EX-10.1



 





Exhibit 10.1




 

 






COOPER TIRE & RUBBER COMPANY




and




MAX-TRAC TIRE CO., INC.,

as Borrowers




 






LOAN AND SECURITY AGREEMENT




Dated as of November 9, 2007




$200,000,000




 






CERTAIN FINANCIAL INSTITUTIONS,

as Lenders,




BANK OF AMERICA, N.A.,

as Administrative Agent and Collateral Agent




PNC BANK, NATIONAL ASSOCIATION,

as Syndication Agent,




BANC OF AMERICA SECURITIES LLC,

as Joint Lead Arranger and Joint Book Manager,




PNC CAPITAL MARKETS LLC,

as Joint Lead Arranger and Joint Book Manager




and




NATIONAL CITY BUSINESS CREDIT, INC.




and




JPMORGAN CHASE BANK, N.A.,

as Co-Documentation Agents




 

 






 









 












TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	SECTION 1.
	 	DEFINITIONS; RULES OF CONSTRUCTION	 	 	1	 
	1.1.
	 	Definitions	 	 	1	 
	1.2.
	 	Accounting Terms	 	 	23	 
	1.3.
	 	Uniform Commercial Code	 	 	24	 
	1.4.
	 	Certain Matters of Construction	 	 	24	 
	 
	 	 	 	 	 	 
	SECTION 2.
	 	CREDIT FACILITIES	 	 	24	 
	2.1.
	 	Revolver Commitment	 	 	24	 
	2.2.
	 	Letter of Credit Facility	 	 	26	 
	2.3.
	 	Facility Increase	 	 	28	 
	 
	 	 	 	 	 	 
	SECTION 3.
	 	INTEREST, FEES AND CHARGES	 	 	29	 
	3.1.
	 	Interest	 	 	29	 
	3.2.
	 	Fees	 	 	31	 
	3.3.
	 	Computation of Interest, Fees, Yield Protection	 	 	32	 
	3.4.
	 	Reimbursement Obligations	 	 	32	 
	3.5.
	 	Illegality	 	 	32	 
	3.6.
	 	Inability to Determine Rates	 	 	32	 
	3.7.
	 	Increased Costs; Capital Adequacy	 	 	33	 
	3.8.
	 	Mitigation	 	 	34	 
	3.9.
	 	Funding Losses	 	 	34	 
	3.10.
	 	Maximum Interest	 	 	34	 
	 
	 	 	 	 	 	 
	SECTION 4.
	 	LOAN ADMINISTRATION	 	 	35	 
	4.1.
	 	Manner of Borrowing and Funding Loans	 	 	35	 
	4.2.
	 	Defaulting Lender	 	 	36	 
	4.3.
	 	Number and Amount of LIBOR Loans; Determination of Rate	 	 	37	 
	4.4.
	 	Borrower Agent	 	 	37	 
	4.5.
	 	One Obligation	 	 	37	 
	4.6.
	 	Effect of Termination	 	 	37	 
	 
	 	 	 	 	 	 
	SECTION 5.
	 	PAYMENTS	 	 	38	 
	5.1.
	 	General Payment Provisions	 	 	38	 
	5.2.
	 	Repayment of Loans	 	 	38	 
	5.3.
	 	Payment of Other Obligations	 	 	38	 
	5.4.
	 	Marshaling; Payments Set Aside	 	 	38	 
	5.5.
	 	Post-Default Allocation of Payments	 	 	38	 
	5.6.
	 	Application of Payments	 	 	39	 
	5.7.
	 	Loan Account; Account Stated	 	 	40	 
	5.8.
	 	Taxes	 	 	40	 
	5.9.
	 	Foreign Lenders	 	 	41	 






 









 






	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	5.10.
	 	Nature and Extent of Each Borrower's Liability	 	 	41	 
	 
	 	 	 	 	 	 
	SECTION 6.
	 	CONDITIONS PRECEDENT	 	 	44	 
	6.1.
	 	Conditions Precedent to Initial Loans	 	 	44	 
	6.2.
	 	Conditions Precedent to All Credit Extensions	 	 	45	 
	6.3.
	 	Limited Waiver of Conditions Precedent	 	 	46	 
	 
	 	 	 	 	 	 
	SECTION 7.
	 	COLLATERAL	 	 	46	 
	7.1.
	 	Grant of Security Interest	 	 	46	 
	7.2.
	 	Lien on Deposit Accounts; Cash Collateral	 	 	47	 
	7.3.
	 	Other Collateral	 	 	47	 
	7.4.
	 	No Assumption of Liability	 	 	48	 
	7.5.
	 	Further Assurances	 	 	48	 
	 
	 	 	 	 	 	 
	SECTION 8.
	 	COLLATERAL ADMINISTRATION	 	 	48	 
	8.1.
	 	Borrowing Base Certificates	 	 	48	 
	8.2.
	 	Administration of Accounts	 	 	48	 
	8.3.
	 	Administration of Inventory	 	 	49	 
	8.4.
	 	Administration of Deposit Accounts	 	 	50	 
	8.5.
	 	General Provisions	 	 	50	 
	8.6.
	 	Power of Attorney	 	 	51	 
	 
	 	 	 	 	 	 
	SECTION 9.
	 	REPRESENTATIONS AND WARRANTIES	 	 	52	 
	9.1.
	 	General Representations and Warranties	 	 	52	 
	9.2.
	 	Complete Disclosure	 	 	57	 
	 
	 	 	 	 	 	 
	SECTION 10.
	 	COVENANTS AND CONTINUING AGREEMENTS	 	 	57	 
	10.1.
	 	Affirmative Covenants	 	 	57	 
	10.2.
	 	Negative Covenants	 	 	60	 
	 
	 	 	 	 	 	 
	SECTION 11.
	 	EVENTS OF DEFAULT; REMEDIES ON DEFAULT	 	 	65	 
	11.1.
	 	Events of Default	 	 	65	 
	11.2.
	 	Remedies upon Default	 	 	67	 
	11.3.
	 	Limited Conditional License for Intellectual Property	 	 	68	 
	11.4.
	 	Setoff	 	 	69	 
	11.5.
	 	Remedies Cumulative; No Waiver	 	 	69	 
	 
	 	 	 	 	 	 
	SECTION 12.
	 	AGENT	 	 	70	 
	12.1.
	 	Appointment, Authority and Duties of Agent	 	 	70	 
	12.2.
	 	Agreements Regarding Collateral and Field Examination Reports	 	 	71	 
	12.3.
	 	Reliance By Agent	 	 	72	 
	12.4.
	 	Action Upon Default	 	 	72	 
	12.5.
	 	Ratable Sharing	 	 	72	 
	12.6.
	 	Indemnification of Agent Indemnitees	 	 	72	 
	12.7.
	 	Limitation on Responsibilities of Agent	 	 	73	 
	12.8.
	 	Successor Agent and Co-Agents	 	 	73	 
	12.9.
	 	Due Diligence and Non-Reliance	 	 	74	 






ii 









 






	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	12.10.
	 	Replacement of Certain Lenders	 	 	74	 
	12.11.
	 	Remittance of Payments and Collections	 	 	75	 
	12.12.
	 	Agent in its Individual Capacity	 	 	75	 
	12.13.
	 	Agent Titles	 	 	75	 
	12.14.
	 	No Third Party Beneficiaries	 	 	76	 
	 
	 	 	 	 	 	 
	SECTION 13.
	 	BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS	 	 	76	 
	13.1.
	 	Successors and Assigns	 	 	76	 
	13.2.
	 	Participations	 	 	76	 
	13.3.
	 	Assignments	 	 	77	 
	 
	 	 	 	 	 	 
	SECTION 14.
	 	MISCELLANEOUS	 	 	77	 
	14.1.
	 	Consents, Amendments and Waivers	 	 	77	 
	14.2.
	 	Indemnity	 	 	78	 
	14.3.
	 	Notices and Communications	 	 	79	 
	14.4.
	 	Performance of Borrowers' Obligations	 	 	79	 
	14.5.
	 	Credit Inquiries	 	 	80	 
	14.6.
	 	Severability	 	 	80	 
	14.7.
	 	Cumulative Effect; Conflict of Terms	 	 	80	 
	14.8.
	 	Counterparts	 	 	80	 
	14.9.
	 	Entire Agreement	 	 	80	 
	14.10.
	 	Relationship with Lenders	 	 	80	 
	14.11.
	 	No Advisory or Fiduciary Responsibility	 	 	80	 
	14.12.
	 	Confidentiality	 	 	81	 
	14.13.
	 	Certifications Regarding Indentures	 	 	82	 
	14.14.
	 	GOVERNING LAW	 	 	82	 
	14.15.
	 	Consent to Forum	 	 	82	 
	14.16.
	 	Waivers by Borrowers	 	 	82	 
	14.17.
	 	Patriot Act Notice	 	 	83	 






iii 









 






LIST OF EXHIBITS AND SCHEDULES




	 	 	 
	Exhibit A

	 	Note
	Exhibit B

	 	Assignment and Acceptance
	Exhibit C

	 	Assignment Notice
	Exhibit D

	 	Borrowing Base
	Exhibit E

	 	Compliance Certificate






	 	 	 
	Schedule 1.1

	 	Commitments of Lenders
	Schedule 8.2.4

	 	Dominion Accounts
	Schedule 8.4

	 	Deposit Accounts
	Schedule 8.5.1

	 	Business Locations
	Schedule 9.1.4

	 	Names and Capital Structure
	Schedule 9.1.5

	 	Former Names and Companies
	Schedule 9.1.11

	 	Patents, Trademarks, Copyrights and Licenses
	Schedule 9.1.15

	 	Restrictive Agreements
	Schedule 9.1.18

	 	Pension Plans
	Schedule 9.1.20

	 	Labor Contracts
	Schedule 10.2.1

	 	Existing Debt
	Schedule 10.2.2

	 	Existing Liens
	Schedule 10.2.17

	 	Existing Affiliate Transactions







iv











 





LOAN AND SECURITY AGREEMENT




     THIS LOAN AND SECURITY AGREEMENT is dated as of November 9, 2007, among COOPER TIRE & RUBBER
COMPANY, a Delaware corporation (“Cooper”), MAX-TRAC TIRE CO., INC., an Ohio corporation
(“Max-Trac” and together with Cooper, collectively, “Borrowers”), the financial
institutions party to this Agreement from time to time as lenders (collectively,
“Lenders”), BANK OF AMERICA, N.A., a national banking association, as administrative agent
(in such capacity, “Administrative Agent”) for the Lenders and collateral agent (in such
capacity, “Collateral Agent”) for the Lenders and other Secured Parties, PNC Bank, National
Association, a national banking association, as syndication agent (“Syndication Agent”),
Banc of America Securities LLC and PNC Capital Markets LLC, as joint book managers (in such
capacity, “Joint Book Managers”) and joint lead arrangers (in such capacity, “Joint
Lead Arrangers”).



RECITALS:




     Borrowers have requested that Lenders provide a credit facility to Borrowers to finance their
mutual and collective business enterprise. Lenders are willing to provide the credit facility on
the terms and conditions set forth in this Agreement.



     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:



     Account: as applied to a Borrower, means an account as defined in the UCC, including
all rights to payment for goods sold or leased, or for services rendered.



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



     Accounts Formula Amount: 85% of the Value of Eligible Accounts.



     Acquisition: with respect to any Person, any transaction or series of related
transactions for the direct or indirect (whether by purchase, lease, exchange, issuance of Equity
Interests or other equity or debt securities, merger, reorganization or any other method) (a)
acquisition by such Person of any other Person, which acquired Person shall then become
consolidated with the acquiring Person in accordance with GAAP, or (b) acquisition by such Person
of all or any substantial part of the assets of any other Person or any division or line of
business of any other Person.



     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: Administrative Agent and Collateral Agent.



     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.



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



     Applicable Margin: with respect to any Type of Loan, the margin set forth below, as
determined by Average Availability (defined below) for the last Fiscal Quarter:



	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Base Rate	 	LIBOR
	Level	 	Average Availability	 	Loans	 	Loans
	 
	 	 	 	 	 	 	 	 
	I

	 	 	< $50,000,000	 	 	0.0 bps
	 	150.0 bps
	II

	 	 	$50,000,000 — $125,000,000	 	 	0.0 bps
	 	125.0 bps
	III

	 	 	> 125,000,000	 	 	0.0 bps
	 	100.0 bps





Until the end of the second full Fiscal Quarter following the Closing Date, margins shall be
determined as if Level III were applicable. Thereafter, the margins shall be subject to increase
or decrease upon receipt by Agent pursuant to Section 8.1 of the first Borrowing Base Certificate
for each Fiscal Quarter, which change shall be effective as of the first day of such Fiscal
Quarter. If, by the fifteenth day of a Fiscal Quarter, the first Borrowing Base Certificate for
such Fiscal Quarter has not been received, then the margins shall be determined as if Level I were
applicable, from such day until the first day of the calendar month following actual receipt.




     Appraisal Trigger Date: as defined in Section 10.1.1(b).



     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, and is administered or managed by a Lender, an entity that
administers or manages a Lender, or an Affiliate of either.



-2-









 





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



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



     Availability: the Borrowing Base minus the principal balance of all Loans.



     Availability Block: $15,000,000.



     Availability Reserve: the sum (without duplication) of (a) the Inventory Reserve; (b)
the Rent and Charges Reserve; (c) the LC Reserve; (d) the Bank Product Reserve; (e) all accrued
Royalties, whether or not then due and payable by a Borrower; (f) the aggregate amount of
liabilities secured by Liens upon Collateral that are senior to Agent’s Liens (but imposition of
any such reserve shall not waive an Event of Default arising therefrom); (g) the Availability
Block; and (h) such additional reserves, in such amounts and with respect to such matters, as are
customary in similar asset-based financing facilities as Agent in its Credit Judgment may elect to
impose from time to time.



     Availability Test: any time when (a) no Default or Event of Default exists and (b) as
of the date of the proposed transaction, both immediately before and after giving effect thereto,
Availability is greater than $30,000,000.



     Average Availability: for any period, an amount equal to the sum of the actual amount
of Availability on each day during such period, as calculated by Agent, divided by the number of
days in such period, a copy of which calculation in reasonable detail shall be provided by Agent as
soon as practicable to Borrower Agent upon request.



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



     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
Borrower by any 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 Borrower, other than Letters of Credit;
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 applicable Secured Party and Borrower 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 Bank Product
Reserve (“Bank Product Amount”), and (iii) the methodology to be used by such parties in
determining the Bank Product Debt owing from time to time. The Bank Product Amount may be changed
from time to time upon written notice to Agent by the Secured Party and Borrower. No Bank Product
Amount may be established or increased at any time that a Default or Event of Default exists, or if
a reserve in such amount would cause an Overadvance.



-3-









 





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



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



     Bank Product Reserve: the aggregate amount of reserves established by Agent from time
to time in its discretion in respect of Bank Product Debt.



     Bankruptcy Code: Title 11 of the United States Code.



     Base Rate: the rate of interest announced by Bank of America from time to time as its
prime rate. Such rate is a rate set by Bank of America based upon 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 announced 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.



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



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



     Borrowed Money: with respect to any Borrower, without duplication, its (a) Debt that
(i) arises from the lending of money by any Person to such Borrower, (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 owing in the
Ordinary Course of Business), or (iv) was issued or assumed as full or partial payment for
Property; (b) Capital Leases; (c) reimbursement obligations with respect to letters of credit,
surety bonds or similar agreements or arrangements; (d) arises from cash pooling or similar
arrangements and (e) guaranties of any Debt of the foregoing types owing by another Person.



     Borrower Agent: as defined in Section 4.4.



     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: on any date of determination, an amount equal to the lesser of (a) the
aggregate amount of Revolver Commitments, minus the LC Reserve, minus the
Availability Block; or (b) the sum of the Accounts Formula Amount, plus the Inventory
Formula Amount, minus the Availability Reserve.



     Borrowing Base Certificate: a certificate, in the form of Exhibit D, by which
Borrowers certify calculation of the Borrowing Base.



     Business Day: any day other than a Saturday, Sunday or other day on which commercial
banks are authorized to close under the laws of, or are in fact closed in, Ohio, Wisconsin, North
Carolina or New York, and if such day relates to a LIBOR Loan, any such day on which dealings in
Dollar deposits are conducted between banks in the London interbank Eurodollar market.



-4-









 





     Capital Expenditures: all liabilities incurred, expenditures made or payments due
(whether or not made) by a Borrower 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
year, including the principal portion of Capital Leases.



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



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



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



     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 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” has a correlative meaning.



     Cash Equivalents: (a) marketable obligations issued or unconditionally guaranteed by,
and backed by the full faith and credit of, the United States government, maturing within 12 months
of the date of acquisition; (b) certificates of deposit, time deposits and bankers’ acceptances
maturing within 12 months of the date of acquisition, and overnight bank deposits, in each case
which are issued by a commercial bank organized under the laws of the United States or any state or
district thereof, rated A-1 (or better) by S&P or P-1 (or better) by Moody’s at the time of
acquisition, and (unless issued by a Lender) not subject to offset rights; (c) repurchase
obligations with a term of not more than 30 days for underlying investments of the types described
in clauses (a) and (b) entered into with any bank 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 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 Borrower 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.



     CERCLA: the Comprehensive Environmental Response Compensation and Liability Act (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



-5-









 




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.




     Change of Control: (a) any “person” or “group” (as such terms are used in Section
13(d) and 14(d) of the Exchange Act), other than employee or retiree benefit plans or trusts
sponsored or established by Cooper or any Borrower is or becomes the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of 35% or more of the Equity
Interests of Cooper; (b) a change in the majority of directors of Cooper, unless approved by the
then majority of directors; or (c) all or substantially all of a Borrower’s assets are sold or
transferred, other than sale or transfer to another 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, or (e) failure by any Borrower to perform or observe any terms of
any Loan Document, 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 Property described in Section 7.1, all Property described in any
Security Documents as security for any Obligations, and all other Property that now or hereafter
secures (or is intended to secure) any Obligations, excluding Accounts, General Intangibles,
Chattel Paper, Payment Intangibles and Supporting Obligations relating to any of the foregoing, in
each case solely to the extent sold, purportedly sold (but recharacterized as financed),
transferred, assigned, contributed or otherwise conveyed to the Receivables Securitization
Facility.



     Commitment Termination Date: the earliest to occur of (a) the Revolver Termination
Date; (b) the date on which Borrowers terminate the Revolver Commitments pursuant to Section 2.1.4;
or (c) the date on which the Revolver Commitments are terminated pursuant to Section 11.2.



     Compliance Certificate: a certificate, in the form of Exhibit E and covering such
other matters as the Agent may request.



     Contingent Obligation: any obligation of a Person arising from a guaranty, indemnity
or other assurance of payment or performance of any Debt, 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) guaranty,
endorsement, co-



-6-









 




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.




     Credit Judgment: Agent’s judgment exercised in good faith, based upon its
consideration of any factor that it believes (a) could adversely affect the quantity, quality, mix
or value of Collateral (including any Applicable Law that may inhibit collection of an Account),
the enforceability or priority of Agent’s Liens, or the amount that Agent and Lenders could receive
in liquidation of any Collateral; (b) suggests that any collateral report or financial information
delivered by any Borrower is incomplete, inaccurate or misleading in any material respect; (c)
materially increases the likelihood of any Insolvency Proceeding involving a Borrower; or (d)
creates or could result in a Default or Event of Default. In exercising such judgment, Agent may
consider any factors that could increase the credit risk of lending to Borrowers on the security of
the Collateral.



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



     Debt: as applied to any Person, without duplication, (a) all items that would be
included as liabilities on a balance sheet in accordance with GAAP, including Capital Leases, but
excluding trade payables incurred and being paid in the Ordinary Course of Business; (b) all
Contingent Obligations; (c) all reimbursement obligations in connection with letters of credit
issued for the account of such Person; (d) obligations of such Person (whether contingent or
otherwise) in respect of surety bonds or similar agreements or arrangements; (e) obligations in
respect of cash pooling or similar arrangements and (f) in the case of a Borrower, the Obligations.
The Debt of a Person shall include any recourse Debt of any partnership in which such Person is a
general partner or joint venturer.



     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% plus the interest rate otherwise applicable thereto.



     Deposit Account Control Agreements: the Deposit Account control agreements to be
executed by each institution maintaining a Deposit Account listed on Schedule 8.2.4, except RPA
Blocked Accounts, for a Borrower, in favor of Agent, for the benefit of Secured Parties, as
security for the Obligations.



-7-









 





     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.



     Dollars: lawful money of the United States.



     Dominion Account: a special account established by Borrowers at Bank of America or
another bank acceptable to Agent, over which Agent has exclusive control for withdrawal purposes.



     EBITDA: determined on a consolidated basis for Borrowers and Subsidiaries, net income,
calculated before interest expense, provision for income taxes, depreciation and amortization
expense, gains or losses arising from the sale of capital assets, gains arising from the write-up
of assets, and any extraordinary gains (in each case, to the extent included in determining net
income).



     Eligible Account: an Account owing to Max-Trac that arises in the Ordinary Course of
Business from the sale of goods or rendition of services, is payable in Dollars and is deemed by
Agent, in its 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 60 days after the original due date,
or more than 120 days after the original invoice date; (b) 50% or more of the Accounts owing by the
Account Debtor are not Eligible Accounts under the foregoing clause; (c) when aggregated with other
Accounts owing by any Account Debtor or group of affiliated Account Debtors, it exceeds 15% of the
aggregate Eligible Accounts (or such higher percentage as Agent may establish for the Account
Debtor or group of Affiliated Account Debtors from time to time); (d) it does not conform to the
representations and warranties set forth in Section 9.1.7 hereof; (e) it is owing by a creditor or
supplier, or is otherwise 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) of which the applicable Borrower has knowledge; (f) 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; (g) the Account Debtor is organized or has its principal offices or assets outside the
United States or Canada; (h) it is owing by a Government Authority, unless 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; (i) it is not subject to a duly
perfected, first priority Lien in favor of Agent, or is subject to any other Lien; (j) 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; (k) it is evidenced by Chattel Paper or an Instrument of any kind, or has been
reduced to judgment; (l) its payment has been extended, the Account Debtor has made a partial
payment, or it arises from a sale on a cash-on-delivery basis; (m) it arises from a sale to an
Affiliate, or from a sale on a bill-and-hold, guaranteed sale, sale-or-return, sale-on-approval,
consignment, or other repurchase or return basis; (n) it represents a progress billing or
retainage; (o) it includes a billing for interest, fees or late charges, but ineligibility shall be
limited to the extent thereof; or (p) it arises from a retail sale to a Person who is purchasing
for personal, family or household purposes. In calculating



-8-









 




delinquent portions of Accounts under clauses (a) and (b), credit balances more than 90 days
old will be excluded.




