices complaints or other disputes with
any union or other organization of any Loan Party’s or Subsidiary’s employees or
consultants, or, to any Loan Party’s knowledge, any asserted or to the knowledge
of any Loan Party, threatened strikes or work stoppages.

9.1.21 Payable Practices. No Loan Party or Subsidiary has made any material
change in its historical accounts payable practices from those in effect on the
Closing Date.

9.1.22 Not a Regulated Entity. No Loan Party or Subsidiary is (a) an “investment
company” within the meaning of the Investment Company Act of 1940; or
(b) subject to regulation under the Federal Power Act, any public utilities code
or any other Applicable Law regarding its authority to incur Debt.

9.1.23 Margin Stock. No Loan Party or Subsidiary is engaged, principally or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock. No Loan proceeds or Letters
of Credit will be used by any Loan

 

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Party or Subsidiary to purchase or carry, or to reduce or refinance any Debt
incurred to purchase or carry, any Margin Stock or for any related purpose
governed by Regulations T, U or X of the Board of Governors.

9.1.24 Excluded Collateral. No material Collateral consists of Property with
respect to which the grant of a Lien hereunder in such Property is prohibited by
Applicable Law or requires any consent of any Governmental Authority not
obtained pursuant to Applicable Law.

9.2 Complete Disclosure. None of the representations or warranties made by any
Loan Party in the Loan Documents as of the date such representations and
warranties are made or deemed made, and none of the statements contained in each
exhibit, report, statement or certificate furnished by or on behalf of any Loan
Party in connection with the Loan Documents, contains any untrue statement of a
material fact or omits any material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they are made, taken as a whole, not misleading in any material
respect as of the time when made or delivered. There is no fact or circumstance
that any Loan Party has failed to disclose to Agent in writing that has resulted
in or could reasonably be expected to have a Material Adverse Effect.

SECTION 10. COVENANTS AND CONTINUING AGREEMENTS

10.1 Affirmative Covenants. As long as any Commitments or Obligations (other
than indemnity obligations that are not currently due and payable) are
outstanding, each Loan Party, jointly and severally with the other Loan Parties,
agrees that it shall, and shall cause each Subsidiary to:

10.1.1 Inspections; Appraisals.

(a) Permit Agent from time to time, subject to reasonable notice and during
normal business hours (except when an Event of Default exists), to visit and
inspect the Properties of any Loan Party or Subsidiary in the United States and
Canada, including, without limitation, inspect, audit and make extracts from any
Loan Party’s or Subsidiary’s books and records, and discuss with its officers,
employees, agents, advisors and independent accountants such Loan Party’s or
Subsidiary’s business, financial condition, assets, prospects and results of
operations. Neither Agent nor any Lender shall have any duty to any Loan Party
to make any inspection, nor to share any results of any inspection, appraisal or
report with any Loan Party. The Loan Parties acknowledge that all inspections,
appraisals and reports are prepared by Agent and Lenders for their purposes, and
the Loan Parties shall not be entitled to rely upon them.

(b) Reimburse Agent in accordance with Section 3.4 for all charges, costs and
expenses of Agent in connection with (i) examinations of any Loan Party’s books
and records or any other financial or Collateral matters as Agent deems
appropriate, up to two (2) times (or, during any Financial Covenant Trigger
Period, three (3) times) per Loan Year; and (ii) appraisals of Inventory up to
two (2) times (or, during any Financial Covenant Trigger Period, three
(3) times) per Loan Year; provided, however, that if an examination or appraisal
is initiated during an Event of Default, all charges, costs and expenses
therefor shall be reimbursed by the Loan Parties without regard to such limits.
Subject to and without limiting the foregoing, the Loan Parties specifically
agree to pay Agent’s then standard charges for each day that an

 

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employee of Agent or its Affiliates is engaged in any examination activities,
and shall pay the standard charges of Agent’s internal appraisal group. This
Section 10.1.1 shall not be construed to limit Agent’s right to conduct
examinations or to obtain appraisals at any time in its discretion, nor to use
third parties for such purposes. Agent agrees, for the benefit of the Lenders,
to commence examinations as referenced in this Section 10.1.1 on at least an
annual basis.

10.1.2 Financial and Other Information. Keep adequate records and books of
account with respect to its business activities, in which proper entries are
made in accordance with GAAP reflecting all financial transactions; and to
furnish to Agent and Lenders:

(a) within ninety (90) days after the close of each Fiscal Year, balance sheets
as of the end of such Fiscal Year and the related statements of income, cash
flow and shareholders’ equity for such Fiscal Year, on a consolidated basis (for
Holdings and its Subsidiaries) and consolidating basis (separately for (i) the
U.S. Borrower and its Subsidiaries that are U.S. Domiciled Loan Parties,
(ii) the Canadian Borrower and its Subsidiaries that are Canadian Domiciled Loan
Parties and CS Automotive LLC and (iii) the External Subsidiaries), which
consolidated statements shall be audited and certified (without a “going
concern” qualification or other qualification as to scope of audit) by a firm of
independent certified public accountants of recognized standing selected by the
Loan Parties and reasonably acceptable to Agent, and shall set forth in
comparative form corresponding figures for the preceding Fiscal Year, and which
unaudited consolidating statements shall set forth in comparative form
corresponding figures for the preceding Fiscal Year and certified by a Senior
Officer of Loan Party Agent as being prepared in accordance with GAAP and fairly
presenting the financial position and results of operations at such date and for
such period, subject to normal year-end adjustments and the absence of
footnotes;

(b) as soon as available, and in any event within thirty (30) days after the end
of each month, unaudited balance sheets as of the end of such month and the
related statements of income for such month and for the portion of the Fiscal
Year then elapsed, on a consolidated basis (for Holdings and its Subsidiaries)
and consolidating basis (separately for (i) the U.S. Borrower and its
Subsidiaries that are U.S. Domiciled Loan Parties, (ii) the Canadian Borrower
and its Subsidiaries that are Canadian Domiciled Loan Parties and CS Automotive
LLC and (iii) the External Subsidiaries), setting forth in comparative form
corresponding figures for the preceding Fiscal Year and certified by a Senior
Officer of Loan Party Agent as being prepared in accordance with GAAP and fairly
presenting the financial position and results of operations for such month and
period, subject to normal year-end adjustments and the absence of footnotes;

(c) as soon as available, and in any event within forty five (45) days after the
end of each of the first three fiscal quarters of each fiscal year, unaudited
statements of cash flows for each such quarterly period, on a consolidated basis
(for Holdings and its Subsidiaries) and consolidating basis (separately for
(i) the U.S. Borrower and its Subsidiaries that are U.S. Domiciled Loan Parties,
(ii) the Canadian Borrower and its Subsidiaries that are Canadian Domiciled Loan
Parties and CS Automotive LLC and (iii) the External Subsidiaries), setting
forth in comparative form corresponding figures for the preceding Fiscal Year
and certified by a Senior Officer of Loan Party Agent as being prepared in
accordance with GAAP and fairly presenting the cash flows of the applicable
Persons for such period, subject to normal year-end adjustments and the absence
of footnotes;

 

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(d) concurrently with delivery of financial statements under clauses (a) and
(c) above (or concurrently with delivery of financial statements under clause
(b) above during the Cash Dominion Trigger Period), and more frequently if
requested by Agent while an Event of Default has occurred and is continuing, a
Compliance Certificate executed by a Senior Officer of Loan Party Agent;

(e) not later than the earlier of sixty (60) days after the end of each Fiscal
Year or thirty (30) days after board approval thereof, projections of the Loan
Parties’ and their Subsidiaries’ consolidated (for Holdings and its
Subsidiaries) and consolidating (separately for (i) the U.S. Borrower and its
Subsidiaries that are U.S. Domiciled Loan Parties, (ii) the Canadian Borrower
and its Subsidiaries that are Canadian Domiciled Loan Parties and CS Automotive
LLC and (iii) the External Subsidiaries) (x) balance sheets and results of
operations for the next Fiscal Year, month by month, and cash flow and
Availability for the next Fiscal Year, on a quarterly basis and (y) balance
sheets and results of operations and cash flow and Availability for the second
and third Fiscal Years thereafter, on an annual basis;

(f) at Agent’s request (but in no event more frequently than once each calendar
quarter, so long as no Default or Event of Default has occurred and is
continuing), a listing of each Loan Party’s trade payables, specifying the trade
creditor and balance due, and a detailed trade payable aging, all in form
reasonably satisfactory to Agent;

(g) promptly after the sending or filing thereof, copies of any final proxy
statements, financial statements or reports that any Loan Party has generally
made publicly available to its shareholders; copies of any regular, periodic and
special reports (including reports on Form 8-K and 10-Q) or registration
statements (other than registration statements on Form S-8) or prospectuses that
any Loan Party files with the Securities and Exchange Commission; and copies of
any press releases or other statements made available by a Loan Party to the
public concerning material changes to or developments in the business of such
Loan Party;

(h) at Agent’s request, after the sending or filing thereof, copies of any
annual information report (including all actuarial reports and other schedules
and attachments thereto) required to be filed with a Governmental Authority in
connection with each Pension Plan or any Canadian Pension Plan; promptly upon
receipt, copies of any notice, demand, inquiry or subpoena received in
connection with any Plan from a Governmental Authority (other than routine
inquiries in the course of application for a favorable IRS determination
letter); at Agent’s request, copies of any annual report required to be filed
with a Governmental Authority in connection with any other Plan or Canadian
Pension Plan;

(i) such other reports and information (financial or otherwise) as Agent may
reasonably request from time to time in connection with any Collateral or any
Loan Party’s or Subsidiary’s financial condition or business; and

(j) upon receipt or delivery thereof by or to any Loan Party or Subsidiary, any
notice of “Default” or “Event of Default” (under and as defined in the Senior
Note Documents and the Permitted Senior Secured Debt Documents) and, without
duplication of any report required to be provided hereunder, each material
report required to be provided pursuant to the Senior Note Indenture and the
Permitted Senior Secured Debt Document and, upon execution thereof, any waiver,
amendment or other modification to the Senior Note Documents and the Permitted
Senior Secured Debt Documents.

 

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Documents required to be delivered pursuant to Section 10.1.2 may be delivered
electronically and if so delivered, shall be deemed to have been delivered on
the date (i) on which the Loan Party Agent posts such documents, or provides a
link thereto on the Loan Party Agent’s website on the Internet at the website
address “cooperstandard.com”; or (ii) on which such documents are posted on the
Loan Party Agent’s behalf on an Internet or Intranet website, if any, to which
each Lender and Agent have access (whether a commercial, third-party website or
whether sponsored by Agent); provided that the Loan Party Agent shall deliver
paper copies of such documents to Agent or any Lender that requests the Loan
Party Agent to deliver such paper copies until a written request to cease
delivering paper copies is given by Agent or such Lender. Agent shall have no
obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor
compliance by the Loan Party Agent with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.

10.1.3 Notices. Notify Agent in writing, promptly after a Senior Officer of the
Loan Party’s obtaining knowledge thereof, of any of the following that affects
any Loan Party or Subsidiary:

(a) the threat or commencement of any proceeding or investigation by any
Governmental Authority, whether or not covered by insurance, that could
reasonably be expected to result in a Material Adverse Effect;

(b) any pending or threatened labor dispute, strike or walkout, or the
expiration of any material labor contract, that in any such case could
reasonably be expected to result in a Material Adverse Effect;

(c) any default under or termination of a Material Contract that could
reasonably be expected to result in a Material Adverse Effect;

(d) the existence of any Default or Event of Default;

(e) any violation or asserted violation of any Applicable Law (including ERISA,
PBA, OSHA, FLSA, or any Environmental Laws) that could reasonably be expected to
have a Material Adverse Effect;

(f) any Environmental Release by a Loan Party or Subsidiary or on any Real
Estate of a Loan Party or Subsidiary that could reasonably be expected to have a
Material Adverse Effect; or receipt of any Environmental Notice that could
reasonably be expected to have a Material Adverse Effect;

(g) the discharge of or any withdrawal or resignation by any of the Loan
Parties’ independent accountants;

(h) any Casualty Event that affects, in aggregate, Collateral with a book value
in excess of the Dollar Equivalent of $5,000,000;

(i) without duplication of any notice required to be provided hereunder, each
material notice required to be provided pursuant to the Senior Note Indenture or
the Permitted Senior Secured Debt Documents; and

 

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(j) the occurrence of a Material Adverse Effect.

10.1.4 Landlord and Storage Agreements. Upon Agent’s commercially reasonable
request, provide Agent with copies of all existing agreements, and promptly
after execution thereof provide Agent with copies of all future agreements, in
each case, between a Loan Party and/or a Subsidiary and any landlord,
warehouseman, processor, shipper, bailee or other Person that owns any premises
at which any Collateral may be kept or that otherwise may possess or handle any
Collateral.

10.1.5 Compliance with Laws. Comply with all Applicable Laws, including ERISA
(and analogous foreign legislation), Environmental Laws, FLSA, OSHA,
Anti-Terrorism Laws, and laws regarding collection and payment of Taxes, and
maintain all Governmental Approvals necessary to the ownership of its Properties
or conduct of its business, unless such failure to so comply (other than failure
to comply with Anti-Terrorism Laws) or to so maintain could not reasonably be
expected to have a Material Adverse Effect. Without limiting the generality of
the foregoing, if any Environmental Release occurs at or on any Real Estate of
any Loan Party or Subsidiary within the United States or Canada that could
reasonably be expected to have a Material Adverse Effect, it shall act promptly
and diligently to conduct any investigation and remediation of such
Environmental Release required under applicable Environmental Law.

10.1.6 Taxes. Pay and discharge all Taxes prior to the date on which they become
delinquent or penalties attach, unless such Taxes are being Properly Contested
or where the failure to pay could not reasonably be expected to have a Material
Adverse Effect.

10.1.7 Insurance. In addition to the insurance requirements set forth in
Section 8.6.2, maintain insurance with insurers (with a Best Rating of at least
A7, unless otherwise approved by Agent) reasonably satisfactory to Agent,
(a) with respect to the Properties and business of the Loan Parties of such type
(including product liability, workers’ compensation, larceny, embezzlement, or
other criminal misappropriation insurance), in such amounts, and with such
coverages and deductibles as are customary for companies similarly situated; and
(b) business interruption insurance in an amount not less than the amount in
effect on the Closing Date, with deductibles and subject to an Insurance
Assignment satisfactory to Agent.

