exv10w12



 







Exhibit 10.12




EXECUTION VERSION




 






$405,000,000


AMENDED AND RESTATED CREDIT AGREEMENT


among


UNITED COMPONENTS, INC.,

as Borrower,


The Several Lenders

from Time to Time Parties Hereto,


LEHMAN BROTHERS INC.

and

J.P. MORGAN SECURITIES INC.,

as Joint Lead Arrangers,


JPMORGAN CHASE BANK, N.A.,

as Syndication Agent,


ABN AMRO BANK N.V.,

BANK OF AMERICA, N.A.,

and

GENERAL ELECTRIC CAPITAL CORPORATION,

as Co-Documentation Agents


and


LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent


Dated as of May 25, 2006



 















 












TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	 

	 	SECTION 1. DEFINITIONS	 	 	 	 
	1.1

	 	Defined Terms
	 	 	1	 
	1.2

	 	Other Definitional Provisions
	 	 	22	 
	 

	 	SECTION 2. AMOUNT AND TERMS OF COMMITMENTS	 	 	 	 
	2.1

	 	Tranche D Term Loan Commitments
	 	 	23	 
	2.2

	 	Procedure for Tranche D Term Loan Borrowing
	 	 	23	 
	2.3

	 	Repayment of Tranche D Term Loans
	 	 	24	 
	2.4

	 	Revolving Credit Commitments
	 	 	24	 
	2.5

	 	Procedure for Revolving Credit Borrowing
	 	 	25	 
	2.6

	 	Swing Line Commitment
	 	 	25	 
	2.7

	 	Procedure for Swing Line Borrowing; Refunding of Swing Line Loans
	 	 	25	 
	2.8

	 	Repayment of Loans; Evidence of Debt
	 	 	27	 
	2.9

	 	Commitment Fees, etc
	 	 	27	 
	2.10

	 	Termination or Reduction of Revolving Credit Commitments
	 	 	28	 
	2.11

	 	Optional Prepayments
	 	 	28	 
	2.12

	 	Mandatory Prepayments and Commitment Reductions
	 	 	28	 
	2.13

	 	Conversion and Continuation Options
	 	 	29	 
	2.14

	 	Minimum Amounts and Maximum Number of Eurodollar Tranches
	 	 	30	 
	2.15

	 	Interest Rates and Payment Dates
	 	 	30	 
	2.16

	 	Computation of Interest and Fees
	 	 	31	 
	2.17

	 	Inability to Determine Interest Rate
	 	 	31	 
	2.18

	 	Pro Rata Treatment and Payments
	 	 	31	 
	2.19

	 	Requirements of Law
	 	 	33	 
	2.20

	 	Taxes	 	 	34	 
	2.21

	 	Indemnity
	 	 	36	 
	2.22

	 	Illegality
	 	 	36	 
	2.23

	 	Change of Lending Office
	 	 	36	 
	2.24

	 	Replacement of Lenders under Certain Circumstances
	 	 	37	 
	 

	 	SECTION 3. LETTERS OF CREDIT	 	 	 	 
	3.1

	 	L/C Commitment
	 	 	37	 
	3.2

	 	Procedure for Issuance of Letter of Credit
	 	 	37	 
	3.3

	 	Fees and Other Charges
	 	 	38	 
	3.4

	 	L/C Participations
	 	 	38	 
	3.5

	 	Reimbursement Obligation of the Borrower
	 	 	39	 
	3.6

	 	Obligations Absolute
	 	 	39	 
	3.7

	 	Letter of Credit Payments
	 	 	40	 
	3.8

	 	Applications
	 	 	40	 
	 

	 	SECTION 4. REPRESENTATIONS AND WARRANTIES	 	 	 	 
	4.1

	 	Financial Condition
	 	 	40	 
	4.2

	 	No Change
	 	 	41	 
	4.3

	 	Corporate Existence; Compliance with Law
	 	 	41	 
	4.4

	 	Power; Authorization; Enforceable Obligations
	 	 	41	 
	4.5

	 	No Legal Bar
	 	 	41	 
	4.6

	 	No Material Litigation
	 	 	42	 
	4.7

	 	No Default
	 	 	42	 
	4.8

	 	Ownership of Property; Liens
	 	 	42	 
	4.9

	 	Intellectual Property
	 	 	42	 





 i









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	4.10

	 	Taxes	 	 	42	 
	4.11

	 	Federal Regulations
	 	 	42	 
	4.12

	 	Labor Matters
	 	 	42	 
	4.13

	 	ERISA	 	 	43	 
	4.14

	 	Investment Company Act; Other Regulations
	 	 	43	 
	4.15

	 	Subsidiaries
	 	 	43	 
	4.16

	 	Use of Proceeds
	 	 	43	 
	4.17

	 	Environmental Matters
	 	 	43	 
	4.18

	 	Accuracy of Information, etc.
	 	 	44	 
	4.19

	 	Security Documents
	 	 	44	 
	4.20

	 	Solvency
	 	 	45	 
	4.21

	 	Senior Indebtedness
	 	 	45	 
	4.22

	 	Regulation H
	 	 	45	 
	 

	 	SECTION 5. CONDITIONS PRECEDENT	 	 	 	 
	5.1

	 	Conditions to Initial Extension of Credit
	 	 	45	 
	5.2

	 	Conditions to Each Extension of Credit
	 	 	47	 
	 

	 	SECTION 6. AFFIRMATIVE COVENANTS	 	 	 	 
	6.1

	 	Financial Statements
	 	 	48	 
	6.2

	 	Certificates; Other Information
	 	 	48	 
	6.3

	 	Payment of Taxes, etc
	 	 	49	 
	6.4

	 	Conduct of Business and Maintenance of Existence, etc.
	 	 	49	 
	6.5

	 	Maintenance of Property; Insurance
	 	 	49	 
	6.6

	 	Inspection of Property; Books and Records; Discussions
	 	 	50	 
	6.7

	 	Notices	 	 	50	 
	6.8

	 	Environmental Laws
	 	 	51	 
	6.9

	 	Interest Rate Protection
	 	 	51	 
	6.10

	 	Additional Collateral, etc.
	 	 	51	 
	6.11

	 	Further Assurances
	 	 	53	 
	6.12

	 	Collateral Covenants
	 	 	53	 
	 

	 	SECTION 7. NEGATIVE COVENANTS	 	 	 	 
	7.1

	 	Financial Condition Covenants
	 	 	55	 
	7.2

	 	Limitation on Indebtedness
	 	 	56	 
	7.3

	 	Limitation on Liens
	 	 	58	 
	7.4

	 	Limitation on Fundamental Changes
	 	 	59	 
	7.5

	 	Limitation on Disposition of Property
	 	 	59	 
	7.6

	 	Limitation on Restricted Payments
	 	 	61	 
	7.7

	 	Limitation on Capital Expenditures
	 	 	62	 
	7.8

	 	Limitation on Investments
	 	 	62	 
	7.9

	 	Limitation on Optional Payments and Modifications of Debt Instruments, etc.
	 	 	63	 
	7.10

	 	Limitation on Transactions with Affiliates
	 	 	64	 
	7.11

	 	Limitation on Sales and Leasebacks
	 	 	64	 
	7.12

	 	Limitation on Changes in Fiscal Periods
	 	 	64	 
	7.13

	 	Limitation on Negative Pledge Clauses
	 	 	64	 
	7.14

	 	Limitation on Restrictions on Subsidiary Distributions
	 	 	65	 
	7.15

	 	Limitation on Lines of Business
	 	 	65	 
	7.16

	 	Limitation on Hedge Agreements
	 	 	66	 
	7.17

	 	Limitation on Activities of Holdings
	 	 	66	 
	 

	 	SECTION 8. EVENTS OF DEFAULT	 	 	 	 
	 

	 	SECTION 9. THE AGENTS	 	 	 	 
	9.1

	 	Appointment
	 	 	69	 
	9.2

	 	Delegation of Duties
	 	 	69	 






ii









 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	9.3

	 	Exculpatory Provisions
	 	 	69	 
	9.4

	 	Reliance by Agents
	 	 	69	 
	9.5

	 	Notice of Default
	 	 	70	 
	9.6

	 	Non-Reliance on Agents and Other Lenders
	 	 	70	 
	9.7

	 	Indemnification
	 	 	70	 
	9.8

	 	Agent in Its Individual Capacity
	 	 	71	 
	9.9

	 	Successor Administrative Agent
	 	 	71	 
	9.10

	 	Authorization to Release Liens and Guarantees
	 	 	71	 
	9.11

	 	The Joint Lead Arrangers; the Syndication Agent
	 	 	71	 
	 

	 	SECTION 10. MISCELLANEOUS	 	 	 	 
	10.1

	 	Amendments and Waivers
	 	 	71	 
	10.2

	 	Notices	 	 	73	 
	10.3

	 	No Waiver; Cumulative Remedies
	 	 	74	 
	10.4

	 	Survival of Representations and Warranties
	 	 	74	 
	10.5

	 	Payment of Expenses
	 	 	74	 
	10.6

	 	Successors and Assigns; Participations and Assignments
	 	 	75	 
	10.7

	 	Adjustments; Set-off
	 	 	78	 
	10.8

	 	Counterparts
	 	 	79	 
	10.9

	 	Severability
	 	 	79	 
	10.10

	 	Integration
	 	 	79	 
	10.11

	 	GOVERNING LAW
	 	 	79	 
	10.12

	 	Submission To Jurisdiction; Waivers
	 	 	79	 
	10.13

	 	Acknowledgments
	 	 	80	 
	10.14

	 	Confidentiality
	 	 	80	 
	10.15

	 	Release of Collateral and Guarantee Obligations
	 	 	80	 
	10.16

	 	Accounting Changes
	 	 	81	 
	10.17

	 	Delivery of Lender Addenda
	 	 	81	 
	10.18

	 	WAIVERS OF JURY TRIAL
	 	 	81	 
	10.19

	 	USA Patriot Act Notice
	 	 	81	 






iii









 






	 	 	 	 	 	 	 
	 	 	 	 	
	ANNEXES:
	 	 	 	 	 	 
	 
	A

	 	Pricing Grid	 	 	 	 
	 
	SCHEDULES:
	 	 	 	 	 	 
	 
	1.1

	 	Mortgaged Property	 	 	 	 
	4.4

	 	Consents, Authorizations, Filings and Notices	 	 	 	 
	4.6

	 	Certain Litigation	 	 	 	 
	4.15

	 	Subsidiaries	 	 	 	 
	4.19(a)-1

	 	UCC Filing Jurisdictions	 	 	 	 
	4.19(a)-2

	 	UCC Financing Statements to Remain on File	 	 	 	 
	4.19(a)-3

	 	UCC Financing Statements to be Terminated	 	 	 	 
	4.19(b)

	 	Mortgage Filing Jurisdictions	 	 	 	 
	7.2(d)

	 	Existing Indebtedness	 	 	 	 
	7.3(f)

	 	Existing Liens	 	 	 	 
	7.8

	 	Existing Investments	 	 	 	 
	7.13

	 	Existing Restrictions on Liens	 	 	 	 
	 
	EXHIBITS:
	 	 	 	 	 	 
	 
	A

	 	Form of Guarantee and Collateral Agreement	 	 	 	 
	B

	 	Form of Compliance Certificate	 	 	 	 
	C

	 	Form of Closing Certificate	 	 	 	 
	D

	 	Form of Mortgage	 	 	 	 
	E

	 	Form of Assignment and Acceptance	 	 	 	 
	F

	 	Form of Legal Opinion of Latham & Watkins LLP	 	 	 	 
	G-1

	 	Form of Tranche D Term Note	 	 	 	 
	G-2

	 	Form of Revolving Credit Note	 	 	 	 
	G-3

	 	Form of Swing Line Note	 	 	 	 
	H

	 	Form of Exemption Certificate	 	 	 	 
	I

	 	Form of Lender Addendum	 	 	 	 
	J

	 	Form of Borrowing Notice	 	 	 	 
















 








          AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 25, 2006, among UNITED COMPONENTS,
INC., a Delaware corporation (the “Borrower”), the several banks and other financial
institutions or entities from time to time parties to this Agreement (the “Lenders”),
LEHMAN BROTHERS INC. and J.P. MORGAN SECURITIES INC., as joint advisors, joint lead arrangers and
joint bookrunners (in such capacity, the “Joint Lead Arrangers”), JPMORGAN CHASE BANK,
N.A., as syndication agent (in such capacity, the “Syndication Agent”), ABN AMRO BANK N.V.,
BANK OF AMERICA, N.A. and GENERAL ELECTRIC CAPITAL CORPORATION, as co-documentation agents (in such
capacity, the “Co-Documentation Agents”), and LEHMAN COMMERCIAL PAPER INC., as
administrative agent (in such capacity, the “Administrative Agent”).




W I T N E S S E T H:




          WHEREAS, the Borrower is party to that certain Credit Agreement, dated as of June 20, 2003 (as
amended, supplemented, modified or waived prior to the date hereof, the “Existing Credit
Agreement”), among the Borrower, the lenders party thereto from time to time, certain agents
named therein and Lehman Commercial Paper Inc., as administrative agent;




          WHEREAS, it is the intent of the parties hereto that this Agreement not constitute a novation
of the obligations and liabilities existing under the Existing Credit Agreement which remain
outstanding or evidence repayment of any of such obligations and liabilities and that this
Agreement amend and restate in its entirety the Existing Credit Agreement and re-evidence the
obligations of the Borrower outstanding thereunder;




          NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, the
parties hereto hereby agree that on the Closing Date (as defined below) the Existing Credit
Agreement shall be, and hereby is, amended and restated in its entirety as follows:




SECTION 1. DEFINITIONS




          1.1 Defined Terms. As used in this Agreement, the terms listed in this Section 1.1
shall have the respective meanings set forth in this Section 1.1.




          “Acquisition”: the acquisition by the Borrower of the Target pursuant to the terms of
the Acquisition Agreement.




          “Acquisition Agreement”: the Stock Purchase Agreement, dated as of March 8, 2006 (as
amended from time to time), among the Borrower, the Target and the sellers named therein.




          “Adjustment Date”: as defined in the Pricing Grid.




          “Administrative Agent”: as defined in the preamble hereto.




          “Advance Auto Parts Factoring Arrangement”: those certain transactions contemplated
in the SunTrust (Advance Auto) Factoring Agreement or any similar or successor agreement pursuant
to which the Borrower or any of its Subsidiaries factors receivables due from Advance Stores
Company Incorporated or its successors or Affiliates.




          “Affiliate”: as to any Person, any other Person that, directly or indirectly, is in
control of, is controlled by, or is under common control with, such Person. For purposes of this
definition, “control”
of a Person means the power, directly or indirectly, either to (a) vote 20% or more of the
securities having ordinary voting power for the election of directors (or persons performing
similar functions) of such










 




2





Person or (b) direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise.




          “Agents”: the collective reference to the Syndication Agent, the Co-Documentation
Agents and the Administrative Agent.




          “Aggregate Exposure”: with respect to any Lender at any time, an amount equal to (a)
until the Closing Date, the aggregate amount of such Lender’s Commitments and Tranche C Term Loans
outstanding at such time and (b) thereafter, the sum of (i) the aggregate then unpaid principal
amount of such Lender’s Tranche D Term Loans and (ii) the amount of such Lender’s Revolving Credit
Commitment then in effect or, if the Revolving Credit Commitments have been terminated, the amount
of such Lender’s Revolving Extensions of Credit then outstanding.




          “Aggregate Exposure Percentage”: with respect to any Lender at any time, the ratio
(expressed as a percentage) of such Lender’s Aggregate Exposure at such time to the sum of the
Aggregate Exposures of all Lenders at such time.




          “Agreement”: this Amended and Restated Credit Agreement, as amended, supplemented or
otherwise modified from time to time.




          “Applicable Margin”: for each Type of Loan under each Facility, (a) with respect to
the Revolving Credit Facility (including Swing Line Loans), the rate per annum set forth on the
Pricing Grid and (b) with respect to the Tranche D Term Loan Facility, 1.25% for Base Rate Loans
and 2.25% for Eurodollar Loans; provided that, if on the date on which financial statements
are delivered to the Lenders pursuant to Section 6.1(b) at the end of the fiscal quarter ending
September 30, 2006, or any other Adjustment Date thereafter, the Consolidated Leverage Ratio of the
Borrower does not exceed 3.85:1.00, the Applicable Margin with respect to the Tranche D Term Loan
Facility shall be 1.00% for Base Rate Loans and 2.00% for Eurodollar Loans.




          “Application”: an application, in such form as the relevant Issuing Lender may
specify from time to time, requesting such Issuing Lender to issue a Letter of Credit.




          “Asset Sale”: any Disposition of Property or series of related Dispositions of
Property which yields Net Cash Proceeds to the Borrower or any of its Subsidiaries in excess of
$5,000,000, excluding (x) any such Disposition permitted by clause (a), (b), (c), (d), (g), (h),
(i), (j), (k) (except to the extent the aggregate Net Cash Proceeds of such Disposition and all
other Dispositions made pursuant to such clause (k) since the date of this Agreement exceed
$20,000,000), (l), (m) or (n) of Section 7.5 and (y) any Recovery Event.




          “Assignee”: as defined in Section 10.6(c).




          “Assignment and Acceptance”: an Assignment and Acceptance substantially in the form
of Exhibit E.




          “Assignor”: as defined in Section 10.6(c).




          “AutoZone Factoring Arrangement”: those certain transactions contemplated in the
SunTrust (AutoZone) Factoring Agreement or any similar or successor agreement pursuant to which the
Borrower or any of its Subsidiaries factors receivables due from Autozone, Inc. or its
successors or Affiliates.











 




3








          “Available Revolving Credit Commitment”: with respect to any Revolving Credit Lender
at any time, an amount equal to the excess, if any, of (a) such Lender’s Revolving Credit
Commitment then in effect over (b) such Lender’s Revolving Extensions of Credit then
outstanding; provided, that in calculating any Lender’s Revolving Extensions of Credit for
the purpose of determining such Lender’s Available Revolving Credit Commitment pursuant to Section
2.9(a), the aggregate principal amount of Swing Line Loans then outstanding shall be deemed to be
zero.




          “Base Rate”: for any day, a rate per annum (rounded upwards, if necessary, to the
next 1/100 of 1%) equal to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof: “Prime
Rate” shall mean the prime lending rate as set forth on the British Banking Association
Telerate Page 5 (or such other comparable page as may, in the reasonable opinion of the
Administrative Agent, replace such page for the purpose of displaying such rate), as in effect from
time to time. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the effective day of such change
in the Prime Rate or the Federal Funds Effective Rate, respectively.




          “Base Rate Loans”: Loans for which the applicable rate of interest is based upon the
Base Rate.




          “BB&T Factoring Agreement”: that certain Supplier Agreement BB&T Factors Draft
Program, effective November 1, 2004, by and between ASC Industries, Inc. and BB&T Factors
Corporation.




          “Benefitted Lender”: as defined in Section 10.7.




          “Board”: the Board of Governors of the Federal Reserve System of the United States
(or any successor).




          “Borrower”: as defined in the preamble hereto.




          “Borrowing Date”: any Business Day specified by the Borrower as a date on which the
Borrower requests the relevant Lenders to make Loans hereunder.




          “Borrowing Notice”: with respect to any request for borrowing of Loans hereunder, a
notice from the Borrower, substantially in the form of, and containing the information prescribed
by, Exhibit J, delivered to the Administrative Agent.




          “Business Day”: (a) for all purposes other than as covered by clause (b) below, a day
other than a Saturday, Sunday or other day on which commercial banks in New York City are
authorized or required by law to close and (b) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (a) and which is also a day for trading by and between banks in
Dollar deposits in the interbank eurodollar market.