     Eligible Assignee: a Person that is (a) a Lender, U.S.-based Affiliate of a Lender or
Approved Fund; (b) any other financial institution approved by Agent and Borrower Agent (which
approval by (i) Agent shall not be unreasonably withheld or delayed and (ii) by Borrower Agent
shall not be unreasonably withheld or delayed and shall be deemed given if no objection is made
within two Business Days after notice of the proposed assignment), that is organized under the laws
of the United States or any state or district thereof, has total assets in excess of $5 billion,
extends asset-based lending facilities in its ordinary course of business and whose becoming an
assignee would not constitute a prohibited transaction under Section 4975 of the Code or any other
Applicable Law; and (c) during any Event of Default, any Person acceptable to Agent in its
discretion (approval of any such Person by Agent not to be unreasonably withheld or delayed).



     Eligible Finished Goods Inventory: Eligible Inventory that is domestic finished goods.



     Eligible Inventory: Inventory owned by a Borrower that Agent, in its discretion, deems
to be Eligible Inventory. Without limiting the foregoing, no Inventory shall be Eligible Inventory
unless it (a) is finished goods, raw materials or work-in-process, and not packaging or shipping
materials, labels, samples, display items, bags, replacement parts or manufacturing supplies and is
not subject to an Account (regardless of whether such Account has been or is to be sold pursuant to
the Receivables Securitization Facility and not subject to an Account); (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, and does not constitute hazardous materials under any
Environmental Law; (f) conforms with the covenants and representations herein; (g) is subject to
Agent’s duly perfected, first priority Lien, and no other Lien; (h) is within the continental
United States, is not in transit except between locations of Borrowers, is not consigned to any
Person and is not sold on approval; (i) is not subject to any warehouse receipt or negotiable
Document; (j) 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 Lien Waiver;
(k) is not located on leased premises or in the possession of a warehouseman, processor, repairman,
mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has
delivered a Lien Waiver or an appropriate Rent and Charges Reserve has been established; (l) is not
subject to a third party’s trademark or other proprietary right, unless Agent is satisfied that it
could sell the inventory on satisfactory terms in a default; and (m) is reflected in the details of
a current perpetual inventory report.



     Eligible Raw Materials Inventory: Eligible Inventory that is domestic raw materials
Inventory.



     Eligible Work-in-Process Inventory: Eligible Inventory that is domestic
work-in-process Inventory.



-9-









 





     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).



     Environmental Laws: all Applicable Laws (including all programs, permits and guidance
promulgated by regulatory agencies), relating to public health (but excluding occupational safety
and health, to the extent regulated by OSHA) or the protection or pollution of the environment,
including CERCLA, RCRA and CWA.



     Environmental Notice: a notice (whether written or oral) from any Governmental
Authority or other Person of any possible noncompliance with, investigation of a possible violation
of, litigation relating to, or potential fine or liability under any Environmental Law, or with
respect to any Environmental Release, environmental pollution or hazardous materials, including any
complaint, summons, citation, order, claim, demand or request for correction, remediation or
otherwise.



     Environmental Release: a release as defined in CERCLA or under any other Environmental
Law.



     Equity Interest: the interest of any (a) shareholder in a corporation; (b) partner in
a partnership (whether general, limited, limited liability or joint venture); (c) member in a
limited liability company; or (d) other Person having any other form of equity security or
ownership interest.



     ERISA: the Employee Retirement Income Security Act of 1974.



     ERISA Affiliate: any trade or business (whether or not incorporated) under common
control with a Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections
414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).



     ERISA Event: (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal
by any Borrower 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; (c) a
complete or partial withdrawal by any Borrower or ERISA Affiliate from a 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) the failure by any Borrower or ERISA Affiliate to meet any funding obligations with
respect to any Pension Plan or Multiemployer Plan; (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; or (g) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA,
upon any Borrower or ERISA Affiliate.



     Event of Default: as defined in Section 11.



     Exchange Act: the Securities Exchange Act of 1934.



-10-









 





     Excluded Tax: with respect to Agent, any Lender, Issuing Bank or any other recipient
of a payment to be made by or on account of any Obligation, (a) taxes imposed on or measured by its
overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income
taxes), 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; and (b) in the case of a Foreign Lender, any
withholding tax attributable to such Foreign Lender’s failure or inability (other than as a result
of a Change in Law) to comply with Section 5.9, except to the extent that such Foreign Lender (or
its assignor, if any) was entitled, at the time of designation of a new Lending Office (or
assignment), to receive additional amounts from the Borrower with respect to such withholding tax.



     Existing Indenture: that certain Indenture dated as of March 17, 1997 between Cooper
and The Chase Manhattan Bank, as trustee.



     Existing Senior Unsecured Notes: those notes evidencing Cooper’s obligations under the
Existing Indenture.



     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 Borrower,
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 Borrower, any representative of creditors
of a Borrower 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 study fees, wages and salaries paid to employees of any Borrower
or independent contractors in liquidating any Collateral, and travel expenses.



     Facility: as defined in Section 2.



     Facility Increase: as defined in Section 2.3.



     Facility Increase Amount: as defined in Section 2.3.



     Facility Increase Effective Date: as defined in Section 2.3.



     Fee Letter: the fee letter agreement between Agent and Borrowers.



-11-









 





     Fiscal Quarter: each period of three months, commencing on the first day of a Fiscal
Year.



     Fiscal Year: the fiscal year of Borrowers and Subsidiaries for accounting and tax
purposes, ending on December 31 of each year.



     Fixed Charge Coverage Ratio: the ratio, determined on a consolidated basis for
Borrowers and Subsidiaries for the most recent four Fiscal Quarters, of (a) EBITDA minus
Capital Expenditures (except those financed with Borrowed Money other than Loans), to (b) Fixed
Charges.



     Fixed Charges: the sum of cash interest paid, cash taxes paid, principal payments made
on Borrowed Money, and Distributions made.



     FLSA: the Fair Labor Standards Act of 1938.



     Foreign Lender: any Lender that is organized under the laws of a jurisdiction other
than the laws of the United States, or any state or district thereof.



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



     Foreign Subsidiary: a Subsidiary that is a “controlled foreign corporation” under
Section 957 of the Code, such that a guaranty by such Subsidiary of the Obligations or a Lien on
the assets of such Subsidiary to secure the Obligations would result in material tax liability to
Borrowers.



     Full Payment: with respect to any Obligations, (a) the full and indefeasible cash
payment thereof, including any interest, fees and other charges accruing during an Insolvency
Proceeding (whether or not allowed in the proceeding); (b) if such Obligations are LC Obligations
or inchoate or contingent in nature, Cash Collateralization thereof (or delivery of a standby
letter of credit acceptable to Agent in its discretion, in the amount of required Cash Collateral);
and (c) a release of any Claims of the Debtor against Agent, Lenders and Issuing Bank arising on or
before the payment date. 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 from
time to time.



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



     Governmental Authority: any federal, state, 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



-12-









 




administrative functions for or pertaining to any government or court, in each case whether
associated with the United States, a state, district or territory thereof, or a foreign entity or
government.




     Guarantor Payment: as defined in Section 5.10.3.



     Hedging Agreement: an agreement relating to any swap, cap, floor, collar, option,
forward, cross right or obligation, or combination thereof or similar transaction, with respect to
interest rate, foreign exchange, currency, commodity, credit or equity risk.



     Immaterial Subsidiary: each Subsidiary of a Borrower organized in a jurisdiction
within the United States and that is not a Significant Subsidiary.



     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 commenced by or against a Person under
any state, federal or foreign law for, or any agreement of such Person to, (a) the entry of an
order for relief under the Bankruptcy Code, or any other insolvency, debtor relief or debt
adjustment law; (b) the appointment of a receiver, trustee, liquidator, administrator, conservator
or other custodian for such Person or any part of its Property; or (c) an assignment or trust
mortgage for the benefit of creditors.



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



     Intellectual Property Claim: any claim or assertion (whether in writing, by suit or
otherwise) that a Borrower’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.



     Intercreditor Agreement: the Intercreditor Agreement of even date herewith, between
PNC Bank, National Association and Agent, relating to the Receivables Securitization Facility.



     Interest Period: as defined in Section 3.1.3.



     Inventory: as defined in the UCC, 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).



-13-









 





     Inventory Formula Amount: (a) Until the Appraisal Trigger Date, the sum of (i) 40% of
the Value of Eligible Raw Materials Inventory; plus (ii) 55% of the Value of Eligible
Work-in-Process Inventory; plus (iii) 70% of the Value of Eligible Finished Goods Inventory
and (b) from and after the Appraisal Trigger Date, the sum of (i) the lesser of (A) 40% of the
Value of Eligible Raw Materials Inventory or (B) 85% of the NOLV Percentage of such Inventory;
plus (ii) the lesser of (A) 55% of the Value of Eligible Work-in-Process Inventory and (B)
85% of the NOLV Percentage of such Inventory; plus (iii) the lesser of (A) 70% of the Value
of Eligible Finished Goods Inventory and (B) 85% of the NOLV Percentage of such Inventory.



     Inventory Reserve: reserves established by Agent 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.



     Investment: any acquisition of all or substantially all assets of a Person; any
acquisition of record or beneficial ownership of any Equity Interests of a Person; or any loan,
advance or other extension of credit, guarantee or credit support to or for the benefit of a
Person; or capital contribution to or other investment in a Person. “Investment” shall also
include any indirect loan or extension of credit to a Subsidiary through any cash pooling
arrangement in which a Person Participates.



     IRS: the United States Internal Revenue Service.



     Issuing Bank: Bank of America or an Affiliate of Bank of America.



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



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



     LC Conditions: the following conditions necessary for issuance of a Letter of Credit:
(a) each of the conditions set forth in Section 6; (b) after giving effect to such issuance, total
LC Obligations do not exceed the Letter of Credit Subline, no Overadvance exists and, if no Loans
are outstanding, the LC Obligations do not exceed the Borrowing Base (without giving effect to the
LC Reserve for purposes of this calculation); (c) the expiration date of such Letter of Credit is
(i) no more than 365 days from issuance, in the case of standby Letters of Credit, (ii) no more
than 120 days from issuance, in the case of documentary Letters of Credit, and (iii) at least 20
Business Days prior to the Revolver Termination Date; (d) the Letter of Credit and payments
thereunder are denominated in Dollars; and (e) the purpose and form of the proposed Letter of
Credit is satisfactory to Agent and Issuing Bank in their discretion.



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



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



-14-









 





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



     LC Reserve: the aggregate of all LC Obligations, other than (a) those that have been
Cash Collateralized; and (b) if no Default or Event of Default exists, those constituting charges
owing to the Issuing Bank.



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



     Lenders: as defined in the preamble to this Agreement, including Agent in its capacity
as a provider of Swingline Loans and any other Person who hereafter becomes a “Lender” pursuant to
an Assignment and Acceptance.



     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 Borrower Agent.



     Letter of Credit: any standby or documentary letter of credit issued by Issuing Bank
for the account of a Borrower, or any indemnity, guarantee, exposure transmittal memorandum or
similar form of credit support issued by Agent or Issuing Bank for the benefit of a Borrower.



     Letter of Credit Subline: $30,000,000.



     LIBOR: for any Interest Period with respect to a LIBOR Loan, the per annum rate of
interest (rounded upward, if necessary, to the nearest 1/8th of 1%), determined by Agent at
approximately 11:00 a.m. (London time) two 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 1 minus the Reserve Percentage.



     LIBOR Loan: a Loan that bears interest based on LIBOR.



     License: any license or agreement under which a Borrower 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.



     Licensor: any Person from whom a Borrower 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, hypothecations, statutory trusts, reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases, and other
title exceptions and encumbrances affecting Property.



-15-









 





     Lien Waiver: an agreement, in form and substance satisfactory to Agent, by which (a)
for any material Collateral located on leased premises, 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) 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.



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



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



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



     Loan Year: each calendar year 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: the effect of any event or circumstance that, taken alone or
in conjunction with other events or circumstances, (a) has or could be reasonably expected to have
a material adverse effect on the business, operations, prospects or condition (financial or
otherwise) of any Borrower, on the value of any material Collateral, on the enforceability of any
Loan Documents, or on the validity or priority of Agent’s Liens on any Collateral; (b) impairs the
ability of any Borrower to perform any obligations under the Loan Documents, including repayment of
any Obligations; or (c) otherwise impairs the ability of Agent or any Lender to enforce or collect
any Obligations or to realize upon any Collateral.



     Material Contract: any agreement or arrangement to which a Borrower or Subsidiary is
party (other than the Loan Documents) (a) that is deemed to be a material contract under any
securities law applicable to such Borrower or Subsidiary, including the Securities Act of 1933; (b)
for which breach, termination, nonperformance or failure to renew could reasonably be expected to
have a Material Adverse Effect; or (c) that relates to Debt in an aggregate amount of $10,000,000
or more.



     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 Borrower or ERISA Affiliate makes or is obligated to make



-16-









 




contributions, or during the preceding five plan years, has made or been obligated to make
contributions.




     Net Proceeds: with respect to an Asset Disposition, proceeds (including, when
received, any deferred or escrowed payments) received by a Borrower 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 for indemnities, until such reserves are no longer needed.



     NOLV Percentage: the net orderly liquidation value of Inventory, expressed as a
percentage of Value, 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 Borrowers’ Inventory after the Appraisal Trigger Date performed by an appraiser and on
terms satisfactory to Agent.



     Notes: each promissory note executed by Borrowers in favor of a Lender in the form of
Exhibit A, which shall be in the amount of such Lender’s Commitment and shall evidence the Loans
made by such Lender or other promissory note executed by a Borrower to evidence any Obligations.



     Notice of Borrowing: a Notice of Borrowing to be provided by Borrower Agent to request
a Borrowing of Loans, in form satisfactory to Agent.



     Notice of Conversion/Continuation: a Notice of Conversion/Continuation to be provided
by Borrower Agent to request a conversion or continuation of any Loans as LIBOR Loans, in form
satisfactory to Agent.



     Notice of Facility Increase: as defined in Section 2.3.



     Obligations: all (a) principal of and premium, if any, on the Loans, (b) LC
Obligations and other obligations of Borrowers with respect to Letters of Credit, (c) interest,
expenses, fees and other sums payable by Borrowers under Loan Documents, (d) obligations of
Borrowers under any indemnity for Claims, (e) Extraordinary Expenses, (f) Bank Product Debt, and
(g) other Debts, obligations and liabilities of any kind owing by Borrowers 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, guaranty, indemnification or otherwise, and whether direct
or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or
several.



     Offerees: as defined in Section 2.3.



     Ordinary Course of Business: the ordinary course of business of any Borrower or
Subsidiary, consistent with past practices and undertaken in good faith.




-17-











 





     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, 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; Lien Waiver; Intercreditor
Agreement; Borrowing Base Certificate, Compliance Certificate, financial statement or report
delivered hereunder; or other document, instrument or agreement (other than this Agreement or a
Security Document) now or hereafter delivered by a Borrower 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: as defined in Section 2.1.5.



     Overadvance Loan: a Base Rate Loan made when an Overadvance exists or is caused by the
funding thereof.



     Participant: as defined in Section 13.2.



     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 Borrower,
including those constituting proceeds of any Collateral.



     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 Borrower or ERISA Affiliate or to which the Borrower 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 plan years.



     Permitted Asset Disposition: as long as no Default or Event of Default exists and all
Net Proceeds are remitted to Agent, an Asset Disposition that is (a) a sale of Inventory in the
Ordinary Course of Business; (b) a disposition of Inventory that is obsolete, unmerchantable or
otherwise unsalable in the Ordinary Course of Business; (c) termination of a lease of real or
personal Property that is not necessary for the Ordinary Course of Business, could not reasonably
be expected to have a Material Adverse Effect and does not result from a Borrower’s default; (d)



-18-









 







a disposition by Cooper of all of its Equity Interests in Oliver Rubber Company, a California
corporation; or (e) approved in writing by Agent and Required Lenders; provided that any
Asset Disposition described in clauses (b) and (d) shall be for fair market value and 80% cash
consideration.



     Permitted Contingent Obligations: Contingent Obligations (a) arising from indorsements
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 any extension or
renewal thereof that does not increase the amount of such Contingent Obligation when extended or
renewed; (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 Equipment permitted
hereunder; (f) arising under the Loan Documents; (f) arising from unsecured guarantees of Debt of a
foreign Subsidiary incurred to finance such foreign Subsidiary’s operations; or (h) in an aggregate
amount of $20,000,000 or less at any time.



     Permitted Lien: as defined in Section 10.2.2.



     Permitted Purchase Money Debt: Purchase Money Debt of Borrowers and Subsidiaries that
is unsecured or secured only by a Purchase Money Lien, as long as the aggregate amount does not
exceed $20,000,000 at any time.



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



     Plan: any employee benefit plan (as such term is defined in Section 3(3) of ERISA)
established by a Borrower or, with respect to any such plan that is subject to Section 412 of the
Code or Title IV of ERISA, an ERISA Affiliate.



     Pledge Agreement: the Pledge Agreement dated the date hereof, by Cooper and Collateral
Agent.



     Pro Rata: with respect to any Lender, a percentage (carried out to the ninth decimal
place) determined (a) while Revolver Commitments are outstanding, by dividing the amount of such
Lender’s Revolver Commitment by the aggregate amount of all Revolver Commitments; and (b) at any
other time, by dividing the amount of such Lender’s Loans and LC Obligations by the aggregate
amount of all outstanding Loans and LC Obligations.



     Properly Contested: with respect to any obligation of a Borrower, (a) the obligation
is subject to a bona fide dispute regarding amount or the Borrower’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; (d)
non-payment could not have a Material Adverse Effect, nor result in forfeiture or sale of any
assets of the Borrower; (e) no Lien is imposed on assets of the Borrower, unless bonded and stayed
to the satisfaction of Agent; and (f) if the obligation results from entry of a judgment or other
order, such judgment or order is stayed pending appeal or other judicial review.



-19-









 





     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 and Sale Agreement: Purchase and Sale Agreement, dated as of August 30, 2006,
between the Originators party thereto and Cooper Receivables LLC, as amended, modified, or
supplemented through the Closing Date and from time to time thereafter to the extent permitted by
subsection 10.1 thereof and Section 10.2.17 hereof.



     Purchase Money Debt: (a) Debt (other than the Obligations) for payment of any of the
purchase price of fixed assets; (b) Debt (other than the Obligations) incurred within 30 days
before or after acquisition of any fixed assets, for the purpose of financing any of the purchase
price thereof; and (c) any renewals, extensions or refinancings (but not increases) thereof.



     Purchase Money Lien: a Lien that secures Purchase Money Debt, encumbering only the
fixed assets acquired with such Debt and the proceeds thereof and constituting a Capital Lease or a
purchase money security interest under the UCC.



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



     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.



     Receivables Accounts: any Accounts sold pursuant to the Receivables Securitization
Facility.



     Receivables Purchase Agreement: Amended and Restated Receivables Purchase Agreement,
dated as of September 14, 2007, among Cooper, Cooper Receivables LLC, the various Purchasers and
Purchaser Agents from time to time party thereto and PNC Bank, National Association, as amended,
modified, or supplemented through the Closing Date and from time to time thereafter to the extent
permitted by subsection 6.1 thereof and Section 10.2.17 hereof.



     Receivables Securitization Facility: the $125,000,000 accounts receivable
securitization facility provided for by (a) the Purchase and Sale Agreement, (b) the Receivables
Purchase Agreement and (c) all documents, agreements, and instruments relating to either of the
foregoing, in each case, as amended, modified, or supplemented through the Closing Date and from
time to time thereafter to the extent permitted by subsection 10.1 of the Purchase and Sale
Agreement, Section 6.1 of the Receivables Purchase Agreement and Section 10.2.17 hereof.



     Receivables Securitization Facility Subordinated Note: the Company Note dated August
30, 2006 executed by Cooper Receivables LLC in favor of Cooper.



     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,
renewed or refinanced; (b) it has a final maturity no sooner than, a weighted average life no less
than, and an interest rate no greater than, the Debt being extended, renewed or



-20-









 




refinanced; (c) it is subordinated to the Obligations at least to the same extent as the Debt
being extended, renewed or refinanced; (d) the representations, covenants and defaults applicable
to it are no less favorable to Borrowers than those applicable to the Debt being extended, renewed
or refinanced; (e) no additional Lien is granted to secure it; (f) no additional Person is
obligated on such Debt; and (g) upon giving effect to it, no Default or Event of Default exists.




     Refinancing Debt: Borrowed Money that is the result of an extension, renewal or
refinancing of Debt permitted under Section 10.2.1(c) or (e).



     Reimbursement Date: as defined in Section 2.2.2.



     Rent and Charges Reserve: the aggregate of (a) all past due rent and other amounts
owing by a Borrower to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight
forwarder, broker or other Person who possesses any Collateral or could assert a Lien on any
Collateral; and (b) a reserve at least equal to three months rent and other charges that could be
payable to any such Person, unless it has executed a Lien Waiver.



     Report: as defined in Section 12.2.3.