10.1.8 Licenses. Keep each material License necessary to make, use or sell any
Collateral (including the manufacture, distribution or disposition of Inventory)
in full force and effect (other than any forfeiture, abandonment or dedication
to the public taken in the Ordinary Course of Business).

10.1.9 Future Subsidiaries. Promptly notify Agent upon any Person becoming a
Canadian Subsidiary or U.S. Subsidiary of Holdings and, if such Person is (a) a
U.S. Subsidiary (other than a U.S. Subsidiary of a Foreign Subsidiary), cause it
to guarantee the U.S. Facility Obligations and the Canadian Facility
Obligations, or (b) a Canadian Subsidiary, cause it to guarantee the Canadian
Facility Obligations, in each case, by execution and delivery of a joinder
agreement in form and substance reasonably acceptable to Agent, or otherwise in
form and substance satisfactory to Agent, and, whether a U.S. Subsidiary or
Canadian Subsidiary, cause such Subsidiary to execute and deliver such
documents, instruments and agreements and to take such other actions as Agent
shall reasonably require (other than, so long as no Event of Default shall have
occurred and be continuing, establishing Agent’s control over any Excluded
Deposit

 

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Account) to evidence and perfect a first priority security interest in and Lien
on all ABL Priority Collateral of such Person in favor of Agent, and to become a
party to this Agreement and the other applicable Loan Documents either as a
Borrower or a Guarantor, and Loan Party Agent shall deliver such legal opinions,
in form and substance consistent with those delivered on the Closing Date.

10.1.10 Post-Closing Matters. The U.S. Borrower shall, and shall cause each of
its Subsidiaries to, satisfy the requirements set forth on Schedule 10.1.10 on
or before the date thereon specified for such requirement, in each case as such
date may be extended by the Agent in its sole discretion by up to an additional
90 days, so long as the U.S. Borrower is working diligently in good faith to
complete, or cause its Subsidiaries to complete, the applicable requirement as
determined by the Agent in its sole discretion.

10.2 Negative Covenants. As long as any Commitments or Obligations (other than
indemnity obligations that are not currently due and payable) are outstanding,
each Loan Party jointly and severally with the other Loan Parties hereby agrees
not to, or to permit any Subsidiary to:

10.2.1 Permitted Debt. Create, incur, guarantee or suffer to exist any Debt,
except:

(a) the Obligations;

(b) Subordinated Debt;

(c) Permitted Purchase Money Debt;

(d) Borrowed Money (other than the Obligations, Subordinated Debt and Permitted
Purchase Money Debt), but only to the extent outstanding on the Closing Date and
not satisfied with proceeds of the initial Loans;

(e) Bank Product Debt and Debt arising out of services and products included in
the definition of “Bank Product” provided by any bank or financing institution
(other than a Lender) or for (and not in excess of the mark to market liability
under) any Hedging Agreement provided by any banking or financial institution
(other than a Lender), to the extent that such Hedging Agreement is permitted by
Section 10.2.4 and 10.2.13;

(f) Debt or other liability that is in existence when a Person becomes (or is
merged, consolidated, combined or amalgamated into) a Subsidiary or that is
secured by an asset when acquired by a Loan Party or Subsidiary, as long as such
Debt was not incurred in contemplation of such Person becoming (or merging,
consolidating, combining or amalgamating into) a Subsidiary or such acquisition;

(g) Permitted Contingent Obligations;

(h) Refinancing Debt as long as each Refinancing Condition is satisfied;

(i) Senior Note Debt of the U.S. Domiciled Loan Parties in an aggregate
principal amount not to exceed $450,000,000 minus any principal payments or
other reductions to principal made thereon or applied thereto, at any time
outstanding;

 

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(j) intercompany Debt among Holdings and its Subsidiaries to the extent
permitted by Sections 10.2.5(d) and (e);

(k) Debt of External Subsidiaries under lines of credit to any such External
Subsidiary from Persons other than Holdings or any of its Subsidiaries, the
proceeds of which Debt are used for such External Subsidiary’s working capital
and other general corporate purposes; provided that the aggregate principal
amount of all such Debt outstanding at any time for all such External
Subsidiaries (excluding refinancings thereof by the applicable Subsidiary or
another Subsidiary in the same country so long as such refinancings do not
increase the amount of the applicable Debt nor provide security not applicable
to such Debt upon the initial incurrence thereof) shall not exceed $50,000,000;

(l) Permitted Senior Secured Debt, provided that (1) the incurrence of such Debt
is permitted under the Senior Notes (as in effect on the Closing Date and
without respect to any “Suspended Covenant” provisions), (2) if applicable, a
Permitted Senior Secured Debt Intercreditor Agreement shall be entered into by
each Loan Party, Agent and the respective Permitted Senior Secured Debt
Collateral Agent and shall be in full force and effect and (3) the Loan Parties
shall have entered into such amendments or other modifications to this Agreement
as Agent shall have reasonably requested in connection with the incurrence of
such Debt and such documents shall be in full force and effect;

(m) additional secured Debt that is not included in any of the preceding clauses
of this Section and, provided that (1) the incurrence of such Debt is permitted
under the Senior Notes (as in effect on the Closing Date and without respect to
any “Suspended Covenant” provisions) and (2) the aggregate principal amount of
Debt outstanding under this clause (m) shall not to exceed $25,000,000 at any
time;

(n) additional unsecured Debt that is not included in any of the preceding
clauses of this Section and is not secured by a Lien so long as the Specified
Transaction Conditions applicable to the issuance of such Debt shall have been
satisfied in connection therewith;

(o) Debt of an External Subsidiary in connection with a Permitted
Securitization;

(p) Debt by and among one or more External Subsidiaries pursuant to any manual
or automatic cash pooling arrangement; provided that the pool shall have at all
times an aggregate cash position of at least U.S.$0, and it being understood
that Dutch BV (or other External Subsidiary) may, but shall not be required to,
act as an intermediary in respect of any such pool;

(q) Debt owed to any Person providing workers’ compensation, health, disability
or other employee benefits or property, casualty or liability insurance,
pursuant to reimbursement or indemnification obligations to such Person, in each
case incurred in the ordinary course of business;

(r) Debt arising from the honoring by a bank or other financial institution of a
check, draft or similar instrument drawn against insufficient funds in the
ordinary course of business, provided that such Debt is extinguished within five
Business Days of its incurrence;

 

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(s) Debt owed to any Person providing property, casualty or liability insurance
to the U.S. Borrower or any of its Subsidiaries, so long as such Debt shall not
be in excess of the amount of the unpaid cost of, and shall be incurred only to
defer the cost of, such insurance for the period in which such Debt is incurred
and such Debt shall be outstanding only during such period; and

(t) Debt existing on the Closing Date and set forth on Schedule 10.2.1(t).

10.2.2 Permitted Liens. Create or suffer to exist any Lien upon any of its
Property, except the following (collectively, “Permitted Liens”):

(a) Liens in favor of Agent;

(b) Purchase Money Liens securing Permitted Purchase Money Debt permitted
pursuant to Section 10.2.1(c);

(c) Liens for Taxes, rates, assessments or other governmental charges or levies
not yet due or being Properly Contested;

(d) statutory Liens (other than Liens for Taxes or imposed under ERISA and
analogous foreign legislation) arising in the Ordinary Course of Business, but
only if (i) payment of the obligations secured thereby is not yet due or is
being Properly Contested, (ii) such Liens do not materially impair the value or
use of any material Property or materially impair operation of the business of
any Loan Party or Subsidiary, and (iii) such Liens do not secure Borrowed Money;

(e) Liens (other than Liens on Inventory or Accounts) incurred or deposits made
in the Ordinary Course of Business to secure the performance of surety and
appeal bonds, performance bonds and other obligations of a like nature, tenders,
bids, leases, contracts (except those relating to Borrowed Money), statutory
obligations and other similar obligations, or arising as a result of progress
payments under government contracts;

(f) Liens arising in the Ordinary Course of Business by operation of law that
are subject to Collateral Access Agreements;

(g) Liens arising by virtue of a judgment or judicial order against any Loan
Party or Subsidiary, or any Property of a Loan Party or Subsidiary, as long as
such judgment or judicial order does not constitute an Event of Default and is
being Properly Contested;

(h) easements, rights-of-way, restrictions, covenants or other agreements of
record, and other similar charges or encumbrances on Real Estate (including,
without limiting the generality of the foregoing, licenses, easements,
rights-of-way and rights in the nature of easements for sidewalks, public ways,
sewers, drains, gas, steam and water mains or electric light and power, or
telephone and telegraph conduits, poles, wires and cables) and land use and
building restrictions, by-laws, regulations and ordinances of federal,
provincial, regional, state, municipal and other Governmental Authorities, minor
defects or irregularities of title and other similar encumbrances on real
property imposed by law, that do not interfere in any material respect with the
Ordinary Course of Business;

 

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(i) normal and customary rights of setoff upon deposits in favor of depository
institutions, and Liens of a collecting bank on Payment Items in the course of
collection;

(j) Liens on property of any Loan Party or its Subsidiaries with respect to Debt
permitted to be incurred under Section 10.2.1(l), including (with respect to any
such Debt) Liens on property of the U.S. Domiciled Loan Parties and/or Canadian
Domiciled Loan Parties constituting Collateral, other than the ABL Priority
Collateral, and to the extent requested by the holders thereof, second priority
Liens on the ABL Priority Collateral of the U.S. Domiciled Loan Parties and/or
Canadian Domiciled Loan Parties;

(k) Liens on property of any Loan Party or its Subsidiaries with respect to Debt
permitted to be incurred under Section 10.2.1(m), including (with respect to any
such Debt) Liens on property of the U.S. Domiciled Loan Parties and/or Canadian
Domiciled Loan Parties constituting Collateral, other than the ABL Priority
Collateral;

(l) Liens on assets of External Subsidiaries that secure Debt permitted to be
incurred by such External Subsidiaries pursuant to Section 10.2.1;

(m) Liens on cash or Cash Equivalents delivered as collateral for or as
pre-funding of (and, in each case, not to exceed the amount of) obligations
arising out of services and products included in the definition of “Bank
Product” provided by any bank or financing institution (other than a Lender) or
for (and not in excess of the mark to market liability under) any Hedging
Agreement provided by any banking or financial institution (other than a
Lender), to the extent that such Hedging Agreement is permitted by
Section 10.2.4 and 10.2.13;

(n) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
suppliers’ and other like Liens imposed by law (including Liens of customs and
revenue authorities to secure customs duties in connection with the importation
of goods), arising in the ordinary course of business and securing obligations
that are not overdue by more than 60 days or are being Properly Contested;

(o) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations;

(p) landlords’ and lessors’ and other like Liens in respect of rent not in
default or being Properly Contested and the rights of any tenant, occupant or
licensee under any lease, occupancy agreement or license which do not materially
impair the use of the real property subject thereto for the purpose for which it
is used by that Person;

(q) reservations, limitations, provisos and conditions expressed in any original
grant from a Canadian Governmental Authority or other grant of real or immovable
property, or interests therein;

(r) the right reserved to or vested in any Governmental Authority by the terms
of any lease, license, franchise, grant or permit acquired by that Person or by
any statutory provision to terminate any such lease, license, franchise, grant
or permit, or to require annual or other payments as a condition to the
continuance thereof;

 

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(s) Liens representing any interest or title of a licensor, lessor or
sub-licensor under any lease or license entered into by the U.S. Borrower or any
of its Subsidiaries in the ordinary course of business;

(t) Liens securing obligations in respect of trade-related letters of credit or
trade-related bankers acceptances issued in the ordinary course of business of
the U.S. Borrower and its Subsidiaries, in each case covering the goods (or the
documents of title in respect of such goods) financed by such letters of credit
or trade-related bankers acceptances and the proceeds and products thereof;

(u) Liens on securities held by the U.S. Borrower or any of its Subsidiaries
representing an interest in a joint venture to which the U.S. Borrower or such
Subsidiary is a party (provided that such joint venture is not a Subsidiary of
the U.S. Borrower) to the extent that (A) such Liens constitute purchase
options, calls or similar rights of a counterparty to such joint venture and
(B) such Liens are granted pursuant to the terms of the partnership agreement,
joint venture agreement or other similar document or documents pursuant to which
such joint venture was created or otherwise governing the rights and obligations
of the parties to such joint venture;

(v) Liens described on Schedule 10.2.2 which are existing on the Closing Date
and which are provided by the Reorganization Plans to be outstanding on the U.S.
Effective Date and on the Canadian Effective Date;

(w) Liens existing or deemed to exist on receivables and Related Assets in
connection with Permitted Securitizations;

(x) Liens in respect of cash pooling arrangements permitted pursuant to
Section 10.2.1(p);

(y) Liens on property of a Person existing at the time such Person is merged
into or consolidated or amalgamated with a Loan Party or any of its
Subsidiaries, or becomes a Subsidiary; provided that such Liens were not created
in contemplation of such merger, consolidation, amalgamation or Investment and
do not extend to any assets other than those of the Person merged into or
consolidated with or acquired by the Loan Party or any of its Subsidiaries, and
the applicable Debt secured by such Lien is permitted under Section 10.2.1(f);

(z) Liens in favor of customs authorities arising as a matter of Applicable Law
in the Ordinary Course of Business;

(aa) Liens arising with respect to precautionary filings of UCC financing
statements relating to leases of equipment or other Property;

(bb) Liens to secure any Refinancing Debt otherwise permitted to be incurred
hereunder;

(cc) The replacement, extension or renewal of any Lien permitted by clauses (b),
(v) and (y) above upon or in the same property of the Debt secured thereby; and

(dd) Liens securing Debt permitted by Section 10.2.1(s).

 

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For the avoidance of doubt, no statutory lien arising under Section 302, 303 or
4068 of ERISA or Section 412 or 430 of the Code shall be a Permitted Lien.