          “Capital Expenditures”: for any period, with respect to any Person, the aggregate of
all cash expenditures by such Person for the acquisition or leasing (pursuant to a capital lease,
but excluding any amount representing capitalized interest) of fixed or capital assets or additions
to equipment
(including replacements, capitalized repairs and improvements during such period) which are
required to be capitalized under GAAP on a balance sheet of such Person; provided that
Capital Expenditures shall in any event (a) exclude the purchase price in connection with the
acquisition of any Person or all or









 




4





substantially all of the assets, or a division, of any Person,
including, without limitation, the Acquisition, and (b) exclude amounts expended with the proceeds
of any Recovery Event.




          “Capital Lease”: any lease of (or other arrangement conveying the right to use) real
or personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP.




          “Capital Lease Obligations”: with respect to any Person, the obligations of such
Person to pay rent or other amounts under any Capital Lease; and, for the purposes of this
Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at
such time determined in accordance with GAAP.




          “Capital Stock”: any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent ownership interests
in a Person (other than a corporation) and any and all warrants, rights or options to purchase any
of the foregoing.




          “CarQuest Factoring Arrangement”: those certain transactions contemplated in the BB&T
Factoring Agreement or any similar or successor agreement pursuant to which the Borrower or any of
its Subsidiaries factors receivables due from General Parts, Inc. or its successors or Affiliates.




          “Cash Equivalents”: (a) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States government or issued by any agency thereof and backed by the full
faith and credit of the United States, in each case maturing within one year from the date of
acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank
deposits having maturities of one year or less from the date of acquisition issued by any Lender or
by any commercial bank organized under the laws of the United States of America or any state
thereof having combined capital and surplus of not less than $500,000,000; (c) commercial paper of
an issuer rated at least A-2 by Standard & Poor’s Ratings Services (“S&P”) or P-2 by
Moody’s Investors Service, Inc. (“Moody’s”), or carrying an equivalent rating by a
nationally recognized rating agency, and maturing within one year from the date of acquisition; (d)
repurchase obligations of any Lender or of any commercial bank satisfying the requirements of
clause (b) of this definition, having a term of not more than 30 days with respect to securities
issued or fully guaranteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign government, the securities
of which state, commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by Moody’s; (f) securities with
maturities of six months or less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; and (g) shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this definition.




          “Change of Control”: the occurrence of any of the following events: (a) the
Permitted Investors shall cease to own directly or indirectly (i) prior to a Qualified Public
Offering, at least 51% of the common voting stock of the Borrower and (ii) on and after a Qualified
Public Offering, at least 30% of the common voting stock of Borrower or such higher percentage that
exceeds the highest percentage of common voting stock owned by any other “person” or “group” (as
such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)); or (b) a
Specified Change of Control.









 




5






          “Closing Date”: the date on which all of the conditions precedent set forth in
Section 5.1 shall have been satisfied or waived and the Tranche D Term Loans have been funded,
which date is May 25, 2006.




          “Code”: the Internal Revenue Code of 1986, as amended from time to time.




          “Co-Documentation Agents”: as defined in the preamble hereto.




          “Collateral”: all Property of the Loan Parties, now owned or hereafter acquired, upon
which a Lien is purported to be created by any Security Document.




          “Commitment”: with respect to any Lender, each of the Tranche D Term Loan Commitment
and the Revolving Credit Commitment of such Lender.




          “Commitment Fee Rate”: as determined pursuant to the Pricing Grid.




          “Commonly Controlled Entity”: an entity, whether or not incorporated, that is under
common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group
that includes the Borrower and that is treated as a single employer under Section 414 of the Code.




          “Compliance Certificate”: a certificate duly executed by a Responsible Officer,
substantially in the form of Exhibit B.




          “Consolidated Current Assets”: of any Person at any date, all amounts (other than
cash and Cash Equivalents) that would, in conformity with GAAP, be set forth opposite the caption
“total current assets” (or any like caption) on a consolidated balance sheet of such Person and its
Subsidiaries at such date; provided, that with respect to each Subsidiary that is not a
Wholly-Owned Subsidiary, the amount of the total current assets of such Subsidiary that shall be
counted for purposes of the Consolidated Current Assets calculation shall equal the product of (x)
the Borrower’s direct and/or indirect percentage ownership of such Subsidiary and (y) the aggregate
amount of the total current assets of such Subsidiary as at such date, determined in accordance
with GAAP.




          “Consolidated Current Liabilities”: of any Person at any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or
any like caption) on a consolidated balance sheet of such Person and its Subsidiaries at such date,
but excluding, with respect to the Borrower, (a) the current portion of any Funded Debt of the
Borrower and its Subsidiaries and (b), without duplication, all Indebtedness consisting of
Revolving Credit Loans or Swing Line Loans, to the extent otherwise included therein;
provided, that with respect to each Subsidiary that is not a Wholly-Owned Subsidiary, the
amount of the total current liabilities of such Subsidiary that shall be counted for purposes of
the Consolidated Current Liabilities calculation shall equal the product of (x) the Borrower’s
direct and/or indirect percentage ownership of such Subsidiary and (y) the aggregate amount of the
total current liabilities of such Subsidiary as at such date, determined in accordance with GAAP.




          “Consolidated EBITDA”: of any Person for any period, Consolidated Net Income of such
Person and its Subsidiaries for such period plus, without duplication and to the extent
reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of
(a) expenses for taxes based on income, (b) total interest expense of such Person and its
Subsidiaries, amortization or
writeoff of debt discount and debt issuance costs and commissions, discounts and other fees
and charges associated with letters of credit, bankers’ acceptance financing or Indebtedness, (c)
depreciation and amortization expense, (d) amortization of intangibles (including, but not limited
to, goodwill) and









 






6



organization costs, (e) any extraordinary, unusual or non-recurring expenses or
losses (including, whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, losses on sales of assets outside of the ordinary course
of business), (f) any other non-cash charges, (g) payments under the Management Agreement, (h) fees
and expenses incurred in connection with the closing of the Acquisition, the Senior Subordinated
Notes and the Loan Documents, (i) costs and expenses incurred in connection with Customer Ramp-Ups
and (j) pro forma cost synergies projected to occur during such period by the Borrower as a result
of the Acquisition so long as (i) such synergies are factually supportable and are certified by the
Chief Financial Officer with summary supporting calculations and (ii) the aggregate amount of such
synergies during the term of the Agreement shall not exceed $2,100,000 and minus, to the
extent included in the statement of such Consolidated Net Income for such period, the sum of (a)
interest income (except to the extent deducted in determining Consolidated Interest Expense), (b)
any extraordinary, unusual or non-recurring income or gains (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income for such period,
gains on the sales of assets outside of the ordinary course of business) and (c) any other non-cash
income, all as determined on a consolidated basis; provided that Consolidated EBITDA shall
be computed without taking into account results attributable to the initial implementation of the
POS Program. For purposes of determining compliance with the financial covenants set forth in
Section 7.1, any equity contribution made to the Borrower by Holdings after the Original Closing
Date and prior to the day that is 10 days after the day on which financial statements are required
to be delivered for a fiscal quarter will, at the request of the Borrower, be deemed to increase,
dollar for dollar, Consolidated EBITDA for such fiscal quarter for the purposes of determining
compliance with such financial covenants at the end of such fiscal quarter and applicable
subsequent periods (any such equity contribution so included in the calculation of Consolidated
EBITDA, a “Specified Equity Contribution”), provided that (a) Specified Equity
Contributions may be made in no more than two fiscal quarters (which may be consecutive) in an
amount not to exceed $10,000,000 for either such fiscal quarter and (b) the amount of any Specified
Equity Contribution shall be no greater than the amount required to cause the Borrower to be in
compliance with the financial covenants set forth in Section 7.1. Notwithstanding the foregoing,
for the fiscal quarters of the Borrower ended September 30, 2005, December 31, 2005 and March 31,
2006, Consolidated EBITDA for each such fiscal quarter shall be deemed to be the following amounts:




	 	 	 	 	 
	Fiscal Quarter Ending	 	Consolidated EBITDA
	September 30, 2005
	 	$ 	34,571,000	 
	December 31, 2005
	 	$ 	32,019,000	 
	March 31, 2006
	 	$ 	34,156,000	 






          “Consolidated Interest Coverage Ratio”: for any period, the ratio of (a) Consolidated
EBITDA of the Borrower and its Subsidiaries for such period to (b) Consolidated Interest Expense of
the Borrower and its Subsidiaries for such period.




          “Consolidated Interest Expense”: of any Person for any period, the difference of (a)
total interest expense due and payable in cash in such period (including capitalized interest and
interest attributable to Capital Lease Obligations) or (without duplication), with respect to the
Senior Subordinated Notes, total interest expense accrued during such period, of such Person and
its Subsidiaries for such period with respect to all outstanding Indebtedness of such Person and
its Subsidiaries
(including, without limitation, all commissions, discounts and other fees and charges owed by
such Person with respect to letters of credit and bankers’ acceptance financing and, without
duplication, net costs of such Person due and payable in cash in such period under Hedge Agreements
in respect of













 




7




interest rates to the extent such net costs are allocable to such period in
accordance with GAAP), but excluding, however, amortization of deferred financing costs to the
extent otherwise included in Consolidated Interest Expense, minus (b) interest income
received by such Person in cash for such period (including, without limitation, net cash income
under Hedge Agreements in respect of interest rates to the extent such net income is allocable to
such period in accordance with GAAP); provided, that with respect to each Subsidiary that
is not a Wholly-Owned Subsidiary, (i) the amount of interest expense of such Subsidiary that shall
be counted for purposes of the Consolidated Interest Expense calculation shall equal the product of
(x) the Borrower’s direct and/or indirect percentage ownership of such Subsidiary and (y) the
aggregate amount of interest expense of such Subsidiary as at such date, determined in accordance
with GAAP, and (ii) the amount of interest income of such Subsidiary that shall be counted for
purposes of the Consolidated Interest Expense calculation shall equal the product of (x) the
Borrower’s direct and/or indirect percentage ownership of such Subsidiary and (y) the aggregate
amount of interest income of such Subsidiary as at such date, determined in accordance with GAAP.




          “Consolidated Leverage Ratio”: as at the last day of any period of four consecutive
fiscal quarters of the Borrower, the ratio of (a) Consolidated Total Debt on such day to (b)
Consolidated EBITDA of the Borrower and its Subsidiaries for such period; provided that for
purposes of calculating Consolidated EBITDA of the Borrower and its Subsidiaries for any period,
(i) notwithstanding clause (a) of the definition of “Consolidated Net Income”, the Consolidated
EBITDA of any Person acquired by the Borrower or its Subsidiaries during such period shall be
included on a pro forma basis for such period (assuming the consummation of such acquisition and
the incurrence or assumption of any Indebtedness in connection therewith occurred on the first day
of such period) and (ii) the Consolidated EBITDA of any Person Disposed of by the Borrower or its
Subsidiaries during such period shall be excluded for such period (assuming the consummation of
such Disposition and the repayment of any Indebtedness in connection therewith occurred on the
first day of such period).




          “Consolidated Net Income”: of any Person for any period, the consolidated net income
(or loss) of such Person and its Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP; provided, that in calculating Consolidated Net Income of the
Borrower and its consolidated Subsidiaries for any period, there shall be excluded (a) the income
(or deficit) of any Person accrued prior to the date it becomes a Subsidiary of the Borrower or is
merged into or consolidated with the Borrower or any of its Subsidiaries, (b) the income (or
deficit) of any Person (other than a Subsidiary of the Borrower) in which the Borrower or any of
its Subsidiaries has an ownership interest, except to the extent that any such income is actually
received by the Borrower or such Subsidiary in the form of dividends or similar distributions and
(c) the undistributed earnings of any Subsidiary of the Borrower other than any Subsidiary
Guarantor to the extent that the declaration or payment of dividends or similar distributions by
such Subsidiary is not at the time permitted by the terms of any Contractual Obligation (other than
under any Loan Document) or Requirement of Law applicable to such Subsidiary or any Organizational
Document of such Subsidiary.




          “Consolidated Senior Debt”: all Consolidated Total Debt, including any Indebtedness
associated with the sale of receivables as permitted pursuant to Section 7.5(m), other than the
Senior Subordinated Notes.




          “Consolidated Senior Leverage Ratio”: as of any day, the ratio of (a) the excess, if
any, of (i) Consolidated Senior Debt on such day over (ii) the aggregate amount of cash and Cash
Equivalents held by the Borrower and its Subsidiaries on such day to (b) Consolidated EBITDA of the
Borrower and
its Subsidiaries for the period of four consecutive fiscal quarters most recently ended prior
to such day for which the Borrower shall have delivered financial statements to the Lenders
pursuant to Section 6.1.












 







8


          “Consolidated Total Debt”: at any date, the aggregate principal amount of all Funded
Debt of the Borrower and its Subsidiaries at such date, determined on a consolidated basis in
accordance with GAAP; provided, that with respect to each Subsidiary that is not a
Wholly-Owned Subsidiary, the amount of Funded Debt of such Subsidiary that shall be counted for
purposes of the Consolidated Total Debt calculation shall equal the product of (x) the Borrower’s
direct and/or indirect percentage ownership of such Subsidiary and (y) the aggregate principal
amount of Funded Debt of such Subsidiary as at such date, determined in accordance with GAAP.




          “Consolidated Working Capital”: at any date, the difference of (a) Consolidated
Current Assets of the Borrower on such date less (b) Consolidated Current Liabilities of the
Borrower on such date.




          “Contractual Obligation”: as to any Person, any provision of any security issued by
such Person or of any agreement, instrument or other undertaking to which such Person is a party or
by which it or any of its Property is bound.




          “Control Investment Affiliate”: as to any Person, any other Person that (i) (a)
directly or indirectly, is in control of, is controlled by, or is under common control with, such
Person and (b) is organized by such Person primarily for the purpose of making or managing equity
or debt investments in any other Person or (ii) is managed or advised by such Person or such
Person’s Subsidiaries. For purposes of this definition, “control” of a Person means the power,
directly or indirectly, to direct or cause the direction of the management and policies of such
Person, whether by contract or otherwise.




          “Customer Ramp-Ups”: start-up costs incurred in connection with change-over inventory
acquisitions, provided that (i) such charges and expenses are paid or otherwise accounted for
within six months of the date the relevant change-over begins, (ii) the aggregate amount of such
expenses shall not exceed $5,000,000 in any fiscal year of the Borrower and (iii) the aggregate
amount of such expenses shall not exceed $20,000,000 during the term of this Agreement.




          “Default”: any of the events specified in Section 8, whether or not any requirement
for the giving of notice, the lapse of time, or both, has been satisfied.




          “Derivatives Counterparty”: as defined in Section 7.6.




          “Disposition”: with respect to any Property, any sale, sale and leaseback,
assignment, conveyance, transfer or other disposition thereof; and the terms “Dispose” and
“Disposed of” shall have correlative meanings.




          “Dollars” and “$”: lawful currency of the United States of America.




          “Domestic Subsidiary”: any Subsidiary of the Borrower that (i) is organized under the
laws of any jurisdiction within the United States of America and (ii) is not an Excluded
Subsidiary.




          “ECF Percentage”: with respect to any fiscal year of the Borrower, 50%;
provided, that, with respect to any fiscal year of the Borrower, the ECF Percentage shall
be 25% if the Consolidated Leverage Ratio as of the last day of such fiscal year is not greater
than 3.25 to 1.0; provided, further, that, with respect to any fiscal year of the
Borrower, the ECF Percentage shall be 0% if the Consolidated Leverage Ratio as of the last day of
such fiscal year is not greater than 2.50 to 1.0.




          “Environmental Laws”: any and all applicable laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, or other legally enforceable requirements (including, without
limitation,













 





9



common law) of any international authority, foreign government, the United States, or
any state, local, municipal or other governmental authority, regulating, relating to or imposing
liability or standards of conduct concerning protection of the environment or of human health, or
employee health and safety (in each case to the extent relating to exposure to Materials of
Environmental Concern), as has been, is now, or may at any time hereafter be, in effect.




          “Environmental Permits”: any and all permits, licenses, approvals, registrations,
exemptions and other authorizations required under any Environmental Law.




          “ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to
time.




          “Eurocurrency Reserve Requirements”: for any day, the aggregate (without duplication)
of the maximum rates (expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and emergency reserves) under any
regulations of the Board or other Governmental Authority having jurisdiction with respect thereto
dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board) maintained by a member bank of the Federal
Reserve System.




          “Eurodollar Base Rate”: with respect to each day during each Interest Period, the
rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to
such Interest Period commencing on the first day of such Interest Period appearing on Page 3750 of
the Telerate screen as of 11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Page 3750 of the Telerate screen
(or otherwise on such screen), the “Eurodollar Base Rate” for purposes of this definition
shall be determined by reference to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent.




          “Eurodollar Loans”: Loans for which the applicable rate of interest is based upon the
Eurodollar Rate.




          “Eurodollar Rate”: with respect to each day during each Interest Period, a rate per
annum determined for such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):




Eurodollar Base Rate

 





1.00 — Eurocurrency Reserve Requirements




          “Eurodollar Tranche”: the collective reference to Eurodollar Loans the then current
Interest Periods with respect to all of which begin on the same date and end on the same later date
(whether or not such Loans shall originally have been made on the same day).




          “Event of Default”: any of the events specified in Section 8, provided that
any requirement for the giving of notice, the lapse of time, or both, has been satisfied.




          “Excess Cash Flow”: for any fiscal year of the Borrower, the difference, if any, of
(a) the sum, without duplication, of (i) Consolidated Net Income for such fiscal year, (ii) the
amount of all non-cash charges (including depreciation and amortization) deducted in arriving at
such Consolidated Net Income, (iii) the amount of the decrease, if any, in Consolidated Working
Capital for such fiscal year, (iv)
the aggregate net amount of non-cash loss on the Disposition of Property by the Borrower and
its Subsidiaries during such fiscal year (other than sales of inventory in the ordinary course of
business), to













 





10



the extent deducted in arriving at such Consolidated Net Income and (v) the net
increase during such fiscal year (if any) in deferred tax accounts of the Borrower minus
(b) the sum, without duplication, of (i) the amount of all non-cash credits included in arriving at
such Consolidated Net Income, (ii) the aggregate amount actually paid by the Borrower and its
Subsidiaries in cash during such fiscal year on account of Capital Expenditures (minus the
principal amount of Indebtedness incurred in connection with such expenditures and minus
the amount of any such expenditures financed with the proceeds of any Reinvestment Deferred
Amount), (iii) the aggregate amount of all prepayments of Revolving Credit Loans and Swing Line
Loans during such fiscal year to the extent accompanying permanent optional reductions of the
Revolving Credit Commitments, all optional prepayments of the Tranche D Term Loans during such
fiscal year and, to the extent included in computing Consolidated Net Income for such period, all
mandatory prepayments of the Tranche D Term Loans during such year pursuant to Section 2.12(b) and
attributable to the cash gain on the relevant Asset Sale, (iv) the aggregate amount of all
regularly scheduled principal payments of Funded Debt (including, without limitation, the Tranche D
Term Loans) of the Borrower and its Subsidiaries made during such fiscal year (other than in
respect of any revolving credit facility to the extent there is not an equivalent permanent
reduction in commitments thereunder), (v) the amount of the increase, if any, in Consolidated
Working Capital for such fiscal year, (vi) the aggregate net amount of non-cash gain on the
Disposition of Property by the Borrower and its Subsidiaries during such fiscal year (other than
sales of inventory in the ordinary course of business), to the extent included in arriving at such
Consolidated Net Income, (vii) the net decrease during such fiscal year (if any) in deferred tax
accounts of the Borrower, (viii) fees and expenses incurred in connection with the closing of the
Acquisition, the Senior Subordinated Notes or the Loan Documents, (ix) purchase price adjustments
paid in connection with the Acquisition or any Permitted Acquisition, (x) the net amount of
Investments permitted to be made pursuant to Section 7.8, (xi) the aggregate amount of cash
payments made during such period in respect of non-cash charges and (xii) the aggregate amount of
repurchases of Senior Subordinated Notes during such fiscal year permitted pursuant to Section
7.9(a).




          “Excess Cash Flow Application Date”: as defined in Section 2.12(c).