     Reportable Event: any of the events set forth in Section 4043(c) of ERISA, other than
events for which the 30 day notice period has been waived.



     Required Lenders: Lenders (subject to Section 4.2) having Revolver Commitments in
excess of 50% of the aggregate Revolver Commitments.



     Reserve Percentage: the reserve percentage (expressed as a decimal, rounded upward to
the nearest 1/8th 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”).



     Restricted Investment: any Investment by a Borrower or Subsidiary, other than (a)
Investments in Subsidiaries to the extent existing on the Closing Date; (b) Cash Equivalents that
are subject to Agent’s Lien and control, pursuant to documentation in form and substance
satisfactory to Agent; (c) loans and advances permitted under Section 10.2.6; (d) loans and
advances that, when taken together with all loans and advances permitted under Section 10.2.6(d),
do not exceed $10,000,000 in the aggregate at any time outstanding; and (e) Investments in
connection with the Receivables Securitization Facility.



     Restrictive Agreement: an agreement (other than a Loan Document) that conditions or
restricts the right of any Borrower or Subsidiary to incur or repay Borrowed Money, to grant Liens
on any assets, to declare or make Distributions, to modify, extend or renew any agreement
evidencing Borrowed Money, or to repay any intercompany Debt.



     Revolver Commitment: for any Lender, its obligation to make Loans and to participate
in LC Obligations up to the maximum principal amount shown on Schedule 1.1, or as hereafter
determined pursuant to each Assignment and Acceptance to which it is a party. “Revolver
Commitments” means the aggregate amount of such commitments of all Lenders.



-21-









 





     Revolver Credit Maximum Amount: $200,000,000, as such amount may be increased or
reduced from time to time pursuant to the terms of this Agreement.



     Revolver
Termination Date: ► November 9, 2012.



     Royalties: all royalties, fees, expense reimbursement and other amounts payable by a
Borrower or its Subsidiaries or Affiliates under a License.



     RPA Blocked Accounts: blocked accounts established in connection with the Receivables
Securitization Facility.



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



     Secured Parties: Agent, Issuing Bank, Lenders and providers of Bank Products.



     Security Documents: the Pledge Agreement, 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 chief financial officer or treasurer of a Borrower.



     Settlement Report: a report delivered by Agent to Lenders summarizing the Loans and
participations in LC Obligations outstanding as of a given settlement date, allocated to Lenders on
a Pro Rata basis in accordance with their Revolver Commitments.



     Significant Subsidiary: a “significant subsidiary” within the meaning of Regulation
S-X promulgated under the Exchange Act and organized under any state of the United States of
America.



     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 its
business and is sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage; (e) is not “insolvent” within the meaning of Section
101(32) of the Bankruptcy Code; and (f) has not incurred (by way of assumption or otherwise) any
obligations or liabilities (contingent or otherwise) under any Loan Documents, 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. “Fair salable value” means
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.



     Subsidiary: any entity at least 50% of whose voting securities or Equity Interests is
owned by a Borrower or any combination of Borrowers (including indirect ownership by a



-22-









 




Borrower through other entities in which the Borrower directly or indirectly owns 50% of the
voting securities or Equity Interests).




     Swingline Loan: any Borrowing of Base Rate Loans funded with Agent’s funds, until such
Borrowing is settled among Lenders pursuant to Section 4.1.3.



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



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



     Trigger Period: the period (a) commencing on the day that an Event of Default occurs,
or Availability is less than $10,000,000 at any time; and (b) continuing until, during the
preceding 90 consecutive days, no Event of Default has existed and Availability has been greater
than $10,000,000 at all times.



     Type: any type of a Loan (i.e., Base Rate Loan or LIBOR Loan) that has the same
interest option and, in the case of LIBOR Loans, the same Interest Period.



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



     Unfunded Pension Liability: the excess of a Pension Plan’s benefit liabilities under
Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in
accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the
Code for the applicable plan year.



     Upstream Payment: a Distribution by a Subsidiary of a Borrower to such Borrower.



     Value: (a) for Inventory, its 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 Borrowers and their Affiliates; and (b) for an Account, its 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.



     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 Borrowers 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 Borrowers’ certified public accountants concur in such change and the change
is disclosed to Agent.



-23-









 





     1.3. Uniform Commercial Code. 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,” “Deposit Account,”
“Document,” “Equipment,” “General Intangibles,” “Goods,” “Instrument,” “Investment Property,”
“Letter-of-Credit Right,” “Payment Intangibles” and “Supporting Obligation.”



     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 include any amendments, waivers and other modifications,
extensions or renewals (to the extent permitted 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 include successors and assigns; (f) time of day
mean time of day at Agent’s notice address under Section 14.3.1; or (g) 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 payments of Obligations shall be in
Dollars and, unless the context otherwise requires, all determinations (including calculations of
Borrowing Base) 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). Borrowers shall have the burden of establishing
any alleged negligence, misconduct or lack of good faith by Agent, 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 Borrowers’ knowledge” or words of similar import are used in any Loan Documents, it
means actual knowledge of a Senior Officer, or knowledge that a Senior Officer would have obtained
if he or she had engaged in good faith and diligent performance of his or her duties, including
reasonably specific inquiries of employees or agents and a good faith attempt to ascertain the
matter to which such phrase relates.



SECTION 2. CREDIT FACILITIES




          Subject to the terms and conditions of, and in reliance upon the representations and
warranties made in, this Agreement and the other Loan Documents, Lenders agree, severally and not
jointly, to make a credit facility (the “Facility”) of up to the Revolving Credit Maximum
Amount available upon Borrowers’ request therefor, as follows:




     2.1. Revolver Commitment.



-24-









 





          2.1.1. Loans. Each Lender agrees, severally on a Pro Rata basis up to its Revolver
Commitment, on the terms set forth herein, to make Loans to Borrowers from time to time through the
Commitment Termination Date. The Loans may be repaid and reborrowed as provided herein. In no
event shall Lenders have any obligation to honor a request for a Loan if the unpaid balance of
Loans outstanding at such time (including the requested Loan) would exceed the Borrowing Base.




          2.1.2. Notes. The 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, Borrowers shall
deliver a Note to such Lender.




          2.1.3. Use of Proceeds. The proceeds of Loans shall be used by Borrowers solely (a)
to satisfy existing Debt; (b) to pay fees and transaction expenses associated with the closing of
this credit facility; (c) to pay Obligations in accordance with this Agreement; and (d) for working
capital, capital expenditures and other lawful corporate purposes of Borrowers.




          2.1.4. Voluntary Reduction or Termination of Revolver Commitments.




          (a) The Revolver Commitments shall terminate on the Revolver Termination Date, unless sooner
terminated in accordance with this Agreement. Upon at least 90 days prior written notice to Agent,
Borrowers may, at their option, terminate the Revolver Commitments and this credit facility. Any
notice of termination given by Borrowers shall be irrevocable. On the termination date, Borrowers
shall make Full Payment of all Obligations.




          (b) Borrowers may permanently reduce the Revolver Commitments, on a Pro Rata basis for each
Lender, upon at least 90 days prior written notice to Agent, which notice shall specify the amount
of the reduction and shall be irrevocable once given. Each reduction shall be in a minimum amount
of $25,000,000, or an increment of $1,000,000 in excess thereof.




          2.1.5. Overadvances. If the aggregate Loans exceed the Borrowing Base
(“Overadvance”) or the aggregate Revolver Commitments at any time, the excess amount shall
be payable by Borrowers on demand by Agent, but all such Loans shall nevertheless constitute
Obligations secured by the Collateral and entitled to all benefits of the Loan Documents. Unless
its authority has been revoked in writing by Required Lenders, Agent may require Lenders to honor
requests for Overadvance Loans and to forbear from requiring Borrowers to cure an Overadvance, (a)
when no other Event of Default is known to Agent, as long as (i) the Overadvance does not continue
for more than 30 consecutive days (and no Overadvance may exist for at least five consecutive days
thereafter before further Overadvance Loans are required), and (ii) the Overadvance, together with
any Protective Advances, is not known by Agent to exceed 10% of the Borrowing Base; 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 $5,000,000, and (ii) does not continue for more than 30 consecutive days.
In no event shall Overadvance Loans be required that would cause the outstanding Loans and LC
Obligations to exceed the aggregate Revolver Commitments. Any funding of an Overadvance Loan or
sufferance of an Overadvance shall not constitute a waiver by Agent or Lenders of the Event of Default caused thereby. In no event




-25-









 







shall any Borrower be deemed a beneficiary of this Section nor authorized to enforce any of its
terms.




          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 Base Rate Loans (“Protective
Advances”) (a) as long as the Overadvance, together with any Protective Advances, is not known
by Agent to exceed 10% of the Borrowing Base, if Agent deems such Loans necessary or desirable to
preserve or protect Collateral, or to enhance the collectibility or repayment of Obligations; or
(b) to pay any other amounts chargeable to Borrowers under any Loan Documents, including costs,
fees and expenses. In no event shall Protective Advances be permitted to the extent they would
cause the outstanding Loans and LC Obligations to exceed the aggregate Revolver Commitments. Each
Lender shall participate in each Protective Advance on a Pro Rata basis. Required Lenders may at
any time revoke Agent’s authority to make further Protective Advances by written notice to Agent.
Absent such revocation, Agent’s determination that funding of a Protective Advance is appropriate
shall be conclusive.




     2.2. Letter of Credit Facility.



          2.2.1. Issuance of Letters of Credit. Issuing Bank agrees to issue Letters of Credit
from time to time until 30 days prior to the Revolver Termination Date (or until the Commitment
Termination Date, if earlier), on the terms set forth herein, including the following:




          (a) Each Borrower acknowledges that Issuing Bank’s willingness to issue any Letter of Credit
is conditioned upon Issuing Bank’s receipt of a LC Application with respect to the requested Letter
of Credit, as well as such other instruments and agreements as Issuing Bank may customarily require
for issuance of a letter of credit of similar type and amount. Issuing Bank shall have no
obligation to issue any Letter of Credit unless (i) Issuing Bank receives a LC Request and LC
Application at least three Business Days prior to the requested date of issuance; and (ii) each LC
Condition is satisfied. If Issuing Bank receives written notice from a Lender at least five
Business Days before issuance of a Letter of Credit that any LC Condition has not been satisfied,
Issuing Bank shall have no obligation to issue the requested Letter of Credit (or any other) until
such notice is withdrawn in writing by that Lender or until Required Lenders have waived such
condition in accordance with this Agreement. Prior to receipt of any such notice, Issuing Bank
shall not be deemed to have knowledge of any failure of LC Conditions.




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




          (c) Borrowers assume all risks of the acts, omissions or misuses of any Letter of Credit by
the beneficiary. In connection with issuance of any Letter of Credit, none of Agent, Issuing Bank
or any 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,




-26-









 







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 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 a 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 Letter of Credit or the proceeds
thereof; or any consequences arising from causes beyond the control of Issuing Bank, Agent or any
Lender, including any act or omission of a Governmental Authority. The rights and remedies of
Issuing Bank under the Loan Documents shall be cumulative. Issuing Bank shall be fully subrogated
to the rights and remedies of each beneficiary whose claims against Borrowers are discharged with
proceeds of any Letter of Credit.




          (d) In connection with its administration of and enforcement of rights or remedies under any
Letters of Credit or LC Documents, 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 Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or
made by a proper Person. 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. 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.




          2.2.2. Reimbursement; Participations.




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




          (b) Upon issuance of a Letter of Credit, each Lender shall be deemed to have irrevocably and
unconditionally purchased from Issuing Bank, without recourse or warranty, an undivided Pro Rata
interest and participation in all LC Obligations relating to the Letter of
Credit. If Issuing Bank makes any payment under a Letter of Credit and Borrowers do not




-27-









 







reimburse such payment on the Reimbursement Date, Agent shall promptly notify Lenders and each
Lender shall promptly (within one Business Day) and unconditionally pay to Agent, for the benefit
of Issuing Bank, the Lender’s Pro Rata share of such payment. Upon request by a Lender, Issuing
Bank shall furnish copies of any Letters of Credit and LC Documents in its possession at such time.




          (c) The obligation of each Lender to make payments to Agent for the account of Issuing Bank in
connection with Issuing Bank’s payment under a 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 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 Borrower may have with respect to any
Obligations. Issuing Bank does not assume any responsibility for any failure or delay in
performance or any breach by any Borrower or other Person of any obligations under any LC
Documents. Issuing Bank does not make to Lenders any express or implied warranty, representation
or guaranty with respect to the Collateral, LC Documents or any Borrower. Issuing Bank shall not
be responsible to any 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, collectibility,
value or sufficiency of any Collateral or the perfection of any Lien therein; or the assets,
liabilities, financial condition, results of operations, business, creditworthiness or legal status
of any Borrower.




          (d) No Issuing Bank Indemnitee shall be liable to any Lender or other Person for any action
taken or omitted to be taken in connection with any LC Documents except as a result of its actual
gross negligence or willful misconduct. Issuing Bank shall not have any liability to any Lender if
Issuing Bank refrains from any action under any Letter of Credit or LC Documents until it receives
written instructions from Required Lenders.




          2.2.3. Cash Collateral. If any 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
Availability is less than zero, (c) after the Commitment Termination Date, or (d) within 20
Business Days prior to the Revolver Termination Date, then Borrowers shall, at Issuing Bank’s or
Agent’s request, Cash Collateralize the stated amount of all outstanding Letters of Credit and pay
to Issuing Bank the amount of all other LC Obligations. If Borrowers fail to provide Cash
Collateral as required herein, Lenders may (and shall upon direction of Agent) advance, as Loans,
the amount of the Cash Collateral required (whether or not the Commitments have terminated, an
Overadvance exists or the conditions in Section 6 are satisfied).









     2.3. Facility Increase. Borrowers may from time to time request an increase in the Revolver Credit Maximum Amount and the
aggregate Revolver Commitments by an aggregate amount of up to $50,000,000 (each such increase, a
“Facility Increase”). Each Facility Increase shall be made on notice given by
any Borrower to Agent no later than 12:00 noon (Central time) 30 days prior to the date of the
proposed Facility Increase. Each such notice (a “Notice of Facility Increase”) shall (i)
specify the date of such proposed Facility Increase (the
“Facility



-28-









 







Increase Effective Date”), (ii) specify the aggregate amount of such proposed Facility Increase, which shall be in
an amount not less than $10,000,000 (the “Facility Increase Amount”), and (iii) certify
that, (a) at such time, no Default or Event of Default shall have occurred and be continuing
(provided that by accepting a requested Facility Increase, Borrower shall be deemed to have
represented to Lenders that no Default or Event of Default shall have occurred and be continuing at
the time the Facility Increase becomes effective) and (b) all representations and warranties shall
be true and correct in all material respects immediately prior to and immediately after giving
effect to, the incurrence of the Facility Increase. Agent shall give each Lender prompt notice of
Agent’s receipt of a Notice of Facility Increase. Each Lender, in its sole and absolute
discretion, may notify the Agent within ten Business Days after the Notice of Facility Increase
whether or not it agrees to provide part of the Facility Increase. Any Lender not responding
within such time period shall be deemed to have declined to increase its Commitment. If the
existing Lenders do not agree to the full amount of the Facility Increase, then the Agent may
approach the existing Lenders to provide the Facility Increase, or, at Borrowers’ request, Agent
shall invite such other financial institutions selected by Borrowers and reasonably acceptable to
Agent to provide the Facility Increase and become Lenders (such existing Lenders and other
financial institutions, the “Offerees”). Each Offeree shall have until 3:00 p.m. (Central
time) on the fifth Business Day preceding the Facility Increase Effective Date to commit in writing
to all or a portion of the Facility Increase. If the Offerees deliver commitments with respect to
such Facility Increase in an amount in excess of the Facility Increase Amount, then Agent shall
allocate the Facility Increase to the Offerees committing to the Facility Increase on any basis
Agent determines appropriate in consultation with Borrower Agent. On the Facility Increase
Effective Date, (A) each Offeree committing to a portion of such Facility Increase shall execute an
assumption agreement satisfactory to Agent pursuant to which such Offeree agrees to be bound by the
terms of this Agreement as a Lender, (B) the Revolver Credit Maximum Amount and the Revolver
Commitments will be increased by the Facility Increase Amount in accordance with the allocations
determined by Agent, and (C) each Lender, after giving effect to such Facility Increase, shall
purchase or sell the Loans held by it from or to the other Lenders, as directed by Agent, such that
after giving effect to such purchases and sales each Lender holds its ratable portion of the
outstanding Loans. If the commitments of the Offerees in respect of such Facility Increase are
less than the Facility Increase Amount, none of the Lenders shall have any obligation to commit to
the uncommitted portion of such Facility Increase, and Borrowers may elect either to reduce the
Facility Increase Amount accordingly or to terminate the request for a Facility Increase. Upon the
effective date of any Facility Increase, Agent shall have received, if requested, opinion letters,
promissory notes and such other agreements, documents and instruments reasonably requested by and
reasonably satisfactory to Agent in its reasonable discretion evidencing and setting for the
conditions of the Facility Increase. Notwithstanding the foregoing, no Facility Increase shall be
effected unless the conditions set forth in Section 6.2 are satisfied on the Facility Increase
Effective Date.



SECTION 3. INTEREST, FEES AND CHARGES




     3.1. Interest.



          3.1.1. Rates and Payment of Interest.





-29-









 








          (a) The Obligations shall bear interest (i) if a Base Rate Loan, at the 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; and (iii) if any other Obligation (including, to the
extent permitted by law, interest not paid when due), at the Base Rate in effect from time to time,
plus the Applicable Margin for Base Rate Loans. Interest shall accrue from the date the Loan is
advanced or the Obligation is incurred or payable, until paid by Borrowers. If a Loan is repaid on
the same day made, one day’s interest shall accrue.




          (b) During an Insolvency Proceeding with respect to any Borrower, or during any other Event of
Default if Agent or Required Lenders in their discretion so elect, Obligations shall bear interest
at the Default Rate (whether before or after any judgment). Each Borrower 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 for this.




          (c) Interest accrued on the Loans shall be due and payable in arrears, (i) on the first day of
each month and, for any LIBOR Loan, the last day of its Interest Period; provided,
however, that if any Interest Period exceeds three month, the respective dates that fall
every three months after the beginning of such Interest Period shall also be Interest Payment
Dates; (ii) on any date of prepayment, with respect to the principal amount of Loans being prepaid;
and (iii) on the 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) Borrowers may on any Business Day, subject to delivery of a Notice of
Conversion/Continuation, elect to convert any portion of the Base Rate Loans to, or to continue any
LIBOR Loan at the end of its Interest Period as, a LIBOR Loan. During any Default or Event of
Default, Agent may (and shall at the direction of Required Lenders) declare that no Loan may be
made, converted or continued as a LIBOR Loan.




          (b) Whenever Borrowers desire to convert or continue Loans as LIBOR Loans, Borrower Agent
shall give Agent a Notice of Conversion/Continuation, no later than 11:00 a.m. at least three
Business Days before the requested conversion or continuation date. Promptly after receiving any
such notice, Agent shall notify each 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 month if not specified). If, upon the expiration of any Interest
Period in respect of any LIBOR Loans, Borrowers shall have failed to deliver a Notice of
Conversion/Continuation, they shall be deemed to have elected to convert such Loans into Base Rate
Loans.




          3.1.3. Interest Periods. In connection with the making, conversion or continuation of
any LIBOR Loans, Borrowers shall select an interest period (“Interest Period”) to apply,
which interest period shall be one, two, three or six months; provided, however,
that:




-30-









 








          (a) the Interest Period shall commence on the date the Loan is made or continued as, or
converted into, a LIBOR 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; and 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




          (c) no Interest Period shall extend beyond the Revolver Termination Date.




          3.1.4. Interest Rate Not Ascertainable. If Agent shall determine that on any date for
determining LIBOR, due to any circumstance affecting the London interbank market, adequate and fair
means do not exist for ascertaining such rate on the basis provided herein, then Agent shall
immediately notify Borrowers of such determination. Until Agent notifies Borrowers 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. Borrowers shall pay to Agent, for the Pro Rata benefit of
Lenders, a fee equal to 0.25% per annum times the amount by which the Revolver Commitments exceed
the average daily balance of Loans and stated amount of Letters of Credit during any month. Such
fee shall be payable in arrears, on the first day of each month for the preceding month and on the
Commitment Termination Date.




          3.2.2. LC Facility Fees. Borrowers shall pay (a) to Agent, for the Pro Rata benefit
of Lenders, a fee equal to the Applicable Margin in effect for LIBOR Loans times the average daily
stated amount of Letters of Credit, which fee shall be payable quarterly in arrears, on the first
day of each Fiscal Quarter for the preceding Fiscal Quarter and on the Commitment Termination Date;
(b) to Agent, for its own account, a fronting fee equal to 0.125% per annum on the stated amount of
each Letter of Credit, which fee shall be payable quarterly in arrears, on the first day of each
Fiscal Quarter for the preceding Fiscal Quarter and on the Commitment Termination Date; and (c) to
Issuing Bank, for its own account, all customary charges associated with the issuance, amending,
negotiating, payment, processing, transfer and administration of Letters of Credit, which charges
shall be paid as and when incurred. During an Event of Default, the fee payable under clause (a)
shall be increased by 2% per annum.




          3.2.3. Closing Fee. Borrowers shall pay to Agent, for the Pro Rata benefit of
Lenders, a closing fee in accordance with the terms of the fee letter among the Arrangers and the
Borrowers, which shall be paid concurrently with the funding of the initial Loans hereunder.




          3.2.4. Agent Fees. In consideration of Agent’s syndication of the Commitments and
service as Agent hereunder, Borrowers shall pay to Agent, for its own account, the fees described
in the Fee Letter.





-31-









 













     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 360 days. 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 as to amounts payable by Borrowers under Section 3.4, 3.6, 3.7, 3.9 or
5.9, submitted to Borrower Agent by Agent or the affected Lender, as applicable, shall be final,
conclusive and binding for all purposes, absent manifest error, and Borrowers shall pay such
amounts to the appropriate party within 10 days following receipt of the certificate.