10.2.3 Distributions; Upstream Payments. Declare or make any Distributions,
except (i) Upstream Payments, (ii) Distributions made in connection with the
consummation of the Transactions, (iii) Distributions made in connection with
and pursuant to stock option plans or other benefit plans of management or
employees of the Loan Parties or any of their Subsidiaries including
compensation to (or as directed by) any director (or equivalent), in each case
as have been approved by the applicable board of directors (or equivalent),
(iv) Distributions by a Borrower to Holdings or a Subsidiary of a Borrower to
its Loan Party parent and, ultimately, to Holdings to the extent promptly used
by Holdings to pay any taxes that are due and payable by Holdings as part of a
consolidated, combined, unitary or similar group that includes the Loan Parties
or any of their Subsidiaries, (v) with respect to the New Preferred Stock, the
following shall be permitted: (A) any accompanying administrative cash payments
made in respect of fractional shares when dividend payments are made as
‘payment-in-kind’ and (B) any in-kind (non-cash) redemptions of New Preferred
Stock as required when dividend payments are made as ‘payment-in-kind’
(accompanied by the administrative replacement of such New Preferred Stock) and
(vi) other payments not exceeding $5,000,000 in the aggregate during any fiscal
year (which amounts, if not used, may be carried forward for one (1) fiscal
year).

10.2.4 Restricted Investments. Make any Restricted Investment.

10.2.5 Loans. Make any loans or other advances of money to any Person, except:

(a) advances to an officer or employee for salary, travel expenses, commissions
and similar items in the Ordinary Course of Business;

(b) prepaid expenses and extensions of trade credit made in the Ordinary Course
of Business;

(c) deposits with financial institutions permitted hereunder;

(d) unsecured loans by the Loan Parties or Subsidiaries thereof existing on the
Closing Date and set forth on Schedule 10.2.5; provided that any such loans by a
Loan Party are evidenced by a note which has been endorsed and pledged to Agent
on the Closing Date;

(e) intercompany loans and advances between and among Holdings and its
Subsidiaries, and/or between Subsidiaries of Holdings (collectively,
“Intercompany Loans”); provided that (I) at no time shall any such Intercompany
Loans be made pursuant to this clause (e) by the Loan Parties to External
Subsidiaries unless the Specified Transaction Conditions applicable to Internal
Specified Transaction clause (c) shall have been satisfied in connection
therewith, (II) any such Intercompany Loan made by a Loan Party to an External
Subsidiary shall be evidenced by an Intercompany Note which may be in the form
of a global intercompany note which shall be pledged to Agent to secure the
Obligations, and (III) each Intercompany Loan made to any Loan Party by an
External Subsidiary shall include (or, if not evidenced by an Intercompany Note,
the books and records of the respective parties shall note that such
Intercompany Loan shall be subject to) the subordination provisions attached as
Annex A to the form of Intercompany Note and (IV) any transfer of funds made as
payment for goods and services in the Ordinary Course of Business by any
Subsidiary of Holdings to any other any Subsidiary of Holdings shall be
permitted; and

 

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(f) other loans of a type not described in clauses (a) through (e) of this
definition and not otherwise prohibited by the terms of this Agreement or the
other Loan Documents so long as the applicable Specified Transaction Conditions
shall have been satisfied in connection therewith and such loan shall be
evidenced by a promissory note which in the case of any loans made by a Loan
Party shall be pledged to Agent to secure the Obligations.

10.2.6 Restrictions on Payment of Certain Debt. Make any payments (whether
voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or
acquisition) with respect to any Debt or Borrowed Money other than:

(a) the Obligations;

(b) with respect to any Subordinated Debt permitted hereunder, (i) regularly
scheduled payments of principal, interest and fees, but only to the extent
permitted under any subordination agreement relating to such Debt and
(ii) voluntary prepayments of Subordinated Debt so long as in the case of this
clause (ii), the applicable Specified Transaction Conditions have been satisfied
with respect thereto;

(c) (i) regularly scheduled payments of principal, interest and fees, and
mandatory prepayments of the Senior Note Debt and (ii) voluntary prepayments of
the Senior Note Debt so long as in the case of this clause (ii), the applicable
Specified Transaction Conditions have been satisfied with respect thereto;

(d) (i) regularly scheduled payments of principal, interest and fees, and
mandatory prepayments of the Permitted Senior Secured Debt and (ii) voluntary
prepayments of the Permitted Senior Secured Debt so long as in the case of this
clause (ii), the applicable Specified Transaction Conditions have been satisfied
with respect thereto;

(e) (i) regularly scheduled payments of principal, interest and fees, and
mandatory prepayments of any other Borrowed Money or Debt permitted pursuant to
Section 10.2.1 (other than the Obligations, Subordinated Debt, Senior Note Debt
or Permitted Senior Secured Debt), in each case, on but not prior to the due
date therefor (or for such portion or installment thereof then due) under the
agreements evidencing such Debt as in effect on the Closing Date (or as amended
thereafter with the consent of Agent) or refinanced in accordance with
Section 10.2.1(h), and (ii) voluntary prepayments of any other Borrowed Money or
Debt permitted pursuant to Section 10.2.1 (other than the Obligations,
Subordinated Debt, Senior Note Debt or Permitted Senior Secured Debt), in each
case, on but not prior to the due date therefor (or for such portion or
installment thereof then due) under the agreements evidencing such Debt as in
effect on the Closing Date (or as amended thereafter with the consent of Agent)
or refinanced in accordance with Section 10.2.1(h) so long as in the case of
this clause (ii), the applicable Specified Transaction Conditions have been
satisfied with respect thereto;

(f) payments of Intercompany Loans, so long as, with respect to payments made by
a Loan Party to an External Subsidiary on account of Loans extended by an
External Subsidiary to a Loan Party, the applicable Specified Transaction
Conditions have been satisfied with respect thereto; or

 

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(g) any payment made with the proceeds of any Debt incurred to refinance such
Debt, so long as the applicable Refinancing Conditions have been satisfied with
respect thereto.

10.2.7 Fundamental Changes.

(a) Merge, amalgamate, combine or consolidate with any Person, or liquidate,
wind up its affairs or dissolve itself, in each case whether in a single
transaction or in a series of related transactions, except for (so long as no
Event of Default then exists or would result therefrom and the Liens of Agent on
any Collateral is not adversely affected): (1) mergers, amalgamations,
combinations or consolidations of (i) any External Subsidiary with and into any
Person or any Person (other than a Loan Party) with and into any External
Subsidiary, (ii) any Person (in connection with a Acquisition permitted
hereunder) or Canadian Facility Loan Party (other than the Canadian Borrower or
a U.S. Facility Loan Party) with and into a Canadian Facility Loan Party (other
than the Canadian Borrower or a U.S. Facility Loan Party), so long as the
survivor of such transaction is a Canadian Facility Loan Party, (iii) any Person
(in connection with a Acquisition permitted hereunder) or U.S. Facility Loan
Party (other than the U.S. Borrower) with and into a U.S. Facility Loan Party
(other than the U.S. Borrower), so long as the survivor of such transaction is a
U.S. Facility Loan Party, (iv) (I) any Person (in connection with a Acquisition
permitted hereunder) with and into a Borrower or (II) any Loan Party with and
into a Borrower in the same Loan Party Group as such Loan Party, so long as, in
either case, such Borrower is the surviving entity, (2) mergers and combinations
on the Closing Date in connection with the release from escrow of proceeds of
the Senior Notes and (3) liquidations, dissolutions or discontinuation of the
business of (i) any External Subsidiary, (ii) a Canadian Domiciled Loan Party
(other than the Canadian Borrower), so long as all or substantially all of its
assets are transferred or otherwise Disposed of to another Canadian Domiciled
Loan Party, and (iii) a U.S. Facility Loan Party (other than the U.S. Borrower),
so long as all or substantially all of its assets are transferred or otherwise
Disposed of to another U.S. Domiciled Loan Party; provided that, in each case
set forth in this clause (a), Loan Party Agent shall, concurrently with the
delivery of financial information required pursuant to Section 10.1.2(b), notify
Agent of any of the forgoing which has occurred in the preceding month, and
shall take all actions reasonably requested by the Agent to ensure the Agent has
a perfected and continuing first priority security interest in and Lien on all
ABL Priority Collateral;

(b) in the case of any Loan Party: change its name or conduct business under any
fictitious name; change its tax, charter or other organizational identification
number; or change its form or state, province or jurisdiction of organization,
without giving Agent advance written notice thereof within 30 days (or such
lesser time as Agent shall reasonably agree), and shall in addition take all
actions reasonably requested by Agent to ensure Agent has a perfected and
continuing first priority security interest in and Lien on all ABL Priority
Collateral; or

(c) in the case of any Loan Party, have outstanding or issue any Disqualified
Equity Interests otherwise prohibited hereunder.

10.2.8 Subsidiaries.

(a) Own, form or acquire any Subsidiary unless the Loan Parties shall have
complied with Sections 10.1.9 (to the extent applicable) and 10.2.4 with respect
to all such newly formed or acquired Subsidiaries; or

 

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(b) permit Holdings to own, form or acquire any direct Subsidiary, other than
the U.S. Borrower.

10.2.9 Organic Documents. Amend, modify or otherwise change any of its Organic
Documents as in effect on the Closing Date in any manner materially adverse to
the Lenders; except that Holdings may amend such Organic Documents as necessary
to permit one or more issuances of preferred Equity Interests, so long as such
issuance is not otherwise prohibited hereunder and any applicable Specified
Transaction Conditions shall have been satisfied in connection therewith.

10.2.10 Tax Consolidation. File or consent to the filing of any consolidated
income tax return with any Person other than the Loan Parties and Subsidiaries.

10.2.11 Accounting Changes. Make any material change in accounting treatment or
reporting practices, except as required by GAAP and in accordance with
Section 1.2; or change its Fiscal Year.

10.2.12 Restrictive Agreements. Become a party to any Restrictive Agreement, or
create or suffer to exist any encumbrance or restriction on the ability of a
Loan Party to make any Distribution, except for (a) restrictions (i) under the
Loan Documents, (ii) under the Senior Note Documents or any Permitted
Refinancing thereof, (iii) under the Permitted Senior Secured Debt Documents so
long any restrictions or conditions contained therein are on prevailing market
terms for similar debt issuances (or terms more favorable to Holdings and its
Subsidiaries) or any Permitted Refinancing thereof and (iv) as required under
Applicable Law; (b) any Restrictive Agreement, encumbrance or restriction as in
effect on the Closing Date and set forth on Schedule 9.1.15 or which would
otherwise be in compliance with Section 9.1.15; (c) any restriction in any
Purchase Money Debt agreement insofar as it relates to granting Liens on such
Loan Party’s Properties securing such Purchase Money Debt permitted hereunder,
provided that such restrictions apply only to the assets subject to such
Purchase Money Debt; (d) customary non-assignment provisions with respect to
leases or licensing agreements entered into by the Loan Parties in the Ordinary
Course of Business; (e) any restriction or encumbrance with respect to any asset
of the Loan Parties imposed pursuant to an agreement which has been entered into
for the sale or disposition of such assets otherwise permitted under this
Agreement; (f) customary provisions in joint venture agreements and other
similar agreements entered into in the Ordinary Course of Business; and
(g) “equal and ratable” clauses in Debt permitted by Section 10.2.2.

10.2.13 Hedging Agreements. Enter into any Hedging Agreement, except to hedge
risks arising under the Loan Documents, the Senior Note Documents, the Permitted
Senior Secured Debt Documents or in the Ordinary Course of Business and, in any
case, not for speculative purposes.

10.2.14 Conduct of Business. Engage in any business, other than its business as
conducted on the Closing Date and reasonable extensions thereof and other
businesses reasonably incidental or related thereto (including relating to
manufacturing processes), and any activities incidental thereto.

10.2.15 Affiliate Transactions. Enter into or be party to any transaction with
an Affiliate, except (a) transactions contemplated by the Loan Documents and the
Senior Note Documents; (b) payment of reasonable compensation to officers and
employees for services

 

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actually rendered and as approved by the board of directors of the Person making
such payment; (c) loans and advances permitted by Section 10.2.5, Investments
permitted by Section 10.2.4, transactions permitted by Section 10.2.7 and
Distributions permitted by Section 10.2.3; (d) payment of customary outside
directors’ fees and customary directors’ indemnities as approved by the board of
directors of the Person making such payment; (e) transactions to the extent
expressly authorized hereunder, solely among (1) the Loan Parties, (2) the
External Subsidiaries and (3) between any Loan Party and External Subsidiary;
(f) transactions with Affiliates that were or are consummated in accordance with
the Reorganization Plans; and (g) transactions with Affiliates in the Ordinary
Course of Business, upon fair and reasonable terms fully disclosed to Agent (to
the extent such transactions are material) and no less favorable than would be
obtained in a comparable arm’s-length transaction with a non-Affiliate; provided
that this clause (g) shall not be deemed to authorize any transaction not
otherwise permitted hereunder or under any other Loan Document.

10.2.16 Plans. Establish, become party to, or admit any new participant into,
any Pension Plan, Canadian Pension Plan, Multiemployer Plan, Canadian
Multi-Employer Plan, Canadian Employee Plan or any Plan providing for medical or
life insurance benefits with respect to terminated or retired employees, other
than any in existence on the Closing Date to which any Loan Party or its
Affiliate or ERISA Affiliate is a party, or amend any Pension Plan, Canadian
Pension Plan, Multi-Employer Plan, Canadian Multi-Employer Plan, or any rights
or entitlements, or the actuarial assumptions used thereunder, in a manner that
would or would reasonably be expected to cause a material increase in any Loan
Party’s or its Affiliate’s or ERISA Affiliate’s liabilities thereunder
(contingent or otherwise), except and to the extent (i) required by Applicable
Laws or a collective bargaining agreement, (ii) as the direct result of the
consummation of any Permitted Acquisition or (iii) if consented to in writing by
Required Lenders or any such event could not reasonably be expected to
materially and adversely affect the Lenders.

10.2.17 Amendments to Senior Note Indenture. Amend, supplement or otherwise
modify any document, instrument or agreement relating to the Senior Note
Indenture (or any refinancing thereof otherwise permitted hereunder) if such
modification (a) increases the principal balance of such Debt (in excess, in the
case of any refinancing, of the amount specified therefor in the Refinancing
Conditions) of, or increases any required payment of principal or interest;
(b) accelerates the date on which any installment of principal or any interest
is due, or adds any additional redemption, put or prepayment provisions;
(c) shortens the final maturity date, the weighted average life to maturity or
otherwise accelerates or increases amortization; (d) increases the interest
rate; (e) increases or adds any material fees or charges or (f) modifies any
covenant in a manner or adds any representation, covenant or default that is
more onerous or restrictive in any material respect for any Loan Party or
Subsidiary, or that is otherwise adverse in any material respect to any Loan
Party, any Subsidiary or a Secured Party. Permit any Loan Party to have or
assume any liability (whether primarily or as a guarantor) for any amounts due
under any Senior Note Document unless such Person is or agrees to be similarly
liable (both in scope and amount) for the payment of the Obligations.