          “Excluded Subsidiaries”: (a) any Foreign Subsidiary in respect of which either (i)
the pledge of all of the Capital Stock of such Subsidiary as Collateral or (ii) the guaranteeing by
such Subsidiary of the Obligations, would, in the good faith judgment of the Borrower (as of the
Original Closing Date or, if later, as of the date of acquisition thereof directly or indirectly by
the Borrower), result in adverse tax consequences to the Borrower, (b) any Subsidiary of a
Subsidiary described in the foregoing clause (a) and (c) any Joint Venture.




          “Existing Credit Agreement”: as defined in the recitals hereto.




          “Facility”: each of (a) the Tranche D Term Loan Commitments and the Tranche D Term
Loans made thereunder (the “Tranche D Term Loan Facility”) and (b) the Revolving Credit
Commitments and the extensions of credit made thereunder (the “Revolving Credit Facility”).




          “Federal Funds Effective Rate”: for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it.




          “Foreign Cash Equivalents”: (a) certificates of deposit or bankers acceptances of, and
bank deposits with, any bank organized under the laws of any country that is a member of the
European Economic Community, whose short-term commercial paper rating from S&P is at least A-1 or
the












 





11



equivalent thereof or from Moody’s is at least P-1 or the equivalent thereof, in each case with
maturities of not more than six months from the date of acquisition, (b) commercial paper maturing
not more than one year from the date of creation thereof and, at the time of acquisition, having
the highest rating obtainable from either S&P’s or Moody’s and (c) shares of any money market
mutual fund that has its assets invested continuously in the types of investments referred to in
clauses (a) and (b) above.




          “Foreign Subsidiary”: any Subsidiary of the Borrower that is not a Domestic
Subsidiary.




          “FQ1”, “FQ2”, “FQ3”, and “FQ4”: when used with a numerical
year designation, means the first, second, third or fourth fiscal quarters, respectively, of such
fiscal year of the Borrower. (e.g., FQ4 2006 means the fourth fiscal quarter of the Borrower’s 2006
fiscal year, which ends December 31, 2006).




          “Funded Debt”: with respect to any Person, all Indebtedness of such Person of the
types described in clauses (a), (c) and (e) of the definition of “Indebtedness” in this Section.




          “Funding Office”: the office specified from time to time by the Administrative Agent
as its funding office by notice to the Borrower and the Lenders.




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




          “Governmental Authority”: any nation or government, any state or other political
subdivision thereof and any other public entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.




          “Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement, dated
as of June 20, 2003, executed and delivered by the Borrower, Holdings and each Subsidiary Guarantor
and substantially in the form of Exhibit A, as the same may be amended, supplemented or otherwise
modified from time to time.




          “Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation of such Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends
or other obligations (the “primary obligations”) of any other third Person (the
“primary obligor”) in any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any Property constituting direct or indirect security therefor, (ii)
to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor, (iii) to purchase Property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of
(a) an amount equal to the stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing
person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation,
unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case the amount of
such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated
liability in respect thereof as determined by the Borrower in good faith.













 





12




          “Hedge Agreements”: all interest rate or currency swaps, caps or collar agreements,
foreign exchange agreements, commodity contracts or similar arrangements entered into by the
Borrower or its Subsidiaries providing for protection against fluctuations in interest rates,
currency exchange rates, commodity prices or the exchange of nominal interest obligations, either
generally or under specific contingencies.




          “Holdings”: UCI Acquisition Holdings, Inc., a Delaware corporation.




          “Indebtedness”: of any Person at any date, without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase
price of Property or services (other than trade payables, accrued expenses and deferred
compensation arrangements incurred in the ordinary course of such Person’s business and progress
and advance payments received in the ordinary course of such Person’s business) which in accordance
with GAAP would be shown on the liability side of the balance sheet of such Person, (c) all
obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d)
all indebtedness created or arising under any conditional sale or other title retention agreement
with respect to Property acquired by such Person (even though the rights and remedies of the seller
or lender under such agreement in the event of default are limited to repossession or sale of such
Property), (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person,
contingent or otherwise, as an account party or applicant under acceptance, letter of credit or
similar facilities, (g) all Guarantee Obligations of such Person in respect of obligations of the
kind referred to in clauses (a) through (f) above and (h) all obligations of the kind referred to
in clauses (a) through (g) above secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) any Lien on Property (including, without
limitation, accounts and contract rights) owned by such Person, whether or not such Person has
assumed or become liable for the payment of such obligation (provided, that, if such Person
has not assumed or otherwise become liable in respect of such Indebtedness, such Indebtedness shall
be deemed to be in an amount equal to the lesser of the amount of such Indebtedness and the fair
market value of the Property that is encumbered by such Lien as determined in good faith by such
Person).




          “Indebtedness for Borrowed Money”: to the extent the following would be reflected on
a consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP,
the principal amount of all Indebtedness of the Borrower and its Subsidiaries with respect to (i)
borrowed money, evidenced by debt securities, debentures, acceptances, notes or other similar
instruments, (ii) obligations under Capital Leases, (iii) reimbursement obligations for letters of
credit and financial guarantees (without duplication), (other than ordinary course of business
contingent reimbursement obligations) or (iv) the deferred purchase price of property or services
(except for accounts payable, deferred compensation arrangements and accrued expenses and receipt
of progress and advance payments related to such purchase price, in each case arising in the
ordinary course of business).




          “Indemnified Liabilities”: as defined in Section 10.5.




          “Indemnitee”: as defined in Section 10.5.




          “Insolvency”: with respect to any Multiemployer Plan, the condition that such Plan is
insolvent within the meaning of Section 4245 of ERISA.




          “Insolvent”: pertaining to a condition of Insolvency.




          “Intellectual Property”: the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United States, multinational or
foreign laws or otherwise, including, without limitation, copyrights, copyright licenses, patents,
patent licenses,













 





13



trademarks, trademark licenses, technology, know-how and processes, and all rights
to sue at law or in equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.




          “Interest Payment Date”: (a) as to any Base Rate Loan, the last day of each March,
June, September and December to occur while such Loan is outstanding and the final maturity date of
such Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or shorter, the
last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof, after the first day
of such Interest Period and the last day of such Interest Period and (d) as to any Loan (other than
any Revolving Credit Loan that is a Base Rate Loan and any Swing Line Loan), the date of any
repayment or prepayment made in respect thereof.




          “Interest Period”: as to any Eurodollar Loan, (a) initially, the period commencing on
the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and
ending one, two, three or six or (if available to all Lenders under the relevant Facility) nine or
twelve months thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan
and ending one, two, three or six or (if available to all Lenders under the relevant Facility) nine
or twelve months thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of the then current
Interest Period with respect thereto; provided that, all of the foregoing provisions
relating to Interest Periods are subject to the following:





     (1) if any Interest Period would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately preceding Business Day;




     (2) any Interest Period that would otherwise extend beyond the Revolving Credit
Termination Date or beyond the date final payment is due on the Tranche D Term Loans, as the
case may be, shall end on the Revolving Credit Termination Date or such due date, as
applicable; and




     (3) any Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of the calendar month at the end
of such Interest Period.



          “Investments”: as defined in Section 7.8.




          “Issuing Lender”: Bank of America, N.A., in its capacity as issuer of Letters of
Credit hereunder, and any other Revolving Credit Lender from time to time designated by the
Borrower as an Issuing Lender with the consent of such Revolving Credit Lender and the
Administrative Agent (such consent of the Administrative Agent not to be unreasonably withheld or
delayed).




          “Joint Lead Arrangers”: as defined in the preamble hereto.




          “Joint Venture”: any entity in which the Borrower or one or more Subsidiaries hold
equity interests representing at least 20%, but not more than 80%, of the total outstanding equity
interests of such entity.













 






14



          “L/C Commitment”: $25,000,000.




          “L/C Fee Payment Date”: the last day of each March, June, September and December
(commencing with June 30, 2006) and the last day of the Revolving Credit Commitment Period.




          “L/C Obligations”: at any time, an amount equal to the sum of (a) the aggregate then
undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount
of drawings under Letters of Credit that have not then been reimbursed by or on behalf of any Loan
Party.




          “L/C Participants”: with respect to any Letter of Credit, the collective reference to
all the Revolving Credit Lenders other than the Issuing Lender that issued such letter of Credit.




          “Lehman Entity”: any of Lehman Commercial Paper Inc. or any of its affiliates
(including Syndicated Loan Funding Trust).




          “Lender Addendum”: (a) with respect to each initial Revolving Credit Lender, a Lender
Addendum which was executed and delivered by such Lender on the Original Closing Date and (b) with
respect to each initial Tranche D Term Lender, a Lender Addendum, substantially in the form of
Exhibit I, to be executed and delivered by such Lender on the Closing Date as provided in Section
10.17.




          “Lenders”: as defined in the preamble hereto.




          “Letters of Credit”: as defined in Section 3.1(a).




          “Lien”: any mortgage, pledge, hypothecation, encumbrance, lien (statutory or other),
or other security agreement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, and any lease in the nature thereof having
substantially the same effect as any of the foregoing).




          “Loan”: any loan made by any Lender pursuant to this Agreement.




          “Loan Documents”: this Agreement, the Security Documents, the Applications and the
Notes.




          “Loan Parties”: the Borrower, Holdings and each Subsidiary Guarantor.




          “Majority Facility Lenders”: with respect to any Facility, the holders of more than
50% of the aggregate unpaid principal amount of the Tranche D Term Loans or the Total Revolving
Extensions of Credit, as the case may be, outstanding under such Facility (or, in the case of the
Revolving Credit Facility, prior to any termination of the Revolving Credit Commitments, the
holders of more than 50% of the Total Revolving Credit Commitments).




          “Majority Revolving Credit Facility Lenders”: the Majority Facility Lenders in
respect of the Revolving Credit Facility.




          “Management Agreement”: the management agreement of the Borrower with the Sponsor
and/or Affiliates of the Sponsor as in effect on the Original Closing Date or as modified from time
to time with the consent of the Administrative Agent.




          “Material Adverse Effect”: a material adverse effect on (a) on or prior to the
Closing Date, the Acquisition, (b) the business, assets, property or financial condition of the
Borrower and its












 





15



Subsidiaries taken as a whole or (c) the validity or enforceability of this
Agreement or any of the other Loan Documents or the rights or remedies of the Agents or the Lenders
hereunder or thereunder.




          “Materials of Environmental Concern”: any gasoline or petroleum (including crude oil
or any fraction thereof) or petroleum products, polychlorinated biphenyls, urea-formaldehyde
insulation, asbestos, pollutants, contaminants, radioactivity, and any other substances or forces
of any kind, whether or not any such substance or force is defined as hazardous or toxic under any
Environmental Law, that is regulated pursuant to or could give rise to liability under any
Environmental Law.




          “Material Subsidiary”: any Subsidiary of Borrower that holds assets having a fair
market value (as reasonably and in good faith determined by the Board of Directors of the Borrower)
of $12,500,000 or more.




          “Maximum Investment Amount”: at any time, the sum of (a) $55,000,000 plus (b)
the aggregate principal amount of Net Cash Proceeds received by the Borrower and its Subsidiaries
from Dispositions of Non-Core Assets on or before such date.




          “Mortgaged Properties”: the real properties listed on Schedule 1.1, as to which the
Administrative Agent for the benefit of the Secured Parties shall be granted a Lien pursuant to one
or more Mortgages.




          “Mortgages”: each of the mortgages and deeds of trust made by any Loan Party in favor
of, or for the benefit of, the Administrative Agent for the benefit of the Secured Parties,
substantially in the form of Exhibit D (with such changes thereto as shall be advisable under the
law of the jurisdiction in which such mortgage or deed of trust is to be recorded), as the same may
be amended, supplemented or otherwise modified from time to time.




          “Multiemployer Plan”: a Plan that is a multiemployer plan as defined in Section
4001(a)(3) of ERISA.




          “Net Cash Proceeds”: (a) in connection with any Asset Sale or any Recovery Event, the
proceeds thereof in the form of cash and Cash Equivalents (including any such proceeds received by
way of deferred payment of principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such Asset Sale or Recovery
Event, net of attorneys’ fees, accountants’ fees, investment banking fees, amounts required to be
applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any
asset which is the subject of such Asset Sale or Recovery Event (other than any Lien pursuant to a
Security Document) and other customary fees and expenses actually incurred in connection therewith
and net of taxes paid or reasonably estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing arrangements) and (b) in
connection with any issuance or sale of equity securities or debt securities or instruments or the
incurrence of loans, the cash proceeds received from such issuance or incurrence, net of attorneys’
fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other
customary fees and expenses actually incurred in connection therewith.




          “Non-Core Assets”: one or more business units or segments of the Borrower or its
Subsidiaries existing on the date hereof that in the aggregate have Consolidated EBITDA for the
most recent fiscal year completed prior to the Closing Date of less than $20,000,000.




          “Non-Excluded Taxes”: as defined in Section 2.20(a).














 





16




          “Non-U.S. Lender”: as defined in Section 2.20(d).




          “Note”: any promissory note evidencing any Loan.




          “Obligations”: the unpaid principal of and interest on (including, without
limitation, interest accruing after the maturity of the Loans and Reimbursement Obligations and
interest accruing after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) the Loans, the Reimbursement
Obligations and all other obligations and liabilities of the Borrower to the Administrative Agent
or to any Lender or any Qualified Counterparty, whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, in each case which may arise under,
out of, or in connection with, this Agreement, any other Loan Document, the Letters of Credit, any
Specified Hedge Agreement or any other document made, delivered or given in connection herewith or
therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees, charges and disbursements of counsel to
the Administrative Agent or to any Lender that are required to be paid by the Borrower pursuant
hereto) or otherwise; provided, that (i) obligations of the Borrower or any Subsidiary
under any Specified Hedge Agreement shall be secured and guaranteed pursuant to the Security
Documents only to the extent that, and for so long as, the other Obligations are so secured and
guaranteed and (ii) any release of Collateral or Guarantors effected in the manner permitted by
this Agreement shall not require the consent of holders of obligations under Specified Hedge
Agreements.




          “Organizational Document”: with respect to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such Person.




          “Original Acquisition Agreement”: the Purchase Agreement, dated as of April 25, 2003,
among UIS, Inc., UIS Industries, Inc. and the Borrower.




          “Original Closing Date”: June 20, 2003.




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




          “Participant”: as defined in Section 10.6(b).




          “Patriot Act”: as defined in Section 10.19.




          “Payment Office”: the office specified from time to time by the Administrative Agent
as its payment office by notice to the Borrower and the Lenders.




          “PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A
of Title IV of ERISA (or any successor).




          “Permitted Acquisition”: any acquisition by the Borrower or any of its Subsidiaries
of all or substantially all of the Capital Stock of (or if the remainder of such Capital Stock will
be held by management, more than 80% of the Capital Stock of), or all or substantially all of the
assets constituting a business unit of, any other Person so long as, with respect to any such
acquisition, the following conditions are satisfied:













 






17




     (a) no Default or Event of Default shall have occurred and be continuing or would
result from such acquisition;




     (b) after giving effect to such acquisition, the Borrower shall be in pro forma
compliance with the financial covenants set forth in Section 7.1;




     (c) the target of such acquisition shall be in the same line of business as the
Borrower and its Subsidiaries or one reasonably related thereto or a reasonable extension
thereof;




     (d) in the case of the acquisition of the Common Stock of another Person, such
acquisition shall not be commenced by the Borrower or its Subsidiaries unless the board of
directors of the target of such acquisition shall have consented thereto; and




     (e) concurrently with the consummation of such acquisition the Borrower shall have
complied with the requirements of Section 6.10 with respect thereto.



          “Permitted Investors”: the collective reference to the Sponsor, its Control
Investment Affiliates and members of management of Holdings, the Borrower or any Subsidiary.




          “Permitted Foreign Investment Amount”: at the time of any determination thereof,
(without duplication) (a) the sum of (i) the aggregate fair market value (as determined by the
Borrower in good faith) of all assets Disposed of by Loan Parties to Excluded Subsidiaries after
the Closing Date (net of the amount of any consideration received therefor), and (ii) the aggregate
amount of Investments made by Loan Parties in Excluded Subsidiaries after the Closing Date (net of
the amount of returns on such Investments, or if such Investment is a loan or a guarantee, less any
cash payments actually received in reimbursement thereof); minus (b) (without duplication
of any returns referred to in clause (a)(ii) above) any dividend received by a Loan Party from an
Excluded Subsidiary.




          “Permitted Seller Note”: a promissory note containing subordination and other
provisions reasonably acceptable to the Administrative Agent, representing Indebtedness of the
Borrower or any Subsidiary incurred in connection with any acquisition permitted under Section
7.8(h) and payable to the seller in connection therewith.




          “Person”: an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.




          “Plan”: at a particular time, any employee benefit plan that is covered by ERISA and
in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as
defined in Section 3(5) of ERISA.




          “POS Program”: AutoZone’s pay-on scan program, pursuant to which the Borrower or its
Subsidiary causes inventory supplied to AutoZone to remain on the books of the Borrower or such
Subsidiary until such products are scanned.




          “Pricing Grid”: the pricing grid attached hereto as Annex A.




          “Pro Forma Balance Sheet”: as defined in Section 4.1(a).












 





18




          “Property”: any right or interest in or to property of any kind whatsoever, whether
real, personal or mixed and whether tangible or intangible, including, without limitation, Capital
Stock of another Person.




          “Qualified Counterparty”: with respect to any Specified Hedge Agreement, any
counterparty thereto that, at the time such Specified Hedge Agreement was entered into, was a
Lender or an affiliate of a Lender.




          “Qualified Public Offering”: any underwritten public offering of the common stock of
the Borrower or Holdings which generates cash proceeds to the Borrower or Holdings, as applicable,
of at least $50,000,000.




          “Recovery Event”: any settlement of or payment in respect of any property or casualty
insurance claim or any condemnation proceeding relating to any asset of the Borrower or any of its
Subsidiaries.




          “Refunded Swing Line Loans”: as defined in Section 2.7.




          “Refunding Date”: as defined in Section 2.7.




          “Register”: as defined in Section 10.6(d).




          “Regulation H”: Regulation H of the Board as in effect from time to time.




          “Regulation U”: Regulation U of the Board as in effect from time to time.




          “Reimbursement Obligation”: the obligation of the Borrower to reimburse each Issuing
Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit issued by such Issuing
Lender.




          “Reinvestment Deferred Amount”: with respect to any Reinvestment Event, the aggregate
Net Cash Proceeds received by the Borrower or any of its Subsidiaries in connection therewith that
are not applied to prepay the Tranche D Term Loans or reduce the Revolving Credit Commitments
pursuant to Section 2.12(b) as a result of the delivery of a Reinvestment Notice.




          “Reinvestment Event”: any Asset Sale or Recovery Event in respect of which the
Borrower has delivered a Reinvestment Notice.




          “Reinvestment Notice”: a written notice executed by a Responsible Officer stating
that no Event of Default under paragraph (a) of Section 8, paragraph (c) of Section 8 (with respect
to the Borrower’s obligations under Section 7.1 only) or paragraph (f) of Section 8 has occurred
and is continuing and that the Borrower (directly or indirectly through a Subsidiary) intends and
expects to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery
Event to acquire assets (other than inventory (except in connection with a Recovery Event that is
itself related to Inventory)) useful in its business (including, without limitation, Permitted
Acquisitions).




          “Reinvestment Prepayment Amount”: with respect to any Reinvestment Event, the
Reinvestment Deferred Amount relating thereto less any amount expended prior to the
relevant
Reinvestment Prepayment Date (or contractually committed on the relevant Reinvestment
Prepayment Date to be expended within 90 days after such Reinvestment Prepayment Date) to acquire
assets (other than inventory (except in connection with a Recovery Event that is itself related to
Inventory)) useful in the business of the Borrower (directly or through a Subsidiary).













 




19





          “Reinvestment Prepayment Date”: with respect to any Reinvestment Event, the earlier
of (a) the date occurring one year after such Reinvestment Event and (b) with respect to any
portion of a Reinvestment Deferred Amount, the date on which the Borrower shall have determined not
to acquire assets (other than inventory (except in connection with a Recovery Event that is itself
related to Inventory)) useful in the business of the Borrower (directly or through a Subsidiary)
with such portion of such Reinvestment Deferred Amount.