     3.4. Reimbursement Obligations. Borrowers shall reimburse Agent for all Extraordinary Expenses. Borrowers 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, Loan Documents and transactions contemplated thereby, including any actions taken to
perfect or maintain priority of Agent’s Liens on any Collateral, to maintain any insurance required
hereunder or to verify Collateral; and (c) subject to the limits of Section 10.1.1(b), each
inspection, audit or appraisal with respect to any Borrower or Collateral, whether prepared by
Agent’s personnel or a third party. All legal, accounting and consulting fees shall be charged to
Borrowers by Agent’s professionals at their billed rates. 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 Borrowers shall immediately 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
Borrowers under this Section shall be due on demand.




     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 LIBOR Loans, or to determine or charge interest rates based upon
LIBOR, 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, then,
on notice thereof by such Lender to Agent, any obligation of such Lender to make or continue LIBOR
Loans or to convert Base Rate Loans to LIBOR 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, Borrowers shall prepay or, if applicable, convert all
LIBOR Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period
therefor, if such Lender may lawfully continue to maintain such LIBOR Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such LIBOR Loans. Upon any such
prepayment or conversion, Borrowers 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, a LIBOR



-32-









 







Loan that (a) Dollar deposits are not being
offered to banks in the London interbank Eurodollar market for the applicable amount and Interest
Period of such Loan, (b) adequate and reasonable means do not exist for determining LIBOR for the
requested Interest Period, or (c) LIBOR 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
Borrower Agent and each Lender. Thereafter, the obligation of Lenders to make or maintain LIBOR
Loans shall be suspended until Agent (upon instruction by Required Lenders) revokes such notice.
Upon receipt of such notice, Borrower Agent may revoke any pending request for a Borrowing of,
conversion to or continuation of a LIBOR Loan or, failing that, will be deemed to have submitted a
request for a Base 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
Issuing Bank;




          (b) subject any Lender or 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 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 Issuing Bank); or




          (c) impose on any Lender or 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
LIBOR Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to
such Lender or 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 Issuing Bank hereunder (whether of
principal, interest or any other amount) then, upon request of such Lender or Issuing Bank,
Borrowers will pay to such Lender or Issuing Bank, as applicable, such additional amount or
amounts as will compensate such Lender or Issuing Bank, as applicable, for such additional costs
incurred or reduction suffered.




          3.7.2. Capital Adequacy. If any Lender or Issuing Bank determines that any Change in
Law affecting such Lender or Issuing Bank or any Lending Office of such Lender or such Lender’s or
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, Issuing Bank’s or holding company’s capital as a
consequence of this Agreement, or such Lender’s or Issuing Bank’s Commitments, Loans, Letters of
Credit or participations in LC Obligations, to a level below that which such Lender, Issuing Bank
or holding company could have achieved but for such Change




-33-









 







in Law (taking into consideration such
Lender’s, Issuing Bank’s and holding company’s policies with respect to capital adequacy), then
from time to time Borrowers will pay to such Lender or 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.




          3.7.3. Compensation. Failure or delay on the part of any Lender or Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of its right to demand
such compensation, but Borrowers shall not be required to compensate a Lender or Issuing Bank for
any increased costs incurred or reductions suffered more than nine months prior to the date that
the Lender or Issuing Bank notifies Borrower Agent of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or 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-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 Borrowers are required to pay additional amounts 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 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 disadvantageous
to such Lender. Borrowers agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.




     3.9. Funding Losses. If for any reason (other than default by a Lender) (a) any Borrowing of, or conversion to or
continuation of, a LIBOR 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 a LIBOR Loan occurs on a day other than the end of its Interest Period, or (c)
Borrowers fail to repay a LIBOR Loan when required hereunder, then Borrowers 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. 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 or, if it exceeds such unpaid principal, refunded to Borrowers.
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



-34-









 







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.



SECTION 4. LOAN ADMINISTRATION




     4.1. Manner of Borrowing and Funding Loans.



          4.1.1. Notice of Borrowing.




          (a) Whenever Borrowers desire funding of a Borrowing of Loans, Borrower Agent shall give Agent
a Notice of Borrowing. Such notice must be received by Agent no later than 11:00 a.m. (i) on the
Business Day of the requested funding date, in the case of Base Rate Loans, and (ii) at least three
Business Days prior to the requested funding date, in the case of LIBOR 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 amount of the Borrowing, (B) the requested funding date
(which must be a Business Day), (C) whether the Borrowing is to be made as Base Rate Loans or LIBOR
Loans, and (D) in the case of LIBOR Loans, the duration of the applicable Interest Period (which
shall be deemed to be one month if not specified).




          (b) Unless payment is otherwise timely made by Borrowers, the becoming due of any Obligations
(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 Base Rate
Loans on the due date, in the amount of such Obligations. The proceeds of such Loans shall be
disbursed as direct payment of the relevant Obligation. In addition, Agent may, at its option,
charge such Obligations against any operating, investment or other account of a Borrower maintained
with Agent or any of its Affiliates.




          4.1.2. Fundings by Lenders. Each Lender shall timely honor its Revolver Commitment by
funding its Pro Rata share of each Borrowing of Loans that is properly requested hereunder. Except
for Borrowings to be made as Swingline Loans, Agent shall endeavor to notify Lenders of each Notice
of Borrowing (or deemed request for a Borrowing) by 12:00 noon on the proposed funding date for Base Rate Loans or by 3:00 p.m. at least two
Business Days before any proposed funding of LIBOR Loans. Each 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 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 Lenders, Agent shall
disburse the proceeds of the Loans as directed by Borrower Agent. Unless Agent shall have received
(in sufficient time to act) written notice from a Lender that it does not intend to fund its Pro
Rata share of a Borrowing, Agent may assume that such Lender has deposited or promptly will deposit
its share with Agent, and Agent may disburse a corresponding amount to Borrowers. If a Lender’s
share of any Borrowing is not in fact received by Agent, then Borrowers agree 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.





-35-









 








          4.1.3. Swingline Loans; Settlement.




          (a) Agent may, but shall not be obligated to, advance Swingline Loans to Borrowers, up to an
aggregate outstanding amount of $15,000,000, unless the funding is specifically required to be made
by all Lenders hereunder. Each Swingline Loan shall constitute a Loan for all purposes, except
that payments thereon shall be made to Agent for its own account. The obligation of Borrowers to
repay Swingline Loans shall be evidenced by the records of Agent and need not be evidenced by any
promissory note.




          (b) To facilitate administration of the Loans, 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 Swingline Loans and other Loans may take place periodically 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 Lender in accordance with the Settlement Report
delivered by Agent to Lenders. Between settlement dates, Agent may in its discretion apply
payments on Loans to Swingline Loans, regardless of any designation by Borrower or any provision
herein to the contrary. Each Lender’s obligation to make settlements with Agent is absolute and
unconditional, without offset, counterclaim or other defense, and whether or not the Commitments
have terminated, an Overadvance exists or the conditions in Section 6 are satisfied. If, due to an
Insolvency Proceeding with respect to a Borrower or otherwise, any Swingline Loan may not be
settled among Lenders hereunder, then each Lender shall be deemed to have purchased from Agent a
Pro Rata participation in each unpaid Swingline Loan and shall transfer the amount of such
participation to Agent, in immediately available funds, within one 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
Borrowers based on telephonic or e-mailed instructions. Borrowers 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 Lenders 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 a Borrower’s behalf.









     4.2. Defaulting Lender. If a Lender fails to make any payment to Agent that is required hereunder, Agent may (but
shall not be required to), in its discretion, retain payments that would otherwise be made to such
defaulting Lender hereunder, apply the payments to such Lender’s defaulted obligations or readvance
the funds to Borrowers in accordance with this Agreement. The failure of any Lender to fund a Loan
or to make a payment in respect of a LC Obligation shall not relieve any other Lender of its
obligations hereunder, 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” until all its defaulted
obligations have been cured.



-36-









 






     4.3. Number and Amount of LIBOR Loans; Determination of Rate. No more than 5 Borrowings of LIBOR Loans may be outstanding at any time, and each Borrowing of
LIBOR Loans when made shall be in a minimum amount of $5,000,000, or an increment of $1,000,000 in
excess thereof. Upon determining LIBOR for any Interest Period requested by Borrowers, Agent shall
promptly notify Borrowers thereof by telephone or electronically and, if requested by Borrowers,
shall confirm any telephonic notice in writing.




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




     4.5. One Obligation. The Loans, LC Obligations and other Obligations shall constitute one general obligation of
Borrowers and (unless otherwise expressly provided in any Loan Document) shall be secured by
Agent’s Lien upon all Collateral; provided, however, that Agent and each Lender shall be
deemed to be a creditor of, and the holder of a separate claim against, each Borrower to the extent
of any Obligations jointly or severally owed by such Borrower.




     4.6. Effect of Termination. On the effective date of any termination of the Commitments, all Obligations shall be
immediately due and payable, and any Lender may terminate its and its Affiliates’ Bank Products
(including, only with the consent of Agent, any Cash Management Services). All undertakings of
Borrowers contained in the Loan Documents shall survive any termination, 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. Notwithstanding Full Payment of the Obligations, Agent shall not be
required to terminate its Liens in any Collateral unless, with respect to any damages Agent may
incur as a result of the dishonor or return of Payment Items applied to Obligations, Agent receives
(a) a written agreement, executed by Borrowers and any Person whose advances are used in whole or
in part to satisfy the Obligations, indemnifying Agent and Lenders from any such damages; or (b)
such Cash Collateral as Agent, in its discretion, deems necessary to protect against any such
damages. The provisions of Sections 2.3, 3.4, 3.6, 3.7, 3.9, 5.4, 5.8, 12, 14.2 and this Section,
and the obligation of each Borrower 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.



-37-









 





SECTION 5. PAYMENTS




     5.1. General Payment Provisions. All payments of Obligations shall be made in Dollars, without offset, counterclaim or defense
of any kind, free of (and without deduction for) any Taxes, and in immediately available funds, not
later than 1:00 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 a LIBOR Loan prior
to the end of its Interest Period shall be accompanied by all amounts due under Section 3.9. Any
prepayment of Loans shall be applied first to Base Rate Loans and then to LIBOR Loans; provided,
however, that as long as no Event of Default exists, prepayments of LIBOR Loans may, at the option
of Borrowers and Agent, be held by Agent as Cash Collateral and applied to such Loans at the end of
their Interest Periods.




     5.2. Repayment of Loans. Loans shall be due and payable in full on the Revolver Termination Date, unless payment is
sooner required hereunder. Loans may be prepaid from time to time, without penalty or premium. If
any Asset Disposition results in an Overadvance, Borrowers shall apply such portion of the Net
Proceeds of such Asset Disposition to the Loans in order to eliminate the Overadvance. Upon the
occurrence of a Default or Event of Default, Borrowers shall apply all Net Proceeds from Asset
Dispositions to the Loans. Notwithstanding anything herein to the contrary, if an Overadvance
exists, Borrowers shall, on the sooner of Agent’s demand or the first
Business Day after any Borrower has knowledge thereof, repay the outstanding Loans in an amount
sufficient to reduce the principal balance of Loans to the Borrowing Base.



     5.3. Payment of Other Obligations. Obligations other than Loans, including LC Obligations and Extraordinary Expenses, shall be
paid by Borrowers as provided in the Loan Documents or, if no payment date 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
Borrower or against any Obligations. If any payment by or on behalf of Borrowers is made to Agent,
Issuing Bank or any Lender, or Agent, 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, Issuing Bank or such Lender in its discretion) to be repaid to a
trustee, receiver 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 an Event
of Default, monies to be applied to the Obligations, whether arising from payments by Borrowers,
realization on Collateral, setoff or otherwise, shall be allocated as follows:




-38-









 








          (a) first, to all costs and expenses, including Extraordinary Expenses, owing to
Agent;




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




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




          (d) fourth, to all Obligations constituting fees (excluding amounts relating to Bank
Products);




          (e) fifth, to all Obligations constituting interest (excluding amounts relating to
Bank Products);




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




          (g) seventh, to all other Obligations, other than Bank Product Debt; and




          (h) last, to Bank Product Debt.



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 lesser of the applicable Bank Product Amount last
reported to Agent or 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 the Secured Party. 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 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 Borrower. 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 as of the end of a Business Day shall be
applied to the Obligations at the beginning of the next Business Day, during any Trigger Period.
If, as a result of such application, a credit balance exists, the balance shall not accrue interest
in favor of Borrowers and shall be made available to Borrowers as long as no Default or Event of
Default exists. Each Borrower irrevocably waives the right to direct the application of any
payments or Collateral proceeds, 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,
notwithstanding any entry by Agent in its records.



-39-









 





     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 Debt of Borrowers
resulting from each Loan or issuance of a Letter of Credit 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 Borrowers to pay any amount owing hereunder. Agent may maintain a single
Loan Account in the name of Borrower Agent, and each Borrower confirms that such arrangement shall
have no effect on the joint and several character of its liability for the Obligations.




          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 30 days after receipt or inspection that
specific information is subject to dispute.




     5.8. Taxes.



          5.8.1. Payments Free of Taxes. Any and all payments by any Borrower on account of any
Obligations shall be made free and clear of and without reduction or withholding for any
Indemnified Taxes or Other Taxes, provided that if a Borrower shall be required by
Applicable Law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then
(a) the sum payable shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section) Agent, Lender or
Issuing Bank, as the case may be, receives an amount equal to the sum it would have received had no
such deductions been made; (b) the Borrower shall make such deductions; and (c) Borrowers shall
timely pay the full amount deducted to the relevant Governmental Authority in accordance with
Applicable Law. Without limiting the foregoing, Borrowers shall timely pay all Other Taxes to the
relevant Governmental Authorities.




          5.8.2. Payment. Borrowers shall indemnify, hold harmless and reimburse Agent, Lenders
and Issuing Bank, within 10 days after demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by Agent, any Lender or Issuing Bank with
respect to any Obligations, Letters of Credit or Loan Documents, and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified
Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered to Borrower Agent
by a Lender or Issuing Bank (with a copy to Agent), or by Agent, shall be conclusive absent
manifest error. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by a
Borrower, Borrower Agent shall deliver to Agent a receipt issued by the Governmental Authority
evidencing such payment or other evidence of payment satisfactory to Agent.





-40-









 








     5.9. Foreign Lenders.



          5.9.1. Exemption. Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which a Borrower 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 Borrower Agent, at the time or times prescribed by
Applicable Law or reasonably requested by Agent or Borrower Agent, such properly completed and
executed documentation prescribed by Applicable Law as will permit such payments to be made without
withholding or at a reduced rate of withholding. In addition, any Lender, if requested by Agent or
Borrower Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably
requested by Agent or Borrower Agent as will enable Agent and Borrower Agent to determine whether
or not such Lender is subject to backup withholding or information reporting requirements.




          5.9.2. Documentation. Without limiting the generality of the foregoing, if a Borrower
is resident for tax purposes in the United States, a Foreign Lender shall deliver to Agent and
Borrower Agent (in such number of copies as shall be requested by the recipient) on or prior to the
date on which such Foreign Lender becomes a Lender hereunder (and from time to time thereafter upon
the request of Agent or Borrower Agent, but only if such Foreign Lender is legally entitled to do
so), (a) duly completed copies of IRS Form W-8BEN claiming eligibility for benefits of an income
tax treaty to which the United States is a party; (b) duly completed copies of IRS Form W-8ECI; (c)
in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under
section 881(c) of the Code, (i) a certificate to the effect that such Foreign Lender is not (A) a
“bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of
any Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign
corporation” described in section 881(c)(3)(C) of the Code, and (ii) duly completed copies of IRS
Form W-8BEN; or (d) any other form prescribed by Applicable Law as a basis for claiming exemption
from or a reduction in United States federal withholding tax, duly completed together with such
supplementary documentation as may be prescribed by Applicable Law to permit Borrowers to determine
the withholding or deduction required to be made.




          5.10. Nature and Extent of Each Borrower’s Liability.




          5.10.1. Joint and Several Liability. Each Borrower 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 under the Loan Documents. Each
Borrower agrees that its guaranty obligations hereunder constitute a continuing guaranty of payment
and not of collection, that such obligations shall not be discharged until Full Payment of the
Obligations, and that such 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 Borrower is or may become a party or be bound; (b) the absence of any action to enforce
this Agreement (including this Section) 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 guaranty
for the Obligations or any action, or the





-41-









 







absence of any action, by Agent or any Lender in respect
thereof (including the release of any security or guaranty); (d) the insolvency of any Borrower;
(e) any election by Agent or any Lender in an Insolvency Proceeding for the application of Section
1111(b)(2) of the Bankruptcy Code; (f) any borrowing or grant of a Lien by any other Borrower, as
debtor-in-possession under Section 364 of the Bankruptcy Code or otherwise; (g) the disallowance of
any claims of Agent or any Lender against any Borrower for the repayment of any Obligations under
Section 502 of the 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 Borrower 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 Borrower, other Person or security for the payment or
performance of any Obligations before, or as a condition to, proceeding against such Borrower.
Each Borrower waives all defenses available to a surety, guarantor or accommodation co-obligor
other than Full Payment of all Obligations. It is agreed among each Borrower, 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 Borrower acknowledges that its guaranty 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 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
Borrower or other Person, whether because of any Applicable Laws pertaining to “election of
remedies” or otherwise, each Borrower 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 Borrower 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 Borrower shall not impair any other
Borrower’s obligation to pay the full amount of the Obligations. Each Borrower 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 Borrower’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.





-42-









 








          5.10.3. Extent of Liability; Contribution.




          (a) Notwithstanding anything herein to the contrary, each Borrower’s liability under this
Section 5.10 shall be limited to the greater of (i) all amounts for which such Borrower is
primarily liable, as described below, and (ii) such Borrower’s Allocable Amount.




          (b) If any Borrower makes a payment under this Section 5.10 of any Obligations (other than
amounts for which such Borrower is primarily liable) (a “Guarantor Payment”) that, taking
into account all other Guarantor Payments previously or concurrently made by any other Borrower,
exceeds the amount that such Borrower would otherwise have paid if each Borrower had paid the
aggregate Obligations satisfied by such Guarantor Payments in the same proportion that such
Borrower’s Allocable Amount bore to the total Allocable Amounts of all Borrowers, then such
Borrower shall be entitled to receive contribution and indemnification
payments from, and to be reimbursed by, each other Borrower 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 Borrower shall be the maximum amount that could
then be recovered from such Borrower under this Section 5.10 without rendering such payment
voidable under Section 548 of the 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 shall limit the liability of any Borrower to pay
Loans made directly or indirectly to that Borrower (including Loans advanced to any other Borrower
and then re-loaned or otherwise transferred to, or for the benefit of, such Borrower), LC
Obligations relating to Letters of Credit issued to support such Borrower’s business, and all
accrued interest, fees, expenses and other related Obligations with respect thereto, for which such
Borrower shall be primarily liable for all purposes hereunder. Agent and Lenders shall have the
right, at any time in their discretion, to condition Loans and Letters of Credit upon a separate
calculation of borrowing availability for each Borrower and to restrict the disbursement and use of
such Loans and Letters of Credit to such Borrower.




          5.10.4. Joint Enterprise. Each Borrower has requested that Agent and Lenders make
this credit facility available to Borrowers on a combined basis, in order to finance Borrowers’
business most efficiently and economically. Borrowers’ business is a mutual and collective
enterprise, and Borrowers believe that consolidation of their credit facility will enhance the
borrowing power of each Borrower and ease the administration of their relationship with Lenders,
all to the mutual advantage of Borrowers. Borrowers acknowledge and agree that Agent’s and
Lenders’ willingness to extend credit to Borrowers and to administer the Collateral on a combined
basis, as set forth herein, is done solely as an accommodation to Borrowers and at Borrowers’
request.




          5.10.5. Subordination. Each Borrower 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 Borrower, howsoever
arising, to the Full Payment of all Obligations.






-43-









 








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 Borrowers hereunder,
until the date (“Closing Date”) that each of the following conditions has been satisfied:



          (a) Notes shall have been executed by Borrowers and delivered to each Lender that requests
issuance of a Note. Each other Loan Document shall have been duly executed and delivered to Agent
by each of the signatories thereto, and each Borrower shall be in compliance with all terms
thereof.




          (b) Agent shall have received acknowledgments of all filings or recordations necessary to
perfect its Liens in the Collateral, as well as UCC and Lien searches and other
evidence satisfactory to Agent that such Liens are the only Liens upon the Collateral, except
Permitted Liens.




          (c) Agent shall have received duly executed agreements establishing each Dominion Account and
related lockbox, in form and substance, and with financial institutions, satisfactory to Agent.




          (d) Agent shall have received certificates, in form and substance satisfactory to it, from a
knowledgeable Senior Officer of each Borrower certifying that, after giving effect to the initial
Loans and transactions hereunder, (i) such Borrower is Solvent; (ii) no Default or Event of Default
exists; (iii) the representations and warranties set forth in Section 9 are true and correct; and
(iv) such Borrower has complied with all agreements and conditions to be satisfied by it under the
Loan Documents.




          (e) Agent shall have received a certificate of a duly authorized officer of each Borrower,
certifying as to (i) such Borrower’s Organic Documents; (ii) resolutions authorizing execution and
delivery of the Loan Documents; and (iii) to the title, name and signature of each Person
authorized to sign the Loan Documents. Agent may conclusively rely on this certificate until it is
otherwise notified by the applicable Borrower in writing.




          (f) Agent shall have received a written opinion of Shumaker, Loop & Kendrick, LLP, as well as
any local counsel to Borrowers or Agent, in form and substance satisfactory to Agent concerning
enforceability under the laws of the State of New York and other customary matters (including,
without limitation, no conflicts with the Existing Indenture, the Purchase and Sale Agreement,
Receivables Purchase Agreement and other contracts) as well as opinions under the laws of the
State of Ohio and the State of Delaware as to organization, existence, good standing, perfection
and validity of security interests, and other customary matters (including, without limitation, no
conflicts with the Existing Indenture, the Purchase and Sale Agreement, Receivables Purchase
Agreement and other contracts).