10.2.18 Plan Documents. After the entry of the U.S. Confirmation Order and the
Canadian Sanction Order, amend, supplement or otherwise modify any Plan Document
in an manner that would materially and adversely affect the rights of the Loan
Parties, Agent or the Secured Parties.

 

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10.2.19 Holding Company. Permit Holdings to (A) conduct any business, other than
the ownership of Equity Interests and the general administrative and corporate
duties for its Subsidiaries incidental to its ownership thereof, (B) incur or
suffer to exist any material liabilities or Debts (other that the Obligations
hereunder and “Obligations” under and as defined in the Senior Note Indenture
and the Permitted Senior Secured Debt Documents), (C) other than as set forth in
clause (A), own any material assets or (D) grant any Liens on its assets, other
than Liens in favor of Agent.

10.3 Financial Covenant. As long as any Commitments or Obligations (other than
indemnity obligations that are not currently due and payable) are outstanding:

10.3.1 Fixed Charge Coverage Ratio. Holdings and its Subsidiaries shall maintain
a Fixed Charge Coverage Ratio (as calculated on a consolidated basis) of at
least 1.1 to 1.0 for each Fixed Charge Coverage Ratio Test Period ending during
any Financial Covenant Trigger Period or immediately before the commencement of
any Financial Covenant Trigger Period.

SECTION 11. EVENTS OF DEFAULT; REMEDIES ON DEFAULT

11.1 Events of Default. Each of the following shall be an “Event of Default”
hereunder, if the same shall occur for any reason whatsoever, whether voluntary
or involuntary, by operation of law or otherwise:

(a) A Loan Party fails to (i) pay when and as required to be paid herein, any
amount of principal of any Loan or any reimbursement obligation under any drawn
Letter of Credit or deposit any funds as Cash Collateral in respect of LC
Obligations, or (ii) pay within three Business Days after the same becomes due,
any interest on any Loan or on any reimbursement obligation under any drawn
Letter of Credit, or (iii) pay within five Business Days after the same becomes
due, any other amount payable hereunder or under any other Loan Document;

(b) Any representation, warranty or other written statement of a Loan Party made
in connection with any Loan Documents or transactions contemplated thereby is
incorrect or misleading in any material respect when given;

(c) (x) A Loan Party breaches or fails to perform any covenant contained in
Sections 8.1, 10.1.3(d), 10.2 or 10.3, or (y) a Loan Party breaches or fails to
perform any covenant contained in Sections 8.2.4, 8.2.5, 8.6.2(a)(1) or (b) or
10.1.1(a), and such breach or failure as referenced in this clause (y) is not
cured within five (5) days after a Senior Officer of such Loan Party has
knowledge thereof or receives notice thereof from Agent, whichever is sooner;

(d) A Loan Party breaches or fails to perform any other covenant contained in
any Loan Documents, and such breach or failure is not cured within thirty
(30) days after a Senior Officer of such Loan Party has knowledge thereof or
receives notice thereof from Agent, whichever is sooner;

(e) A Guarantor repudiates, revokes or attempts to revoke, in writing, its
Guarantee; a Loan Party contests the validity or enforceability of any Loan
Document or any Obligations; or the perfection or priority of any Lien on any
material portion of the Collateral granted or purported to be granted to Agent
or any Loan Document ceases to be in full force or effect for any reason (other
than a waiver or release by Agent and Lenders, or on any Collateral for which
perfection is not required hereunder or under any Loan Document, or any action
solely in the control of Agent);

 

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(f) Any breach or default of a Loan Party occurs under any document, instrument
or agreement to which it is a party or by which it or any of its Properties is
bound, relating to any Debt (other than the Obligations) in excess of the Dollar
Equivalent of $25,000,000, if the effect of such breach or default is to permit
the holder or holders of such Debt to cause the maturity of such Debt to be
accelerated or demanded, or required to be repurchased or redeemed due to such
breach;

(g) Any judgment or order for the payment of money is entered against a Loan
Party in an amount that exceeds, individually or cumulatively with all
unsatisfied judgments or orders against all Loan Parties, the Dollar Equivalent
of $20,000,000 (in each case, net of any insurance coverage therefor which has
not been denied in writing), unless a stay of enforcement of such judgment or
order is in effect, by reason of a pending appeal (and, where applicable, the
posting of any necessary bond) or otherwise;

(h) A loss, theft, damage or destruction occurs with respect to any Collateral
if the amount not covered by insurance exceeds the Dollar Equivalent of
$20,000,000;

(i) Any Loan Party generally fails to pay or admits in writing its inability or
refusal to pay, in each case, its debts as they become due; an Insolvency
Proceeding is commenced by a Loan Party; a Loan Party agrees to, commences or is
subject to any liquidation, dissolution or winding up of its affairs (except as
permitted pursuant to Section 10.2.8); the Canadian Facility Loan Parties
(excluding the U.S. Facility Loan Parties), taken as a whole, or the U.S.
Facility Loan Parties, in each case taken as a whole, are not Solvent; a Loan
Party makes an offer of settlement, extension or composition to its unsecured
creditors generally; a trustee is appointed to take possession of any
substantial Property of or to operate any material portion of the business of a
Loan Party; or an Insolvency Proceeding is commenced against a Loan Party and
either (1) such Loan Party consents to institution of the proceeding, (2) the
petition commencing the proceeding is not timely contested by such Loan Party,
(3) the petition is not dismissed within sixty (60) days after filing, or (4) an
order for relief is entered in the proceeding;

(j) (i) (A) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan that has resulted or could reasonably be expected to result
in liability of a Loan Party or ERISA Affiliate to a Pension Plan, Multiemployer
Plan, the PBGC or IRS, or which would constitute or could reasonably be expected
to constitute grounds for appointment of a trustee for or termination by the
PBGC of any Pension Plan or Multiemployer Plan; (B) a Loan Party or ERISA
Affiliate fails to pay when due any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan;
(C) the “funding target attainment percentage” (within the meaning of Code
Section 430) (“FTAP”) for any plan year of a Pension Plan falls below the FTAP
of such Pension Plan as of the U.S. Effective Date; or (D) the amount of
unfunded post-retirement benefit liabilities, determined in accordance with ASC
715-60, that have resulted or could reasonably be expected to result in
liability of a Loan Party or its Affiliate or ERISA Affiliate increases relative
to the amount of such liabilities as of the Closing Date; (ii) (A) a Termination
Event shall occur or any Canadian Multi-Employer Plan shall be terminated, in
each case, in circumstances which would result or could reasonably be expected
to result in a Canadian Facility Loan Party being required to make a
contribution to or in respect of a Canadian Pension Plan or a Canadian
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appointment, by FSCO, of an administrator to wind up a Canadian Pension Plan;
(B) any Canadian Domiciled Loan Party is in default with respect to any required
contributions to a Canadian Pension Plan; or (C) any Lien arises (save for
contribution amounts not yet due) in connection with any Canadian Pension Plan,
provided the events set forth in clauses (i) and (ii), (whether or not in
existence as of the Closing Date), individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect;

(k) A Change of Control occurs;

(l) Any subordination provision in any Subordinated Debt in a principal amount
of $25,000,000, or any subordination provision in any Guarantee by any Loan
Party of any Subordinated Debt, shall cease to be in full force and effect, or
any Loan Party shall contest in any manner the validity, binding nature or
enforceability of any such provision or a proceeding shall be commenced by any
subordinating party or any Governmental Authority having jurisdiction over any
of them, seeking to establish the invalidity or unenforceability thereof; or

(m) At any time that any Permitted Senior Secured Debt is outstanding, the
Permitted Senior Secured Debt Intercreditor Agreement shall cease to be in full
force or effect (except in accordance with its terms) or any of the Loan Parties
or the Permitted Senior Secured Debt Collateral Agent shall challenge, deny or
disaffirm their respective obligations theretunder.

11.2 Remedies upon Default. If an Event of Default described in Section 11.1(i)
occurs and is continuing with respect to any Loan Party, then to the extent
permitted by Applicable Law, all Obligations shall become automatically due and
payable and all Commitments shall terminate, without any action by Agent or
notice of any kind. In addition, or if any other Event of Default exists, Agent
may in its discretion (and shall upon written direction of Required Lenders) do
any one or more of the following from time to time: declare any Obligations
immediately due and payable, whereupon they shall be due and payable without
diligence, presentment, demand, protest or notice of any kind, all of which are
hereby waived by the Loan Parties to the fullest extent permitted by law;
terminate, reduce or condition any Commitment, or make any adjustment to the
Borrowing Base; require the Loan Parties to Cash Collateralize LC Obligations
and Bank Product Debt, and, if the Loan Parties fail promptly to deposit such
Cash Collateral, Agent may (and shall upon the direction of Required Lenders)
advance the required Cash Collateral as Loans (whether or not an Overadvance
exists or is created thereby, or the conditions in Section 6 are satisfied); and
exercise any other rights or remedies afforded under any agreement, by law, at
equity or otherwise, including the rights and remedies of a secured party under
the UCC and the PPSA. Such rights and remedies include the rights to (i) take
possession of any Collateral; (ii) require the Loan Parties to assemble
Collateral, at the Loan Parties’ expense, and make it available to Agent at a
place designated by Agent; (iii) enter any premises where Collateral is located
and store Collateral on such premises until sold (and if the premises are owned
or leased by a Loan Party, the Loan Parties agree not to charge for such
storage); and (iv) sell or otherwise dispose of any Collateral in its then
condition, or after any further manufacturing or processing thereof, at public
or private sale, with such notice as may be required by Applicable Law, in lots
or in bulk, at such locations, all as Agent, in its discretion, deems advisable.
Each Loan Party agrees that ten (10) days notice of any proposed sale or other
disposition of Collateral by Agent shall be reasonable. Agent shall have the
right to conduct such sales on any Loan Party’s premises, without charge, and
such sales may be adjourned from time to time in accordance with Applicable Law.
Agent shall have the right to sell, lease or otherwise dispose of any Collateral
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Agent may purchase any Collateral at public or, if permitted by law, private
sale and, in lieu of actual payment of the purchase price, may set off the
amount of such price against the Obligations.

11.3 License. Effective upon the occurrence and during the continuance of an
Event of Default, Agent is hereby granted an irrevocable, worldwide,
non-exclusive right and license, including the right to sub-license (without
payment of Royalty or other compensation to any Person) under any and all
Intellectual Property owned or sublicensable by the Loan Parties, including
computer hardware and software, trade secrets, brochures, customer lists,
promotional and advertising materials, labels, packaging materials and other
Property, to use and exercise all other rights under such Intellectual Property
in connection with advertising for sale, marketing, selling, collecting, making,
having made, completing manufacture of, or otherwise exercising any rights or
remedies with respect to, any Collateral. Each Loan Party’s rights and interests
under such Intellectual Property, and Agent’s use thereof under this Section,
shall inure solely to such Loan Party’s benefit. With respect to any trademarks
or similar Property included in the license granted hereunder, Agent shall
ensure that the quality of the goods and services with which it uses such
trademark or similar Property shall be consistent with the quality of the goods
and services as manufactured, marketed and sold by the Loan Parties.

11.4 Setoff. At any time after the occurrence and during the continuance of an
Event of Default, Agent, Issuing Banks, Lenders, and any of their Affiliates are
authorized, to the fullest extent permitted by Applicable Law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final, in whatever currency) at any time held and other obligations (in whatever
currency) at any time owing by Agent, such Issuing Bank, such Lender or such
Affiliate to or for the credit or the account of a Loan Party against any
Obligations then due, irrespective of whether or not Agent, such Issuing Bank,
such Lender or such Affiliate shall have made any demand under this Agreement or
any other Loan Document and although such Obligations may be contingent or
unmatured or are owed to a branch or office of Agent, such Issuing Bank, such
Lender or such Affiliate different from the branch or office holding such
deposit or obligated on such indebtedness. The rights of Agent, each Issuing
Bank, each Lender and each such Affiliate under this Section 11.4 are in
addition to other rights and remedies (including other rights of setoff) that
such Person may have.

11.5 Remedies Cumulative; No Waiver.

11.5.1 Cumulative Rights. All agreements, warranties, guarantees, indemnities
and other undertakings of the Loan Parties under the Loan Documents are
cumulative and not in derogation of each other. The rights and remedies of Agent
and Lenders are cumulative, may be exercised at any time and from time to time,
concurrently or in any order, and are not exclusive of any other rights or
remedies available by agreement, by law, at equity or otherwise. All such rights
and remedies shall continue in full force and effect until Full Payment of all
Obligations.

11.5.2 Waivers. No waiver or course of dealing shall be established by (a) the
failure or delay of Agent or any Lender to require strict performance by the
Loan Parties with any terms of the Loan Documents, or to exercise any rights or
remedies with respect to Collateral or otherwise; (b) the making of any Loan or
issuance of any Letter of Credit during a Default, Event of Default or other
failure to satisfy any conditions precedent; or (c) acceptance by Agent or any
Lender of any payment or performance by a Loan Party under any Loan Documents in
a manner other than that specified therein. It is expressly acknowledged by the
Loan Parties that any failure to satisfy a financial covenant on a measurement
date shall not be cured or remedied by satisfaction of such covenant on a
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11.6 Judgment Currency. If, for the purpose of obtaining judgment in any court
or obtaining an order enforcing a judgment, it becomes necessary to convert any
amount due under this Agreement in Dollars or in any other currency (hereinafter
in this Section 11.6 called the “first currency”) into any other currency
(hereinafter in this Section 11.6 called the “second currency”), then the
conversion shall be made at Agent’s spot rate of exchange for buying the first
currency with the second currency prevailing at Agent’s close of business on the
Business Day next preceding the day on which the judgment is given or (as the
case may be) the order is made. Any payment made by a Loan Party to any Secured
Party pursuant to this Agreement in the second currency shall constitute a
discharge of the obligations of any applicable Loan Parties to pay to such
Secured Party any amount originally due to the Secured Party in the first
currency under this Agreement only to the extent of the amount of the first
currency which such Secured Party is able, on the date of the receipt by it of
such payment in any second currency, to purchase, in accordance with such
Secured Party’s normal banking procedures, with the amount of such second
currency so received. If the amount of the first currency falls short of the
amount originally due to such Secured Party in the first currency under this
Agreement, the Loan Parties agree that they will indemnify each Secured Party
against and save such Secured Party harmless from any shortfall so arising. This
indemnity shall constitute an obligation of each such Loan Party separate and
independent from the other obligations contained in this Agreement, shall give
rise to a separate and independent cause of action and shall continue in full
force and effect notwithstanding any judgment or order for a liquidated sum or
sums in respect of amounts due to any Secured Party under any Loan Documents or
under any such judgment or order. Any such shortfall shall be deemed to
constitute a loss suffered by such Secured Party and the Loan Parties shall not
be entitled to require any proof or evidence of any actual loss. If the amount
of the first currency exceeds the amount originally due to a Secured Party in
the first currency under this Agreement, such Secured Party shall promptly remit
such excess to the Loan Parties. The covenants contained in this Section 11.6
shall survive the Full Payment of the Obligations under this Agreement.