          “Related Fund”: with respect to any Lender, any fund that (x) invests in commercial
loans and (y) is managed or advised by the same investment advisor as such Lender or an Affiliate
of such investment advisor, or by such Lender or an Affiliate of such Lender.




          “Reorganization”: with respect to any Multiemployer Plan, the condition that such
plan is in reorganization within the meaning of Section 4241 of ERISA.




          “Reportable Event”: any of the events set forth in Section 4043(c) of ERISA, other
than those events as to which the thirty day notice period is waived
under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.




          “Required Lenders”: at any time, the holders of more than 50% of (a) until the
Closing Date, the Commitments and Tranche C Term Loans outstanding and (b) thereafter, the sum of
(i) the aggregate unpaid principal amount of the Tranche D Term Loans then outstanding and (ii) the
Total Revolving Credit Commitments then in effect or, if the Revolving Credit Commitments have been
terminated, the Total Revolving Extensions of Credit then outstanding.




          “Requirement of Law”: as to any Person, any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or any of its
Property is subject.




          “Responsible Officer”: with respect to financial matters, the chief executive
officer, president, chief financial officer, treasurer or controller of the Borrower, and with
respect to all other matters, any officer of the Borrower or other applicable Loan Party.




          “Restricted Payments”: as defined in Section 7.6.




          “Revolving Credit Commitment”: as to any Lender, the obligation of such Lender, if
any, to make Revolving Credit Loans and participate in Swing Line Loans and Letters of Credit, in
an aggregate principal and/or face amount not to exceed the amount set forth under the heading
“Revolving Credit Commitment” opposite such Lender’s name on Schedule 1 to the Lender Addendum
delivered by such Lender on the Original Closing Date, or, as the case may be, in the Assignment
and Acceptance pursuant to which such Lender became a party hereto, as the same may be changed from
time to time pursuant to the terms hereof. The original aggregate amount of the Total Revolving
Credit Commitments is $75,000,000.




          “Revolving Credit Commitment Period”: the period from and including the Original
Closing Date to the Revolving Credit Termination Date.




          “Revolving Credit Facility”: as defined in the definition of “Facility” in this
Section 1.1.




          “Revolving Credit Lender”: each Lender that has a Revolving Credit Commitment or that
is the holder of Revolving Credit Loans.













 




20





          “Revolving Credit Loans”: as defined in Section 2.4.




          “Revolving Credit Note”: as defined in Section 2.8.




          “Revolving Credit Percentage”: as to any Revolving Credit Lender at any time, the
percentage which such Lender’s Revolving Credit Commitment then constitutes of the Total Revolving
Credit Commitments (or, at any time after the Revolving Credit Commitments shall have expired or
terminated, the percentage which the aggregate amount of such Lender’s Revolving Extensions of
Credit then outstanding constitutes the amount of the Total Revolving Extensions of Credit then
outstanding).




          “Revolving Credit Termination Date”: June 30, 2009.




          “Revolving Extensions of Credit”: as to any Revolving Credit Lender at any time, an
amount equal to the sum of (a) the aggregate principal amount of all Revolving Credit Loans made by
such Lender then outstanding, (b) such Lender’s Revolving Credit Percentage of the L/C Obligations
then outstanding and (c) such Lender’s Revolving Credit Percentage of the aggregate principal
amount of Swing Line Loans then outstanding.




          “SEC”: the Securities and Exchange Commission (or successors thereto or an analogous
Governmental Authority).




          “Secured Parties”: as defined in the Guarantee and Collateral Agreement.




          “Security Documents”: the collective reference to the Guarantee and Collateral
Agreement, the Mortgages and all other security documents hereafter delivered to the Administrative
Agent granting a Lien on any Property of any Person to secure the obligations and liabilities of
any Loan Party under any Loan Document.




          “Senior Subordinated Note Indenture”: the Indenture entered into by the Borrower and
certain of its Subsidiaries in connection with the issuance of the Senior Subordinated Notes,
together with all material instruments and other agreements entered into by the Borrower or such
Subsidiaries in connection therewith, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with Section 7.9.




          “Senior Subordinated Notes”: the subordinated notes of the Borrower issued on the
Original Closing Date and any exchange notes issued in replacement thereof, in each case pursuant
to the Senior Subordinated Note Indenture.




          “Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but which is
not a Multiemployer Plan.




          “Solvent”: with respect to any Person, as of any date of determination, (a) the
amount of the “present fair saleable value” of the assets of such Person will, as of such date,
exceed the amount of all “liabilities of such Person, contingent or otherwise”, as of such date, as
such quoted terms are determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of
such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an
unreasonably small amount of capital with which to conduct its business, and (d) such Person will
be able to pay its debts as they mature. For purposes of this definition, (i) “debt” means
liability on a “claim”, and (ii) “claim” means any (x) right to payment, whether or not such a
right is reduced to judgment, liquidated,













 




21

unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy
for breach of performance if such breach gives rise to a right to payment, whether or not such
right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured,
disputed, undisputed, secured or unsecured.




          “Specified Change of Control”: a “Change of Control”, as defined in the Senior
Subordinated Note Indenture.




          “Specified Hedge Agreement”: any Hedge Agreement entered into by the Borrower or any
Subsidiary Guarantor and any Qualified Counterparty.




          “Sponsor”: TC Group L.L.C. (which operates under the trade name “The Carlyle Group”).




          “Subsidiary”: as to any Person, a corporation, partnership, limited liability company
or other entity of which shares of stock or other ownership interests having ordinary voting power
(other than stock or such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a
“Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Borrower.




          “Subsidiary Guarantor”: each Subsidiary of the Borrower other than any Excluded
Subsidiary.




          “SunTrust”: SunTrust Bank, a Georgia banking corporation.




          “SunTrust (Advance Auto) Factoring Agreement”: that certain Letter of Understanding
and Agreement, dated February 9, 2004, by and between ASC Industries, Inc. and SunTrust.




          “SunTrust (Autozone) Factoring Agreement”: that certain Supplier Agreement, dated as
of November 30, 2004, by and between ASC Industries, Inc. and SunTrust.




          “Swing Line Commitment”: the obligation of the Swing Line Lender to make Swing Line
Loans pursuant to Section 2.6 in an aggregate principal amount at any one time outstanding not to
exceed $15,000,000.




          “Swing Line Lender”: Lehman Commercial Paper Inc., in its capacity as the lender of
Swing Line Loans.




          “Swing Line Loans”: as defined in Section 2.6.




          “Swing Line Note”: as defined in Section 2.8.




          “Swing Line Participation Amount”: as defined in Section 2.7.




          “Syndication Agent”: as defined in the preamble hereto.




          “Target”: ACAS Acquisitions (ASC), Inc. to be renamed ASC Holdco, Inc. on or about
the Closing Date.










 



22




          “Total Revolving Credit Commitments”: at any time, the aggregate amount of the
Revolving Credit Commitments then in effect.




          “Total Revolving Extensions of Credit”: at any time, the aggregate amount of the
Revolving Extensions of Credit of the Revolving Credit Lenders outstanding at such time.




          “Tranche C Term Loan Lender”: as defined in the Existing Credit Agreement.




          “Tranche C Term Loans”: all tranche C term loans outstanding under the Existing
Credit Agreement and repaid in full or converted to Tranche D Term Loans on the Closing Date.




          “Tranche D Term Loan”: as defined in Section 2.1.




          “Tranche D Term Loan Commitment”: as to any Lender, the obligation of such Lender, if
any, to make a Tranche D Term Loan to the Borrower hereunder on the Closing Date in a principal
amount not to exceed the amount set forth in paragraph B or paragraph C, as applicable, of the
Lender Addendum delivered by such Lender, or, as the case may be, in the Assignment and Acceptance
pursuant to which such Lender became a party hereto. The original aggregate amount of the Tranche
D Term Loan Commitments is $330,000,000.




          “Tranche D Term Loan Lender”: each Lender that has a Tranche D Term Loan Commitment
or that holds a Tranche D Term Loan.




          “Tranche D Term Loan Percentage”: as to any Tranche D Term Lender at any time, the
percentage which such Lender’s Tranche D Term Loan Commitment then constitutes of the aggregate
Tranche D Term Loan Commitments (or, at any time after the Closing Date, the percentage which the
aggregate principal amount of such Lender’s Tranche D Term Loans then outstanding constitutes of
the aggregate principal amount of the Tranche D Term Loans then outstanding).




          “Tranche D Term Note”: as defined in Section 2.8.




          “Transferee”: as defined in Section 10.14.




          “Type”: as to any Loan, its nature as a Base Rate Loan or a Eurodollar Loan.




          “Wholly Owned Subsidiary”: as to any Person, any other Person all of the Capital
Stock of which (other than directors’ qualifying shares required by law) is owned by such Person
directly and/or through other Wholly Owned Subsidiaries.




          “Wholly Owned Subsidiary Guarantor”: any Subsidiary Guarantor that is a Wholly Owned
Subsidiary of the Borrower.




          1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all terms
defined in this Agreement shall have the defined meanings when used in the other Loan Documents or
any certificate or other document made or delivered pursuant hereto or thereto.




          (b) As used herein and in the other Loan Documents, and any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms relating to the Borrower and its
Subsidiaries not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the
extent not defined, shall have the respective meanings given to them under GAAP.










 



23




          (c) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise
specified.




          (d) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.




          (e) All calculations of financial ratios set forth in Section 7.1 and the calculation of the
Consolidated Leverage Ratio for purposes of determining the Applicable Margin shall be calculated
to the same number of decimal places as the relevant ratios are expressed in. For example, if the
relevant ratio is to be calculated to the hundredth decimal place and the calculation of the ratio
is 5.126, the ratio will be 5.12.




          (f) With respect to each Subsidiary that is not a Wholly-Owned Subsidiary, for purposes of
calculating any financial covenant, any basket or threshold amount, any liability and/or any
capital expenditures, the amount attributable to such Subsidiary that shall be counted for such
purposes shall equal the product of (x) the Borrower’s direct and/or indirect percentage ownership
of such Subsidiary and (y) the aggregate amount of the applicable item of such Subsidiary.




SECTION 2. AMOUNT AND TERMS OF COMMITMENTS




          2.1 Tranche D Term Loan Commitments. Subject to the terms and conditions hereof, the
Tranche D Term Lenders severally agree to make term loans (each, a “Tranche D Term Loan”)
to the Borrower on the Closing Date in an amount for each Tranche D Term Loan Lender not to exceed
the Tranche D Term Loan Commitment of such Lender. The Tranche D Term Loans may from time to time
be Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.2 and 2.13.




          2.2 Procedure for Tranche D Term Loan Borrowing. The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent
prior to 10:00 A.M., New York City time, (a) three Business Days prior to the anticipated Closing
Date, in the case of Eurodollar Loans (provided that such notice shall contain an agreement
satisfactory to the Administrative Agent that the Borrower agrees to indemnify and hold harmless
each Lender from any loss or expense that such Lender actually sustains or incurs (but excluding
any loss of anticipated profits) as a consequence of the Closing Date not occurring, for any
reason, on the anticipated Closing Date set forth in such notice) and (b) one Business Day prior to
the anticipated Closing Date, in the case of Base Rate Loans) requesting that the Tranche D Term
Loan Lenders make the requested Tranche D Term Loans on the Closing Date, and specifying the amount
to be borrowed. The Tranche D Term Loans initially made on the Closing Date shall initially be
Base Rate Loans, but any Tranche D Term Loans that were converted from Tranche C Term Loans that
were Eurodollar Loans shall continue as Eurodollar Loans with the same Interest Period as the
Tranche C Term Loans so converted. Upon receipt of such notice the Administrative Agent shall
promptly notify each
Tranche D Term Loan Lender thereof. Not later than 12:00 Noon, New York City time, on the
Closing Date, each Tranche D Term Loan Lender shall make available to the Administrative Agent at
the Funding Office an amount in immediately available funds equal to the Tranche D Term Loan or
Tranche D Term Loans to be made by such Lender; provided, however, that, at the
option of each Tranche D Term Loan Lender that is a Tranche C Term Loan Lender immediately prior to
giving effect to the amendment and restatement of the Existing Credit Agreement, all or a portion
of the aggregate amount of Tranche C Term Loans of such Tranche D Term Loan Lender may be converted
to Tranche D Term Loans and applied toward the satisfaction of the foregoing funding requirement.
Subject to the immediately preceding sentence, the Administrative Agent










 



24



shall use the amounts made
available to the Administrative Agent by the Tranche D Term Loan Lenders to prepay the Tranche C
Term Loans outstanding and not converted as set forth above on such date.




          2.3 Repayment of Tranche D Term Loans. The Tranche D Term Loan of each Tranche D Term
Loan Lender shall mature in 24 consecutive quarterly installments, commencing on September 30,
2006, each of which shall be in an amount equal to such Lender’s Tranche D Term Loan Percentage
multiplied by the amount set forth below opposite such installment, as such amount may be reduced
by any optional or mandatory prepayment made in accordance with the terms hereof:




	 	 	 	 	 
	Installment Date	 	Principal Amount
	September 30, 2006
	 	$	825,000	 
	December 31, 2006
	 	$	825,000	 
	March 31, 2007
	 	$	825,000	 
	June 30, 2007
	 	$	825,000	 
	September 30, 2007
	 	$	825,000	 
	December 31, 2007
	 	$	825,000	 
	March 31, 2008
	 	$	825,000	 
	June 30, 2008
	 	$	825,000	 
	September 30, 2008
	 	$	825,000	 
	December 31, 2008
	 	$	825,000	 
	March 31, 2009
	 	$	825,000	 
	June 30, 2009
	 	$	825,000	 
	September 30, 2009
	 	$	825,000	 
	December 31, 2009
	 	$	825,000	 
	March 31, 2010
	 	$	825,000	 
	June 30, 2010
	 	$	825,000	 
	September 30, 2010
	 	$	825,000	 
	December 31, 2010
	 	$	825,000	 
	March 31, 2011
	 	$	825,000	 
	June 30, 2011
	 	$	825,000	 
	September 30, 2011
	 	$	78,375,000	 
	December 31, 2011
	 	$	78,375,000	 
	March 31, 2012
	 	$	78,375,000	 
	June 30, 2012
	 	$	78,375,000	 






          2.4 Revolving Credit Commitments. (a) Subject to the terms and conditions hereof, the Revolving Credit Lenders severally
agree to make revolving credit loans (“Revolving Credit Loans”) to the Borrower from time
to time during the Revolving Credit Commitment Period in an aggregate principal amount at any one
time outstanding for each Revolving Credit Lender which, when added to such Lender’s Revolving
Credit Percentage of the sum of (i) the L/C Obligations then outstanding and (ii) the aggregate
principal amount of the Swing Line Loans then outstanding, does not exceed the amount of such
Lender’s Revolving Credit Commitment. During the Revolving Credit Commitment Period the Borrower
may use the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit Loans in
whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. The
Revolving Credit Loans may from time to time be Eurodollar Loans or Base Rate Loans, as determined
by the Borrower and notified to the Administrative Agent in accordance with Sections 2.5 and 2.13,
provided that no Revolving Credit Loan shall be made as a Eurodollar Loan after the day
that is one month prior to the Revolving Credit Termination Date. Any Revolving Credit Loan







 



25




(as
defined under the Existing Credit Agreement) outstanding on the Closing Date shall remain
outstanding as a Revolving Credit Loan hereunder.




          (b) The Borrower shall repay all outstanding Revolving Credit Loans on the Revolving Credit
Termination Date.




          2.5 Procedure for Revolving Credit Borrowing. The Borrower may borrow under the
Revolving Credit Commitments on any Business Day during the Revolving Credit Commitment Period,
provided that the Borrower shall deliver to the Administrative Agent a Borrowing Notice
(which Borrowing Notice must be received by the Administrative Agent prior to 12:00 Noon, New York
City time, (a) three Business Days prior to the requested Borrowing Date, in the case of Eurodollar
Loans, or (b) one Business Day prior to the requested Borrowing Date, in the case of Base Rate
Loans). Each borrowing of Revolving Credit Loans under the Revolving Credit Commitments shall be
in an amount equal to (x) in the case of Base Rate Loans, $250,000 or a multiple of $50,000 in
excess thereof (or, if the then aggregate Available Revolving Credit Commitments are less than
$250,000, such lesser amount) and (y) in the case of Eurodollar Loans, $1,000,000 or a multiple of
$500,000 in excess thereof; provided, that the Swing Line Lender may request, on behalf of
the Borrower, borrowings of Base Rate Loans under the Revolving Credit Commitments in other amounts
pursuant to Section 2.7 and the Borrower may request borrowings of Base Rate Loans under the
Revolving Credit Commitments in other amounts pursuant to Section 3.5. Upon receipt of any such
Borrowing Notice from the Borrower, the Administrative Agent shall promptly notify each Revolving
Credit Lender thereof. Each Revolving Credit Lender will make its Revolving Credit Percentage of
the amount of each borrowing of Revolving Credit Loans available to the Administrative Agent for
the account of the Borrower at the Funding Office prior to 12:00 Noon, New York City time, on the
Borrowing Date requested by the Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrower by the Administrative Agent in
like funds as received by the Administrative Agent.




          2.6 Swing Line Commitment. (a) Subject to the terms and conditions hereof, the Swing
Line Lender agrees that, during the Revolving Credit Commitment Period, it will make available to
the Borrower in the form of swing line loans (“Swing Line Loans”) a portion of the credit
otherwise available to the Borrower under the Revolving Credit Commitments; provided that
(i) the aggregate principal amount of Swing Line Loans outstanding at any time shall not exceed the
Swing Line Commitment then in effect (notwithstanding that the Swing Line Loans outstanding at any
time, when aggregated with the Swing Line Lender’s other outstanding Revolving Credit Loans
hereunder, may exceed the Swing Line Commitment then in effect or such Swing Line Lender’s
Revolving Credit Commitment then in effect)
and (ii) the Borrower shall not request, and the Swing Line Lender shall not make, any Swing
Line Loan if, after giving effect to the making of such Swing Line Loan, the aggregate amount of
the Available Revolving Credit Commitments would be less than zero. During the Revolving Credit
Commitment Period, the Borrower may use the Swing Line Commitment by borrowing, repaying and
reborrowing, all in accordance with the terms and conditions hereof. Swing Line Loans shall be
Base Rate Loans only.




          (b) The Borrower shall repay all outstanding Swing Line Loans on the Revolving Credit
Termination Date.




          2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans. (a) The
Borrower may borrow under the Swing Line Commitment on any Business Day during the Revolving Credit
Commitment Period, provided, the Borrower shall give the Swing Line Lender irrevocable
telephonic notice confirmed promptly in writing (which telephonic notice must be received by the
Swing Line Lender not later than 12:00 Noon, New York City time, on the proposed Borrowing Date),
specifying (i) the amount to be borrowed and (ii) the requested Borrowing Date. Each borrowing
under







 



26




the Swing Line Commitment shall be in an amount equal to $100,000 or a whole multiple of
$50,000 in excess thereof. Not later than 2:00 P.M., New York City time, on the Borrowing Date
specified in the borrowing notice in respect of any Swing Line Loan, the Swing Line Lender shall
make available to the Administrative Agent at the Funding Office an amount in immediately available
funds equal to the amount of such Swing Line Loan. The Administrative Agent shall make the
proceeds of such Swing Line Loan available to the Borrower on such Borrowing Date in like funds as
received by the Administrative Agent.