          (g) Agent shall have received copies of the charter documents of each Borrower, certified by
the Secretary of State or other appropriate official of such Borrower’s jurisdiction of
organization. Agent shall have received good standing certificates for each Borrower, issued by
the Secretary of State or other appropriate official of such Borrower’s




-44-









 







jurisdiction of
organization and each jurisdiction where such Borrower’s conduct of business or ownership of
Property necessitates qualification.




          (h) Agent shall have received copies of policies or certificates of insurance for the
insurance policies carried by Borrowers, all in compliance with the Loan Documents.




          (i) Agent shall have completed its business, financial and legal due diligence of Borrowers,
including a roll-forward of its previous field examination, with results satisfactory to Agent. No
material adverse change in the financial condition of any Borrower or in the quality, quantity or
value of any Collateral shall have occurred since December 31, 2006.




          (j) Borrowers shall have paid all fees and expenses to be paid to Agent and Lenders on the
Closing Date.




          (k) Agent shall have received a Borrowing Base Certificate prepared as of September 30, 2007.
Upon giving effect to the initial funding of Loans and issuance of Letters of Credit, and the
payment by Borrowers of all fees and expenses incurred in connection herewith as well as any
payables stretched beyond their customary payment practices, Availability shall be at least
$100,000,000.




          (l) Agent shall have received, each in form and substance satisfactory to them, (a) 5 year
projections of Borrowers and Subsidiaries, dated as of the Closing Date, which balance sheet shall
reflect no material adverse changes from the most recent pro forma balance sheet of the Borrowers
previously delivered to Agent and (b) interim financial statements for Borrowers as of a date no
more than 45 days prior to the Closing Date.




          (m) Agent shall have received an executed copy of the Intercreditor Agreement in form and
substance acceptable to Agent and Cooper.









     6.2. Conditions Precedent to All Credit Extensions. Agent, Issuing Bank and Lenders shall not be required to fund any Loans, arrange for issuance
of any Letters of Credit or grant any other accommodation to or for the benefit of Borrowers,
unless the following conditions are satisfied:



          (a) No Default or event described in Section 11.1(a) — (n) shall exist at the time of, or
result from, such funding, issuance or grant, regardless of whether or not the existence of the
event is deemed an Event of Default;




          (b) The representations and warranties of each Borrower in the Loan Documents shall be true
and correct 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);




          (c) All conditions precedent in any other Loan Document shall be satisfied;




          (d) No event shall have occurred or circumstance exist that has or could reasonably be
expected to have a Material Adverse Effect; and





-45-









 








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



Each request (or deemed request) by Borrowers for funding of a Loan, issuance of a Letter of Credit
or grant of an accommodation shall constitute a representation by Borrowers that the foregoing
conditions are satisfied on the date of such request and on the date of such funding, issuance or
grant. As an additional condition to any funding, issuance or grant, Agent shall have received
such other information, documents, instruments and agreements as it deems appropriate in connection
therewith.











     6.3.
Limited Waiver of Conditions Precedent.   If Agent, Issuing Bank or Lenders fund any Loans, arrange for issuance of any Letters of
Credit or grant any other accommodation when any conditions precedent are not satisfied (regardless
of whether the lack of satisfaction was known or unknown at the time), it shall not operate as a
waiver of (a) the right of Agent, Issuing Bank and Lenders to insist upon satisfaction of all
conditions precedent with respect to any subsequent funding, issuance or grant; nor (b) any Default
or Event of Default due to such failure of conditions or otherwise.



SECTION 7. COLLATERAL




     7.1.
Grant of Security Interest.   To secure the prompt payment and performance of all Obligations, each Borrower hereby grants
to Agent, for the benefit of Secured Parties, a continuing security interest in and Lien upon all
of the following Property of such Borrower, whether now owned or hereafter acquired, and wherever
located:



          (a) all Accounts, excluding Accounts sold to the Receivables Securitization Facility and
excluding all Accounts owed by The Pep Boys — Manny, Moe & Jack;




          (b) all Inventory;




          (c) all Deposit Accounts of the Borrowers;




          (d) all Chattel Paper arising from the sale of Inventory, excluding Chattel Paper to the
extent sold, purportedly sold (but recharacterized as financed), transferred, assigned, contributed
or otherwise conveyed to the Receivables Securitization Facility;




          (e) all Payment Intangibles arising from the sale of Inventory, excluding Payment Intangibles
to the extent sold, purportedly sold (but recharacterized as financed), transferred, assigned,
contributed or otherwise conveyed to the Receivables Securitization Facility;




          (f) the Receivables Securitization Facility Subordinated Note;




          (g) the membership interests of Cooper Receivables LLC;




          (h) all Documents relating to any of the foregoing;




          (i) all Supporting Obligations relating to any of the foregoing;





-46-









 








          (j) 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
Collateral; and




          (k) all books and records (including customer lists, files, correspondence, tapes, computer
programs, print-outs and computer records) pertaining to the foregoing.




     7.2. Lien on Deposit Accounts; Cash Collateral.



          7.2.1. Deposit Accounts. To further secure the prompt payment and performance of all
Obligations, each Borrower hereby grants to Agent, for the benefit of Secured Parties, a continuing
security interest in and Lien upon all amounts credited to any Deposit Account of such Borrower,
including any sums in any blocked or lockbox accounts or in any accounts into which such sums are
swept, but excluding any RPA Blocked Accounts. Each Borrower shall authorize and direct each bank
or other depository to deliver to Agent (following notice to such banks and other depositories
delivered by Agent of a Default or Event of Default), on a daily basis, all balances in each
Deposit Account maintained by such Borrower with such depository for application to the Obligations
then outstanding. Each Borrower irrevocably appoints Agent as such Borrower’s attorney-in-fact to
collect such balances to the extent any such delivery is not so made. Cooper shall at all times
cause the collections from all RPA Blocked Accounts to be swept daily (except Canadian Accounts) to
a Deposit Account of Cooper that is subject to the foregoing requirements.




          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 Borrower, and shall have no responsibility for any investment or loss. Each
Borrower hereby grants to Agent, for the benefit of Secured Parties, a security interest in all
Cash Collateral held from time to time and all proceeds thereof, as security for the Obligations,
whether such Cash Collateral is held in a Cash Collateral Account or elsewhere. Agent may apply
Cash Collateral to the payment of any Obligations, 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 Borrower or other Person claiming through or on behalf of any
Borrower shall have any right to any Cash Collateral, until Full Payment of all Obligations.









     7.3. Other Collateral. By the fifteenth day of each Fiscal Quarter of Borrowers, Borrowers shall notify Agent in
writing if any Borrower has obtained any interest in any Collateral consisting of Deposit Accounts,
Documents, or Inventory since Borrowers’ prior such disclosure and, upon Agent’s request, shall
promptly take such actions as Agent deems appropriate to effect Agent’s duly perfected, first
priority Lien upon such Collateral, including obtaining any appropriate possession, control
agreement (subject to the requirements of Section 8.4 hereof) or Lien Waiver. If any Collateral is
in the possession of a third party, at Agent’s request, Borrowers shall obtain an acknowledgment
that such third party holds the Collateral for the benefit of Agent.



-47-









 






     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 Borrowers relating to any
Collateral.




     7.5. Further Assurances. Promptly upon request, Borrowers 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 Borrower authorizes Agent to file any financing
statement that indicates the Collateral as being of an equal or lesser scope, or with greater or
lesser detail, than as set forth in Section 7.1 and ratifies any action taken by Agent before the
Closing Date to effect or perfect its Lien on any Collateral.



SECTION 8. COLLATERAL ADMINISTRATION




     8.1. Borrowing Base Certificates. (a) By the 15th day of each Fiscal Quarter of Borrowers, and (b) from and after such time as
the sum of the total principal amount of all Loans and LC Obligations exceeds $10,000,000, by the
15th day of each month, Borrowers shall deliver to Agent (and Agent shall promptly deliver same to
Lenders) a Borrowing Base Certificate prepared as of the close of business of the previous Fiscal
Quarter or month, as applicable, and at such other times as Agent may request. All calculations of
Availability in any Borrowing Base Certificate shall originally be made by Borrowers and certified
by a Senior Officer, provided that Agent may from time to time review and adjust any such
calculation (a) to 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 made in accordance with this Agreement or does not accurately reflect the
Availability Reserve. Concurrently with the delivery of each Borrowing Base Certificate pursuant
to this Section, Borrowers shall deliver to Agent, in form reasonably acceptable to Agent, a
reconciliation of the Borrowing Base (including Accounts, Inventory and Loans) to the general
ledger of Borrowers and of such general ledger to the financial statements most recently delivered
pursuant to Section 10.1.2.




     8.2. Administration of Accounts.



          8.2.1. Records and Schedules of Accounts. Each Borrower shall keep accurate and
complete records 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 request. Each Borrower shall also provide to Agent, on or before the
15th day of each month or quarterly as provided for in Section 8.1, a detailed aged trial balance
of all Accounts of Max-Trac, except when a Default or Event of Default exists, then all Accounts,
as of the end of the preceding month, specifying 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 in an aggregate face amount of $1,000,000 or more cease to be
Eligible Accounts, Borrowers shall notify Agent of such occurrence promptly (and in any event
within one Business Day) after any Borrower has knowledge thereof.




-48-









 








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




          8.2.3. Account Verification. Whether or not a Default or Event of Default exists,
Agent shall have the right at any time, in the name of Agent, any designee of Agent or any
Borrower, to verify the validity, amount or any other matter relating to any Accounts of Max-Trac
by mail, telephone or otherwise. Borrowers shall cooperate fully with Agent in an effort to
facilitate and promptly conclude any such verification process.




          8.2.4. Maintenance of Dominion Account. Borrowers shall maintain Dominion Accounts
pursuant to lockbox or other arrangements acceptable to Agent as listed on Schedule 8.2.4.
Borrowers shall obtain an agreement (in form and substance satisfactory to Agent) from each lockbox
servicer and Dominion Account bank listed on Schedule 8.2.4, establishing Agent’s control over and
Lien in the lockbox or Dominion Account, which may be exercised by Agent during any Trigger Period,
requiring immediate deposit of all remittances received in the lockbox to a Dominion Account, and
waiving offset rights of such servicer or bank, except for customary administrative charges. If a
Dominion Account is not maintained with Bank of America, Agent may, during any Trigger Period,
require immediate transfer of all funds in such account to a Dominion Account maintained with Bank
of America. Neither Agent nor Lenders assume any responsibility to Borrowers for any lockbox
arrangement 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. Borrowers shall request in writing and otherwise take
all necessary steps to ensure that all payments on Accounts of Max-Trac and, when a Default or
Event of Default exists, all Accounts of Cooper, and all payments otherwise relating to Collateral
are made directly to a Dominion Account (or a lockbox relating to a Dominion Account). If any
Borrower or Subsidiary receives cash or Payment Items with respect to any Collateral, it shall hold
same in trust for Agent and promptly (not later than the next Business Day) deposit same into a
Dominion Account. Cooper shall require Cooper Receivables LLC to transfer (on a daily basis) all
collections except Canadian collections held in all RPA Blocked Accounts to a Dominion Account.




     8.3. Administration of Inventory.



          8.3.1. Records and Reports of Inventory. Each Borrower shall keep accurate and
complete records of its Inventory, including costs and daily withdrawals and additions, and shall
submit to Agent inventory and reconciliation reports in form satisfactory to Agent, on such
periodic basis as Agent may request. Each Borrower shall conduct a physical inventory 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 request. Agent may participate in and observe each
physical count.




-49-









 








          8.3.2. Returns of Inventory. No Borrower 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 $10,000,000; and (d) any payment received by a Borrower for a return is promptly
remitted to Agent for application to the Obligations.




          8.3.3. Acquisition, Sale and Maintenance. Borrower shall take all steps to assure
that all Inventory is produced in accordance with Applicable Law, including the FLSA. Borrowers
shall use, store and maintain all Inventory with reasonable care and caution, in accordance with
applicable standards of any insurance and in conformity with all Applicable Law, and shall make
current rent payments (within applicable grace periods provided for in leases) at all locations
where any Collateral is located.









     8.4. Administration of Deposit Accounts. Schedule 8.4 sets forth all Deposit Accounts maintained by Borrowers, including all Dominion
Accounts. Each Borrower shall take all actions necessary to establish Agent’s control of each
Dominion Account and, after an Event of Default, each other such Deposit Account (other than an
account exclusively used for payroll, payroll taxes or employee benefits, or an account containing
not more that $10,000 at any time or RPA Blocked Accounts). Each Borrower shall be the sole
account holder of each Deposit Account and shall not allow any other Person (other than Agent) to
have control over a Deposit Account or any Property deposited therein. Each Borrower shall
promptly notify Agent of any opening or closing of a Deposit Account and, with the consent of
Agent, will amend Schedule 8.4 to reflect same.




     8.5. General Provisions.



          8.5.1. Location of Collateral. All tangible items of Collateral, other than Inventory
in transit, shall at all times be kept by Borrowers at the business locations set forth in Schedule
8.5.1, except that Borrowers may (a) make sales or other dispositions of Collateral in accordance
with Section 10.2.5; and (b) move Collateral to another location in the United States, upon 5
Business Days prior written notice to Agent.




          8.5.2. Insurance of Collateral; Condemnation Proceeds.




          (a) Each Borrower shall maintain property and casualty and third party liability insurance
with respect to the Collateral in amounts, with endorsements and with insurers (with a Best Rating
of at least A7, unless otherwise approved by Agent) satisfactory to Agent. All proceeds relating
to or arising out of a loss or claim with respect to Collateral under each property and casualty
policy shall be payable to Agent. From time to time upon request, Borrowers shall deliver to Agent
the originals or certified copies of its property and casualty liability insurance policies. Prior
to the earlier of (i) March 31, 2008 and (ii) the making of any Loans or issuance of any Letters of
Credit, unless Agent shall agree otherwise, each property and casualty policy shall include
satisfactory endorsements (i) showing Agent as sole loss payee or additional insured, as
appropriate; (ii) requiring 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 Borrower or the
owner





-50-









 







of the Property, nor by the occupation of the premises for purposes more hazardous than are
permitted by the policy. Upon request, Borrowers shall deliver to Agent originals or certified
copies of third party liability insurance policies and certificates of insurance evidencing third
party liability coverage naming Agent as an additional insured and requiring 30 days’ prior written
notice to Agent of any cancellation. If any Borrower fails to provide and pay for any required
property and casualty or third party liability insurance, Agent may, at its option, but shall not
be required to, procure such insurance and charge Borrowers therefor. During any period that no
Event of Default exists, Borrowers may settle, adjust or compromise any insurance claim relating to
or arising out of a loss or claim with respect to Collateral, as long as the proceeds are delivered
to Agent. If an Event of Default exists, only Agent shall be authorized to settle, adjust and
compromise such claims.




          (b) Any proceeds of insurance that relate to Inventory shall be paid to Agent and applied to
payment of the Loans, and then to any other Obligations (other than Bank Product Debt) outstanding.
Thereafter, any excess will be returned to Borrowers.




          8.5.3. Protection of Collateral. All expenses of protecting, storing, warehousing,
insuring, handling, maintaining and shipping any Collateral, all Taxes payable with respect to any
Collateral (including any sale thereof), and all other payments required to be made by Agent to any
Person to realize upon any Collateral, shall be borne and paid by Borrowers. 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
Borrowers’ sole risk.




          8.5.4. Defense of Title to Collateral. Each Borrower shall at all times defend its
title to Collateral and Agent’s Liens therein against all Persons, claims and demands whatsoever,
except Permitted Liens.









     8.6. Power of Attorney. Each Borrower hereby irrevocably constitutes and appoints Agent (and all Persons designated by
Agent) as such Borrower’s true and lawful attorney (and agent-in-fact) for the purposes provided in
this Section. Agent, or Agent’s designee, may, without notice and in either its or a Borrower’s
name, but at the cost and expense of Borrowers:



          (a) Indorse a Borrower’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) During an Event of Default, (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)
take control, in any manner, of any proceeds of Collateral; (v) prepare, file and sign a
Borrower’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





-51-









 







mail addressed to a Borrower, and notify postal authorities to change the address for delivery
thereof to such address as Agent may designate; (vii) indorse any Chattel Paper, Document,
Instrument, invoice, freight bill, bill of lading, or similar document or agreement relating to any
Accounts, Inventory or other Collateral; (viii) use a Borrower’s stationery and sign its name to
verifications of Accounts and notices to Account Debtors; (ix) use the information recorded on or
contained in any data processing equipment and computer hardware and software relating to any
Collateral; (x) make and adjust claims under policies of insurance; (xi) take any action as may be
necessary or appropriate to obtain payment under any letter of credit or banker’s acceptance for
which a Borrower is a beneficiary; and (xii) take all other actions as Agent deems appropriate to
fulfill any Borrower’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 Borrower represents and warrants that:



          9.1.1. Organization and Qualification. Each Borrower is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization. Each
Borrower is duly qualified, authorized to do business and in good standing as a foreign corporation
in each jurisdiction where failure to be so qualified could reasonably be expected to have a
Material Adverse Effect.




          9.1.2. Power and Authority. Each Borrower is duly authorized to execute, deliver and
perform its Loan Documents. The execution, delivery and performance of the Loan Documents have
been duly authorized by all necessary action, and do not (a) require any consent or approval of any
holders of Equity Interests of any Borrower, other than those already obtained; (b) contravene the
Organic Documents of any Borrower; (c) violate or cause a default under any Applicable Law or
Material Contract; or (d) result in or require the imposition of any Lien (other than Permitted
Liens) on any Property of any Borrower.




          9.1.3. Enforceability. Each Loan Document is a legal, valid and binding obligation of
each Borrower party thereto, enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights
generally.




          9.1.4. Capital Structure. Schedule 9.1.4 shows, for each Borrower, its name, its
jurisdiction of organization, its authorized and issued Equity Interests, the holders of its Equity
Interests, and all agreements binding on such holders with respect to their Equity Interests. Each
Borrower has good title to its Equity Interests in its Subsidiaries, free and clear of all Liens,
and all such Equity Interests are duly issued, fully paid and non-assessable. There are no
outstanding options to purchase, warrants, subscription rights, agreements to issue or sell,
convertible interests, phantom rights or powers of attorney relating to any Equity Interests of any
Borrower or Subsidiary.




          9.1.5. Corporate Names; Locations. During the five years preceding the Closing Date,
except as shown on Schedule 9.1.5, no Borrower has been known as or used any




-52-









 








corporate, fictitious or trade names, has been the surviving corporation of a merger or combination, or has acquired any
substantial part of the assets of any Person. The chief executive offices and other places of
business of Borrowers are shown on Schedule 8.5.1. During the five years preceding the Closing
Date, no Borrower has had any other office or place of business.




          9.1.6. Title to Properties; Priority of Liens. Each Borrower and Subsidiary has good
and marketable title to (or valid leasehold interests in) all Inventory, free of Liens except
Permitted Liens. Each Borrower and Significant Subsidiary has paid and discharged all lawful
claims that, if unpaid, could become a Lien on its Properties, other than Permitted Liens. All
Liens of Agent in the Collateral are duly perfected, first priority Liens, subject only to
Permitted Liens that are expressly allowed to have priority over Agent’s Liens.




          9.1.7. Accounts. Agent may rely, in determining which Accounts of Max-Trac are
Eligible Accounts, on all statements and representations made by Borrowers with respect thereto.
Borrowers warrant, with respect to each Account at the time it is shown as an Eligible Account in a
Borrowing Base Certificate, that:




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




          (b) 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;




          (c) 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;




          (d) it is not subject to any offset, Lien (other than Agent’s Lien), deduction, defense,
dispute, counterclaim or other adverse condition except as arising in the Ordinary Course of
Business and disclosed to Agent; and it is absolutely owing by the Account Debtor, without
contingency in any respect;




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




          (f) no extension, compromise, settlement, modification, credit, deduction or return has been
authorized with respect to the Account, except 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; and




          (g) to the best of Borrowers’ knowledge, (i) there are no facts or circumstances that are
reasonably likely to impair the enforceability or collectibility of such Account; (ii) 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;




-53-









 







and (iii) 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.




          9.1.8. Financial Statements. The consolidated and consolidating balance sheets, and
related statements of income, cash flow and shareholder’s equity, of Borrowers and Subsidiaries
that have been and are hereafter delivered to Agent and Lenders, are prepared in accordance with
GAAP, and fairly present the financial positions and results of operations of Borrowers and
Subsidiaries at the dates and for the periods indicated. All projections delivered from time to
time to Agent and Lenders have been prepared in good faith, based on reasonable assumptions in
light of the circumstances at such time. Since December 31, 2006, there has been no change in the
condition, financial or otherwise, of any Borrower or Subsidiary that could reasonably be expected
to have a Material Adverse Effect. No financial statement delivered to Agent or Lenders at any
time contains any untrue statement of a material fact, nor fails to disclose any material fact
necessary to make such statement not materially misleading. Each Borrower and Subsidiary is
Solvent.




          9.1.9. Taxes. Each Borrower and Subsidiary has filed all federal, state and local tax
returns and other reports that it is required by law to file, and has paid, or made provision for
the payment of, all Taxes upon it, its income and its Properties that are due and payable other
than (a) those presently payable without penalty or interest or (b) those which are being Properly
Contested or (c) those which could not, individually or not, in the aggregate, be reasonably
expected to have a Material Adverse Effect. The provision for Taxes on the books of each Borrower
is adequate for all years not closed by applicable statutes, and for its current Fiscal Year.




          9.1.10. Brokers. There are no brokerage commissions, finder’s fees or investment
banking fees payable in connection with any transactions contemplated by the Loan Documents.