SECTION 12. AGENT

12.1 Appointment, Authority and Duties of Agent.

12.1.1 Appointment and Authority.

(a) Each Lender appoints and designates Bank of America as Agent hereunder.
Agent may, and each Lender authorizes Agent to, enter into all Loan Documents to
which Agent is intended to be a party and accept all Security Documents, for
Agent’s benefit and the Pro Rata benefit of the Secured Parties. Each Lender
agrees that any action taken by Agent, Required Facility Lenders or Required
Lenders in accordance with the provisions of the Loan Documents, and the
exercise by Agent or Required Lenders of any rights or remedies set forth
therein, together with all other powers reasonably incidental thereto, shall be
authorized by and binding upon all Lenders. Without limiting the generality of
the foregoing, Agent shall have the sole and exclusive authority to (a) act as
the disbursing and collecting agent for Lenders with respect to all payments and
collections arising in connection with the Loan Documents; (b) execute and
deliver as Agent each Loan Document, including any intercreditor or
subordination agreement, and accept delivery of each Loan Document from any Loan
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(c) act as collateral agent for Secured Parties for purposes of perfecting and
administering Liens under the Loan Documents, and for all other purposes stated
therein; (d) manage, supervise or otherwise deal with Collateral; and (e) take
any Enforcement Action or otherwise exercise any rights or remedies with respect
to any Collateral under the Loan Documents, Applicable Law or otherwise. The
duties of Agent shall be ministerial and administrative in nature, and Agent
shall not have a fiduciary relationship with any Lender, Secured Party,
Participant or other Person, by reason of any Loan Document or any transaction
relating thereto. Agent alone shall be authorized to determine whether any
Accounts or Inventory constitute Eligible Accounts or Eligible Inventory, or
whether to impose or release any reserve, and to exercise its Permitted
Discretion in connection therewith, which determinations and judgments, if
exercised in good faith, shall exonerate Agent from liability to any Lender or
other Person for any error in judgment.

(b) For the purposes of creating a solidarité active in accordance with Article
1541 of the Civil Code of Québec between each Secured Party, taken individually,
on the one hand, and Agent, on the other hand, each Loan Party and each such
Secured Party acknowledge and agree with Agent that such Secured Party and Agent
are hereby conferred the legal status of solidary creditors of each such Loan
Party in respect of all Obligations owed by each such Loan Party to Agent and
such Secured Party hereunder and under the other Loan Documents (collectively,
the “Solidary Claim”) and that, accordingly, but subject (for the avoidance of
doubt) to Article 1542 of the Civil Code of Québec, each such Loan Party is
irrevocably bound towards Agent and each Secured Party in respect of the entire
Solidary Claim of Agent and such Secured Party. As a result of the foregoing,
the parties hereto acknowledge that Agent and each Secured Party shall at all
times have a valid and effective right of action for the entire Solidary Claim
of Agent and such Secured Party and the right to give full acquittance for it.
Accordingly, and without limiting the generality of the foregoing, Agent, as
solidary creditor with each Secured Party, shall at all times have a valid and
effective right of action in respect of the Solidary Claim and the right to give
a full acquittance for same. By its execution of the Loan Documents to which it
is a party, each such Loan Party not a party hereto shall also be deemed to have
accepted the stipulations hereinabove provided. The parties further agree and
acknowledge that such Liens (hypothecs) under the Security Documents and the
other Loan Documents shall be granted to Agent, for its own benefit and for the
benefit of the Secured Parties, as solidary creditor as hereinabove set forth.

12.1.2 Duties. Agent shall not have any duties except those expressly set forth
in the Loan Documents. The conferral upon Agent of any right shall not imply a
duty on Agent’s part to exercise such right, unless instructed to do so by
Required Lenders or Required Facility Lenders in accordance with this Agreement.

12.1.3 Agent Professionals. Agent may perform its duties through agents and
employees. Agent may consult with and employ Agent Professionals, and shall be
entitled to act upon, and shall be fully protected in any action taken in good
faith reliance upon, any advice given by an Agent Professional. Agent shall not
be responsible for the negligence or misconduct of any agents, employees or
Agent Professionals selected by it with reasonable care.

12.1.4 Instructions of Required Lenders. The rights and remedies conferred upon
Agent under the Loan Documents may be exercised without the necessity of joinder
of any other party, unless required by Applicable Law. Agent may request
instructions from Required Lenders or Required Facility Lenders with respect to
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connection with any Loan Documents, and may seek assurances to its satisfaction
from Lenders of their indemnification obligations under Section 12.6 against all
Claims that could be incurred by Agent in connection with any act. Agent shall
be entitled to refrain from any act until it has received such instructions or
assurances, and Agent shall not incur liability to any Person by reason of so
refraining. Instructions of Required Lenders or Required Facility Lenders shall
be binding upon all Lenders, and no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
in accordance with the instructions of Required Lenders or Required Facility
Lenders. Notwithstanding the foregoing, instructions by and consent of all
Lenders shall be required in the circumstances described in Section 14.1.1,
(except as otherwise specified in such Section) and in no event shall Required
Lenders or Required Facility Lenders, without the prior written consent of each
Lender, direct Agent to accelerate and demand payment of Loans held by one
Lender without accelerating and demanding payment of all other Loans, nor to
terminate the Commitments of one Lender without terminating the Commitments of
all Lenders. In no event shall Agent be required to take any action that, in its
opinion, is contrary to Applicable Law or any Loan Documents or could subject
any Agent Indemnitee to personal liability.

12.2 Agreements Regarding Collateral and Field Examination Reports.

12.2.1 Lien Releases; Care of Collateral.

(a) Canadian Lenders (i) authorize Agent to, and Agent shall, release any Lien
or guarantee with respect to any Canadian Facility Collateral (a) upon Full
Payment of the Canadian Facility Obligations; (b) that is the subject of an
Asset Disposition, merger, amalgamation or other combination or transaction, or
a Lien which Loan Party Agent certifies in writing to Agent is not prohibited
hereunder (and Agent may rely conclusively on any such certificate without
further inquiry); or (c) with the written consent of all Canadian Lenders (or
such lesser number as may be required by Section 14.1) and (ii) authorize Agent
to, and upon Agent’s reasonable determination of the appropriateness to do so,
Agent shall, subordinate their Liens to any Purchase Money Lien permitted
hereunder.

(b) U.S. Lenders (i) authorize Agent to, and Agent shall, release any Lien or
guarantee with respect to any U.S. Facility Collateral (a) upon Full Payment of
the U.S. Facility Obligations; (b) that is the subject of an Asset Disposition
which Loan Party Agent certifies in writing to Agent is not prohibited hereunder
(and Agent may rely conclusively on any such certificate without further
inquiry); (c) with the written consent of all U.S. Lenders or such lesser number
as may be required by Section 14.1) and (ii) authorize Agent to, and upon
Agent’s reasonable determination of the appropriateness to do so, Agent shall,
subordinate their Liens to any Purchase Money Lien permitted hereunder.

(c) Agent shall have no obligation to assure that any Collateral exists or is
owned by a Loan Party, or is cared for, protected, insured or encumbered, nor to
assure that Agent’s Liens have been properly created, perfected or enforced, or
are entitled to any particular priority, nor to exercise any duty of care with
respect to any Collateral.

12.2.2 Possession of Collateral.

(a) Agent and Canadian Lenders appoint each Canadian Lender as agent (for the
benefit of Canadian Facility Secured Parties) for the purpose of perfecting
Liens in any Canadian Facility Collateral held or controlled by such Canadian
Lender, to the extent such Liens are perfected by possession or control.

 

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(b) Agent and U.S. Lenders appoint each U.S. Lender as agent (for the benefit of
U.S. Facility Secured Parties) for the purpose of perfecting Liens in any U.S.
Facility Collateral held or controlled by such U.S. Lender, to the extent such
Liens are perfected by possession or control.

(c) If any Lender obtains possession or control of any Collateral, it shall
notify Agent thereof and, promptly upon Agent’s request, deliver such Collateral
to Agent or otherwise deal with it in accordance with Agent’s instructions.

12.2.3 Reports. Agent shall promptly forward to each Applicable Lender, when
complete, copies of any field audit, examination or appraisal report prepared by
or for Agent with respect to any Loan Party or Collateral (“Report”). Each
Lender agrees (a) that neither Bank of America nor Agent makes any
representation or warranty as to the accuracy or completeness of any Report, and
shall not be liable for any information contained in or omitted from any Report;
(b) that the Reports are not intended to be comprehensive audits or
examinations, and that Agent or any other Person performing any audit or
examination will inspect only specific information regarding Obligations or the
Collateral and will rely significantly upon the applicable Loan Parties’ books
and records as well as upon representations of the applicable Loan Parties’
officers and employees; and (c) to keep all Reports confidential and strictly
for such Lender’s internal use, and not to distribute any Report (or the
contents thereof) to any Person (except to such Lender’s Participants, attorneys
and accountants) or use any Report in any manner other than administration of
the Loans and other Obligations. Each Lender agrees to indemnify and hold
harmless Agent and any other Person preparing a Report from any action such
Lender may take as a result of or any conclusion it may draw from any Report, as
well as from any Claims arising as a direct or indirect result of Agent
furnishing a Report to such Lender.

12.3 Reliance By Agent. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any certification, notice or other communication
(including those by telephone, telex, telegram, telecopy or e-mail) believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person, and upon the advice and statements of Agent Professionals.

12.4 Action Upon Default. Agent shall not be deemed to have knowledge of any
Default or Event of Default unless it has received written notice from a Lender
or Loan Party Agent specifying the occurrence and nature thereof. If any Lender
acquires knowledge of a Default or Event of Default, it shall promptly notify
Agent and the other Lenders thereof in writing. Each Lender agrees that, except
as otherwise provided in any Loan Documents or with the written consent of Agent
and Required Lenders, it will not take any Enforcement Action, accelerate
Obligations under any Loan Documents, or exercise any right that it might
otherwise have under Applicable Law to credit bid at foreclosure sales, UCC or
PPSA sales or other similar dispositions of Collateral. Notwithstanding the
foregoing, however, a Lender may take action to preserve or enforce its rights
against a Loan Party where a deadline or limitation period is applicable that
would, absent such action, bar enforcement of Obligations held by such Lender,
including the filing of proofs of claim in an Insolvency Proceeding.

 

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12.5 Ratable Sharing. If any Lender shall obtain any payment or reduction of any
Obligation, whether through set-off or otherwise, in excess of its share of such
Obligation, determined on a Pro Rata basis or in accordance with Section 5.5.1,
as applicable, such Lender shall forthwith purchase from Agent, the applicable
Issuing Bank and the other Applicable Lenders such participations in the
affected Obligation as are necessary to cause the purchasing Lender to share the
excess payment or reduction on a Pro Rata basis or in accordance with
Section 5.5.1, as applicable. If any of such payment or reduction is thereafter
recovered from the purchasing Lender, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest. No
Lender shall set off against any DACA Deposit Account or Dominion Account
without the prior consent of Agent. Notwithstanding anything to the contrary
contained herein, the provisions of this Section 12.5 shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Lenders that are not Defaulting Lenders as opposed to
Defaulting Lenders.

12.6 Indemnification of Agent Indemnitees. EXCEPT FOR LOSSES DETERMINED IN A
FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO RESULT
FROM AN AGENT INDEMNITEE’S ACTUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS
DETERMINED BY A FINAL, NON-APPEALABLE JUDGMENT OF A COURT OF COMPETENT
JURISDICTION, EACH LENDER SHALL INDEMNIFY AND HOLD HARMLESS AGENT INDEMNITEES,
TO THE EXTENT NOT REIMBURSED BY THE LOAN PARTIES (BUT WITHOUT LIMITING THE
INDEMNIFICATION OBLIGATIONS OF THE LOAN PARTIES UNDER ANY LOAN DOCUMENTS), ON A
PRO RATA BASIS, AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST
ANY AGENT INDEMNITEE, PROVIDED THE CLAIM RELATES TO OR ARISES FROM AN AGENT
INDEMNITEE ACTING AS OR FOR AGENT (IN ITS CAPACITY AS AGENT). In Agent’s
discretion, it may reserve for any such Claims made against an Agent Indemnitee,
and may satisfy any judgment, order or settlement relating thereto, from
proceeds of Collateral prior to making any distribution of Collateral proceeds
to Lenders. If Agent is sued by any Creditor Representative,
debtor-in-possession or other Person for any alleged preference or fraudulent
transfer, then any monies paid by Agent in settlement or satisfaction of such
proceeding, together with all interest, costs and expenses (including attorneys’
fees) incurred in the defense of same, shall be promptly reimbursed to Agent by
each Lender to the extent of its Pro Rata share.