          (b) The Swing Line Lender, at any time and from time to time in its sole and absolute
discretion may, on behalf of the Borrower (which hereby irrevocably directs the Swing Line Lender
to act on its behalf), on one Business Day’s notice given by the Swing Line Lender no later than
12:00 Noon, New York City time, request each Revolving Credit Lender to make, and each Revolving
Credit Lender hereby agrees to make, a Revolving Credit Loan (which shall initially be a Base Rate
Loan), in an amount equal to such Revolving Credit Lender’s Revolving Credit Percentage of the
aggregate amount of the Swing Line Loans (the “Refunded Swing Line Loans”) outstanding on
the date of such notice, to repay the Swing Line Lender. Each Revolving Credit Lender shall make
the amount of such Revolving Credit Loan available to the Administrative Agent at the Funding
Office in immediately available funds, not later than 10:00 A.M., New York City time, one Business
Day after the date of such notice. The proceeds of such Revolving Credit Loans shall be made
immediately available by the Administrative Agent to the Swing Line Lender for application by the
Swing Line Lender to the repayment of the Refunded Swing Line Loans.




          (c) If prior to the time a Revolving Credit Loan would have otherwise been made pursuant to
Section 2.7(b), one of the events described in Section 8(f) shall have occurred and be continuing
with respect to the Borrower, or if for any other reason, as determined by the Swing Line Lender in
its sole discretion, Revolving Credit Loans may not be made as contemplated by Section 2.7(b), each
Revolving Credit Lender shall, on the date such Revolving Credit Loan was to have been made
pursuant to the notice referred to in Section 2.7(b) (the “Refunding Date”), purchase for
cash an undivided participating interest in the then outstanding Swing Line Loans by paying to the
Swing Line Lender an amount (the “Swing Line Participation Amount”) equal to (i) such
Revolving Credit Lender’s Revolving Credit Percentage times (ii) the sum of the aggregate
principal amount of Swing Line Loans then outstanding which were to have been repaid with such
Revolving Credit Loans.




          (d) Whenever, at any time after the Swing Line Lender has received from any Revolving Credit
Lender such Lender’s Swing Line Participation Amount, the Swing Line Lender
receives any payment on account of the Swing Line Loans, the Swing Line Lender will distribute
to such Lender its Swing Line Participation Amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender’s participating interest was
outstanding and funded and, in the case of principal and interest payments, to reflect such
Lender’s pro rata portion of such payment if such payment is not sufficient to pay
the principal of and interest on all Swing Line Loans then due); provided, however,
that in the event that such payment received by the Swing Line Lender is required to be returned,
such Revolving Credit Lender will return to the Swing Line Lender any portion thereof previously
distributed to it by the Swing Line Lender.




          (e) Each Revolving Credit Lender’s obligation to make the Loans referred to in Section 2.7(b)
and to purchase participating interests pursuant to Section 2.7(c) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without limitation, (i) any
setoff, counterclaim, recoupment, defense or other right which such Revolving Credit Lender or the
Borrower may have against the Swing Line Lender, the Borrower or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default or an Event of Default or the failure
to satisfy any of the other conditions specified in Section 5; (iii) any adverse change in the
condition (financial or otherwise)







 



27




of the Borrower; (iv) any breach of this Agreement or any other
Loan Document by the Borrower, any other Loan Party or any other Revolving Credit Lender; or (v)
any other circumstance, happening or event whatsoever, whether or not similar to any of the
foregoing.




          2.8 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of the appropriate Revolving Credit
Lender or Tranche D Term Loan Lender, as the case may be, (i) the then unpaid principal amount of
each Revolving Credit Loan of such Revolving Credit Lender on the Revolving Credit Termination Date
(or on such earlier date on which the Loans become due and payable pursuant to Section 8), (ii) the
then unpaid principal amount of each Swing Line Loan of such Swing Line Lender on the Revolving
Credit Termination Date (or on such earlier date on which the Loans become due and payable pursuant
to Section 8) and (iii) the principal amount of each Tranche D Term Loan of such Tranche D Term
Loan Lender in installments according to the amortization schedule set forth in Section 2.3 (or on
such earlier date on which the Loans become due and payable pursuant to Section 8);
provided that to the extent not otherwise paid in full, all principal and interest
outstanding in respect of the Tranche D Term Loans shall be paid on the date of the last
installment thereof. The Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Loans from time to time outstanding from the date hereof until payment in full
thereof at the rates per annum, and on the dates, set forth in Section 2.15.




          (b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing indebtedness of the Borrower to such Lender resulting from each Loan of such Lender from
time to time, including the amounts of principal and interest payable and paid to such Lender from
time to time under this Agreement.




          (c) The Administrative Agent, on behalf of the Borrower, shall maintain the Register pursuant
to Section 10.6(d), and a subaccount therein for each Lender, in which shall be recorded (i) the
amount of each Loan made hereunder and any Note evidencing such Loan, the Type of such Loan and
each Interest Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder and (iii) both the
amount of any sum received by the Administrative Agent hereunder from the Borrower and each
Lender’s share thereof.




          (d) The entries made in the Register and the accounts of each Lender maintained pursuant to
Section 2.8(b) shall, to the extent permitted by applicable law, be presumptively correct,
absent manifest error, as to the existence and amounts of the obligations of the Borrower
therein recorded; provided, however, that the failure of any Lender or the
Administrative Agent to maintain the Register or any such account, or any error therein, shall not
in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans
made to the Borrower by such Lender in accordance with the terms of this Agreement.




          (e) The Borrower agrees that, upon the request to the Administrative Agent by any Lender, the
Borrower will promptly execute and deliver to such Lender a promissory note of the Borrower
evidencing any Tranche D Term Loans, Revolving Credit Loans or Swing Line Loans, as the case may
be, of such Lender, substantially in the forms of Exhibit G-1, G-2 or G-3, respectively (a
“Tranche D Term Note”, “Revolving Credit Note” or “Swing Line Note”,
respectively), with appropriate insertions as to date and principal amount; provided, that
delivery of Notes shall not be a condition precedent to the occurrence of the Closing Date or the
making of the Tranche D Term Loans on the Closing Date.




          2.9 Commitment Fees, etc. (a) The Borrower agrees to pay to the Administrative Agent
for the account of each Revolving Credit Lender a commitment fee for the period from and including
the Original Closing Date to the last day of the Revolving Credit Commitment Period,







 



28




computed at
the Commitment Fee Rate on the average daily amount of the Available Revolving Credit Commitment of
such Lender during the period for which payment is made, payable quarterly in arrears on the last
day of each March, June, September and December and on the Revolving Credit Termination Date, with
the payment of such fees having commenced on September 30, 2003.




          (b) The Borrower agrees to pay to the Administrative Agent, the Syndication Agent and the
Joint Lead Arrangers the fees in the amounts and on the dates previously agreed to in writing by
the Borrower and the Administrative Agent, the Syndication Agent and the Joint Lead Arrangers (or
any of them individually).




          2.10 Termination or Reduction of Revolving Credit Commitments. The Borrower shall
have the right, upon not less than one Business Day’s notice to the Administrative Agent, to
terminate the Revolving Credit Commitments or, from time to time, to reduce the aggregate amount of
the Revolving Credit Commitments; provided that no such termination or reduction of
Revolving Credit Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans and Swing Line Loans made on the effective date thereof,
the Total Revolving Extensions of Credit would exceed the Total Revolving Credit Commitments. Any
such reduction shall be in an amount equal to $500,000, or a multiple of $50,000 in excess thereof,
and shall reduce permanently the Revolving Credit Commitments then in effect.




          2.11 Optional Prepayments. The Borrower may at any time and from time to time prepay
the Loans, in whole or in part, without premium or penalty (except as otherwise provided herein),
upon notice delivered to the Administrative Agent at least three Business Days prior thereto in the
case of Eurodollar Loans and at least one Business Day prior thereto in the case of Base Rate
Loans, which notice shall specify the date and amount of such prepayment, whether such prepayment
is of Tranche D Term Loans or Revolving Credit Loans, and whether such prepayment is of Eurodollar
Loans or Base Rate Loans; provided, that (i) if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any
amounts owing pursuant to Section 2.21 and (ii) no prior notice is
required for the prepayment of Swing Line Loans. Any notice of prepayment given pursuant to
this Section shall be irrevocable, provided, that such notice may state that it is
conditioned upon the effectiveness of other credit facilities, in which case such notice may be
revoked if such condition is not satisfied. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof. If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified therein, together with
(except in the case of Revolving Credit Loans that are Base Rate Loans and Swing Line Loans)
accrued interest to such date on the amount prepaid. Partial prepayments of Tranche D Term Loans
and Revolving Credit Loans shall be in an aggregate principal amount of $500,000 or a multiple of
$50,000 in excess thereof. Partial prepayments of Swing Line Loans shall be in an aggregate
principal amount of $100,000 or a whole multiple thereof.




          2.12 Mandatory Prepayments and Commitment Reductions. (a) Unless the Required
Lenders shall otherwise agree, if (i) any Capital Stock shall be issued by Holdings or the Borrower
(other than any issuance to Holdings or any of its other Subsidiaries), excluding any such Capital
Stock issued by the Borrower or Holdings (A) to any Permitted Investor or (B) the proceeds of which
are used within 360 days after receipt thereof by the Borrower or any Subsidiary to make
Investments permitted by Section 7.8(h) or Capital Expenditures permitted by this Agreement,
(provided that (x) the Borrower shall have notified the Administrative Agent in writing of such
intended use not later than the ten days after the date of receipt of such proceeds and (y) any
such proceeds not so used within such 360-day period shall be applied to the prepayment of the
Tranche D Term Loans on the last day of such period), or (ii) any Funded Debt is incurred by the
Borrower or any other Loan Party (excluding Indebtedness permitted by Section 7.2), then on the
date of such issuance or incurrence, as the case may be, the Tranche D Term Loans shall be prepaid
by an amount equal to the amount 50% of the Net Cash Proceeds of such issuance








 



29



of Capital Stock or
100% of the Net Cash Proceeds of such incurrence of Indebtedness, as the case may be. The
provisions of this Section do not constitute a consent to the issuance of any equity securities by
any entity whose equity securities are pledged pursuant to the Guarantee and Collateral Agreement,
or a consent to the incurrence of any Indebtedness by the Borrower or any of its Subsidiaries.




          (b) Unless the Required Lenders shall otherwise agree, if on any date the Borrower or any
other Loan Party shall receive Net Cash Proceeds from any Asset Sale (including any Disposition of
any Capital Stock of any Subsidiary, whether by the issuer or the Loan Party that is the owner
thereof, other than any such Disposition excluded from being an Asset Sale by the exclusions
contained in the definition of “Asset Sale” in Section 1.1) or Recovery Event yielding Net Cash
Proceeds in excess of $5,000,000 then, unless a Reinvestment Notice shall be delivered in respect
thereof, within three Business Days after the date of receipt by such Loan Party of such Net Cash
Proceeds, the Tranche D Term Loans shall be prepaid, and/or the Revolving Credit Commitments shall
be reduced, by an amount equal to the amount of such Net Cash Proceeds, as set forth in Section
2.12(d); provided, that, notwithstanding the foregoing, (i) the aggregate Net Cash Proceeds
of Asset Sales that may be excluded from the foregoing requirement pursuant to a Reinvestment
Notice shall not exceed the sum of (x) $20,000,000 in any fiscal year of the Borrower and (y) up to
$15,000,000 during the term of this Agreement of Net Cash Proceeds from the Disposition of Non-Core
Assets, (ii) on each Reinvestment Prepayment Date the Tranche D Term Loans shall be prepaid, and/or
the Revolving Credit Commitments shall be reduced, by an amount equal to the Reinvestment
Prepayment Amount with respect to the relevant Reinvestment Event, as set forth in Section 2.12(d),
and (iii) in any event the Tranche D Term Loans shall be prepaid and/or the Revolving Credit
Commitments shall be reduced, by an amount equal to any Net Cash Proceeds of any Asset Sale,
Recovery Event or other Disposition of property of any Loan Party that would otherwise be required
to be used to prepay the Senior Subordinated Notes, on the date such prepayment of the Senior
Subordinated Notes would otherwise be required to be made, as set forth in Section 2.12(d). The
provisions of this Section do not constitute a consent to the consummation of any Disposition
not permitted by Section 7.5.




          (c) Unless the Required Lenders shall otherwise agree, if, for any fiscal year of the Borrower
commencing with the fiscal year ending December 31, 2004, there shall be Excess Cash Flow, then, on
the relevant Excess Cash Flow Application Date, the Tranche D Term Loans shall be prepaid by an
amount equal to the ECF Percentage of such Excess Cash Flow. Each such prepayment and commitment
reduction shall be made on a date (an “Excess Cash Flow Application Date”) no later than
five days after the date on which the financial statements of the Borrower referred to in Section
6.1(a), for the fiscal year with respect to which such prepayment is made, are required to be
delivered to the Lenders.




          (d) Amounts to be applied in connection with prepayments and Commitment reductions made
pursuant to Section 2.12(b) shall be applied, first, to the prepayment of the Tranche D
Term Loans until the Tranche D Term Loans are repaid in full and, second, to reduce
permanently the Revolving Credit Commitments. Any such reduction of the Revolving Credit
Commitments shall be accompanied by prepayment of the Revolving Credit Loans and/or Swing Line
Loans to the extent, if any, that the Total Revolving Extensions of Credit exceed the amount of the
Total Revolving Credit Commitments as so reduced, provided that if the aggregate principal
amount of Revolving Credit Loans and Swing Line Loans then outstanding is less than the amount of
such excess (because L/C Obligations constitute a portion thereof), the Borrower shall, to the
extent of the balance of such excess, replace outstanding Letters of Credit and/or deposit an
amount in cash in a cash collateral account established with the Administrative Agent for the
benefit of the Secured Parties on terms and conditions reasonably satisfactory to the
Administrative Agent.




          2.13 Conversion and Continuation Options. (a) The Borrower may elect from time to
time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least one








 



30




Business Day’s prior irrevocable notice of such election. The Borrower may elect from time to time
to convert Base Rate Loans to Eurodollar Loans by giving the Administrative Agent at least three
Business Days’ prior irrevocable notice of such election (which notice shall specify the length of
the initial Interest Period therefor), provided that no Base Rate Loan under a particular
Facility may be converted into a Eurodollar Loan (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has, or the Majority Facility Lenders in respect of such
Facility have, determined in its or their sole discretion not to permit such conversions or (ii)
after the date that is one month prior to the final scheduled termination or maturity date of such
Facility. Upon receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.




          (b) The Borrower may elect to continue any Eurodollar Loan as such upon the expiration of the
then current Interest Period with respect thereto by giving irrevocable notice to the
Administrative Agent, in accordance with the applicable provisions of the term “Interest Period”
set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Loans,
provided that no Eurodollar Loan under a particular Facility may be continued as such when
any Event of Default has occurred and is continuing and the Administrative Agent has, or the
Majority Facility Lenders in respect of such Facility have, determined in its or their sole
discretion not to permit such continuations, and provided, further, that if the
Borrower shall fail to give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso, such Loans shall be converted
automatically to Base Rate Loans on the last day of such then expiring Interest Period. Upon
receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender
thereof.




          (c) Any Tranche C Term Loan that is a Eurodollar Loan and is converted to a Tranche D Term
Loan shall continue as a Eurodollar Loan.




          2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches. Notwithstanding
anything to the contrary in this Agreement, all borrowings, conversions, continuations and optional
prepayments of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and
be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate
principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to
$1,000,000 or a whole multiple of $500,000 in excess thereof and (b) no more than nine Eurodollar
Tranches shall be outstanding at any one time.




          2.15 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear interest
for each day during each Interest Period with respect thereto at a rate per annum equal to the
Eurodollar Rate determined for such day plus the Applicable Margin in effect for such day.




          (b) Each Base Rate Loan shall bear interest for each day on which it is outstanding at a rate
per annum equal to the Base Rate in effect for such day plus the Applicable Margin in effect for
such day.




          (c) (i) If all or a portion of the principal amount of any Loan or Reimbursement Obligation
shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such
overdue amount shall bear interest at a rate per annum that is equal to (x) in the case of the
Loans, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of
this Section plus 2% or (y) in the case of Reimbursement Obligations, the rate applicable to Base
Rate Loans under the Revolving Credit Facility plus 2%, and (ii) if all or a portion of any
interest payable on any Loan or Reimbursement Obligation or any commitment fee or other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate then
applicable to Base Rate Loans under the relevant Facility plus 2% (or, in the case of any such
other amounts that do not relate to a particular Facility, the rate then applicable







 



31



to Base Rate Loans under the Revolving Credit Facility plus 2%), in each case, with respect to clauses (i) and
(ii) above, from the date of such non-payment until such amount is paid in full (after as well as
before judgment).




          (d) Interest shall be payable in arrears on each Interest Payment Date, provided that
interest accruing pursuant to paragraph (c) of this Section shall be payable from time to time on
demand.




          2.16 Computation of Interest and Fees. (a) Interest, fees and commissions payable
pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed,
except that, with respect to Base Rate Loans on which interest is calculated on the basis of the
Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case
may be) day year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination of a Eurodollar
Rate. Any change in the interest rate on a Loan resulting from a change in the Base Rate or the
Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day
on which such change becomes effective. The Administrative Agent shall as soon as practicable
notify the Borrower and the relevant Lenders of the effective date and the amount of each such
change in interest rate.




          (b) Each determination of an interest rate by the Administrative Agent pursuant to any
provision of this Agreement shall be presumptively correct in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Administrative Agent in determining any interest rate pursuant
to Section 2.15(a).




          2.17 Inability to Determine Interest Rate. If prior to the first day of any Interest
Period:




          (a) the Administrative Agent shall have determined (which determination shall be conclusive
and binding upon the Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest
Period, or




          (b) the Administrative Agent shall have received notice from the Majority Facility Lenders in
respect of the relevant Facility that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans during such Interest
Period,



the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the
relevant Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar
Loans under the relevant Facility requested to be made on the first day of such Interest Period
shall be made as Base Rate Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be continued as Base
Rate Loans and (z) any outstanding Eurodollar Loans under the relevant Facility shall be converted,
on the last day of the then current Interest Period with respect thereto, to Base Rate Loans.
Until such notice has been withdrawn by the Administrative Agent (which the Administrative Agent
shall do promptly after the circumstances giving rise to such event no longer exist), no further
Eurodollar Loans under the relevant Facility shall be made or continued as such, nor shall the
Borrower have the right to convert Loans under the relevant Facility to Eurodollar Loans.




          2.18 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower from the
Lenders hereunder, each payment by the Borrower on account of any commitment fee or Letter of











 



32



Credit fee, and any reduction of the Commitments of the Lenders, shall be made pro
rata according to the respective Tranche D Term Loan Percentages or Revolving Credit
Percentages, as the case may be, of the relevant Lenders. Each payment (other than prepayments) in
respect of principal or interest in respect of the Tranche D Term Loans and each payment in respect
of fees payable hereunder shall be applied to the amounts of such obligations then due and owing to
the Lenders pro rata according to the respective amounts then due and owing to the
Lenders.




          (b) Each payment (including each prepayment) of outstanding Tranche D Term Loans shall be
allocated among the Tranche D Term Loan Lenders holding such Tranche D Term Loans pro
rata based on the principal amount of such Tranche D Term Loans held by such Tranche D Term
Loan Lenders. Each optional prepayment in respect of the Tranche D Term Loans shall be allocated
among the remaining installments thereof in accordance with the Borrower’s instructions. Each
mandatory prepayment in respect of the Tranche D Term Loans shall be applied to the installments of
such Tranche D Term Loans first, in direct order of the next four scheduled installments thereof to
become due under Section 2.3(a) or (b), and thereafter, pro rata based on the
remaining outstanding
principal amount of the remaining installments. Amounts repaid or prepaid on account of the
Tranche D Term Loans may not be reborrowed.




          (c) Each payment (including each prepayment) by the Borrower on account of principal of and
interest on the Revolving Credit Loans shall be made pro rata according to the
respective outstanding principal amounts of the Revolving Credit Loans then held by the Revolving
Credit Lenders. Each payment in respect of Reimbursement Obligations in respect of any Letter of
Credit shall be made to the Issuing Lender that issued such Letters of Credit.




          (d) The application of any payment of Loans under any Facility (including optional and
mandatory prepayments) shall be made, first, to Base Rate Loans under such Facility and,
second, to Eurodollar Loans under such Facility. Each payment of the Loans (except in the
case of Swing Line Loans and Revolving Credit Loans that are Base Rate Loans) shall be accompanied
by accrued interest to the date of such payment on the amount paid.