          9.1.11. Intellectual Property. Each Borrower and Subsidiary owns or has the lawful
right to use all Intellectual Property necessary for the conduct of its business, without conflict
with any rights of others, except where the failure to own or have such right to use or the
existence of conflict with any rights of others could not reasonably be expected to have a Material
Adverse Effect. There is no pending or, to any Borrower’s knowledge, threatened Intellectual
Property Claim with respect to any Borrower, any Subsidiary or any of their Property (including any
Intellectual Property), which could be reasonably likely to have a Material Adverse Effect.




          9.1.12. Governmental Approvals. Each Borrower and Significant Subsidiary has, is in
compliance with, and is in good standing with respect to, all material Governmental Approvals
necessary to conduct its business and to own, lease and operate its Properties. 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 Borrowers and
Subsidiaries have complied with all foreign and domestic laws with respect to the shipment and
importation of any goods or Collateral, except where noncompliance could not reasonably be expected
to have a Material Adverse Effect.





-54-









 








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




          9.1.14. Compliance with Environmental Laws. To any Borrower’s knowledge, except as
set forth in the Forms 10-K, 10-Q, 8-K or S-4 filed by the Borrowers with the SEC after January 1,
2007 and prior to July 31, 2007, the Borrowers and their Subsidiaries are in material compliance
with all Environmental Laws.




          9.1.15. Burdensome Contracts. No Borrower is a party or subject to any contract,
agreement or charter restriction that could reasonably be expected to have a Material Adverse
Effect. No Borrower is, and as of the Closing Date, no Subsidiary is, party or subject to any
Restrictive Agreement, except as shown on Schedule 9.1.15, none of which prohibit the execution or
delivery of any Loan Documents by a Borrower nor the performance by a Borrower of any obligations
thereunder.




          9.1.16. Litigation. Except as set forth in Forms 10-K, 10-Q, 8-K or S-4 filed with
the SEC after January 1, 2007 and prior to July 31, 2007, there is no litigation or governmental
proceedings pending or, to any Borrower’s knowledge, after diligent inquiry, threatened against any
Borrower or Subsidiary, that could reasonably be expected to have a Material Adverse Effect. No
Borrower or Subsidiary is in default with respect to any order, injunction or judgment of any
Governmental Authority.




          9.1.17. No Defaults. No event or circumstance has occurred or exists that constitutes
a Default or Event of Default. No Borrower 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,
under any Material Contract or in the payment of any Borrowed Money in excess of $10,000,000.
There is no basis upon which any party (other than a Borrower or Subsidiary) could terminate a
Material Contract prior to its scheduled termination date.




          9.1.18. ERISA. Except as disclosed on Schedule 9.1.18:




          (a) Each Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code, and other federal and state laws. Each Plan that is intended to qualify under
Section 401(a) of the Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with respect thereto and, to
the knowledge of Borrowers, nothing has occurred which would prevent, or cause the loss of, such
qualification. Each Borrower and ERISA Affiliate has made all required contributions to each Plan
subject to Section 412 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.




          (b) There are no pending or, to the knowledge of Borrowers, threatened claims, actions or
lawsuits, or action by any Governmental Authority, with respect to any Plan




-55-









 







that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan that has resulted in or
could reasonably be expected to have a Material Adverse Effect.




          (c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan
has any Unfunded Pension Liability; (iii) no Borrower or ERISA Affiliate has incurred, or
reasonably expects 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 Borrower or ERISA
Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred
which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) no Borrower or ERISA
Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA,
in the case of clauses (i) — (v) above, except to the extent such event could not reasonably be
expected to have a Material Adverse Effect.




          (d) Except to the extent that, if any such event occurred or status exists, it could not
reasonably be expected to have a Material Adverse Effect, with respect to any Foreign Plan, (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 normal accounting practices; (ii) the fair
market value of the assets of each funded Foreign Plan, the liability of each insurer for any
Foreign Plan funded through insurance, or the book reserve established for any Foreign Plan,
together with any accrued contributions, is sufficient to procure or provide for the accrued
benefit obligations with respect to all current and former participants in such Foreign Plan
according to the actuarial assumptions and valuations most recently used to account for such
obligations in accordance with applicable generally accepted accounting principles; and (iii) it
has been registered as required and has been maintained in good standing with applicable regulatory
authorities.




          9.1.19. Trade Relations. There exists no actual or threatened termination, limitation
or modification of any business relationship between any Borrower or Subsidiary and any customer or
supplier, or any group of customers or suppliers, who individually or in the aggregate are material
to the business of such Borrower or Subsidiary. There exists no condition or circumstance that
could reasonably be expected to impair the ability of any Borrower or Significant 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. Each Borrower and Subsidiary is in compliance with all
employee benefit plans, employment agreements, collective bargaining agreements and labor contracts
and all applicable federal, state and local labor and employment laws including, but not limited
to, those related to equal employment opportunity and affirmative action, labor relations, minimum
wage, overtime, child labor, medical insurance continuation, worker adjustment and
relocation notices, immigration controls and worker and unemployment compensation, except
where the failure to comply could not be reasonably likely to have a Material Adverse effect.
Except as described on Schedule 9.1.20, no Borrower is party to or bound by any collective
bargaining agreement, management agreement or consulting agreement. Schedule 9.1.20 sets forth the
scheduled expiration or termination date of each such collective bargaining agreement,





-56-









 







management
agreement or casualty agreement. There are no material grievances, disputes or controversies with
any union or other organization of any Borrower’s employees, or, to any Borrower’s knowledge, any
asserted or threatened strikes, work stoppages or demands for collective bargaining.




          9.1.21. Payable Practices. No Borrower or Significant 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 Borrower or Significant Subsidiary is (a) an
“investment company” or a “person directly or indirectly controlled by or acting on behalf of an
investment company” within the meaning of the Investment Company Act of 1940; or (b) subject to
regulation under the Federal Power Act, the Interstate Commerce Act, any public utilities code or
any other Applicable Law regarding its authority to incur Debt.




          9.1.23. Margin Stock. No Borrower or Significant 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
Borrowers 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. Immaterial Subsidiaries. The Borrowers’, Immaterial Subsidiaries, taken as a
whole, do not represent more than 20%% of Cooper’s consolidated EBITDA or 20% of Cooper’s
consolidated assets.




          9.1.25. Significant Subsidiaries. On the Closing Date, Cooper has no Significant
Subsidiary that is organized under the laws of a State in the United States other than Max-Trac.









     9.2. Complete Disclosure. No Loan Document contains any untrue statement of a material fact, nor fails to disclose any
material fact necessary to make the statements contained therein not materially misleading. There
is no fact or circumstance that any Borrower has failed to disclose to Agent in writing that 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 are outstanding, each Borrower shall:



          10.1.1. Inspections; Appraisals.




          (a) Permit Agent from time to time, subject (except when a Default or Event of Default exists)
to reasonable notice and normal business hours, to visit and inspect the Properties of any
Borrower, inspect, audit and make extracts from any Borrower’s books and records, and discuss with
its officers, employees, agents, advisors and independent accountants such Borrower’s business,
financial condition, assets, prospects and results of operations. Lenders may participate in any
such visit or inspection, at their own expense. Neither Agent nor




-57-









 







any Lender shall have any duty
to any Borrower to make any inspection, nor to share any results of any inspection, appraisal or
report with any Borrower. Borrowers acknowledge that all inspections, appraisals and reports are
prepared by Agent and Lenders for their purposes, and Borrowers shall not be entitled to rely upon
them.




          (b) Reimburse Agent for all charges, costs and expenses of Agent in connection with (i)
examinations of any Borrower’s books and records or any other financial or Collateral matters as
Agent deems appropriate, up to three times per Loan Year; and (ii) after the Appraisal Trigger
Date, appraisals of Inventory up to two times per Loan Year; provided, however,
that if an examination or appraisal is initiated during a Default or Event of Default, all charges,
costs and expenses therefor shall be reimbursed by Borrowers without regard to such limits.
Subject to and without limiting the foregoing, Borrowers specifically agree to pay Agent’s then
standard charges for each day that an employee of Agent or its Affiliates is engaged in any
examination activities, and shall pay the standard charges of Agent’s internal appraisal group.
The limitations on Borrowers’ liability under this Section 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. In addition to the foregoing, Borrowers shall cooperate with
Agent in connection with appraisals of Inventory from and after the date, if any, that the sum of
the total principal amount of all Loans and LC Obligations exceeds $50,000,000 (such date, the
“Appraisal Trigger Date”), such appraisal to be accomplished within 45 days following the
Appraisal Trigger Date.




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




          (a) as soon as available, and in any event within 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 Borrowers and
Subsidiaries, which consolidated statements shall be audited and certified (without qualification
as to scope, “going concern” or similar items) by a firm of independent certified public
accountants of recognized standing selected by Borrowers and acceptable to Agent, and shall set
forth in comparative form corresponding figures for the preceding Fiscal Year and other information
acceptable to Agent;




          (b) as soon as available, and in any event within 45 days after the end of each Fiscal
Quarter, unaudited balance sheets as of the end of such quarter and the related statements of
income and cash flow for such quarter and for the portion of the Fiscal Year then elapsed, on
consolidated basis for Borrowers and Subsidiaries, setting forth in comparative form corresponding
figures for the preceding Fiscal Year and certified by the chief financial officer of
Borrower Agent as prepared in accordance with GAAP and fairly presenting the financial
position and results of operations for such quarter and period, subject to normal year-end
adjustments and the absence of footnotes;




          (c) with each of the financial statements delivered under clauses (a) and (b) above,
internally prepared consolidating statements by business segment;




-58-









 








          (d) concurrently with delivery of financial statements under clauses (a) and (b) above, or
more frequently if requested by Agent while a Default or Event of Default exists, a Compliance
Certificate executed by the chief financial officer of Borrower Agent;




          (e) concurrently with delivery of financial statements under clause (a) above, copies of all
management letters and other material reports submitted to Borrowers by their accountants in
connection with such financial statements;




          (f) no later than 60 days after the end of each Fiscal Year, projections of Borrowers’ and
Subsidiaries’ consolidated balance sheets, results of operations, cash flow and Availability for
the next Fiscal Year, month by month;




          (g) at Agent’s request, a listing of each Borrower’s trade payables, specifying the trade
creditor and balance due, and a detailed trade payable aging, all in form satisfactory to Agent;




          (h) promptly after the sending or filing thereof, copies of any proxy statements, financial
statements or reports that any Borrower has made generally available to its shareholders; copies of
any regular, periodic and special reports or registration statements or prospectuses that any
Borrower files with the Securities and Exchange Commission or any other Governmental Authority, or
any securities exchange; and copies of any press releases or other statements made available by a
Borrower to the public concerning material changes to or developments in the business of such
Borrower;




          (i) at Agent’s request, promptly after the sending or filing thereof, copies of any annual
report to be filed in connection with each Plan or Foreign Plan; and




          (j) such other reports and information (financial or otherwise) as Agent may request from time
to time in connection with any Collateral or any Borrower’s or Subsidiary’s financial condition or
business.




          10.1.3. Notices. Notify Agent and Lenders in writing, promptly after a Borrower’s
obtaining knowledge thereof, of any of the following that affects a Borrower: (a) the threat or
commencement of any proceeding or investigation, whether or not covered by insurance, if an adverse
determination could have a Material Adverse Effect; (b) any pending or threatened labor dispute,
strike or walkout, or the expiration of any material labor contract; (c) any default under or
termination of a Material Contract; (d) the existence of any Default or Event of Default; (e) any
judgment in an amount exceeding $10,000,000; (f) the assertion of any Intellectual Property Claim,
if an adverse resolution could have a Material Adverse Effect; (g) any violation or asserted
violation of any Applicable Law (including ERISA, OSHA, FLSA, or any Environmental Laws), if an
adverse resolution could have a Material Adverse Effect; (h) any
Environmental Release by a Borrower or on any Property owned, leased or occupied by a
Borrower; or receipt of any Environmental Notice regarding a noncompliance or violation which, if
adversely determined, could reasonably be expected to result in a Material Adverse Effect; (i) the
occurrence of any ERISA Event in an amount exceeding $10,000,000; (j) an Immaterial Subsidiary is
now a Significant Subsidiary; or (k) the discharge of or any withdrawal or resignation by
Borrowers’ independent accountants.




-59-









 








          10.1.4. Landlord and Storage Agreements. Upon request, provide Agent with copies of
all existing agreements, and promptly after execution thereof provide Agent with copies of all
future agreements, between a Borrower 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, and cause each Subsidiary to comply, with all
Applicable Laws, including ERISA, 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 failure to comply (other than
failure to comply with Anti-Terrorism Laws) or 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 Properties of any Borrower or any Significant Subsidiary, it shall act
promptly and diligently to investigate and report to Agent and all appropriate Governmental
Authorities the extent of, and to make appropriate remedial action to eliminate, such Environmental
Release, whether or not directed to do so by any Governmental Authority.




          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.




          10.1.7. Insurance. Maintain casualty and third party liability insurance as required
by Section 8.5.2.




          10.1.8. Licenses. Keep, and cause each Subsidiary to keep, each License affecting any
Collateral (including the manufacture, distribution or disposition of Inventory) or any other
material Property of Borrowers and Subsidiaries in full force and effect; promptly notify Agent of
any proposed modification to any such License, or entry into any new License, in each case at least
30 days prior to its effective date; pay, and cause each Subsidiary to pay, all Royalties when due;
and notify Agent of any default or breach asserted by any Person to have occurred under any
License.




          10.1.9. Post Closing Matters. Notwithstanding any provision of the Agreement to the
contrary, Borrower Agent agrees that it shall deliver to the Agent (a) within 90 days after the
Closing Date, the executed Deposit Account Control Agreements and (b) no later than the earlier to
occur of (i) 90 days after the Closing Date and (ii) the date of the initial Borrowing or Letter of
Credit issuance hereunder, resolutions of the Board of Directors of each Borrower in form and
substance satisfactory to the Agent and certified by an authorized officer of each Borrower
ratifying the borrowing of money and incurrence of loans and financing obligations hereunder and
under the other Loan Documents on the terms and conditions set forth herein and therein, the
grant of Liens and security interests contemplated in the Loan Documents, and the execution
and delivery of the Loan Documents, any amendments or modifications thereto, and any and all
agreements, instruments or documents contemplated thereby and the performance of such other acts as
necessary or desirable to carry out the purposes of such resolutions.









     10.2. Negative Covenants. As long as any Commitments or Obligations are outstanding, each Borrower shall not:




-60-











 





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




          (a) the Obligations;




          (b) Permitted Purchase Money Debt;




          (c) Borrowed Money (other than the Obligations and Permitted Purchase Money Debt), but only to
the extent such Debt is listed on Schedule 10.2.1, outstanding on the Closing Date and not
satisfied with proceeds of the initial Loans;




          (d) Bank Product Debt;




          (e) Debt that is in existence when a Person becomes a Subsidiary or that is secured by an
asset when acquired by a Borrower or Subsidiary, as long as such Debt was not incurred in
contemplation of such Person becoming a Subsidiary or such acquisition;




          (f) Permitted Contingent Obligations;




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




          (h) Debt under the Receivables Securitization Facility;




          (i) Debt secured by a Lien permitted under Section 10.2.2(l) hereof to the extent reasonably
satisfactory to the Agent;




          (j) Unsecured Contingent Obligations of a Borrower for debts of its Subsidiaries to the extent
such incurrence is customary in the conduct of the Borrowers’ business; and




          (k) Debt that is not included in any of the preceding clauses of this Section, is not secured
by a Lien and has a maturity date at least 6 months after the Revolver Termination Date.




          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;




          (c) Liens for Taxes not yet due or being Properly Contested;




          (d) statutory Liens (other than Liens for Taxes or imposed under ERISA) 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, and (ii) such Liens do not materially impair the value or use
of the Property or materially impair operation of the business of any Borrower or Subsidiary;




-61-









 








          (e) Liens incurred or deposits made in the Ordinary Course of Business to secure the
performance of 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, as long as such Liens are at all times junior to Agent’s Liens;




          (f) Liens arising in the Ordinary Course of Business that are subject to Lien Waivers;




          (g) Liens arising by virtue of a judgment or judicial order against any Borrower or
Subsidiary, or any Property of a Borrower or Subsidiary, as long as such Liens are (i) in existence
for less than 20 consecutive days or being Properly Contested, and (ii) at all times junior to
Agent’s Liens;




          (h) easements, rights-of-way, restrictions, covenants or other agreements of record, and other
similar charges or encumbrances on Real Estate, that do not secure any monetary obligation and do
not interfere with the Ordinary Course of Business;




          (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) existing Liens shown on Schedule 10.2.2;




          (k) Liens arising in connection with the Receivables Securitization Facility; and




          (l) Liens on assets that constitute Principal Property (as defined in the Existing Indenture)
and sale and leaseback transactions (as defined in the Existing Indenture) of Cooper and its
Subsidiaries, in each case to the extent permitted by the terms of the Existing Indenture (assuming
that, at the time of incurrence, such Existing Indenture are in full force and effect).




          10.2.3. Distributions; Upstream Payments. Declare or make any Distributions, except
Upstream Payments; or create or suffer to exist any encumbrance or restriction on the ability of
Max-Trac or any other domestic Subsidiary of any Borrower to make any Upstream Payment, except for
restrictions under the Loan Documents, under Applicable Law or in effect on the Closing Date as
shown on Schedule 9.1.15; provided that such limitations on Distributions shall not apply
if at the time of the declaration of such Distribution, the Availability Test is met and the most
recently delivered Projections indicate that the Availability Test will also be met at the time of
payment of such Distribution.




          10.2.4. Restricted Investments and Acquisitions. Make any Restricted Investment;
provided that limitations on Restricted Investments (other than restrictions on
Acquisitions) shall not apply if the Availability Test is met as of both the date the applicable
Borrower commits to make such Restricted Investment and the date the Borrower funds such Restricted
Investment; make, directly or indirectly through any Subsidiary or Affiliate, any Acquisitions
unless (i) no Default or Event of Default has occurred and is continuing; (ii) the acquired
business is primarily in the same or a substantially similar line of business as the



-62-









 






Borrowers or a reasonable extension of such line of businesses; (iii) such Acquisition is
approved by the Board of Directors and shareholders of the acquired business; and (iv) the
consideration paid in such Acquisition does not exceed $30,000,000 for any individual Acquisition
or $100,000,000 for all Acquisitions since the Closing Date; provided that limitations on
the amount of consideration that may be paid in connection with Acquisitions shall not apply if the
Availability Test is met and the Fixed Charge Coverage Ratio is greater than 1.0:1.0 in each case
at the time the Borrower commits to such Acquisition and at the time the Borrower funds such
Acquisition.




          10.2.5. Disposition of Assets. Make any Asset Disposition, except the following




          (a) Permitted Asset Dispositions; and




          (b) intercompany transfers among the Borrowers and any other intercompany transfers (excluding
transfers and liens under the Receivables Securitization Facility) so long as on an arms-length
basis and in the Ordinary Course of Business;




          (c) all other Asset Dispositions so long as, both immediately before and after such Asset
Disposition (and the accompanying prepayment, if applicable), Borrowers are in compliance with the
Availability Test;




          (d) Dispositions of Accounts, General Intangibles, Chattel Paper, Payment Intangibles and
Supporting Obligations, in each case solely to the extent sold, purportedly sold (but
recharacterized as financed), transferred, assigned, contributed or otherwise conveyed to the
Receivables Securitization Facility; and




          (e) so long as no Default is continuing, sales of Accounts owned by Cooper that are owed by
foreign account debtors.




          10.2.6. Loans. Make any loans or other advances (or distributions) 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) any Investments permitted under Section 10.2.4
and (d) loans and advances that, when taken together with all loans and advances permitted under
clause (d) of the definition of “Restricted Investments", do not exceed $10,000,000 in the
aggregate at any time outstanding.




          10.2.7. 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 Borrowed Money (other than the Obligations) prior to its due date under the agreements
evidencing such Debt as in effect on the Closing Date (or as amended thereafter with the consent of
Agent); provided the restrictions on voluntary payments shall not apply so long as the
Availability Test is met at the time of such prepayment.




          10.2.8. Fundamental Changes. Merge, 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 mergers or consolidations of a wholly-owned
Subsidiary with or into a Borrower (so long as a Borrower is the surviving entity of such merger



-63-









 






or consolidation); 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 of
organization.




          10.2.9. Organic Documents. Amend, modify or otherwise change any of its Organic
Documents as in effect on the Closing Date in a manner adverse to the Lenders.




          10.2.10. Tax Consolidation. File or consent to the filing of any consolidated income
tax return with any Person other than Borrowers 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, or permit any domestic Significant
Subsidiary (other than Cooper Receivables LLC) to become, a party to any Restrictive Agreement,
except (a) a Restrictive Agreement as in effect on the Closing Date and shown on Schedule 9.1.15;
(b) a Restrictive Agreement relating to secured Debt permitted hereunder, if such restrictions
apply only to the collateral for such Debt; and (c) customary provisions in leases and other
contracts restricting assignment thereof.




          10.2.13. Hedging Agreements. Enter into any Hedging Agreement, except to hedge risks
arising in the Ordinary Course of Business (including interest rate swaps) and 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 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; (b) payment of reasonable
compensation to officers and employees for services actually rendered, and loans and advances
permitted by Section 10.2.6; (c) payment of customary directors’ fees and indemnities; (d)
transactions solely among Borrowers; (e) transactions with Affiliates that were consummated prior
to the Closing Date, as shown on Schedule 10.2.17; (f) transactions with Affiliates in the Ordinary
Course of Business, upon fair and reasonable terms (if requested by Agent, fully disclosed to
Agent) and no less favorable than would be obtained in a comparable arm’s-length transaction with a
non-Affiliate; (g) sales of accounts receivable, payment intangibles and related assets or
participations therein, in connection with the Receivables Securitization Facility; and (h)
Restricted Investments permitted under Section 10.2.4 hereof.