12.7 Limitation on Responsibilities of Agent. Agent shall not be liable to
Lenders for any action taken or omitted to be taken under the Loan Documents,
except for losses determined in a final, non-appealable judgment by a court of
competent jurisdiction to result from Agent’s actual gross negligence or willful
misconduct. Agent does not assume any responsibility for any failure or delay in
performance or any breach by any Loan Party or Lender of any obligations under
the Loan Documents. Agent does not make to Lenders any express or implied
warranty, representation or guarantee with respect to any Obligations,
Collateral, Loan Documents or Loan Party. No Agent Indemnitee shall be
responsible to Lenders for any recitals, statements, information,
representations or warranties contained in any Loan Documents; the execution,
validity, genuineness, effectiveness or enforceability of any Loan Documents;
the genuineness, enforceability, collectability, value, sufficiency, location or
existence of any Collateral, or the validity, extent, perfection or priority of
any Lien therein; the validity, enforceability or collectability of any
Obligations; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any Loan Party or
Account Debtor. No Agent Indemnitee shall have any obligation to any Lender to
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into the existence of any Default or Event of Default, the observance or
performance by any Loan Party of any terms of the Loan Documents, or the
satisfaction of any conditions precedent contained in any Loan Documents.

12.8 Successor Agent and Co-Agents.

12.8.1 Resignation; Successor Agent. Subject to the appointment and acceptance
of a successor Agent as provided below, Agent may resign at any time by giving
at least thirty (30) days written notice thereof to Lenders and Loan Party Agent
Upon receipt of such notice, Required Lenders shall have the right to appoint a
successor Agent which shall be (a) a U.S. Lender or an Affiliate of a U.S.
Lender; or (b) a commercial bank that is organized under the laws of the United
States or any state or district thereof, has a combined capital surplus of at
least $200,000,000 and (provided no Event of Default exists) is reasonably
acceptable to Loan Party Agent. If no successor agent is appointed prior to the
effective date of the resignation of Agent, then Agent may appoint a successor
agent from among Lenders. Upon acceptance by a successor Agent of an appointment
to serve as Agent hereunder, such successor Agent shall thereupon succeed to and
become vested with all the powers and duties of the retiring Agent without
further act, and the retiring Agent shall be discharged from its duties and
obligations hereunder but shall continue to have the benefits of the
indemnification set forth in Sections 12.6 and 14.2. Notwithstanding any Agent’s
resignation, the provisions of this Section 12 shall continue in effect for its
benefit with respect to any actions taken or omitted to be taken by it while
Agent. Any successor to Bank of America by merger, combination, amalgamation or
consolidation, or acquisition of stock shall continue to be Agent hereunder
without further act on the part of the parties hereto, unless such successor
resigns as provided above.

12.8.2 Separate Collateral Agent. It is the intent of the parties that there
shall be no violation of any Applicable Law denying or restricting the right of
financial institutions to transact business in any jurisdiction. If Agent
believes that it may be limited in the exercise of any rights or remedies under
the Loan Documents due to any Applicable Law, Agent may appoint an additional
Person who is not so limited, as a separate collateral agent or co-collateral
agent. If Agent so appoints a collateral agent or co-collateral agent, each
right and remedy intended to be available to Agent under the Loan Documents
shall also be vested in such separate agent. Every covenant and obligation
necessary to the exercise thereof by such agent shall run to and be enforceable
by it as well as Agent. Lenders shall execute and deliver such documents as
Agent deems appropriate to vest any rights or remedies in such agent. If any
collateral agent or co-collateral agent shall die or dissolve, become incapable
of acting, resign or be removed, then all the rights and remedies of such agent,
to the extent permitted by Applicable Law, shall vest in and be exercised by
Agent until appointment of a new agent.

12.9 Due Diligence and Non-Reliance. Each Lender acknowledges and agrees that it
has, independently and without reliance upon Agent or any other Lenders, and
based upon such documents, information and analyses as it has deemed
appropriate, made its own credit analysis of each Loan Party and its own
decision to enter into this Agreement and to fund Loans and participate in LC
Obligations hereunder. Each Lender has made such inquiries concerning the Loan
Documents, the Collateral and each Loan Party as such Lender feels necessary.
Each Lender further acknowledges and agrees that the other Lenders and Agent
have made no representations or warranties concerning any Loan Party, any
Collateral or the legality, validity, sufficiency or enforceability of any Loan
Documents or Obligations. Each Lender will, independently and without reliance
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financial statements, documents and information as it deems appropriate at the
time, continue to make and rely upon its own credit decisions in making Loans
and participating in LC Obligations, and in taking or refraining from any action
under any Loan Documents. Except for notices, reports and other information
expressly requested by a Lender, Agent shall have no duty or responsibility to
provide any Lender with any notices, reports or certificates furnished to Agent
by any Loan Party or any credit or other information concerning the affairs,
financial condition, business or Properties of any Loan Party (or any of its
Affiliates) which may come into possession of Agent or any of Agent’s
Affiliates.

12.10 Replacement of Certain Lenders. If a Lender (a) is a Defaulting Lender,
(b) fails to give its consent to any amendment, waiver or action for which
consent of all Lenders or the Supermajority Required Facility Lenders was
required, and Required Lenders, or Required Facility Lenders, as applicable,
have consented, or (c) gives notice under Section 3.5 or requests compensation
under Section 3.7, or if either Borrower is required to pay additional amounts
or indemnity payments with respect to a Lender under Section 5.8, then, in
addition to any other rights and remedies that any Person may have, Agent or
Loan Party Agent may, by notice to such Lender within one hundred twenty
(120) days after such event (or within one hundred twenty (120) days after
receipt of a notice from such Lender claiming indemnity payments under
Section 5.8), require such Lender to assign all of its rights and obligations
under the Loan Documents to Eligible Assignee(s) specified by Agent or Loan
Party Agent, pursuant to appropriate Assignment and Acceptance(s) and within
twenty (20) days after Agent’s or Loan Party Agent’s notice, as applicable.
Agent is irrevocably appointed as attorney-in-fact to execute any such
Assignment and Acceptance if Lender fails to execute same. Such Lender shall be
entitled to receive, in cash, concurrently with such assignment, all amounts
owed to it under the Loan Documents, including all principal, interest and fees
through the date of assignment but excluding any prepayment charge.

12.11 Remittance of Payments and Collections.

12.11.1 Remittances Generally. All payments by any Lender to Agent shall be made
by the time and on the day set forth in this Agreement, in immediately available
funds. If no time for payment is specified or if payment is due on demand by
Agent and request for payment is made by Agent by 11:00 a.m. on a Business Day,
payment shall be made by Lender not later than 2:00 p.m. on such day, and if
request is made after 11:00 a.m., then payment shall be made by 11:00 a.m. on
the next Business Day. Payment by Agent to any Lender shall be made by wire
transfer, in the type of funds received by Agent. Any such payment shall be
subject to Agent’s right of offset for any amounts due from such Lender under
the Loan Documents.

12.11.2 Failure to Pay. If any Lender fails to pay any amount when due by it to
Agent pursuant to the terms hereof, such amount shall bear interest from the due
date until paid at the rate determined by Agent as customary in the banking
industry for interbank compensation. In no event shall the Loan Parties be
entitled to receive credit for any interest paid by a Lender to Agent, nor shall
any Defaulting Lender be entitled to interest on any amounts held by Agent
pursuant to Section 4.2.

12.11.3 Recovery of Payments. If Agent pays any amount to a Lender in the
expectation that a related payment will be received by Agent from a Loan Party
and such related payment is not received, then Agent may recover such amount
from each Lender that received it.

 

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If Agent determines at any time that an amount received under any Loan Document
must be returned to a Loan Party or paid to any other Person pursuant to
Applicable Law or otherwise, then, notwithstanding any other term of any Loan
Document, Agent shall not be required to distribute such amount to any Lender.
If any amounts received and applied by Agent to any Obligations are later
required to be returned by Agent pursuant to Applicable Law, each Lender shall
pay to Agent, on demand, such Lender’s Pro Rata share of the amounts required to
be returned.

12.12 Agent in its Individual Capacity. As a Lender, Bank of America shall have
the same rights and remedies under the Loan Documents as any other Lender, and
the terms “Lenders,” “Required Lenders”, “Required Facility Lenders” or any
similar term shall include Bank of America in its capacity as a Lender. Each of
Bank of America and its Affiliates may accept deposits from, maintain deposits
or credit balances for, invest in, lend money to, provide Bank Products to, act
as trustee under indentures of, serve as financial or other advisor to, and
generally engage in any kind of business with, the Loan Parties and their
Affiliates, as if Bank of America were any other bank, without any duty to
account therefor (including any fees or other consideration received in
connection therewith) to the other Lenders. In their individual capacity, Bank
of America and its Affiliates may receive information regarding the Loan
Parties, their Affiliates and their Account Debtors (including information
subject to confidentiality obligations), and each Lender agrees that Bank of
America and its Affiliates shall be under no obligation to provide such
information to Lenders, if acquired in such individual capacity and not as Agent
hereunder.

12.13 Agent Titles. Each Lender, other than Bank of America, that is designated
(on the cover page of this Agreement or otherwise) by Bank of America as an
“Agent” or “Arranger” of any type shall not have any right, power,
responsibility or duty under any Loan Documents other than those applicable to
all Lenders, and shall in no event be deemed to have any fiduciary relationship
with any other Lender.

12.14 No Third Party Beneficiaries. This Section 12 (other than Section 12.2.1,
12.8 and 12.10) is an agreement solely among Lenders and Agent, and shall
survive Full Payment of the Obligations. This Section 12 (other than
Section 12.2.1, 12.8 and 12.10) does not confer any rights or benefits upon the
Loan Parties or any other Person. As between the Loan Parties and Agent, any
action that Agent may take under any Loan Documents or with respect to any
Obligations shall be conclusively presumed to have been authorized and directed
by Lenders.

SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS

13.1 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Loan Parties, Agent, Lenders, and their respective successors
and assigns, except that (a) no Loan Party (other than pursuant to a transaction
permitted under Section 10.2.7(a)) shall have the right to assign its rights or
delegate its obligations under any Loan Documents; and (b) any assignment by a
Lender must be made in compliance with Section 13.3. Agent may treat the Person
which made any Loan as the owner thereof for all purposes until such Person
makes an assignment in accordance with Section 13.3. Any authorization or
consent of a Lender shall be conclusive and binding on any subsequent transferee
or assignee of such Lender.

 

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13.2 Participations.

13.2.1 Permitted Participants; Effect. Any Lender may, in the ordinary course of
its business and in accordance with Applicable Law, at any time sell to a
financial institution (“Participant”) a participating interest in the rights and
obligations of such Lender under any Loan Documents. Despite any sale by a
Lender of participating interests to a Participant, such Lender’s obligations
under the Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for performance of such obligations,
such Lender shall remain the holder of its Loans and Facility Commitments for
all purposes, all amounts payable by the Loan Parties within the applicable Loan
Party Group shall be determined as if such Lender had not sold such
participating interests, and the Loan Parties within the applicable Loan Party
Group and Agent shall continue to deal solely and directly with such Lender in
connection with the Loan Documents. Each Lender shall be solely responsible for
notifying its Participants of any matters under the Loan Documents, and Agent
and the other Lenders shall not have any obligation or liability to any such
Participant. A Participant of U.S. Facility Obligations or Canadian Facility
Obligations that would be a Foreign Lender if it were a Lender shall be entitled
to the benefits of Section 5.8 in the same manner as if the Participant acquired
its interest by assignment, provided the Participant complies with the
requirements of Section 5.9 as if it were a Lender. Each Lender selling a
participation to a Participant shall keep a register, as agent for the
Borrowers, meeting the requirements of Treasury Regulation Section 5f.103-1(c),
of each such participation, specifying such Participant’s entitlement to
payments of principal, interest and other amounts with respect to such
participation.

13.2.2 Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, waiver or other
modification of any Loan Documents other than that which forgives principal,
interest or fees, reduces the stated interest rate or fees payable with respect
to the applicable Loan or Facility Commitment in which such Participant has an
interest, postpones the Canadian Revolver Commitment Termination Date or U.S.
Facility Revolver Commitment Date, as applicable, or any date fixed for any
regularly scheduled payment of principal, interest or fees on such Loan or
Commitment in which such Participant has an interest, or releases the applicable
Borrower, or all or substantially all of the benefits of the applicable
Guarantee, or all or substantially all of the applicable ABL Priority
Collateral.

13.2.3 Benefit of Set-Off. The Loan Parties agree that each Participant shall
have a right of set-off in respect of its participating interest to the same
extent as if such interest were owing directly to a Lender, and each Lender
shall also retain the right of set-off with respect to any participating
interests sold by it. By exercising any right of set-off, a Participant agrees
to share with Lenders all amounts received through its set-off, in accordance
with Section 12.5 as if such Participant were a Lender.

13.3 Assignments.

13.3.1 Permitted Assignments. A Lender may assign to an Eligible Assignee any of
its rights and obligations under the Loan Documents, as long as (a) each
assignment is of a constant, and not a varying, percentage of the transferor
Lender’s rights and obligations under the Loan Documents and, in the case of a
partial assignment, is in a minimum principal amount of $5,000,000 (unless
otherwise agreed by Agent and Loan Party Agent, each in its discretion) and
integral multiples of $1,000,000 in excess of that amount; (b) except in the
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assignment in whole of a Lender’s rights and obligations, the aggregate amount
of the Commitments retained by the transferor Lender is at least $5,000,000
(unless otherwise agreed by Agent and Loan Party Agent, each in its discretion);
(c) the parties to each such assignment shall execute and deliver to Agent, for
its acceptance and recording, an Assignment and Acceptance; and (d) the
transferee Lender shall have executed a joinder to the Reallocation Agreement in
form and substance acceptable to Agent. Nothing herein shall limit the right of
a Lender to pledge or assign any rights under the Loan Documents to (i) any
Federal Reserve Bank or the United States Treasury as collateral security
pursuant to Regulation A of the Board of Governors and any Operating Circular
issued by such Federal Reserve Bank, or (ii) counterparties to swap agreements
relating to any Loans; provided, however, (i) such Lender shall remain the
holder of its Loans and owner of its interest in any Letter of Credit for all
purposes hereunder, (ii) the Borrowers, Agent, the other Lenders and Issuing
Banks shall continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement, (iii) any
payment by the Loan Parties to the assigning Lender in respect of any
Obligations assigned as described in this sentence shall satisfy the Loan
Parties’ obligations hereunder to the extent of such payment, and no such
assignment shall release the assigning Lender from its obligations hereunder.
Notwithstanding the foregoing, nothing herein shall limit the right of a Lender
to pledge or assign any rights under the Loan Documents to another Lender
following an acceleration of Loans and termination of Commitments pursuant to
Section 11.2 in connection with implementation of the Reallocation Agreement
following a Designation Date.