          (e) All payments (including prepayments) to be made by the Borrower hereunder, whether on
account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and
shall be made prior to 1:00 P.M., New York City time, on the due date thereof to the Administrative
Agent, for the account of the relevant Lenders, at the Payment Office, in Dollars and in
immediately available funds. Any payment made by the Borrower after 1:00 P.M., New York City time,
on any Business Day shall be deemed to have been on the next following Business Day. The
Administrative Agent shall distribute such payments to the Lenders promptly upon receipt in like
funds as received. If any payment hereunder (other than payments on the Eurodollar Loans) becomes
due and payable on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next succeeding Business
Day unless the result of such extension would be to extend such payment into another calendar
month, in which event such payment shall be made on the immediately preceding Business Day. In the
case of any extension of any payment of principal pursuant to the preceding two sentences, interest
thereon shall be payable at the then applicable rate during such extension.




          (f) Unless the Administrative Agent shall have been notified in writing by any Lender prior to
a borrowing that such Lender will not make the amount that would constitute its share of such
borrowing available to the Administrative Agent, the Administrative Agent may assume that such
Lender is making such amount available to the Administrative Agent, and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If
such







 



33



amount is not made available to the Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative Agent. A
certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing
under this paragraph shall be conclusive in the absence of manifest error. If such Lender’s share
of such borrowing is not made available to the Administrative Agent by such Lender within three
Business Days after such Borrowing Date, the Administrative Agent shall also be entitled to recover
such amount with interest thereon at the rate per annum applicable to Base Rate Loans under the
relevant Facility, within three Business Days after demand therefor, from the Borrower.




          (g) Unless the Administrative Agent shall have been notified in writing by the Borrower prior
to the date of any payment due to be made by the Borrower hereunder that the Borrower will not make
such payment to the Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption, make available to the Lenders their respective pro
rata shares of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days after such due date, the Administrative Agent
shall be entitled to recover, on demand, from each Lender to which any amount which was made
available pursuant to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing herein shall be deemed to
limit the rights of the Administrative Agent or any Lender against the Borrower.




          2.19 Requirements of Law. (a) If the adoption of or any change in any Requirement of
Law or in the interpretation or application thereof or compliance by any Lender with any request or
directive (whether or not having the force of law) from any central bank or other Governmental
Authority first made subsequent to the date hereof:





	 	(i)	 	shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.20 and changes in the rate of
tax on the overall net income, or net profits or capital (if either is
imposed in lieu of net income taxes), of such Lender);
	 
	 	(ii)	 	shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender that is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
	 
	 	(iii)	 	shall impose on such Lender any other
condition;




and the result of any of the foregoing is to increase the cost to such Lender, by an amount which
such Lender reasonably deems to be material, of making, converting into, continuing or maintaining
Eurodollar Loans or issuing or participating in Letters of Credit, or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay
such Lender, within 30 days after receipt of a reasonably detailed request therefor, any additional
amounts necessary to compensate such Lender for such increased cost or reduced amount receivable.
If any Lender becomes entitled to claim








 



34


any additional amounts pursuant to this Section, it shall
promptly notify the Borrower (with a copy to the Administrative Agent) of the event by reason of
which it has become so entitled.




          (b) If any Lender shall have determined that the adoption of or any change in any Requirement
of Law regarding capital adequacy or in the interpretation or application thereof or compliance by
such Lender or any corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental Authority first
made subsequent to the date hereof shall have the effect of reducing the rate of return on such
Lender’s or such corporation’s capital as a consequence of its obligations hereunder or under or in
respect of any Letter of Credit to a level below that which such Lender or such corporation could
have achieved but for such adoption, change or compliance (taking into consideration such Lender’s
or such corporation’s policies with respect to capital adequacy) by an amount deemed by such Lender
to be material, then from time to time, within 30 days after submission by such Lender to the
Borrower of a
reasonably detailed request therefor (with a copy to the Administrative Agent) of a written
request therefor, the Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such corporation for such reduction; provided that the Borrower
shall not be required to compensate a Lender pursuant to this paragraph for any amounts incurred
more than six months prior to the date that such Lender notifies the Borrower of such Lender’s
intention to claim compensation therefor; and provided further that, if the
circumstances giving rise to such claim have a retroactive effect, then such six-month period shall
be extended to include the period of such retroactive effect.




          (c) A certificate as to any additional amounts payable pursuant to this Section submitted by
any Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive in the
absence of manifest error. The obligations of the Borrower pursuant to this Section shall survive
the termination of this Agreement and the payment of the Loans and all other amounts payable
hereunder.




          2.20 Taxes. (a) Except as required by applicable law, all payments made by the
Borrower under this Agreement to any Agent or Lender shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding income taxes and
franchise taxes imposed on or measured by any Agent’s or Lender’s net income, or net profits or
capital if either is imposed in lieu of net income taxes, as a result of a present or former
connection between such Agent or such Lender and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or therein (other than
any such connection arising solely from such Agent’s or such Lender’s having executed, delivered or
performed its obligations or received a payment under, or enforced, this Agreement or any other
Loan Document). If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings (“Non-Excluded Taxes”) or any Other Taxes are required to be withheld from
any amounts payable to any Agent or any Lender hereunder, the amounts so payable to such Agent or
such Lender shall be increased to the extent necessary to yield to such Agent or such Lender (after
payment of all Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement; provided,
however, that the Borrower shall not be required to increase any such amounts payable to
any Agent or any Lender with respect to any Non-Excluded Taxes (i) that are attributable to such
Agent or Lender’s failure to comply with the requirements of paragraph (d) or (e) of this Section
or (ii) that are United States withholding taxes imposed on amounts payable to such Agent or Lender
at the time such Agent or Lender becomes a party to this Agreement, except to the extent that such
Agent’s or Lender’s assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes pursuant to this
paragraph (a).










 



35




          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.




          (c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly as
reasonably possible thereafter the Borrower shall send to the Administrative Agent for the account
of the relevant Agent or Lender, as the case may be, (i) a certified copy of an original official
receipt received by the Borrower showing payment thereof or (ii) if the Borrower determines that it
is unable to provide a certified copy of such receipt, a certificate as to the amount of such
payment. If the Borrower fails to pay any Non-Excluded Taxes or Other Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent copies of the required
receipts or other required documentary evidence, the Borrower shall indemnify the Agents and the
Lenders for any incremental taxes, interest or penalties that may become payable by any Agent or
any Lender as a result of any such
failure. The agreements in this Section shall survive the termination of this Agreement and
the payment of the Loans and all other amounts payable hereunder.




          (d) Each Lender (or Transferee) that is not a United States person as defined in Section
7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver to the Borrower and the
Administrative Agent (or, in the case of a Participant, to the Borrower and the Lender from which
the related participation shall have been purchased) two copies of either U.S. Internal Revenue
Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United
States is a party or Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of
“portfolio interest” a statement substantially in the form of Exhibit H and two copies of Form
W-8BEN, or any subsequent versions thereof or successors thereto properly completed and duly
executed by such Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S.
federal withholding tax on all payments by the Borrower under this Agreement and the other Loan
Documents. Such forms shall be delivered by each Non-U.S. Lender on or before the date it becomes
a party to this Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation). In addition, each Non-U.S. Lender agrees that it
will deliver to the Borrower (and the Administrative Agent) updated versions of the foregoing
documentation and such other forms as may be required to confirm or establish the entitlement of
the Non-U.S. Lender to a continued exemption from or reduction in withholding tax with respect to
payments under this Agreement or under any Loan Document and each Non-U.S. Lender shall deliver
such forms promptly upon the obsolescence or invalidity of any form previously delivered by such
Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it determines
that it is no longer in a position to provide any previously delivered certificate to the Borrower
(or any other form of certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not legally able to
deliver.




          (e) A Lender that is entitled to an exemption from or reduction of non-U.S. withholding tax
under the law of the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Borrower, 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, provided that such Lender is legally entitled to complete, execute and
deliver such documentation and in such Lender’s reasonable judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender.




          (f) Any Lender that is United States person as defined in section 7701(a)(30) of the Code
shall deliver to the Borrower (with a copy to the Administrative Agent) a statement signed by an







 



36




authorized signatory of the Lender that it is a United States person and, if necessary to avoid
U.S. backup withholding, a duly completed and signed Internal Revenue Service Form W-9 (or
successor form) establishing that the Lender is organized under the laws of the United States and
is not subject to backup withholding.




          (g) If any Agent or Lender determines, in its good faith judgment, that it has received a
refund of, any Non-Excluded Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts pursuant to Section
2.20(a) or Section 2.20(b), it shall pay over such refund to the Borrower within thirty Business
Days of the receipt of such refund to the extent that it determines that it can do so without
prejudice to the retention of such refund; provided, however, that the Borrower agrees promptly to
return such refund (together with any interest with respect thereto due to the relevant taxing
authority) (free of all Non-Excluded Taxes) to the
applicable Agent or Lender, as the case may be, upon receipt of a notice that such refund is
required to be repaid to the relevant taxing authority. This section shall not be construed to
require any Agent or Lender to make available its tax returns (or any other information relating to
its taxes that it deems confidential) to the Borrower or to any other Person.




          2.21 Indemnity. The Borrower agrees to indemnify each Lender for, and to hold each
Lender harmless from, any loss or expense that such Lender may actually sustain or incur as a
consequence of (a) default by the Borrower in making a borrowing of, conversion into or
continuation of Eurodollar Loans after the Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement (other than by operation of Section 2.17 or 2.22),
(b) default by the Borrower in making any prepayment after the Borrower has given a notice thereof
in accordance with the provisions of this Agreement (whether or not such notice has been revoked or
withdrawn by the Borrower) or (c) the making of a prepayment or conversion of Eurodollar Loans on a
day that is not the last day of an Interest Period with respect thereto, other than any conversion
of a Tranche C Term Loan that is a Eurodollar Loan to a Tranche D Term Loan on the Closing Date. A
certificate as to any amounts payable pursuant to this Section submitted to the Borrower by any
Lender shall be conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.




          2.22 Illegality. Notwithstanding any other provision herein, if the adoption after
the date hereof of, or any change after the date hereof in, any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate Loans to Eurodollar
Loans shall forthwith be suspended until such time as it is no longer unlawful for such Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement and (b) such Lender’s Loans
then outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect to such Loans or
within such earlier period as required by law. If any such conversion of a Eurodollar Loan occurs
on a day which is not the last day of the then current Interest Period with respect thereto, the
Borrower shall pay to such Lender such amounts, if any, as may be required pursuant to Section
2.21.




          2.23 Change of Lending Office. Each Lender agrees that, upon the occurrence of any
event giving rise to the operation of Section 2.19, 2.20(a) or 2.22 with respect to such Lender, it
will, if requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its
lending office(s) to suffer no economic, legal or







 



37




regulatory disadvantage, and provided,
further, that nothing in this Section shall affect or postpone any of the obligations of
any Borrower or the rights of any Lender pursuant to Section 2.19, 2.20(a) or 2.22.




          2.24 Replacement of Lenders under Certain Circumstances. The Borrower shall be
permitted to replace with a replacement financial institution any Lender (a) that requests
reimbursement for amounts owing pursuant to Section 2.19 or 2.20 or gives a
notice of illegality pursuant to Section 2.22, (b) that defaults in its obligation to make
Loans hereunder or (c) that has refused to consent to any waiver or amendment with respect to any
Loan Document that has been consented to by the Required Lenders; provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) prior to any such replacement
pursuant to clause (a) above, such Lender shall have taken no action under Section 2.23 so as to
eliminate the continued need for payment of amounts owing pursuant to Section 2.19 or 2.20 or to
eliminate the illegality referred to in such notice of illegality given pursuant to Section 2.22,
(iii) the replacement financial institution shall purchase, at par, all Loans and other amounts
owing to such replaced Lender on or prior to the date of replacement, (iv) the Borrower shall be
liable to such replaced Lender under Section 2.21 (as though Section 2.21 were applicable) if any
Eurodollar Loan owing to such replaced Lender shall be purchased other than on the last day of the
Interest Period relating thereto, (v) the replacement financial institution, if not already a
Lender, shall be reasonably satisfactory to the Administrative Agent, (vi) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of Section 10.6
(provided that the Borrower or the assignee Lender shall be obligated to pay the registration and
processing fee referred to therein), (vii) the Borrower shall pay all additional amounts (if any)
required pursuant to Section 2.19 or 2.20, as the case may be, in respect of any period prior to
the date on which such replacement shall be consummated, and (viii) any such replacement shall not
be deemed to be a waiver of any rights that the Borrower, the Administrative Agent or any other
Lender shall have against the replaced Lender.




SECTION 3. LETTERS OF CREDIT




          3.1 L/C Commitment. (a) Subject to the terms and conditions hereof, each Issuing
Lender, in reliance on the agreements of the other Revolving Credit Lenders set forth in Section
3.4(a), agrees to issue letters of credit (“Letters of Credit”) for the account of the
Borrower, or for the joint and several account of the Borrower and any Subsidiary, on any Business
Day during the Revolving Credit Commitment Period in such form as may be approved from time to time
by such Issuing Lender; provided, that no Issuing Lender shall have any obligation to issue
any Letter of Credit if, after giving effect to such issuance, (i) the L/C Obligations would exceed
the L/C Commitment or (ii) the aggregate amount of the Available Revolving Credit Commitments would
be less than zero. Each Letter of Credit shall (i) be denominated in Dollars and (ii) expire no
later than the earlier of (x) the first anniversary of its date of issuance and (y) the date which
is three Business Days prior to the Revolving Credit Termination Date; provided that any
Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause (y) above). Any
Letter of Credit (as defined in the Existing Credit Agreement) that remains outstanding on the
Closing Date shall continue to be a Letter of Credit hereunder.




          (b) No Issuing Lender shall at any time be obligated to issue any Letter of Credit hereunder
if such issuance would conflict with any applicable Requirement of Law.




          3.2 Procedure for Issuance of Letter of Credit. The Borrower may from time to time
request that an Issuing Lender issue a Letter of Credit by delivering to such Issuing Lender at its
address for notices specified herein an Application with a copy to the Administrative Agent
therefor, completed to the reasonable satisfaction of such Issuing Lender, and such other
certificates, documents and other papers and information as such Issuing Lender may reasonably
request. Upon receipt of any Application, an Issuing Lender will process such Application and the
certificates, documents and other papers and







 



38




information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the Letter of Credit requested
thereby by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise
may be agreed to by such Issuing Lender and the Borrower (but in no event shall any Issuing
Lender be required to issue any Letter of Credit earlier than three Business Days after its receipt
of the Application with a copy to the Administrative Agent therefor and all such other
certificates, documents and other papers and information relating thereto). Promptly after
issuance by an Issuing Lender of a Letter of Credit, such Issuing Lender shall furnish a copy of
such Letter of Credit to the Borrower. Each Issuing Lender shall promptly give notice to the
Administrative Agent of the issuance of each Letter of Credit issued by such Issuing Lender
(including the amount thereof).




          3.3 Fees and Other Charges. (a) The Borrower will pay a fee on the aggregate
drawable amount of all outstanding Letters of Credit at a per annum rate equal to the Applicable
Margin then in effect with respect to Eurodollar Loans under the Revolving Credit Facility (less
the percentage per annum at which the Fronting Fee (as defined below) is paid in respect of such
Letter of Credit), shared ratably among the Revolving Credit Lenders in accordance with their
respective Revolving Credit Percentages and payable quarterly in arrears on each L/C Fee Payment
Date after the issuance date. In addition, the Borrower shall pay to the relevant Issuing Lender
for its own account a fronting fee (the “Fronting Fee”) on the aggregate drawable amount of
all outstanding Letters of Credit issued by it of 0.25% per annum, payable quarterly in arrears on
each L/C Fee Payment Date after the issuance date.




          (b) In addition to the foregoing fees, the Borrower shall pay or reimburse each Issuing Lender
for such normal and customary costs and expenses as are incurred or charged by such Issuing Lender
in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of
Credit.




          3.4 L/C Participations. (a) Each Issuing Lender irrevocably agrees to grant and
hereby grants to each L/C Participant, and, to induce each Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts
and purchases from each Issuing Lender, on the terms and conditions hereinafter stated, for such
L/C Participant’s own account and risk, an undivided interest equal to such L/C Participant’s
Revolving Credit Percentage in each Issuing Lender’s obligations and rights under each Letter of
Credit issued by such Issuing Lender hereunder and the amount of each draft paid by such Issuing
Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees with each Issuing
Lender that, if a draft is paid under any Letter of Credit issued by such Issuing Lender for which
such Issuing Lender is not reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to such Issuing Lender upon demand at such Issuing
Lender’s address for notices specified herein an amount equal to such L/C Participant’s Revolving
Credit Percentage of the amount of such draft, or any part thereof, that is not so reimbursed.




          (b) If any amount required to be paid by any L/C Participant to an Issuing Lender pursuant to
Section 3.4(a) in respect of any unreimbursed portion of any payment made by such Issuing Lender
under any Letter of Credit is paid to such Issuing Lender within three Business Days after the date
such payment is due, such L/C Participant shall pay to such Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal Funds Effective Rate
during the period from and including the date such payment is required to the date on which such
payment is immediately available to such Issuing Lender, times (iii) a fraction the numerator of
which is the number of days that elapse during such period and the denominator of which is 360. If
any such amount required to be paid by any L/C Participant pursuant to Section 3.4(a) is not made
available to such Issuing Lender by such L/C Participant within three Business Days after the date
such payment is due, such Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to Base Rate Loans under the Revolving
Credit







 



39




Facility. A certificate of such Issuing Lender submitted to any L/C Participant with
respect to any such amounts owing under this Section shall be conclusive in the absence of manifest
error.




          (c) Whenever, at any time after an Issuing Lender has made payment under any Letter of Credit
and has received from any L/C Participant its pro rata share of such payment in
accordance with Section 3.4(a), such Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the Borrower or otherwise, including proceeds of collateral applied
thereto by such Issuing Lender), or any payment of interest on account thereof, such Issuing Lender
will distribute to such L/C Participant its pro rata share thereof;
provided, however, that in the event that any such payment received by such Issuing
Lender shall be required to be returned by such Issuing Lender, such L/C Participant shall return
to such Issuing Lender the portion thereof previously distributed by such Issuing Lender to it.




          3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to reimburse each
Issuing Lender, on each date on which such Issuing Lender notifies the Borrower of the date and
amount of a draft presented under any Letter of Credit and paid by such Issuing Lender, for the
amount of (a) such draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by such Issuing Lender in connection with such payment (the amounts described in the
foregoing clauses (a) and (b) in respect of any drawing, collectively, the “Payment
Amount”). Each such payment shall be made to such Issuing Lender at its address for notices
specified herein in lawful money of the United States of America and in immediately available
funds. Interest shall be payable on each Payment Amount from the date of the applicable drawing
until payment in full at the rate set forth in (i) until the third Business Day following the date
of the applicable drawing, Section 2.15(b) and (ii) thereafter, Section 2.15(c). Each drawing
under any Letter of Credit shall (unless an event of the type described in clause (i) or (ii) of
Section 8(f) shall have occurred and be continuing with respect to the Borrower, in which case the
procedures specified in Section 3.4 for funding by L/C Participants shall apply, or unless the
Borrower otherwise notifies the Administrative Agent and the relevant Issuing Lender and reimburses
such Issuing Lender before a Loan would otherwise be made pursuant to this sentence) constitute a
request by the Borrower to the Administrative Agent for a borrowing pursuant to Section 2.5 of Base
Rate Loans (or, at the option of the Administrative Agent and the Swing Line Lender in their sole
discretion, a borrowing pursuant to Section 2.7 of Swing Line Loans) in the amount of such drawing.
The Borrowing Date with respect to such borrowing shall be the first date on which a borrowing of
Revolving Credit Loans (or, if applicable, Swing Line Loans) could be made, pursuant to Section 2.5
(or, if applicable, Section 2.7), if the Administrative Agent had received a notice of such
borrowing at the time the Administrative Agent receives notice from the relevant Issuing Lender of
such drawing under such Letter of Credit.