          10.2.16. Plans. Become party to any Multiemployer Plan or Foreign Plan, other than
any in existence on the Closing Date.




          10.2.17. Amendments and Notices of Amendments to Receivables Purchase Agreement or
Purchase and Sale Agreement. Except for extensions and renewals, Cooper shall (a) provide
Agent with written notice of any proposed amendment, modification or other change to, and each
consent to a departure from, the terms or provisions of the Receivables Securitization Facility and
(b) promptly following the effectiveness thereof, provide Agent with a copy of each such amendment,
modification or other change to, and each such consent to a



-64-









 






departure from, the terms or provisions of the Receivable Securitization Facility. Prior to a
Facility Termination Date (as defined under the Receivables Securitization Facility), Cooper shall
not, without the prior written consent of Agent, amend, modify or otherwise change or obtain a
consent to a departure from Section 1.4, the definition of “Termination Day”, or any changes to
Section 2 of Exhibit II thereof, in each case under and as defined in the Receivables Purchase
Agreement that (i) would be adverse in any way (as determined by Agent in its commercially
reasonable discretion) to the Agent or Lenders or (ii) could in any way impair the Lien of Agent or
Lenders in the Collateral (including, without limitation, by impairing the creation, attachment,
perfection, or priority of such Lien).




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 Borrower fails to pay (i) any Obligations (except Bank Product Debt in an aggregate
amount less than $1,000,000) when due or (ii) Bank Product Debt in an aggregate amount equal to or
greater than $1,000,000 within three (3) days following the date due, (in each case, whether at
stated maturity, on demand, upon acceleration or otherwise);




          (b) Any representation, warranty or other written statement of a Borrower made in connection
with any Loan Documents or transactions contemplated thereby is incorrect or misleading in any
material respect when given;




          (c) A Borrower breaches or fail to perform any covenant contained in Section 7.2, 7.3, 7.5,
8.1 (unless the Borrowing Base Certificate is delivered within 3 days following the date due),
8.2.4, 8.2.5, 8.5.2, 10.1.1, 10.1.2 (unless the required deliveries are made within 10 days
following the date due), or 10.2;




          (d) A Borrower breaches or fails to perform any other covenant contained in any Loan
Documents, and such breach or failure is not cured within 30 days after a Senior Officer of such
Borrower has knowledge thereof or receives notice thereof from Agent, whichever is sooner;
provided, however, that such notice and opportunity to cure shall not apply if the breach or
failure to perform is not capable of being cured within such period or is a willful breach by a
Borrower;




          (e) A Borrower denies or contests the validity or enforceability of any Loan Documents or
Obligations, or the perfection or priority of any Lien 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);




          (f) Any breach or default of a Borrower 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 $10,000,000 if the maturity of or any payment with respect to
such Debt may be accelerated or demanded due to such breach; or



-65-









 






any termination event or unmatured termination event, however named, occurs under the
Receivables Securitization Facility (or any other securitization facility) to which Borrower or any
special purpose entity established by either Borrower is a party, relating to any debt, interests
in either Borrower’s Accounts (including, without limitation, Receivables Accounts) or similar
investment in excess of $10,000,000, if such event allows such securitization facility to be
accelerated or terminated or causes the reinvestment of collections in new Accounts (including,
without limitation, Receivables Accounts) to terminate or be suspended.




          (g) Any judgment or order for the payment of money is entered against a Borrower in an amount
that exceeds, individually or cumulatively with all unsatisfied judgments or orders against all
Borrowers, $10,000,000 (net of any insurance coverage, cash reserve or self-insurance coverage
therefor acknowledged in writing by the insurer), unless a stay of enforcement of such judgment or
order is obtained within sixty (60) days of the date of such judgment or order;




          (h) A loss, theft, damage or destruction occurs with respect to any Collateral in excess of
$3,000,000 if the such Collateral is not covered by insurance;




          (i) A Borrower or any Significant Subsidiary is enjoined, restrained or in any way prevented
by any Governmental Authority from conducting any material part of its business; a Borrower or any
Significant Subsidiary suffers the loss, revocation or termination of any material license, permit,
lease or agreement necessary to its business; there is a cessation of any material part of a
Borrower’s or any Significant Subsidiary’s business for a material period of time; any material
Collateral or Property of a Borrower is taken or impaired through condemnation; a Borrower or any
Significant Subsidiary agrees to or commences any liquidation, dissolution or winding up of its
affairs; or a Borrower or any Significant Subsidiary ceases to be Solvent;




          (j) An Insolvency Proceeding is commenced by a Borrower or any Significant Subsidiary; a
Borrower or any Significant Subsidiary 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 of the business of a Borrower or any Significant Subsidiary; or an
Insolvency Proceeding is commenced against a Borrower or any Significant Subsidiary and: the
Borrower or any Significant Subsidiary consents to institution of the proceeding, the petition
commencing the proceeding is not timely controverted by the Borrower or the applicable Significant
Subsidiary, the petition is not dismissed within 30 days after filing, or an order for relief is
entered in the proceeding;




          (k) 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 Borrower to a Pension Plan,
Multiemployer Plan or PBGC in excess of $10,000,000, or that constitutes grounds for appointment of
a trustee for or termination by the PBGC of any Pension Plan or Multiemployer Plan; a Borrower 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; or any event similar to the
foregoing occurs or exists with respect to a Foreign Plan;




-66-









 








          (l) A Borrower or any Significant Subsidiary or any of their respective Senior Officers is
criminally indicted or convicted for (i) a felony committed in the conduct of the Borrower’s or a
Significant Subsidiary’s business, or (ii) violating any state or federal law (including the
Controlled Substances Act, Money Laundering Control Act of 1986 and Illegal Exportation of War
Materials Act) that could lead to forfeiture of any material Property or any Collateral;




          (m) A Change of Control occurs; or any event occurs or condition exists that has a Material
Adverse Effect; or




          (n) The Existing Senior Unsecured Notes are not refinanced, defeased or reserved for under the
Borrowing Base at least 90 days prior to the maturity date of such Existing Senior Unsecured Notes.



Notwithstanding any other provision in this Section 11.1, no Event of Default under Sections
11.1(a) — (h) and (k) — (n) shall be deemed to occur if, at the time of the occurrence of an
event under any of Sections 11.1(a) — (h) or (k) — (n):




     (i) (a) no Loans and LC Obligations are outstanding and (b) within five (5) Business Days, all
fees and expenses then due under this Agreement have been paid in full in cash and all other
Obligations have been cash collateralized in an amount equal to 100% of the outstanding amount of
such Obligations and otherwise to Administrative Agent’s reasonable satisfaction; or



     (ii) (a) the aggregate outstanding principal balance of all Loans and LC Obligations is less
than $50,000,000, (b) both immediately before and during the immediately succeeding five (5)
Business Day period following such event, Availability is greater than $100,000,000 and (c) within
five (5) Business Days , (I) all Loans, drawings under Letters of Credit, fees and expenses have
been paid in full in cash, (II) all other LC Obligations have been cash collateralized in an amount
equal to 105% of the stated amount of such LC Obligations and otherwise to Administrative Agent’s
reasonable satisfaction and (III) all other Obligations have been cash collateralized in an amount
equal to 100% of the outstanding amount of such LC Obligations and otherwise to Administrative
Agent’s reasonable satisfaction.



     11.2. Remedies upon Default. If an Event of Default described in Section 11.1(j) occurs with
respect to any Borrower, 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:



          (a) 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 Borrowers to the fullest extent permitted by law;




          (b) require Borrowers to Cash Collateralize LC Obligations, Bank Product Debt and other
Obligations that are contingent or not yet due and payable, and, if Borrowers fail promptly to
deposit such Cash Collateral, Agent may (and shall upon the direction of Required



-67-









 






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);




          (c) 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. Such rights and
remedies include the rights to (i) take possession of any Collateral; (ii) require Borrowers to
assemble Collateral, at Borrowers’ 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 Borrower, Borrowers 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 Borrower agrees that 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 Borrower’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 for cash, credit or any combination thereof, and 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; and




          (d) direct Account Debtors of the Borrowers (or require Borrowers to direct such Account
Debtors) to pay all amounts owing to Borrowers to a Dominion Account (or other depository account
identified by Agent).



Upon the occurrence of any event described in Section 11.1(a) — (n), Agent may, in its discretion,
(or, at the request of Requisite Lenders, shall) terminate, reduce or condition any Commitment or
make any adjustment to the Borrowing Base.




     11.3. Limited Conditional License for Intellectual Property. In addition to, and not by way of
limitation of, the granting of a security interest in the Collateral pursuant hereto, each of the
Borrowers hereby assigns, transfers and conveys to the Agent, for use upon the occurrence and
during the continuation of an Event of Default, the irrevocable, nonexclusive right and license to
use all present and future trademarks, trade names, trade dress and copyrights owned or used by
such Borrower that relate to the Collateral, together with any goodwill associated therewith, all
to the extent necessary to enable the Agent to realize on, and exercise all rights of the Agent and
the Lenders in relation to, the Collateral in accordance with this Agreement (including without
limitation advertising in all media as the Agent deems appropriate in connection with marketing and
sales of the Collateral) and to enable any transferee or assignee of the Collateral to enjoy the
benefits of the Collateral, and including in such license access to all media in which any of the
licensed items may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof; provided, however, the license granted under this
Section 11.3 shall not be construed to limit such Borrower’s ability to take reasonable
steps, in accordance with its then current business practices, to protect and preserve its
trademarks, trade names, trade dress and copyrights. This right shall inure to the benefit of all
successors, assigns and transferees of the Agent and its successors, assigns and transferees,
whether by voluntary conveyance, operation of law, assignment, transfer, foreclosure, deed in



-68-









 




lieu of foreclosure or otherwise. Such right and license shall be granted free of charge, without
requirement that any monetary payment whatsoever be made to such Borrower. In addition, each
Borrower hereby grants to the Agent and its employees, representatives and agents the right to
visit such Borrower’s and any of its Affiliate’s or subcontractor’s plants, facilities and other
places of business that are utilized in connection with the manufacture, production, inspection,
storage or sale of Collateral (or which were so utilized during the prior six month period), and to
inspect the quality control and all other records relating thereto upon reasonable advance written
notice to such Borrower and at reasonable dates and times and as often as may be reasonably
requested. Notwithstanding the fact that the foregoing license does not extend to or cover
patents, patent applications and technical processes The Borrowers acknowledge and agree that
following the occurrence and continuance of an Event of Default, Agent shall be permitted to sell
the Collateral without liability for intellectual property infringement.




     11.4. Setoff. At any time during an Event of Default, Agent, Issuing Bank, 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,
Issuing Bank, such Lender or such Affiliate to or for the credit or the account of a Borrower
against any Obligations, irrespective of whether or not Agent, 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, 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, Issuing Bank, each Lender and each such
Affiliate under this Section 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 covenants, conditions, provisions, warranties,
guaranties, indemnities and other undertakings of Borrowers contained in the Loan Documents are
cumulative and not in derogation or substitution of each other. In particular, 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 shall not be exclusive of any other rights or remedies that Agent
and Lenders may have, whether under any agreement, by law, at equity or otherwise.




          11.5.2. Waivers. The failure or delay of Agent or any Lender to require strict
performance by Borrowers with any terms of the Loan Documents, or to exercise any rights or
remedies with respect to Collateral or otherwise, shall not operate as a waiver thereof nor as
establishment of a course of dealing. All rights and remedies shall continue in full force and
effect until Full Payment of all Obligations. No modification of any terms of any Loan Documents
(including any waiver thereof) shall be effective, unless such modification is specifically
provided in a writing directed to Borrowers and executed by Agent or the requisite Lenders, and
such modification shall be applicable only to the matter specified. No waiver of any Default or
Event of Default shall constitute a waiver of any other Default or Event of Default that may exist
at such time, unless expressly stated. If Agent or any Lender accepts performance by any Borrower
or any Significant Subsidiary under any Loan Documents in a manner other than that specified
therein, or during any Default or Event of Default, or if Agent or any Lender



-69-









 






shall delay or exercise any right or remedy under any Loan Documents, such acceptance, delay
or exercise shall not operate to waive any Default or Event of Default nor to preclude exercise of
any other right or remedy.




SECTION 12. AGENT




     12.1. Appointment, Authority and Duties of Agent.



          12.1.1. Appointment and Authority. 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 Lenders. Each Lender agrees that any action taken by Agent 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 Borrower or other Person; (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 Credit Judgment 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.




          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 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



-70-









 






Lenders with respect to any act (including the failure to act) in 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 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. Notwithstanding the
foregoing, instructions by and consent of all Lenders shall be required in the circumstances
described in Section 14.1.1, and in no event shall Required 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. Lenders authorize Agent to release any
Lien with respect to any Collateral (a) upon Full Payment of the Obligations; (b) that is the
subject of an Asset Disposition which Borrowers certify in writing to Agent is a Permitted Asset
Disposition, an Asset Disposition permitted by Section 10.2.5 or a Lien which Borrowers certify is
a Permitted Lien entitled to priority over Agent’s Liens (and Agent may rely conclusively on any
such certificate without further inquiry); (c) that does not constitute a material part of the
Collateral; or (d) with the written consent of all Lenders. Agent shall have no obligation
whatsoever to any Lenders to assure that any Collateral exists or is owned by a Borrower, 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. Agent and Lenders appoint each other Lender as
agent (for the benefit of Secured Parties) for the purpose of perfecting Liens in any Collateral
held by such Lender, to the extent such Liens are perfected by possession. If any Lender obtains
possession 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, upon receipt thereof, forward to each Lender
copies of the results of any field audit, examination or appraisal prepared by or on behalf of
Agent with respect to any Borrower 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 Borrowers’
books and records as well as upon representations of Borrowers’ 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



-71-









 






such Lender’s Participants, attorneys and accountants or to the extent required by Applicable
Law or applicable Governmental Authorities) 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 any Claims arising in
connection with any third parties that obtain any part or contents of a Report through 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 Borrower 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 sales or other similar dispositions of Collateral. Notwithstanding the
foregoing, however, a Lender may take action to preserve or enforce its rights against a Borrower
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.



     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, Issuing Bank and the other 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 Dominion Account without the prior consent of Agent.



     12.6. Indemnification of Agent Indemnitees. EACH LENDER SHALL INDEMNIFY AND HOLD HARMLESS AGENT
INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY BORROWERS (BUT WITHOUT LIMITING THE INDEMNIFICATION
OBLIGATIONS OF BORROWERS 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), EXCEPT TO THE
EXTENT ARISING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF



-72-









 




SUCH AGENT INDEMNITEE. 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 receiver, bankruptcy trustee, 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 directly and solely
caused by Agent’s gross negligence or willful misconduct. Agent does not assume any responsibility
for any failure or delay in performance or any breach by any Borrower 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
Borrower. 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, collectibility, value, sufficiency, location or existence of any Collateral, or the
validity, extent, perfection or priority of any Lien therein; the validity, enforceability or
collectibility of any Obligations; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any Borrower or Account Debtor. No Agent
Indemnitee shall have any obligation to any Lender to ascertain or inquire into the existence of
any Default or Event of Default, the observance or performance by any Borrower 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 30 days written
notice thereof to Lenders and Borrowers. Upon receipt of such notice, Required Lenders shall have
the right to appoint a successor Agent which shall be (a) a Lender or an Affiliate of a 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 Default
or Event of Default exists) is reasonably acceptable to Borrowers. 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
or acquisition of stock or this loan shall continue to be Agent hereunder without further act on
the part of the parties hereto, unless such successor resigns as provided above.




-73-









 








          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
Borrower 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 Borrower 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
Borrower, any Collateral or the legality, validity, sufficiency or enforceability of any Loan
Documents or Obligations. Each Lender will, independently and without reliance upon the other
Lenders or Agent, and based upon such 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 Borrower or any credit or other information concerning the
affairs, financial condition, business or Properties of any Borrower (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) fails to fund its Pro Rata share of any
Loan or LC Obligation hereunder, and such failure is not cured within two Business Days, (b)
defaults in performing any of its obligations under the Loan Documents, or (c) fails to give its
consent to any amendment, waiver or action for which consent of all Lenders was required and
Required Lenders consented, then, in addition to any other rights and remedies that any Person may
have, Agent may, by notice to such Lender within 120 days after such event, require such Lender to
assign all of its rights and obligations under the Loan Documents to Eligible Assignee(s) specified
by Agent, pursuant to appropriate Assignment and Acceptance(s) and within 20 days after Agent’s
notice. Agent is irrevocably appointed as attorney-in-fact to execute any such Assignment and
Acceptance if the 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).



-74-









 





     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 Borrowers be entitled to receive credit for any interest paid by a Lender to Agent.




          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 Borrower and such related
payment is not received, then Agent may recover such amount from each Lender that received it. If
Agent determines at any time that an amount received under any Loan Document must be returned to a
Borrower 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 other Loan Documents as any other Lender, and the terms “Lenders,” “Required
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, Borrowers 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
Borrowers, 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



-75-









 




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 is an agreement solely among Lenders and
Agent, and shall survive Full Payment of the Obligations. This Section 12 does not confer any
rights or benefits upon Borrowers or any other Person. As between Borrowers 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
Borrowers, Agent, Lenders, and their respective successors and assigns, except that (a) no Borrower
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.



     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 Commitments for all purposes, all amounts payable by
Borrowers shall be determined as if such Lender had not sold such participating interests, and
Borrowers 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 that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 5.8 unless Borrowers agree otherwise in
writing.




          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 any Loan or Commitment in which such Participant has an interest,
postpones the Commitment Termination Date or any date fixed for any regularly scheduled payment of
principal, interest or fees on such Loan or Commitment, or releases any Borrower or substantial
portion of the Collateral.




-76-









 








          13.2.3. Benefit of Set-Off. Borrowers 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 $10,000,000
(unless otherwise agreed by Agent in its discretion) and integral multiples of $1,000,000 in excess
of that amount; (b) except in the case of an assignment in whole of a Lender’s rights and
obligations, the aggregate amount of the Commitments retained by the transferor Lender is at least
$10,000,000 (unless otherwise agreed by Agent in its discretion); and (c) the parties to each such
assignment shall execute and deliver to Agent, for its acceptance and recording, an Assignment and
Acceptance. 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, that any payment by Borrowers to the assigning Lender in respect
of any Obligations assigned as described in this sentence shall satisfy Borrowers’ obligations
hereunder to the extent of such payment, and no such assignment shall release the assigning Lender
from its obligations hereunder.




          13.3.2. Effect; Effective Date. Upon delivery to Agent of an assignment notice in the
form of Exhibit C 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 Borrowers shall 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.




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
Borrower party to such Loan Document; provided, however, that




-77-









 








          (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 Issuing Bank, no modification shall be effective with
respect to any LC Obligations or Section 2.2;




          (c) without the prior written consent of each affected Lender, no modification shall be
effective that would (i) increase the 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; and




          (d) without the prior written consent of all Lenders (except a defaulting Lender as provided
in Section 4.2), no modification shall be effective that would (i) extend the Revolver Termination
Date; (ii) alter Section 5.5, 7.1 (except to add Collateral) or 14.1.1; (iii) amend the definitions
of Borrowing Base (and the defined terms used in such definition), Pro Rata or Required Lenders;
(iv) increase any advance rate, decrease the Availability Block or increase total Commitments; (vi)
release all or substantially all of the Collateral; or (vii) release any Borrower from liability
for any Obligations.




          14.1.2. Limitations. The agreement of Borrowers 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 Bank as among themselves. Only the consent of the parties to the
Fee Letter or any agreement relating to a Bank Product shall be required for any modification of
such agreement, and no Affiliate of a Lender that is party to a Bank Product agreement shall have
any other right to consent to or 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 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 Borrower 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 BORROWER 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. In no event shall any party to a Loan Document have any
obligation thereunder 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
the gross negligence or willful misconduct of such Indemnitee.



-78-









 





     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 Borrower, at
Borrower Agent’s address shown on the signature pages hereof, and to any other Person at its
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 Business Days after deposit in the U.S. mail, with first-class postage
pre-paid, addressed to the applicable address; or (c) if given by personal delivery, when duly
delivered to the notice address with receipt acknowledged. Notwithstanding the foregoing, no
notice to Agent pursuant to Section 2.1.4, 2.3, 3.1.2 or 4.1.1 shall be effective until actually
received by the individual 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 Borrower Agent shall be deemed received by all Borrowers. Each Person who becomes a
Lender after the Closing Date shall give Agent and Borrowers an Assignment Notice in the form of
Exhibit C, and until the Person provides Borrowers the Assignment Notice of the Person’s address,
no Borrower is required to give the Person notice hereunder.




          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 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 Borrower 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 Borrower shall indemnify and hold harmless
each Indemnitee from any liabilities, losses, costs and expenses arising from any telephonic
communication purportedly given by or on behalf of a Borrower.




     14.4. Performance of Borrowers’ Obligations. Agent may, in its discretion at any time and from
time to time, at Borrowers’ expense, pay any amount or do any act required of a Borrower under any
Loan Documents or otherwise lawfully requested by Agent 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 shall be reimbursed to Agent by Borrowers, on
demand, with interest from the date incurred to the date of payment thereof at the Default Rate
applicable to Base Rate Loans. Any payment made or action taken by



-79-









 




Agent under this Section 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 Borrower hereby authorizes Agent and Lenders (but they shall have
no obligation) to respond to usual and customary credit inquiries from third parties concerning any
Borrower or Subsidiary.



     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 shall be
effective as delivery of a manually executed counterpart of such agreement.



     14.9. Entire Agreement. Time is of the essence of the Loan Documents. 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, and each Lender shall be
entitled, to the extent not otherwise restricted hereunder, to protect and enforce its rights
arising out of the Loan Documents. 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 Borrower.