13.3.2 Register. Agent, acting solely for this purpose as an agent of the
Borrowers, shall maintain at one of its offices a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of Lenders, and the Commitments of and principal amounts of the Loans
and LC Obligations 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, Agent, Issuing Banks and Lenders shall 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, any
Issuing Bank, and any Lender (with respect to its own interest only), at any
reasonable time and from time to time upon reasonable prior notice.
Notwithstanding anything herein to the contrary, Agent shall have no liability
to the Borrowers or any other Person for the inaccuracy of any entries in the
Register.

13.3.3 Effect; Effective Date. Upon delivery to Agent of an assignment notice in
the form of Exhibit E and a processing fee of $3,500 (unless otherwise agreed by
Agent in its discretion), the assignment shall become effective as specified in
the notice, if it complies with this Section 13.3. From such effective date, the
Eligible Assignee shall for all purposes be a Lender under the Loan Documents,
and shall have all rights and obligations of a Lender thereunder. Upon
consummation of an assignment, the transferor Lender, Agent and the Loan Parties
shall upon request by the transferring or transferee Lender make appropriate
arrangements for issuance of replacement and/or new Notes, as applicable. The
transferee Lender shall comply with Section 5.9 and deliver, upon request, an
administrative questionnaire satisfactory to Agent.

 

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SECTION 14. MISCELLANEOUS

14.1 Consents, Amendments and Waivers.

14.1.1 Amendment. No modification of any Loan Document, including any extension
or amendment of a Loan Document or any waiver of a Default or Event of Default,
shall be effective without the prior written agreement of Agent (with the
consent of Required Lenders) and each Loan Party party to such Loan Document;
provided, however, that:

(a) without the prior written consent of Agent, no modification shall be
effective with respect to any provision in a Loan Document that relates to any
rights, duties or discretion of Agent;

(b) without the prior written consent of each affected Issuing Bank, no
modification shall be effective with respect to any LC Obligations, Section 2.2
or Section 2.3;

(c) without the prior written consent of each affected Lender (except a
Defaulting Lender as and to the extent provided in Section 4.2), no modification
shall be effective that would (i) increase the Facility Commitment of such
Lender; or (ii) reduce the amount of, or waive or delay payment of, any
principal, interest or fees payable to such Lender; or (iii) increase the
aggregate amount of all Commitments (except as set forth in Section 2.1.4);

(d) without the prior written consent of all Lenders (except a Defaulting Lender
as and to the extent provided in Section 4.2), no modification shall be
effective that would (i) extend the U.S. Revolver Commitment Termination Date,
the Canadian Revolver Commitment Termination Date or Facility Termination Date;
(ii) alter Section 5.5, 7.1 (except to add Collateral) or 14.1.1; (iii) amend
the definitions of Pro Rata, Required Lenders, Required Facility Lenders or
Supermajority Required Facility Lenders; (iv) amend this Section 14.1.1; or
(v) increase the Maximum Facility Amount (except as set forth in Section 2.1.4);

(e) without the prior written consent of the Supermajority Required Facility
Lenders having Commitments to a Borrower (except a Defaulting Lender as and to
the extent provided in Section 4.2), no amendment or waiver shall be effective
that would (x) with respect to Lenders having Facility Commitments to the
Canadian Borrower, amend the definition of Canadian Borrowing Base (or, for
purposes of such definition, any defined term used in such definition) or
(y) with respect to Lenders having Facility Commitments to the U.S. Borrower,
amend the definition of U.S. Borrowing Base (or, for purposes of such
definition, any defined term used in such definition); and

(f) without the prior written consent of all Lenders having Commitments to a
Borrower (except a Defaulting Lender as and to the extent provided in
Section 4.2), no amendment or waiver shall be effective that would (x) with
respect to Lenders having Facility Commitments to the Canadian Borrower,
(i) increase the advance rates applicable to the Canadian Borrower, (ii) release
all or substantially all of the Canadian Facility Collateral, except as
currently contemplated by Section 12.2.1, or (iii) release any Canadian Facility
Loan Party from liability for any Canadian Facility Obligations, except as
currently contemplated by Section 12.2.1; or (y) with respect to Lenders having
Facility Commitments to the U.S. Borrower, (i) increase the advance rates
applicable to the U.S. Borrower, (ii) release all or substantially all of the
U.S. Facility Collateral, except as currently contemplated by Section 12.2.1, or
(iii) release any U.S. Facility Loan Party from liability for any U.S. Facility
Obligations, except as currently contemplated by Section 12.2.1.

 

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Notwithstanding the foregoing, upon the execution and delivery of all
documentation required by Section 10.2.1(l) to be delivered in connection with
the incurrence by any Loan Party of any Permitted Senior Secured Debt, upon
Agent’s request, the Loan Parties and Agent shall enter into an amendment
hereof, and, to the extent deemed necessary by Agent, any other applicable Loan
Documents, solely for the purpose of reflecting any Liens granted in favor of
Agent or any Permitted Senior Secured Debt Collateral Agent in connection with
any such transaction and to make changes incidental thereto. By their execution
hereof, each Lender expressly authorizes and approves Agent’s entry into such
amendments.

14.1.2 Limitations. The agreement of the Loan Parties shall not be necessary to
the effectiveness of any modification of a Loan Document that deals solely with
the rights and duties of Lenders, Agent and/or Issuing Banks as among
themselves. Only the consent of the parties to the Fee Letter, any Collateral
Access Agreement, Deposit Account Control Agreement or any agreement relating to
a Bank Product shall be required for any modification of such agreement, and any
non-Lender that is party to a Bank Product agreement shall have no right to
participate in any manner in modification of any other Loan Document. The making
of any Loans during the existence of a Default or Event of Default shall not be
deemed to constitute a waiver of such Default or Event of Default, nor to
establish a course of dealing. Any waiver or consent granted by Agent or Lenders
hereunder shall be effective only if in writing, and then only in the specific
instance and for the specific purpose for which it is given.

14.1.3 Payment for Consents. No Loan Party will, directly or indirectly, pay any
remuneration or other thing of value, whether by way of additional interest, fee
or otherwise, to any Lender (in its capacity as a Lender hereunder) as
consideration for agreement by such Lender with any modification of any Loan
Documents, unless such remuneration or value is concurrently paid, on the same
terms, on a Pro Rata basis to all Lenders providing their consent.

14.2 Indemnity. EACH LOAN PARTY SHALL INDEMNIFY AND HOLD HARMLESS THE
INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY
INDEMNITEE, INCLUDING CLAIMS ARISING FROM THE NEGLIGENCE OF AN INDEMNITEE;
provided that, in no event shall any Loan Party have any obligation hereunder to
indemnify or hold harmless an Indemnitee with respect to a Claim that is
determined in a final, non-appealable judgment by a court of competent
jurisdiction to result from its actual gross negligence or willful misconduct.
In the case of an investigation, litigation or proceeding to which the indemnity
in this paragraph applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Loan Parties, their
equity holders or creditors, a third party or an Indemnitee and whether or not
an Indemnitee is otherwise a party thereto and, except for losses determined in
a final, non-appealable judgment by a court of competent jurisdiction to result
from an Indemnitee’s actual gross negligence or willful misconduct.

14.3 Notices and Communications.

14.3.1 Notice Address. Subject to Section 4.1.4, all notices and other
communications by or to a party hereto shall be in writing and shall be given to
any Loan Party, at Loan Party Agent’s address shown on the signature pages
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address shown on the signature pages hereof (or, in the case of a Person who
becomes a Lender after the Closing Date, at the address shown on its Assignment
and Acceptance), or at such other address as a party may hereafter specify by
notice in accordance with this Section 14.3. Each such notice or other
communication shall be effective only (a) if given by facsimile transmission,
when transmitted to the applicable facsimile number, if confirmation of receipt
is received; (b) if given by mail, three (3) Business Days after deposit in the
U.S. mail (or, in the case of a Canadian Domiciled Loan Party, the Canadian mail
system), with first-class postage pre-paid, addressed to the applicable address;
(c) if given by personal delivery, when duly delivered to the notice address
with receipt acknowledged of (d) if given by electronic mail or any other
telecommunications device, when transmitted to an electronic mail address (or by
another means of electronic delivery). Notwithstanding the foregoing, no notice
to Agent pursuant to Section 2.1.4, 2.2, 2.3, 3.1.2, 3.1.3 or 4.1.1 shall be
effective until actually received by the individual or department to whose
attention at Agent such notice is required to be sent. Any written notice or
other communication that is not sent in conformity with the foregoing provisions
shall nevertheless be effective on the date actually received by the noticed
party. Any notice received by Loan Party Agent shall be deemed received by all
Loan Parties.

14.3.2 Electronic Communications; Voice Mail. Electronic mail and internet
websites may be used only for routine communications, such as financial
statements, Borrowing Base Certificates and other information required by
Section 10.1.2, administrative matters, distribution of Loan Documents for
execution, and matters permitted under Section 4.1.4. Agent and Lenders make no
assurances as to the privacy and security of electronic communications.
Electronic communication and voice mail may not be used as effective notice
under the Loan Documents.

14.3.3 Non-Conforming Communications. Agent and Lenders may rely upon any
notices purportedly given by or on behalf of any Loan Party even if such notices
were not made in a manner specified herein, were incomplete or were not
confirmed, or if the terms thereof, as understood by the recipient, varied from
a later confirmation. Each Loan Party shall indemnify and hold harmless each
Indemnitee from any liabilities, losses, costs and expenses arising from any
non-conforming communication purportedly given by or on behalf of a Loan Party.

14.4 Performance of the Loan Parties’ Obligations. Agent may, in its discretion
at any time and from time to time, at the expense of the Loan Parties of the
applicable Loan Party Group, pay any amount or do any act required of a Loan
Party under any Loan Documents to (a) enforce any Loan Documents or collect any
Obligations; (b) protect, insure, maintain or realize upon any Collateral; or
(c) defend or maintain the validity or priority of Agent’s Liens in any
Collateral, including any payment of a judgment, insurance premium, warehouse
charge, finishing or processing charge, or landlord claim, or any discharge of a
Lien. All payments, costs and expenses (including Extraordinary Expenses) of
Agent under this Section 14.4 shall be reimbursed to Agent by the Loan Parties,
on demand, with interest from the date incurred to the date of payment thereof
at the rate applicable to Base Rate Loans. Any payment made or action taken by
Agent under this Section 14.4 shall be without prejudice to any right to assert
an Event of Default or to exercise any other rights or remedies under the Loan
Documents.

14.5 Credit Inquiries. Each Loan Party hereby authorizes Agent and Lenders (but
they shall have no obligation) to respond to usual and customary credit
inquiries from third parties concerning any Loan Party or Subsidiary.

 

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14.6 Severability. Wherever possible, each provision of the Loan Documents shall
be interpreted in such manner as to be valid under Applicable Law. If any
provision is found to be invalid under Applicable Law, it shall be ineffective
only to the extent of such invalidity and the remaining provisions of the Loan
Documents shall remain in full force and effect.

14.7 Cumulative Effect; Conflict of Terms. The provisions of the Loan Documents
are cumulative. The parties acknowledge that the Loan Documents may use several
limitations, tests or measurements to regulate similar matters, and they agree
that these are cumulative and that each must be performed as provided. Except as
otherwise provided in another Loan Document (by specific reference to the
applicable provision of this Agreement), if any provision contained herein is in
direct conflict with any provision in another Loan Document, the provision
herein shall govern and control.

14.8 Counterparts. Any Loan Document may be executed in counterparts, each of
which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Agreement shall become effective when Agent
has received counterparts bearing the signatures of all parties hereto. Delivery
of a signature page of any Loan Document by telecopy or other electronic means
shall be effective as delivery of a manually executed counterpart of such
agreement.

14.9 Entire Agreement. The Loan Documents constitute the entire contract among
the parties relating to the subject matter hereof, and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof.

14.10 Relationship with Lenders. The obligations of each Lender hereunder are
several, and no Lender shall be responsible for the obligations or Commitments
of any other Lender. Amounts payable hereunder to each Lender shall be a
separate and independent debt. It shall not be necessary for Agent or any other
Lender to be joined as an additional party in any proceeding for such purposes.
Nothing in this Agreement and no action of Agent or Lenders pursuant to the Loan
Documents shall be deemed to constitute Agent and Lenders to be a partnership,
association, joint venture or any other kind of entity, nor to constitute
control of any Loan Party.

14.11 No Advisory or Fiduciary Responsibility. In connection with all aspects of
each transaction contemplated by any Loan Document, the Loan Parties acknowledge
and agree that (a)(i) this credit facility and any related arranging or other
services by Agent, any Lender, any of their Affiliates or any arranger are
arm’s-length commercial transactions between the Loan Parties and such Person;
(ii) the Loan Parties have consulted their own legal, accounting, regulatory and
tax advisors to the extent they have deemed appropriate; and (iii) the Loan
Parties are capable of evaluating and understanding, and do understand and
accept, the terms, risks and conditions of the transactions contemplated by the
Loan Documents; (b) each of Agent, Lenders, their Affiliates and any arranger is
and has been acting solely as a principal in connection with this credit
facility, is not the financial advisor, agent or fiduciary for the Loan Parties,
any of their Affiliates or any other Person (except as expressly set forth in
Section 13.3.2), and has no obligation with respect to the transactions
contemplated by the Loan Documents except as expressly set forth therein; and
(c) Agent, Lenders, their Affiliates and any arranger may be engaged in a broad
range of transactions that involve interests that differ from those of the Loan
Parties and their Affiliates, and have no obligation to disclose any of such
interests to the Loan Parties or their Affiliates. To the fullest extent
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hereby waives and releases any claims that it may have against Agent, Lenders,
their Affiliates and any arranger with respect to any breach or alleged breach
of agency or fiduciary duty in connection with any aspect of any transaction
contemplated by a Loan Document.