          3.6 Obligations Absolute. The Borrower’s obligations under this Section 3 shall be
absolute and unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment that the Borrower may have or have had against any Issuing
Lender, any beneficiary of a Letter of Credit or any other Person. The Borrower also agrees with
each Issuing Lender that, unless resulting from the gross negligence or willful misconduct of such
Issuing Lender, such Issuing Lender shall not be responsible for, and the Borrower’s Reimbursement
Obligations under Section 3.5 shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even though such documents shall in fact
prove to be invalid, fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be
transferred or any claims whatsoever of the Borrower against any beneficiary of such
Letter of Credit or any such transferee. No Issuing Lender shall be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any message or advice,
however transmitted, in connection with any Letter of Credit, except for errors or omissions found
by a final and nonappealable decision of a court of competent jurisdiction to have resulted from
the gross negligence or willful misconduct of such Issuing Lender. The Borrower agrees that any
action taken or







 



40




omitted by an Issuing Lender under or in connection with any Letter of Credit
issued by it or the related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards or care specified in the Uniform Commercial
Code of the State of New York, shall be binding on the Borrower and shall not result in any
liability of such Issuing Lender to the Borrower.




          3.7 Letter of Credit Payments. If any draft shall be presented for payment under any
Letter of Credit, the relevant Issuing Lender shall promptly notify the Borrower of the date and
amount thereof. The responsibility of the relevant Issuing Lender to the Borrower in connection
with any draft presented for payment under any Letter of Credit, in addition to any payment
obligation expressly provided for in such Letter of Credit issued by such Issuing Lender, shall be
limited to determining that the documents (including each draft) delivered under such Letter of
Credit in connection with such presentment appear on their face to be in conformity with such
Letter of Credit.




          3.8 Applications. To the extent that any provision of any Application related to any
Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this
Section 3 shall apply.




SECTION 4. REPRESENTATIONS AND WARRANTIES




          To induce the Agents and the Lenders to enter into this Agreement and to make the Loans and
issue or participate in the Letters of Credit, the Borrower hereby represents and warrants to each
Agent and each Lender that, as of the Closing Date (after giving effect to the Acquisition, except
as otherwise specified herein) and as of any other date on which the representations and warranties
set forth in this Section 4 are repeated pursuant to Section 5.2:




          4.1 Financial Condition. (a) The unaudited pro forma consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at December 31, 2005 (including
the notes thereto) (the “Pro Forma Balance Sheet”), copies of which have heretofore been
furnished to each Lender, has been prepared giving effect (as if such events had occurred on such
date) to (i) the consummation of the Acquisition, (ii) the Loans to be made on the Closing Date and
the use of proceeds thereof and (iii) the payment of fees and expenses in connection with the
foregoing. The Pro Forma Balance Sheet has been prepared based on information believed by the
Borrower to be reasonable and correct as of the date of delivery thereof, and presents fairly the
Borrower’s good faith estimate on a pro forma basis of the financial position of
Borrower and its consolidated Subsidiaries as at December 31, 2005, assuming that the events
specified in the preceding sentence had actually occurred at such date.




          (b) Without giving effect to the Acquisition, the audited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at December 31, 2005, and the related consolidated
statements of income and of cash flows for the fiscal year ended on such date, reported on by and
accompanied by an unqualified report from Grant Thornton, present fairly in all material respects
the consolidated financial condition of the Borrower as at such date, and the consolidated results
of its
operations and its consolidated cash flows for the fiscal year then ended. All such financial
statements, including the related schedules and notes thereto, have been prepared in accordance
with GAAP applied consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein). During the period from December 31,
2005 to and including the date hereof there has been no Disposition by the Borrower of any material
part of its business or Property, other than as permitted by the Existing Credit Agreement.




          (c) The audited consolidated balance sheet of the Target and its consolidated Subsidiaries as
at December 31, 2005, and the related consolidated statements of income and of cash flows for the
fiscal year ended on such date, reported on by and accompanied by an unqualified report







 



41




from Ernst
& Young, present fairly in all material respects the consolidated financial condition of the Target
as at such date, and the consolidated results of its operations and its consolidated cash flows for
the fiscal year then ended. All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants and disclosed
therein). During the period from December 31, 2005 to and including the date hereof there has been
no Disposition by the Target of any material part of its business or Property, other than in the
ordinary course of business as permitted by the Acquisition Agreement.




          4.2 No Change. Since December 31, 2005 there has been no development or event that
has had or could reasonably be expected to have a Material Adverse Effect.




          4.3 Corporate Existence; Compliance with Law. Each of Holdings, the Borrower and its
Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the corporate power and authority, and the legal right,
to own and operate its Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership, lease or operation of
Property or the conduct of its business requires such qualification and (d) is in compliance with
all Requirements of Law, except, in the case of the foregoing clauses (c) and (d), to the extent
that the failure to be so qualified or to comply with such Requirements of Law, as the case may be,
could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.




          4.4 Power; Authorization; Enforceable Obligations. Each Loan Party has the corporate
or other power and authority, and the legal right, to make, deliver and perform the Loan Documents
to which it is a party and, in the case of the Borrower, to borrow hereunder. Each Loan Party has
taken all necessary corporate or other organizational action to authorize the execution, delivery
and performance of the Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the borrowings on the terms and conditions of this Agreement. Except as could not
reasonably be expected to have a Material Adverse Effect, no consent or authorization of, filing
with, notice to or other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the Acquisition, the borrowings hereunder or the execution, delivery,
performance, validity or enforceability of this Agreement or any of the other Loan Documents,
except (i) consents, authorizations, filings and notices described in Schedule 4.4, which consents,
authorizations, filings and notices have been obtained or made and are in full force and effect and
(ii) the filings referred to in Section 4.19. Each Loan Document has been duly executed and
delivered on behalf of each Loan Party that is a party thereto. This Agreement constitutes, and
each other Loan Document
upon execution will constitute, a legal, valid and binding obligation of each Loan Party that
is a party thereto, enforceable against each such Loan Party in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors’ rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).




          4.5 No Legal Bar. The execution, delivery and performance of this Agreement and the
other Loan Documents, the issuance of Letters of Credit, the borrowings hereunder and the use of
the proceeds thereof (a) will not violate the Organizational Documents of any of the Loan Parties
or (b) except as could not reasonably be expected to have a Material Adverse Effect, violate any
Requirement of Law applicable to, or any Contractual Obligation of, Holdings, the Borrower or any
of its Subsidiaries, or result in, or require, the creation or imposition of any Lien on any of
their respective properties or revenues pursuant to any Requirement of Law or any such Contractual
Obligation (other than the Liens created by the Security Documents).










 



42




          4.6 No Material Litigation. Except as set forth on Schedule 4.6, no litigation,
investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to
the knowledge of the Borrower, threatened by or against Holdings, the Borrower or any of its
Subsidiaries or against any of their respective properties or revenues (a) with respect to any of
the Loan Documents or any of the transactions contemplated hereby or thereby, or (b) that could
reasonably be expected to have a Material Adverse Effect.




          4.7 No Default. No Default or Event of Default has occurred and is continuing.




          4.8 Ownership of Property; Liens. Each of the Borrower and each of its Subsidiaries
has title in fee simple to, or a valid leasehold interest in, all its real property, and good title
to, or a valid leasehold interest in, all its other Property, in each case, except where the
failure to do so would not have a Material Adverse Effect, and none of such Property is subject to
any Lien except as permitted by Section 7.3.




          4.9 Intellectual Property. Except as all of the following in the aggregate could not
reasonably be expected to have a Material Adverse Effect: (a) the Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary for the conduct of
its business as currently conducted; (b) no material claim has been asserted and is pending by any
Person challenging or questioning the use of any material Intellectual Property of the Borrower or
its Subsidiaries or the validity or effectiveness of any such material Intellectual Property; and
(c) the use of Intellectual Property by the Borrower and its Subsidiaries does not infringe on the
rights of any Person.




          4.10 Taxes. Each of the Borrower and each of its Subsidiaries has filed or caused to
be filed all material tax returns that are required to be filed and has paid all taxes shown to be
due and payable on
said returns and all other material taxes, fees or other charges imposed on it or any of its
Property by any Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with respect to which any
reserves required in conformity with GAAP have been provided on the books of the Borrower or its
Subsidiaries, as the case may be). To the knowledge of the Borrower, no claim is being asserted
with respect to any such tax, fee or other charge described in the proceeding sentence, except as
could not reasonably be expected to have a Material Adverse Effect.




          4.11 Federal Regulations. No part of the proceeds of any Loans will be used for
“purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted
terms under Regulation U as now and from time to time hereafter in effect or for any purpose that
violates the provisions of the Regulations of the Board. If requested by any Lender (through the
Administrative Agent) or the Administrative Agent, the Borrower will furnish to the Administrative
Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR
Form G-3 or FR Form U-1 referred to in Regulation U.




          4.12 Labor Matters. There are no strikes or other labor disputes against the Borrower
or any of its Subsidiaries pending or, to the knowledge of the Borrower, threatened that
(individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect.
Hours worked by and payment made to employees of the Borrower and its Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Requirement of Law dealing with
such matters that (individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect. All payments due from the Borrower or any of its Subsidiaries on account
of employee health and welfare insurance that (individually or in the aggregate) could reasonably
be expected to have a Material Adverse Effect if not paid have been paid or accrued as a liability
on the books of the Borrower or the relevant Subsidiary.












 



43




          4.13 ERISA. Other than exceptions to any of the following that could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect: (a)
neither a Reportable Event nor an “accumulated funding deficiency” (within the meaning of Section
412 of the Code or Section 302 of ERISA) has occurred during the five-year period prior to the date
on which this representation is made or deemed made with respect to any Plan, and each Plan has
complied in all respects with the applicable provisions of ERISA and the Code; (b) no termination
of a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen,
during such five-year period; (c) the present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed made, exceed the
value of the assets of such Plan allocable to such accrued benefits; (d) neither the Borrower nor
any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan
that has resulted or could reasonably be expected to result in a liability under ERISA; and (e) no
such Multiemployer Plan is in Reorganization or Insolvent.




          4.14 Investment Company Act; Other Regulations. No Loan Party is an “investment
company”, or a company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940, as amended. No
Loan Party is subject to regulation under any Requirement of Law which limits its ability to
incur the Indebtedness to be incurred by it hereunder and under the other Loan Documents.




          4.15 Subsidiaries. (a) The Subsidiaries listed on Schedule 4.15 constitute all the
Subsidiaries of Holdings and the Borrower as of the Closing Date. Schedule 4.15 sets forth as of
the Closing Date the name and jurisdiction of incorporation of each Subsidiary and, as to each
Subsidiary, the percentage of each class of Capital Stock owned by each Loan Party.




          (b) As of the Closing Date, there are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to employees or
directors and directors’ qualifying shares) of any nature relating to any Capital Stock of
Holdings, the Borrower or any Subsidiary, except as disclosed on Schedule 4.15.




          4.16 Use of Proceeds. The proceeds of the Revolving Credit Loans and the Swing Line
Loans, and the Letters of Credit, shall be used for general corporate purposes. The proceeds of
the Tranche D Term Loans shall be used to finance the Acquisition (and related expenses), refinance
certain Indebtedness of the Target and its Subsidiaries and to prepay the Tranche C Term Loans
outstanding on the Closing Date that are not converted to Tranche D Term Loans.




          4.17 Environmental Matters. Other than exceptions to any of the following that could
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect:




          (a) The Borrower and its Subsidiaries: (i) are, and within the period of all applicable
statutes of limitation have been, in compliance with all applicable Environmental Laws; (ii) hold
all Environmental Permits (each of which is in full force and effect) required for any of their
current operations or for any property owned, leased, or otherwise operated by any of them; and
(iii) are, and within the period of all applicable statutes of limitation have been, in compliance
with all of their Environmental Permits.




          (b) Materials of Environmental Concern are not present at, on, under, in, or about any real
property now or formerly owned, leased or operated by the Borrower or any of its Subsidiaries, or
at any other location (including, without limitation, any location to which Materials of
Environmental Concern have been sent for re-use or recycling or for treatment, storage, or
disposal) which could reasonably be expected to (i) give rise to liability of the Borrower or any
of its Subsidiaries under any









 



44




applicable Environmental Law or otherwise result in costs to the
Borrower or any of its Subsidiaries, or (ii) interfere with the Borrower’s or any of its
Subsidiaries’ continued operations, or (iii) impair the fair saleable value of any real property
owned or leased by the Borrower or any of its Subsidiaries.




          (c) There is no judicial, administrative, or arbitral proceeding (including any notice of
violation or alleged violation) under or relating to any Environmental Law to which the Borrower or
any of its Subsidiaries is, or to the knowledge of the Borrower or any of its Subsidiaries will be,
named as a party that is pending or, to the knowledge of the Borrower or any of its Subsidiaries,
threatened.




          (d) Neither the Borrower nor any of its Subsidiaries has received any written request for
information, or been notified that it is a potentially responsible party under or relating to the
federal
Comprehensive Environmental Response, Compensation, and Liability Act or any similar
Environmental Law, or with respect to any Materials of Environmental Concern.




          (e) Neither the Borrower nor any of its Subsidiaries has entered into or agreed to any consent
decree, order, or settlement or other agreement, or is subject to any judgment, decree, or order or
other agreement, in any judicial, administrative, arbitral, or other forum for dispute resolution,
relating to compliance with or liability under any Environmental Law.




          (f) Neither the Borrower nor any of its Subsidiaries has assumed or retained, by contract or
operation of law, any liabilities of any kind, fixed or contingent, known or unknown, under any
Environmental Law or with respect to any Materials of Environmental Concern.




          4.18 Accuracy of Information, etc. No statement or information contained in this
Agreement, any other Loan Document or any certificate furnished to the Administrative Agent or the
Lenders or any of them, by or on behalf of any Loan Party for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents, when taken as a whole,
contained as of the date such information or certificate was so furnished, any untrue statement of
a material fact or omitted to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances under which such
statements were made; provided, however that the Borrower makes no representation and
warranty in respect of any third-party reports. The projections and pro forma
financial information contained in the materials referenced above are based upon good faith
estimates and assumptions believed by management of the Borrower to be reasonable at the time made,
it being recognized by the Lenders that such financial information as it relates to future events
is not to be viewed as fact and that actual results during the period or periods covered by such
financial information may differ from the projected results set forth therein by a material amount.




          4.19 Security Documents. (a) The Guarantee and Collateral Agreement is effective to
create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral described therein and proceeds thereof. In the
case of the Pledged Stock described in the Guarantee and Collateral Agreement, when any stock
certificates representing such Pledged Stock are delivered to the Administrative Agent, and in the
case of the other Collateral described in the Guarantee and Collateral Agreement, when financing
statements in appropriate form are filed in the offices specified on Schedule 4.19(a)-1 (which
financing statements have been duly completed and delivered to the Administrative Agent), or, with
respect to after-acquired property, when the requirements set forth in Section 6.10 have been
complied with, the Administrative Agent shall have a fully perfected Lien on, and security interest
in, all right, title and interest of the Loan Parties in such Collateral and the proceeds thereof,
as security for the Obligations (as defined in the Guarantee and Collateral Agreement), in each
case prior and superior in right to any other Person (except, in the case of Collateral other than
Pledged Stock, Liens permitted by Section 7.3), in each case to the extent required by the
Guarantee and Collateral Agreement. As of the date hereof, Schedule 4.19(a)-2 lists each UCC







 



45




Financing Statement that (i) names any Loan Party as debtor and (ii) will remain on file after the
Closing Date. As of the date hereof, Schedule 4.19(a)-3 lists each UCC Financing Statement that
(i) names any Loan Party as debtor and (ii) will be terminated on or prior to the Closing Date; and
on or prior to the Closing Date, the Borrower will have delivered to the Administrative Agent (or
will have made appropriate arrangements for the delivery thereof to the Administrative Agent), or
caused to be filed, duly completed UCC termination statements, together with the authorization of
the relevant secured party to file such termination statements, in respect of each UCC Financing
Statement listed in Schedule 4.19(a)-3.




          (b) Each of the Mortgages is effective to create in favor of the Administrative Agent, for the
benefit of the Secured Parties, a legal, valid and enforceable Lien on the Mortgaged Properties
described therein and proceeds thereof; and the Administrative Agent has (or, when the Mortgages
are filed in the offices designated by the Borrower (in the case of any Mortgage to be executed and
delivered pursuant to Section 6.10(b)), the Administrative Agent will have) a fully perfected Lien
on, and security interest in, all right, title and interest of the Loan Parties in the Mortgaged
Properties described therein and the proceeds thereof, as security for the Obligations (as defined
in the relevant Mortgage), in each case prior and superior in right to any other Person (other than
Persons holding Liens or other encumbrances or rights permitted by Section 7.3). As of the Closing
Date, the Mortgaged Properties constitute all fee interests in real property held by any Loan Party
having a value (together with improvements thereof) of at least $5,000,000, other than the property
in Meridian, MS.




          4.20 Solvency. Each Loan Party is, and after giving effect to the Acquisition and the
incurrence of all Indebtedness and obligations being incurred in connection herewith and therewith
will be and will continue to be, Solvent.




          4.21 Senior Indebtedness. The Obligations constitute “Senior Indebtedness” of the
Borrower under and as defined in the Senior Subordinated Note Indenture. The obligations of each
Subsidiary Guarantor under the Guarantee and Collateral Agreement constitute “Guarantor Senior
Indebtedness” of such Subsidiary Guarantor under and as defined in the Senior Subordinated Note
Indenture.




          4.22 Regulation H. No Mortgage encumbers improved real property which is located in
an area that has been identified by the Secretary of Housing and Urban Development as an area
having special flood hazards and in which flood insurance has been made available under the
National Flood Insurance Act of 1968 (except any Mortgaged Properties as to which such flood
insurance as required by Regulation H has been obtained and is in full force and effect as required
by this Agreement).




SECTION 5. CONDITIONS PRECEDENT




          5.1 Conditions to Initial Extension of Credit. The agreement of each Lender to make
the initial extension of credit requested to be made by it hereunder is subject to the
satisfaction, prior to or concurrently with the making of such extension of credit on the Closing
Date, of the following conditions precedent:




          (a) Loan Documents. The Administrative Agent shall have received (i) this Agreement,
executed and delivered by a duly authorized officer of the Borrower, (ii) joinders to the Guarantee
and Collateral Agreement, executed and delivered by a duly authorized officer of the Target and
each of Target’s Subsidiaries that is to become a Subsidiary Guarantor, (iii) a reaffirmation of
the Guarantee and Collateral Agreement in form and substance reasonably satisfactory to the
Administrative Agent, executed and delivered by a duly authorized officer of each existing
Subsidiary Guarantor; (iv) a Lender Addendum executed and delivered by each Tranche D Term Lender
and accepted by the Borrower







 



46




and (v) satisfactory evidence that this Agreement shall have been
consented to by the Required Lenders under, and as defined in, the Existing Credit Agreement.




          (b) Acquisition, etc. The following transactions shall have been consummated:





     (i) The Acquisition shall have been consummated in accordance with the terms of the
Acquisition Agreement, and the Administrative Agent shall have received satisfactory
evidence thereof; and




     (ii) (i) The Administrative Agent shall have received satisfactory evidence that all
material Indebtedness of the Target and its Subsidiaries, other than Indebtedness of the
Target’s Chinese operations, shall have been terminated and all amounts thereunder shall
have been paid in full and (ii) satisfactory arrangements shall have been made for the
termination of all Liens granted in connection therewith.



          (c) Pro Forma Balance Sheet; Financial Statements. The Lenders shall have received
(i) the Pro Forma Balance Sheet, (ii) audited consolidated financial statements of the Target for
the 2005 and 2004 fiscal years and (iii) unaudited interim consolidated financial statements of the
Target for each quarterly period ended subsequent to the date of the latest applicable financial
statements delivered pursuant to clause (ii) of this paragraph and not less than 45 days prior to
the Closing Date.