     14.11. No Advisory or Fiduciary Responsibility. In connection with all aspects of each
transaction contemplated by any Loan Document, Borrowers 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 Borrowers and such
Person; (ii) Borrowers have consulted their own legal, accounting, regulatory and tax advisors to
the extent they have deemed appropriate; and (iii) Borrowers are capable of



-80-









 




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 Borrowers, any of their Affiliates or any
other Person, 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
Borrowers and their Affiliates, and have no obligation to disclose any of such interests to
Borrowers or their Affiliates. To the fullest extent permitted by Applicable Law, each Borrower
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 Bank 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 its Affiliates’ respective partners, directors, officers,
employees, agents, advisors and representatives (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such Information and instructed
to keep such Information confidential); (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory authority, such as the
National Association of Insurance Commissioners); (c) to the extent required by Applicable Law or
by any subpoena or similar legal process; (d) to any other party hereto; (e) in connection with the
exercise of any remedies, the enforcement of any rights, or any action or proceeding relating to
any Loan Documents; (f) subject to an agreement containing provisions substantially the same as
those of this Section, to any Transferee or any actual or prospective party (or its advisors) to
any Bank Product; (g) with the consent of the Borrower; or (h) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section or (ii) becomes
available to Agent, any Lender, Issuing Bank or any of their Affiliates on a nonconfidential basis
from a source other than Borrowers. Agent, Lenders and Issuing Bank shall use reasonable efforts
to provide Borrowers notice of all requests for information described in item (c) above to the
extent not prohibited by law or judicial process. Notwithstanding the foregoing, Agent and Lenders
may issue and disseminate to the public general information describing this credit facility,
including the names and addresses of Borrowers and a general description of Borrowers’ businesses,
and may use Borrowers’ names in advertising and other promotional materials. For purposes of this
Section, “Information” means all information received from a Borrower or Subsidiary relating to it
or its business, other than any information that is available to Agent, any Lender or Issuing Bank
on a nonconfidential basis prior to disclosure by the Borrower or Subsidiary, provided that, in the
case of information received from a Borrower or Subsidiary after the date hereof, such information
is clearly identified at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information pursuant to this Section shall be considered to have complied with
its obligation to do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own confidential
information. Each of Agent, Lenders and Issuing Bank acknowledges that (i) Information may include
material non-public information concerning a Borrower or Subsidiary; (ii) it has developed
compliance procedures regarding the use of material non-public



-81-









 




information; and (iii) it will handle such material non-public information in accordance with
Applicable Law, including federal and state securities laws.




     14.13. Certifications Regarding Indentures. 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 Indenture, dated as of March 17, 1997, between Cooper and The Chase
Manhattan Bank. Agent may condition Borrowings, Letters of Credit and other credit accommodations
under the Loan Documents from time to time upon Agent’s receipt of evidence that the Commitments
and Obligations continue to constitute permitted debt at such time.



     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 BORROWER HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF
ANY FEDERAL OR STATE COURT SITTING IN OR WITH JURISDICTION OVER 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 COURT. EACH BORROWER 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 Borrower 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 Borrowers. To the fullest extent permitted by Applicable Law, each Borrower
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 (except as set forth
in Section 11.1(d) with respect to knowledge of such default), non-payment, maturity, release,
compromise, settlement, extension or renewal of any commercial paper, accounts, documents,
instruments, chattel paper and guaranties at any time held by Agent on which a Borrower 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



-82-









 




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
Borrower 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 Borrowers. Each Borrower 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.




     14.17.
Patriot Act Notice. Agent and Lenders hereby notify Borrowers that pursuant to the
requirements of the Patriot Act, Agent and Lenders are required to obtain, verify and record
information that identifies each Borrower, 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. Agent and Lenders will also require information regarding each personal guarantor, if any,
and may require information regarding Borrowers’ management and owners, such as legal name,
address, social security number and date of birth.



[Remainder of page intentionally left blank; signatures begin on following page]





-83-









 








     IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date set forth
above.



	 	 	 	 	 
	 	BORROWERS:



COOPER TIRE & RUBBER COMPANY

 	 
	 	By:  	/s/ Charles F. Nagy
 	 
	 	 	Name:  	Charles F. Nagy 	 
	 	 	Title:  	Assistant Treasurer

	 
	 	 	Address:  	
701 Lima Avenue

Findlay, OH  45840

Attn:  C. F. Nagy

Telecopy:
             
            
                    
         	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Philip G. Weaver
 	 
	 	 	Name:  	Philip G. Weaver 	 
	 	 	Title:  	Vice President and Chief Financial Officer

	 
	 	 	Address:  	
701 Lima Avenue

Findlay, OH  45840

Attn:  P. G. Weaver

Telecopy:
             
            
                    
         	 
	 



	 	 	 	 	 
	 	MAX-TRAC TIRE CO., INC.

 	 
	 	By:  	/s/ Charles F. Nagy
 	 
	 	 	Name:  	Charles F. Nagy 	 
	 	 	Title:  	Assistant Treasurer

	 
	 	 	Address:  	
4600 Prosper Drive

Stow, OH  44224

Attn:  C. F. Nagy

Telecopy:
             
            
                    
         	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Donald P. Ingols
 	 
	 	 	Name:  	Donald P. Ingols 	 
	 	 	Title:  	Vice President 	 
	 



[Signature Page to Loan and Security Agreement]




 









 








	 	 	 	 	 
	 	AGENT AND LENDERS:



BANK OF AMERICA, N.A.,

as Agent and Lender

 	 
	 	By:  	/s/ Thomas H. Herron
 	 
	 	 	Name:  	Thomas H. Herron 	 
	 	 	Title:  	Senior Vice President 
	 	 	Address:  	
20975 Swenson Drive

Suite 200

Waukesha, WI  53181

Attn:  Operations

Telecopy: 312-453-3000	 
	 



	 	 	 	 	 
	 	PNC BANK, NATIONAL ASSOCIATION,

as Syndication Agent and Lender

 	 
	 	By:  	/s/ Michael A. Gasser
 	 
	 	 	Name:  	Michael A. Gasser 	 
	 	 	Title:  	Vice President 
	 	 	Address:  	
1375 East 9th Street, Suite 2430

Cleveland, OH  44114

Attn:  Thomas  Humbyrd

Telecopy: 216-348-8594	 
	 



[Signature Page to Loan and Security Agreement]




 









 








	 	 	 	 	 
	 	NATIONAL CITY BUSINESS CREDIT, INC.

as Documentation Agent and Lender

 	 
	 	By:  	/s/ Gerald R. Kirpes
 	 
	 	 	Name:  	Gerald R. Kirpes 	 
	 	 	Title:  	Director 
	 	 	Address:  	
One East 4th Street, 6th Floor

Locator 25-C213A

Cincinnati, OH  45202 
	 	 	Attn:   	
 Michael McNeirney 
	 	 	Telecopy:	 (216) 222-8155	 
	 



	 	 	 	 	 
	 	KEYBANK NATIONAL ASSOCIATION,

as a Lender

 	 
	 	By:  	/s/ Roger F. Reeder
 	 
	 	 	Name:  	Roger F. Reeder 	 
	 	 	Title:  	Vice President 
	 	 	Address:  	
127 Public Square — 18th Floor

Cleveland, OH  44114 
	 	 	Attn:  	
	 
	 	 	Telecopy:  	
	 
	 



	 	 	 	 	 
	 	FIFTH THIRD BANK,

as a Lender

 	 
	 	By:  	/s/ Brian Jelinski
 	 
	 	 	Name:  	Brian Jelinski 	 
		 	Title:  	Assistant Vice President 
	 	 	Address:  	
1000 Town Center

MD JTWN5F

Southfield, MI 48075
	 
	 	 	Attn:  	
  Brian Jelinski

	 
	 	 	Telecopy:  	248-603-0548	 
	 



[Signature Page to Loan and Security Agreement]




 









 








	 	 	 	 	 
	 	JPMorgan Chase Bank, N.A.

as a Lender

 	 
	 	By:  	/s/ Randy J. Abrams
 	 
	 	 	Name:  	Randy J. Abrams 	 
		 	Title:  	Vice President 
		 	Address:  	
101 Central Plaza South, 2nd Floor

Canton, OH  44702 
	 	 	Attn:  	
  Randy J. Abrams  OH2-5272

	 
	 	 	Telecopy:  	330-438-8312	 
	 



[Signature Page to Loan and Security Agreement]





 











 





EXHIBIT A

to

Loan and Security Agreement




NOTE




					
	[Date]
	 	$                                        
	 	[City, State of Governing Law]






     COOPER TIRE & RUBBER COMPANY, a Delaware corporation (“Cooper”), MAX-TRAC TIRE CO.,
INC., an Ohio corporation (“Max-Trac”, and together with Cooper, collectively,
“Borrowers”), for value received, hereby unconditionally promise to pay, on a joint and
several basis, to the order of                                          (“Lender”), the principal sum
of                                          DOLLARS ($                      ), or such lesser amount as may be advanced by Lender
as Loans and owing as LC Obligations from time to time under the Loan Agreement described below,
together with all accrued and unpaid interest thereon. Terms are used herein as defined in the
Loan and Security Agreement dated as of November 9, 2007, among Borrowers, Bank of America, N.A.,
as Agent, Lender, and certain other financial institutions, as such agreement may be amended,
modified, renewed or extended from time to time (“Loan Agreement”).



     Principal of and interest on this Note from time to time outstanding shall be due and payable
as provided in the Loan Agreement. This Note is issued pursuant to and evidences Loans and LC
Obligations under the Loan Agreement, to which reference is made for a statement of the rights and
obligations of Lender and the duties and obligations of Borrowers. The Loan Agreement contains
provisions for acceleration of the maturity of this Note upon the happening of certain stated
events, and for the borrowing, prepayment and reborrowing of amounts upon specified terms and
conditions.



     The holder of this Note is hereby authorized by Borrowers to record on a schedule annexed to
this Note (or on a supplemental schedule) the amounts owing with respect to Loans and LC
Obligations, and the payment thereof. Failure to make any notation, however, shall not affect the
rights of the holder of this Note or any obligations of Borrowers hereunder or under any other Loan
Documents.



     Time is of the essence of this Note. Each Borrower and all endorsers, sureties and guarantors
of this Note hereby severally waive demand, presentment for payment, protest, notice of protest,
notice of intention to accelerate the maturity of this Note, diligence in collecting, the bringing
of any suit against any party, and any notice of or defense on account of any extensions, renewals,
partial payments, or changes in any manner of or in this Note or in any of its terms, provisions
and covenants, or any releases or substitutions of any security, or any delay, indulgence or other
act of any trustee or any holder hereof, whether before or after maturity. Borrowers jointly and
severally agree to pay, and to save the holder of this Note harmless against, any liability for the
payment of all costs and expenses (including without limitation reasonable attorneys’ fees) if this
Note is collected by or through an attorney-at-law.



Exhibit A-1









 





     In no contingency or event whatsoever shall the amount paid or agreed to be paid to the holder
of this Note for the use, forbearance or detention of money advanced hereunder exceed the highest
lawful rate permitted under Applicable Law. If any such excess amount is inadvertently paid by
Borrowers or inadvertently received by the holder of this Note, such excess shall be returned to
Borrowers or credited as a payment of principal, in accordance with the Loan Agreement. It is the
intent hereof that Borrowers not pay or contract to pay, and that holder of this Note not receive
or contract to receive, directly or indirectly in any manner whatsoever, interest in excess of that
which may be paid by Borrowers under Applicable Law.



     This Note 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).



     IN WITNESS WHEREOF, this Note is executed as of the date set forth above.



	 	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

Secretary

	 	 
	 	By	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:
	[Seal]
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

Secretary

	 	 
	 	By	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:
	[Seal]
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

Secretary

	 	 
	 	By	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:
	[Seal]
	 	 	 	 	 	 






Exhibit A-2









 






EXHIBIT B

to

Loan and Security Agreement




ASSIGNMENT AND ACCEPTANCE




     Reference is made to the Loan and Security Agreement dated as of November ___, 2007, as amended
(“Loan Agreement”), among COOPER TIRE & RUBBER COMPANY (“Cooper”), MAX-TRAC TIRE
CO., INC. (“Max-Trac”, and together with Cooper, collectively, “Borrowers”), BANK
OF AMERICA, N.A., as agent (“Agent”) for the financial institutions from time to time party
to the Loan Agreement (“Lenders”), and such Lenders. Terms are used herein as defined in
the Loan Agreement.



                                                                  (“Assignor
”) and                                                             
(“Assignee”) agree as follows:



     1. Assignor hereby assigns to Assignee and Assignee hereby purchases and assumes from Assignor
(a) a principal amount of $                      of Assignor’s outstanding Loans and $                      of Assignor’s
participations in LC Obligations and (b) the amount of $                      of Assignor’s Revolver
Commitment (which represents ___% of the total Revolver Commitments) (the foregoing items being,
collectively, the “Assigned Interest”), together with an interest in the Loan Documents
corresponding to the Assigned Interest. This Agreement shall be effective as of the date
(“Effective Date”) indicated in the corresponding Assignment Notice delivered to Agent,
provided such Assignment Notice is executed by Assignor, Assignee, Agent and Borrower Agent, if
applicable. From and after the Effective Date, Assignee hereby expressly assumes, and undertakes
to perform, all of Assignor’s obligations in respect of the Assigned Interest, and all principal,
interest, fees and other amounts which would otherwise be payable to or for Assignor’s account in
respect of the Assigned Interest shall be payable to or for Assignee’s account, to the extent such
amounts accrue on or after the Effective Date.



     2. Assignor (a) represents that as of the date hereof, prior to giving effect to this
assignment, its Revolver Commitment is $                      and the outstanding balance of its Loans and
participations in LC Obligations is $                      ; (b) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or representations made in or
in connection with the Loan Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Agreement or any other instrument or document
furnished pursuant thereto, other than that Assignor is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and clear of any adverse
claim; and (c) makes no representation or warranty and assumes no responsibility with respect to
the financial condition of Borrowers or the performance by Borrowers of their obligations under the
Loan Documents. [Assignor is attaching the Note[s] held by it and requests that Agent exchange
such Note[s] for new Notes payable to Assignee [and Assignor].]



     3. Assignee (a) represents and warrants that it is legally authorized to enter into this
Assignment and Acceptance; (b) confirms that it has received copies of the Loan Agreement and



Exhibit B1









 





such other Loan Documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees that it shall,
independently and without reliance upon Assignor and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in taking or not
taking action under the Loan Documents; (d) confirms that it is an Eligible Assignee; (e) appoints
and authorizes Agent to take such action as agent on its behalf and to exercise such powers under
the Loan Agreement as are delegated to Agent by the terms thereof, together with such powers as are
incidental thereto; (f) agrees that it will observe and perform all obligations that are required
to be performed by it as a “Lender” under the Loan Documents; and (g) represents and warrants that
the assignment evidenced hereby will not result in a non-exempt “prohibited transaction” under
Section 406 of ERISA.




     4. This Agreement shall be governed by the laws of the State of New York. 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 this Agreement shall remain in full force and effect.



     5. Each notice or other communication hereunder shall be in writing, shall be sent by
messenger, by telecopy or facsimile transmission, or by first-class mail, shall be deemed given
when sent and shall be sent as follows:




	 	(a)	 	If to Assignee, to the following address (or to such other
address as Assignee may designate from time to time):





__________________________

__________________________

__________________________





	 	(b)	 	If to Assignor, to the following address (or to such other
address as Assignor may designate from time to time):




__________________________

__________________________

__________________________

__________________________




     Payments hereunder shall be made by wire transfer of immediately available Dollars as follows:



     If to Assignee, to the following account (or to such other account as Assignee may designate
from time to time):


__________________________

__________________________

ABA No.___________________

__________________________

Account No.________________

Reference: _________________





Exhibit B2









 








     If to Assignor, to the following account (or to such other account as Assignor may designate
from time to time):


__________________________

__________________________

ABA No. __________________

__________________________

Account No. ________________

Reference: __________________




     IN WITNESS WHEREOF, this Assignment and Acceptance is executed as of                     .



                                                                  
  
           

(“Assignee”)




By   
               
             
               
                
  
        

     Title:




     
               
                 
                 
                        

(“Assignor”)




By   
                                                           
     
        

     Title:




Exhibit B3









 





EXHIBIT C

to

Loan and Security Agreement




ASSIGNMENT NOTICE




     Reference is made to (1) the Loan and Security Agreement dated as of November ___, 2007, as
amended (“Loan Agreement”), among COOPER TIRE & RUBBER COMPANY (“Cooper”), MAX-TRAC
TIRE CO., INC. (“Max-Trac”, and together with Cooper, collectively, “Borrowers”),
BANK OF AMERICA, N.A., as agent (“Agent”) for the financial institutions from time to time
party to the Loan Agreement (“Lenders”), and such Lenders; and (2) the Assignment and
Acceptance dated as of                      , 20___(“Assignment Agreement”), between                                          
(“Assignor”) and                                          (“Assignee”). Terms are
used herein as defined in the Loan Agreement.



     Assignor hereby notifies Borrowers and Agent of Assignor’s intent to assign to Assignee
pursuant to the Assignment Agreement (a) a principal amount of $                      of Assignor’s outstanding
Loans and $                      of Assignor’s participations in LC Obligations and (b) the amount of $                      of
Assignor’s Revolver Commitment (which represents ___% of the total Revolver Commitments) (the
foregoing items being, collectively, the “Assigned Interest”), together with an interest in
the Loan Documents corresponding to the Assigned Interest. This Agreement shall be effective as of
the date (“Effective Date”) indicated below, provided this Assignment Notice is executed by
Assignor, Assignee, Agent and Borrowers, if applicable. Pursuant to the Assignment Agreement,
Assignee has expressly assumed all of Assignor’s obligations under the Loan Agreement to the extent
of the Assigned Interest, as of the Effective Date.



     For purposes of the Loan Agreement, Agent shall deem Assignor’s Revolver Commitment to be
reduced by $                      , and Assignee’s Revolver Commitment to be increased by $                      .



     The address of Assignee to which notices and information are to be sent under the terms of the
Loan Agreement is:


 __________________________

__________________________

__________________________

__________________________





     The address of Assignee to which payments are to be sent under the terms of the Loan Agreement
is shown in the Assignment and Acceptance.



     This Notice is being delivered to Borrowers and Agent pursuant to Section 13.3 of the Loan
Agreement. Please acknowledge your acceptance of this Notice by executing and returning to
Assignee and Assignor a copy of this Notice.



Exhibit C-1









 





     IN
WITNESS WHEREOF, this Assignment Notice is executed as of                     .



                                                                  
  
           

(“Assignee”)




By   
               
             
               
                
  
        

     Title:




     
               
                 
                 
                        

(“Assignor”)




By   
                                                           
     
        

     Title:



ACKNOWLEDGED AND AGREED,

AS OF THE DATE SET FORTH ABOVE:




BORROWERS:*




	 	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 

Title:
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 

Title:
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 

Title:
	 	 








 




			
	*	 	No signature required if Assignee is a Lender, U.S.-based Affiliate of a Lender or Approved Fund,
or if an Event of Default exists.




Exhibit C-2-









 










BANK OF AMERICA, N.A.,

as Agent




	 	 	 	 	 
	 	 	 
	 
	 	 	 	 
	By
	 	 	 	 
	 

	 	 

Title:
	 	 







Exhibit C-3-













 





EXHIBIT D




Exhibit
D intentionally omitted.






 









 





EXHIBIT E




FORM OF COMPLIANCE CERTIFICATE




COOPER TIRE & RUBBER COMPANY




Date:                     , 200___




     This Certificate is provided by Cooper Tire & Rubber Company, a Delaware corporation
(“Cooper”), pursuant to Section 10.1.2(d) of that certain Loan and Security Agreement dated
as of November ___, 2007 (as amended, restated or otherwise modified from time to time, the “Loan
Agreement”) among Cooper, Max-Trac Tire Co., Inc. (together with Cooper, the “Borrowers”), the
financial institutions from time to time party thereto (the “Lenders”), Bank of America, N.A., as
administrative agent for the Lenders and collateral agent for the Lenders and other Secured Parties
(in such capacities, “Agent”). Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to them in the Loan Agreement.



     The undersigned is the chief financial officer of Cooper and is duly authorized to execute and
deliver this Certificate on behalf of the Borrowers. By executing this Certificate, such officer
hereby certifies to Agent and Lenders on behalf of the Borrowers (and not in a personal capacity)
that:



          (a) the financial statements delivered with this Certificate in accordance with Section
10.1.2(a) and/or 10.1.2(b) of the Loan Agreement fairly present in all material
respects the results of operations and financial condition of Borrowers and Subsidiaries as of the
dates of such financial statements;




          (b) I have reviewed the terms of the Loan Agreement and have made, or caused to be made under
my supervision, a review in reasonable detail of the transactions and conditions of the Borrowers
and Subsidiaries during the accounting period covered by such financial statements;




          (c) such review has not disclosed the existence during or at the end of such accounting
period, and I have no knowledge of the existence as of the date hereof, of any condition or event
that constitutes a Default or an Event of Default, except as set forth below, which includes a
description of the nature and period of existence of such Default or Event of Default and what
action the Borrowers have taken, are taking and propose to take with respect thereto;




                         [Description, if any]



          (d) the Borrowers and Subsidiaries are, as of the date of this Certificate, in compliance in
all material respects with all of the covenants and agreements in the Loan Agreement and the other
Loan Documents [except — describe if applicable]; and




          (e) except as described below, subsequent to the date of the most recent Compliance
Certificate submitted by Cooper, neither any Borrower nor any Subsidiary has (i) changed its name
as it appears in official filings in the jurisdiction of its organization, (ii) changed its chief
executive office or principal place of business, (iii) changed the type of entity that it is, (iv)
changed (or has had changed) its organization identification number, if any, issued




 









 







by its jurisdiction of organization, (v) changed its jurisdiction of organization, (vi) changed the
end of its Fiscal Year, or (vii) formed any new Subsidiary.




	 	 	 	 	 
	 	COOPER TIRE & RUBBER COMPANY

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Its: Chief Financial Officer