14.12 Confidentiality. Each of Agent, Lenders and Issuing Banks agrees to
maintain the confidentiality of all Information (as defined below), except that
Information may be disclosed (a) to its Affiliates, and to its and their
partners, directors, officers, employees, agents, advisors and representatives
(provided such Persons are informed of the confidential nature of the
Information and instructed to keep it confidential); (b) to the extent requested
by any governmental, regulatory or self-regulatory authority purporting to have
jurisdiction over it or its Affiliates; (c) to the extent required by Applicable
Law or by any subpoena or other legal process; (d) to any other party hereto;
(e) in connection with any action or proceeding, or other exercise of rights or
remedies, relating to any Loan Documents or Obligations; (f) subject to an
agreement containing provisions substantially the same as this Section 14.12, to
any Transferee or any actual or prospective party (or its advisors) to any Bank
Product; (g) with the consent of Loan Party Agent; or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 14.12 or (ii) is available to Agent, any Lender, any Issuing Bank
or any of their Affiliates on a nonconfidential basis from a source other than
the Loan Parties. Notwithstanding the foregoing, Agent and Lenders may publish
or disseminate general information describing this credit facility, including
the names and addresses of the Loan Parties and a general description of the
Loan Parties’ businesses, and may use the Loan Parties’ logos, trademarks or
product photographs in advertising materials. As used herein, “Information”
means all information received from a Loan Party or Subsidiary relating to it or
its business that is identified as confidential when delivered. Any Person
required to maintain the confidentiality of Information pursuant to this
Section 14.12 shall be deemed to have complied if it exercises the same degree
of care that it accords its own confidential information. Each of Agent, Lenders
and Issuing Banks acknowledges that (i) Information may include material
non-public information concerning a Loan Party or Subsidiary; (ii) it has
developed compliance procedures regarding the use of material non-public
information; and (iii) it will handle such material non-public information in
accordance with Applicable Law, including federal, state, provincial and
territorial securities laws.

14.13 Certifications Regarding Senior Note Indenture. Borrowers certify to Agent
and Lenders that neither the execution or performance of the Loan Documents nor
the incurrence of any Obligations by Borrowers violates the Senior Note
Indenture.

14.14 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, UNLESS
OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO
FEDERAL LAWS RELATING TO NATIONAL BANKS).

14.15 Consent to Forum.

14.15.1 Forum. EACH LOAN PARTY HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION
OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH JURISDICTION OVER THE STATE OF
NEW YORK, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO ANY LOAN
DOCUMENTS, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN
ANY SUCH

 

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COURT. EACH LOAN PARTY IRREVOCABLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES
THAT IT MAY HAVE REGARDING SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION,
VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE
OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1. Nothing herein
shall limit the right of Agent or any Lender to bring proceedings against any
Loan Party in any other court, nor limit the right of any party to serve process
in any other manner permitted by Applicable Law. Nothing in this Agreement shall
be deemed to preclude enforcement by Agent of any judgment or order obtained in
any forum or jurisdiction.

14.16 Waivers by the Loan Parties. To the fullest extent permitted by Applicable
Law, each Loan Party waives (a) the right to trial by jury (which Agent and each
Lender hereby also waives) in any proceeding or dispute of any kind relating in
any way to any Loan Documents, Obligations or Collateral; (b) presentment,
demand, protest, notice of presentment, default, non-payment, maturity, release,
compromise, settlement, extension or renewal of any accounts, documents,
instruments, chattel paper and guarantees at any time held by Agent on which a
Loan Party may in any way be liable, and hereby ratifies anything Agent may do
in this regard; (c) notice prior to taking possession or control of any
Collateral; (d) any bond or security that might be required by a court prior to
allowing Agent to exercise any rights or remedies; (e) the benefit of all
valuation, appraisement and exemption laws; (f) any claim against Agent or any
Lender, on any theory of liability, for special, indirect, consequential,
exemplary or punitive damages (as opposed to direct or actual damages) in any
way relating to any Enforcement Action, Obligations, Loan Documents or
transactions relating thereto; and (g) notice of acceptance hereof. Each Loan
Party acknowledges that the foregoing waivers are a material inducement to Agent
and Lenders entering into this Agreement and that Agent and Lenders are relying
upon the foregoing in their dealings with the Loan Parties. Each Loan Party has
reviewed the foregoing waivers with its legal counsel and has knowingly and
voluntarily waived its jury trial and other rights following consultation with
legal counsel. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.

(a) Patriot Act Notice. Agent and Lenders hereby notify the Loan Parties that
pursuant to the requirements of the Patriot Act, the Proceeds of Crime Act and
other applicable anti-money laundering, anti-terrorist financing, government
sanction and “know your client” policies, regulations, laws or rules (the
Proceeds of Crime Act and such other applicable policies, regulations, laws or
rules, collectively, including any guidelines or orders thereunder, “AML
Legislation”), Agent and Lenders are required to obtain, verify and record
information that identifies each Loan Party, including its legal name, address,
tax ID number and other information that will allow Agent and Lenders to
identify it in accordance with the Patriot Act and the AML Legislation. Agent
and Lenders will also require information regarding each personal guarantor, if
any, and may require information regarding the Loan Parties’ management and
owners, such as legal name, address, social security number and date of birth.
Each Loan Party shall promptly provide all such information, including
supporting documentation and other evidence, as may be reasonably requested by
any Lender or any prospective assignee or participant of a Lender, in order to
comply with the Patriot Act and/or the applicable AML Legislation, whether now
or hereafter in existence.

 

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14.17 Canadian Anti-Money Laundering Legislation.

(a) If Agent has ascertained the identity of any Canadian Facility Loan Party or
any authorized signatories of any Canadian Facility Loan Party for the purposes
of applicable AML Legislation, then Agent:

(i) shall be deemed to have done so as an agent for each Canadian Lender, and
this Agreement shall constitute a “written agreement” in such regard between
each Canadian Lender and Agent within the meaning of the applicable AML
Legislation; and

(ii) shall provide to each Canadian Lender copies of all information obtained in
such regard without any representation or warranty as to its accuracy or
completeness.

Notwithstanding the preceding sentence and except as may otherwise be agreed in
writing, each Canadian Lender agrees that Agent has no obligation to ascertain
the identity of the Canadian Loan Parties or any authorized signatories of the
Canadian Loan Parties on behalf of any Canadian Lender, or to confirm the
completeness or accuracy of any information it obtains from any Canadian
Facility Loan Party or any such authorized signatory in doing so.

14.18 Reinstatement. This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against any Loan
Party for liquidation or reorganization, should any Loan Party become insolvent
or make an assignment for the benefit of creditors or should a receiver or
trustee be appointed for all or any significant part of such Loan Party’s
assets, and shall continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Obligations, or any part thereof,
is, pursuant to Applicable Law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Obligations, whether as
a “voidable preference”, “fraudulent conveyance”, or otherwise, all as though
such payment or performance had not been made. In the event that any payment, or
any part thereof, is rescinded, reduced, restored or returned, the Obligations
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.

14.19 Nonliability of Lenders. Neither Agent, any Issuing Bank nor any Lender
undertakes any responsibility to any Loan Party to review or inform any Loan
Party of any matter in connection with any phase of any Loan Party’s business or
operations. Each Loan Party agrees, on behalf of itself and each other Loan
Party, that neither Agent, any Issuing Bank nor any Lender shall have liability
to any Loan Party (whether sounding in tort, contract or otherwise) for losses
suffered by any Loan Party in connection with, arising out of, or in any way
related to the transactions contemplated and the relationship established by the
Loan Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the actual gross
negligence or willful misconduct of the party from which recovery is sought. NO
LENDER SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY OTHERS OF ANY
INFORMATION OR OTHER MATERIALS OBTAINED THROUGH INTRALINKS OR OTHER SIMILAR
INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT.

14.20 PERMITTED SENIOR SECURED DEBT INTERCREDITOR AGREEMENT. REFERENCE IS MADE
TO THE PERMITTED SENIOR SECURED DEBT INTERCREDITOR AGREEMENT (TO THE EXTENT SUCH
AGREEMENT IS IN EFFECT). EACH LENDER HEREUNDER (A) CONSENTS TO THE SUBORDINATION
OF LIENS

 

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PROVIDED FOR IN THE PERMITTED SENIOR SECURED DEBT INTERCREDITOR AGREEMENT (TO
THE EXTENT SUCH AGREEMENT IS IN EFFECT), (B) AGREES THAT, FROM AND AFTER THE
EXECUTION AND DELIVERY OF THE PERMITTED SENIOR SECURED DEBT INTERCREDITOR
AGREEMENT (TO THE EXTENT SUCH AGREEMENT IS IN EFFECT) BY AGENT AND THE OTHER
PERSONS PARTY THERETO, IT WILL BE BOUND BY AND WILL TAKE NO ACTIONS CONTRARY TO
THE PROVISIONS OF THE PERMITTED SENIOR SECURED DEBT INTERCREDITOR AGREEMENT (TO
THE EXTENT SUCH AGREEMENT IS IN EFFECT), (C) AUTHORIZES AND INSTRUCTS AGENT TO
ENTER INTO THE PERMITTED SENIOR SECURED DEBT INTERCREDITOR AGREEMENT (TO THE
EXTENT SUCH AGREEMENT IS IN EFFECT) AS COLLATERAL AGENT AND ON BEHALF OF SUCH
LENDER AND (D) AUTHORIZES AND INSTRUCTS AGENT TO ENTER INTO SUCH JOINDER
AGREEMENTS AND MODIFICATIONS TO THE PERMITTED SENIOR SECURED DEBT INTERCREDITOR
AGREEMENT (TO THE EXTENT SUCH AGREEMENT IS IN EFFECT) AS MAY BE CONTEMPLATED IN
ACCORDANCE WITH THE PROVISIONS OF THE PERMITTED SENIOR SECURED DEBT
INTERCREDITOR AGREEMENT (TO THE EXTENT SUCH AGREEMENT IS IN EFFECT).

[Remainder of page intentionally left blank; signatures begin on following page]

 

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IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the
date set forth above.

 

COOPER-STANDARD HOLDINGS INC.,
as a U.S. Facility Guarantor and a Canadian Facility Guarantor

By:  

/s/ Timothy W. Hefferon

  Name: Timothy W. Hefferon   Title: V.P., General Counsel & Secretary
COOPER-STANDARD AUTOMOTIVE INC., as the U.S. Borrower, a U.S. Facility Guarantor
and a Canadian Facility Guarantor By:  

/s/ Timothy W. Hefferon

  Name: Timothy W. Hefferon   Title: V.P., General Counsel & Secretary
COOPER-STANDARD AUTOMOTIVE CANADA LIMITED, as the Canadian Borrower and a
Canadian Facility Guarantor By:  

/s/ Timothy W. Hefferon

  Name: Timothy W. Hefferon   Title: Secretary COOPER-STANDARD AUTOMOTIVE NC
L.L.C., as a U.S. Facility Guarantor and Canadian Facility Guarantor By:  

/s/ Timothy W. Hefferon

  Name: Timothy W. Hefferon   Title: Secretary COOPER-STANDARD AUTOMOTIVE OH,
LLC, as a U.S. Facility Guarantor and Canadian Facility Guarantor By:  

/s/ Timothy W. Hefferon

  Name: Timothy W. Hefferon   Title: Secretary

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COOPER-STANDARD AUTOMOTIVE FLUID SYSTEMS MEXICO HOLDING LLC, as a U.S. Facility
Guarantor and Canadian Facility Guarantor By:  

/s/ Timothy W. Hefferon

  Name: Timothy W. Hefferon   Title: Secretary CSA SERVICES INC., as a U.S.
Facility Guarantor and Canadian Facility Guarantor By:  

/s/ Timothy W. Hefferon

  Name: Timothy W. Hefferon   Title: Secretary NISCO HOLDING COMPANY, as a U.S.
Facility Guarantor and Canadian Facility Guarantor By:  

/s/ Timothy W. Hefferon

  Name: Timothy W. Hefferon   Title: Secretary NORTH AMERICAN RUBBER,
INCORPORATED, as a U.S. Facility Guarantor and Canadian Facility Guarantor By:  

/s/ Timothy W. Hefferon

  Name: Timothy W. Hefferon   Title: Secretary STANTECH, INC., as a U.S.
Facility Guarantor and Canadian Facility Guarantor By:  

/s/ Timothy W. Hefferon

  Name: Timothy W. Hefferon   Title: Secretary

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STERLING INVESTMENTS COMPANY, as a U.S. Facility Guarantor and Canadian Facility
Guarantor By:  

/s/ Timothy W. Hefferon

  Name: Timothy W. Hefferon   Title: Secretary WESTBORN SERVICE CENTER, INC., as
a U.S. Facility Guarantor and Canadian Facility Guarantor By:  

/s/ Timothy W. Hefferon

  Name: Timothy W. Hefferon   Title: Secretary COOPER-STANDARD AUTOMOTIVE FHS
INC., as a U.S. Facility Guarantor and Canadian Facility Guarantor By:  

/s/ Timothy W. Hefferon

  Name: Timothy W. Hefferon   Title: V.P. & Secretary CS AUTOMOTIVE LLC, as a
Canadian Facility Guarantor By:  

/s/ Timothy W. Hefferon

  Name: Timothy W. Hefferon   Title: Secretary

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AGENT AND LENDERS:

 

BANK OF AMERICA, N.A., as Agent and a U.S. Lender

By:  

/s/ David Ritchay

Title:  

Senior Vice President

BANK OF AMERICA, N.A. (acting through its Canada branch), as a Canadian Lender
By:  

/s/ Medina Sales de Andrade

Title:  

Vice President

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DEUTSCHE BANK AG, NEW YORK BRANCH, as a U.S. Lender and a Canadian Lender

By:  

/s/ Carin Keegan

Title:  

Director

By:  

/s/ Erin Morrissey

Title:  

Vice President

 

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DEUTSCHE BANK TRUST COMPANY AMERICAS, as an LC Issuer

By:  

/s/ Carin Keegan

Title:  

Director

By:  

/s/ Erin Morrissey

Title:  

Vice President

 

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UBS LOAN FINANCE LLC, as a U.S. Lender

By:  

/s/ Irja R. Otsa

Title:  

Associate Director Banking Products Services, U.S.

By:  

/s/ Mary E. Evans

Title:  

Associate Director Banking Products Services, U.S.

UBS AG CANADA BRANCH, as a Canadian Lender

By:  

/s/ Irja R. Otsa

Title:  

Associate Director Banking Products Services, U.S.

By:  

/s/ Mary E. Evans

Title:  

Associate Director Banking Products Services, U.S.

 

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BARCLAYS BANK PLC, as a U.S. Lender and a Canadian Lender

By:  

/s/ Kevin Cullen

Title:  

Director