          (d) Approvals. All material governmental approvals necessary in connection with the
Acquisition and the transactions contemplated hereby shall have been obtained and be in full force
and effect, and all applicable waiting periods shall have expired without any action being taken or
threatened by any competent authority which would restrain, prevent or otherwise impose material
adverse conditions on the Acquisition or the financing contemplated hereby.




          (e) Related Agreements. The Administrative Agent shall have received true and correct
copies, certified as to authenticity by the Borrower, of the Acquisition Agreement and no material
provision thereof shall have been waived, amended, supplemented or otherwise modified in a manner
that is material and adverse to the Lenders.




          (f) Fees. The Administrative Agent, the Syndication Agent and the Joint Lead
Arrangers shall have received all fees required to be paid, and all reasonable out-of-pocket
expenses for which invoices have been presented (including reasonable fees, disbursements and other
charges of counsel to the Agents), on or before the Closing Date.




          (g) Lien Searches. The Administrative Agent shall have received the results of a
recent lien search in each of the jurisdictions in which Uniform Commercial Code financing
statement or other filings or recordations should be made to evidence or perfect security interests
in all assets of the Target and its Subsidiaries, and such search shall reveal no liens on any of
the assets of such Person, except for Liens permitted by Section 7.3 and Liens to be discharged on
or prior to the Closing Date.




          (h) Closing Certificate. The Administrative Agent shall have received a certificate
of each Loan Party, dated the Closing Date, substantially in the form of Exhibit C, with
appropriate insertions and attachments.




          (i) Legal Opinions. The Administrative Agent shall have received the following
executed legal opinions:











 



47





     (i) the legal opinion of Latham & Watkins LLP, counsel to the Borrower and its
Subsidiaries, substantially in the form of Exhibit F;




     (ii) to the extent consented to by the relevant counsel, each legal opinion, if any,
delivered in connection with the Acquisition Agreement, accompanied by a reliance letter in
favor of the Lenders; and




     (iii) such legal opinions of local counsel as may be reasonably requested by the
Administrative Agent, in each case covering such matters as the Administrative Agent shall
reasonably request.



          (j) Pledged Stock; Stock Powers; Acknowledgment and Consent; Pledged Notes. The
Administrative Agent shall have received (i) the certificates, if any, representing the shares of
Capital Stock of Target and its Subsidiaries pledged pursuant to the Guarantee and Collateral
Agreement, together with an undated stock power for each such certificate executed in blank by a
duly authorized officer of the pledgor thereof and (ii) each promissory note of Target and its
Subsidiaries pledged pursuant to the Guarantee and Collateral Agreement endorsed (without
recourse) in blank (or accompanied by an executed transfer form in blank satisfactory to the
Administrative Agent) by the pledgor thereof.




          (k) Filings, Registrations and Recordings. Each document (including, without
limitation, any Uniform Commercial Code financing statement) required by the Security Documents or
reasonably requested by the Administrative Agent to be filed, registered or recorded in order to
create in favor of the Administrative Agent, for the benefit of the Secured Parties, a perfected
Lien on the Collateral described therein, prior and superior in right to any other Person (other
than with respect to Liens expressly permitted by Section 7.3), shall have been filed, registered
or recorded or shall have been delivered to the Administrative Agent be in proper form for filing,
registration or recordation.




          (l) Credit Ratings. The Tranche D Term Loan Facility shall have received
ratings from Standard and Poor’s Ratings Service and Moody’s Investors Service.




          5.2 Conditions to Each Extension of Credit. The agreement of each Lender to make any
extension of credit requested to be made by it hereunder on any date (including, without
limitation, its initial extension of credit) is subject to the satisfaction of the following
conditions precedent:




          (a) Representations and Warranties. Each of the representations and warranties made
by any Loan Party in or pursuant to the Loan Documents that is qualified by materiality shall be
true and correct on and as of such date as if made on and as of such date, and each of the
representations and warranties made by any Loan Party in or pursuant to the Loan Documents that is
not qualified by materiality shall be true and correct in all material respects on and as of such
date as if made on and as of such date, except, in each case, to the extent that such
representations and warranties expressly relate to an earlier date, in which case such
representations and warranties shall be true and correct, or true and correct in all material
respects, as the case may be, as of such earlier date.




          (b) No Default. No Default or Event of Default shall have occurred and be continuing
on such date or after giving effect to the extensions of credit requested to be made on such date.




          Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower hereunder shall
constitute a representation and warranty by the Borrower as of the date of such extension of credit
that the conditions contained in this Section 5.2 have been satisfied.





 









 





48



SECTION 6. AFFIRMATIVE COVENANTS




          The Borrower hereby agrees that, so long as the Commitments remain in effect, any Letter of
Credit remains outstanding that has not been cash-collateralized or backstopped on terms and
conditions acceptable to the Administrative Agent and the Issuing Lender in their sole discretion
or any Loan or other amount is owing to any Lender or any Agent hereunder, the Borrower shall and
shall cause each of its Subsidiaries to:




          6.1 Financial Statements. Furnish to the Administrative Agent (which shall make
available such items to the Lenders):




          (a) as soon as available, but in any event within 90 days (or, if the Borrower is not at such
time required to file with the SEC an Annual Report on Form 10-K with respect to such fiscal year,
120 days) after the end of each fiscal year of the Borrower, a copy of the audited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such year and the
related audited consolidated statements of income and of cash flows for such year, setting forth in
each case, in comparative form the figures as of the end of and for the previous year, reported on
without a “going concern” or like qualification or exception, or qualification arising out of the
scope of the audit, by Grant Thornton or other independent certified public accountants of
nationally recognized standing;




          (b) as soon as available, but in any event not later than 45 days after the end of each of the
first three quarterly periods of each fiscal year of the Borrower, the unaudited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such quarter and
the related unaudited consolidated statements of income and of cash flows for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in each case, in
comparative form the figures as of the end of and for the corresponding period in the previous
year, certified by a Responsible Officer as being fairly stated in all material respects (subject
to normal year-end audit adjustments and the absence of footnote disclosure); and




          (c) all such financial statements to be complete and correct in all material respects and to
be prepared in reasonable detail and in accordance with GAAP (subject, in the case of quarterly
financial statements, to normal year-end audit adjustments and the absence of footnote disclosure)
applied consistently throughout the periods reflected therein and with prior periods (except as
approved by such accountants or officer, as the case may be, and disclosed therein).
Notwithstanding the foregoing, (i) in the event that the Borrower delivers to the Administrative
Agent an Annual Report for Borrower on Form 10-K for such fiscal year, as filed with the SEC,
within 90 days after the end of such fiscal year, such Form 10-K shall satisfy all requirements of
paragraph (a) of this Section and (ii) in the event that the Borrower delivers to the
Administrative Agent a Quarterly Report for Borrower on Form 10-Q for such fiscal quarter, as filed
with the SEC, within 45 days after the end of such fiscal quarter, such Form 10-Q shall satisfy all
requirements of paragraph (b) of this Section.




          6.2 Certificates; Other Information. Furnish to the Administrative Agent (which shall
make available such items to the Lenders):




          (a) concurrently with the delivery of the financial statements referred to in Section 6.1(a),
a certificate of the independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor no knowledge was obtained of
any Default or
Event of Default, except as specified in such certificate (it being understood that such
certificate shall be limited to the items that independent certified public accountants are
permitted to cover in such certificates pursuant to their professional standards and customs of the
profession);




 









 






49


          (b) concurrently with the delivery of any financial statements pursuant to Section 6.1, (i) a
certificate of a Responsible Officer stating that such Responsible Officer is not aware of any
Default or Event of Default except as specified in such certificate, (ii) beginning with the date
of delivery of financial statements for the fiscal quarter ended September 30, 2006, a Compliance
Certificate containing all information and calculations necessary for determining compliance by the
Borrower and its Subsidiaries with the provisions of this Agreement referred to therein as of the
last day of the fiscal quarter or fiscal year of the Borrower, as the case may be, (iii) to the
extent not previously disclosed to the Administrative Agent, a listing of any material patents,
trademarks or copyrights (to the extent recorded in the Patent and Trademark Office or Copyright
Office) acquired by any Loan Party since the date of the most recent list delivered pursuant to
this clause (iii) or pursuant to the Existing Credit Agreement (or, in the case of the first such
list so delivered, since the Closing Date) and (iv) if during the period covered by such financial
statements the Borrower made any purchases of Senior Subordinated Notes pursuant to the proviso to
clause (a) of Section 7.9, a certificate of a Responsible Officer demonstrating that the conditions
to such purchase set forth in such proviso were complied with;




          (c) as soon as available, and in any event no later than 45 days after the end of each fiscal
year of the Borrower, a detailed consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its Subsidiaries as of the end of the
following fiscal year, and the related consolidated statements of projected cash flow, projected
changes in financial position and projected income);




          (d) no later than five Business Days prior to the effectiveness thereof, copies of
substantially final drafts of any proposed amendment, supplement, waiver or other modification
adverse to the Lenders with respect to the Senior Subordinated Note Indenture or the Acquisition
Agreement;




          (e) promptly after the same are sent, copies of all financial statements and reports that the
Borrower sends to the holders of any class of its debt securities or public equity securities and,
promptly after the same are filed, copies of all financial statements and reports that the Borrower
may make to, or file with, the SEC; and




          (f) promptly, such additional financial and other information as any Lender, through the
Administrative Agent, may from time to time reasonably request.




          6.3 Payment of Taxes, etc. Pay, discharge or otherwise satisfy at or before maturity
or before they become delinquent, as the case may be, all material taxes, fees or other charges
imposed on it or any of its Property by any Governmental Authority, except where the amount or
validity thereof is currently being contested in good faith by appropriate proceedings and any
required reserves in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or its Subsidiaries, as the case may be.




          6.4 Conduct of Business and Maintenance of Existence, etc. (a) (i) Preserve, renew
and keep in full force and effect its corporate or other organizational existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary or desirable in the
normal conduct of its business, except, in each case, as otherwise permitted
by Section 7.4 and except, in the case of clause (ii) above, to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect; and (b) comply with all
Requirements of Law, except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.




          6.5 Maintenance of Property; Insurance. (a) (i) Keep all Property and systems useful
and necessary in its business in reasonably good working order and condition, ordinary wear and
tear excepted and (ii) maintain with financially sound and reputable insurance companies insurance
on all its




 









 





50



Property in at least such amounts and against at least such risks as are usually insured
against in the same general area by companies engaged in the same or a similar business.




          (b) Maintain, with financially sound and reputable companies, insurance policies (i) insuring
the Mortgaged Properties and the Inventory and Equipment constituting Collateral against loss by
fire, explosion, theft and such other casualties as may be reasonably satisfactory to the
Administrative Agent and (ii) to the extent requested by the Administrative Agent, insuring the
applicable Loan Party and the Administrative Agent for the benefit of the Secured Parties against
liability for personal injury and property damage relating to such Inventory and Equipment, such
policies to be in such form and amounts and having such coverage as may be reasonably satisfactory
to the Administrative Agent. All such insurance shall (i) provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective until at least 30
days after receipt by the Administrative Agent of written notice thereof, (ii) name the
Administrative Agent as insured party or loss payee and (iii) be reasonably satisfactory in all
other respects to the Administrative Agent.




          (c) Deliver to the Administrative Agent a report of a reputable insurance broker with respect
to insurance maintained by the Loan Parties on the Collateral substantially concurrently with the
delivery by the Borrower to the Administrative Agent of its audited financial statements for each
fiscal year, and such supplemental reports with respect thereto as the Administrative Agent may
from time to time reasonably request.




          6.6 Inspection of Property; Books and Records; Discussions. (a) Keep proper books of
records and account in which full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all material dealings and transactions in relation to its
business and activities and (b) permit representatives of any Lender, upon reasonable notice, to
visit and inspect any of its properties and examine and make abstracts from any of its books and
records at any reasonable time during normal business hours and as often as may reasonably be
desired and to discuss the business, operations, properties and financial and other condition of
the Borrower and its Subsidiaries with officers and employees of the Borrower and its Subsidiaries
and with its independent certified public accountants; provided, the Lenders shall
coordinate such visits through the Administrative Agent such that, in the absence of any Event of
Default that has occurred and is continuing, not more than one such visit shall occur in any
calendar year.




          6.7 Notices. Promptly after any Responsible Officer obtains knowledge thereof, give
notice to the Administrative Agent and each Lender of:




          (a) the occurrence of any Default or Event of Default;




          (b) any litigation, investigation or proceeding which may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority, that in either case, if not
cured or if adversely determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;




          (c) any litigation or proceeding affecting the Borrower or any of its Subsidiaries in which
the amount involved is $1,000,000 or more and not covered by insurance or in which injunctive or
similar relief is sought;




          (d) the following events, as soon as possible and in any event within 30 days after the
Borrower knows or has reason to know thereof: (i) the occurrence of any Reportable Event with
respect to any Plan, a failure to make any required material contribution to a Plan, the creation
of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency





 









 






51


of, any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan;




          (e) the acquisition by the Borrower or any of its Subsidiaries of any fee interest in real
property having a value (together with improvements thereof) of at least $5,000,000 (other than any
such real property owned by an Excluded Subsidiary or subject to a Lien expressly permitted by
Section 7.3(g)); and




          (f) any development or event that has had or could reasonably be expected to have a Material
Adverse Effect.



Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer
setting forth details of the occurrence referred to therein and stating what action the Borrower or
the relevant Subsidiary proposes to take with respect thereto.




          6.8 Environmental Laws. (a) Except as would not have a Material Adverse Effect,
comply in all material respects with all applicable Environmental Laws, and obtain and comply in
all material respects with and maintain any and all material licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws.




          (b) Except as would not have a Material Adverse Effect, conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal and other actions lawfully
required under applicable Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding Environmental Laws provided
that the foregoing shall not prohibit Borrower from challenging in good faith any such order,
regulation or statute requiring investigation, remediation or other actions (provided such
challenge would not reasonably be expected to result in a Material Adverse Effect).




          6.9 Interest Rate Protection. In the case of the Borrower, within 120 days after the
Closing Date, enter into Hedge Agreements to the extent necessary to provide that at least 35% of
the aggregate principal amount of the Senior Subordinated Notes and the Tranche D Term Loans is
subject to either a fixed interest rate or interest rate protection for a period of not less than
two years on a weighted average basis, which Hedge Agreements shall have terms and conditions
reasonably satisfactory to the Administrative Agent.




          6.10 Additional Collateral, etc. (a) With respect to any Property acquired after the
Closing Date by the Borrower or any of its Subsidiaries (other than (x) any Property described in
paragraph (b) or paragraph (c) of this Section or any other interest in real property, (y) any
Property subject to a Lien expressly permitted by Section 7.3(g) and (z) Property acquired by an
Excluded Subsidiary) as to which the Administrative Agent, for the benefit of the Secured Parties,
does not have a perfected Lien, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement or such other documents as the Administrative
Agent deems necessary to grant to the Administrative Agent, for the benefit of the Secured Parties,
a security interest in such Property, to the extent required by the Guarantee and Collateral
Agreement, and (ii) take all actions necessary to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest in such Property, to
the extent required by the Guarantee and Collateral Agreement, including without limitation, the
filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by
the Guarantee and Collateral Agreement or as may be requested by the Administrative Agent.





 









 







 52


          (b) With respect to any fee interest in any real property (including a fee interest in
improvements which are subject to a ground lease) having a value (together with improvements
thereof) of at least $5,000,000 acquired after the Closing Date by the Borrower or any of its
Subsidiaries (other than any such real property owned by an Excluded Subsidiary or subject to a
Lien expressly permitted by Section 7.3(g)), promptly (i) execute and deliver a first priority
Mortgage in favor of the Administrative Agent, for the benefit of the Secured Parties, covering
such real property, (ii) if requested by the Administrative Agent, provide the Lenders with (or in
the case of clause (y) use all commercially reasonable efforts to provide the Lenders with) (x)
title and extended coverage insurance covering such real property in an amount at least equal to
the purchase price of such real property (or such other amount as shall be reasonably specified by
the Administrative Agent) as well as a current ALTA survey thereof, together with a surveyor’s
certificate and (y) any consents or estoppels reasonably deemed necessary by the Administrative
Agent in connection with such Mortgage, each of the foregoing in form and substance reasonably
satisfactory to the Administrative Agent and (iii) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters described above, which
opinions shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent; provided, that the Borrower shall not be required to comply with the
foregoing provisions of this paragraph (b) in respect of any parcel of real property as to which
the Administrative Agent shall have determined that the cost of the foregoing actions is
disproportionate (taking into account any potential environmental issues with respect to such
parcel) to the value of such parcel as Collateral.




          (c) With respect to any new Subsidiary (other than an Excluded Subsidiary) created or acquired
after the Closing Date (which, for the purposes of this paragraph, shall include any existing
Subsidiary that ceases to be an Excluded Subsidiary), by the Borrower or any of its Subsidiaries,
promptly (i) execute and deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement as the Administrative Agent reasonably deems necessary to grant to the
Administrative Agent, for the benefit of the Secured Parties, a perfected first priority security
interest in the Capital Stock of such new Subsidiary that is owned by the Borrower or any of its
Subsidiaries, (ii) deliver to the Administrative Agent the certificates, if any, representing such
Capital Stock, together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Borrower or such Subsidiary, as the case may be, (iii) cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral Agreement and (B) to take such
actions reasonably deemed necessary by the Administrative Agent to grant to the Administrative
Agent for the benefit of the Secured Parties a perfected first priority security interest in the
Collateral described in the Guarantee and Collateral Agreement with respect to such new Subsidiary,
including, without limitation, the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or as may be requested
by the Administrative Agent, and (iv) if reasonably requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters described above, which
opinions shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.




          (d) With respect to any new Excluded Subsidiary created or acquired after the Closing Date by
the Borrower or any of its Subsidiaries (other than any Excluded Subsidiaries), promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee and Collateral
Agreement or such other documents as the Administrative Agent deems necessary in order to grant to
the Administrative Agent, for the benefit of the Secured Parties, a perfected first priority
security interest in the Capital Stock of such new Subsidiary that is owned by the Borrower or any
of its Subsidiaries (other than any Excluded Subsidiaries), (provided that in no event shall more
than 65% of the total outstanding Capital Stock of any such new Excluded Subsidiary be required to
be so pledged), (ii) deliver to the Administrative Agent the certificates, if any, representing
such Capital Stock, together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Borrower or such Subsidiary, as the case may be, and take such other
action as may be necessary or, in the opinion of the Administrative Agent, desirable to perfect the
Lien of the Administrative Agent thereon, and (iii) if





 









 





53



reasonably requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.




          6.11 Further Assurances. From time to time execute and deliver, or cause to be
executed and delivered, such additional instruments, certificates or documents, and take such
actions, as the Administrative Agent may reasonably request for the purposes of implementing or
effectuating the provisions of this Agreement and the other Loan Documents, or of more fully
perfecting or renewing the rights of the Administrative Agent and the Lenders with respect to the
Collateral (or with respect to any additions thereto or replacements or proceeds thereof or with
respect to any other property or assets hereafter acquired by the Borrower or any Subsidiary which
may be deemed to be part of the Collateral) pursuant hereto or thereto. Upon the exercise by the
Administrative Agent of any power, right, privilege or remedy pursuant to this Agreement or the
other Loan Documents which requires any consent, approval, recording, qualification or
authorization of any Governmental Authority, the Borrower will execute and deliver, or will cause
the execution and delivery of, all applications, certifications, instruments and other documents
and papers that the Administrative Agent may be required to obtain from the Borrower or any of its
Subsidiaries for such governmental consent, approval, recording, qualification or authorization.




          6.12 Collateral Covenants. Take the following actions with respect to the Borrower’s
Collateral, and cause each other Loan Party to take the following actions with respect to the
Collateral of such Loan Party:




          (a) If any amount in excess of $1,000,000 payable under or in connection with any of the
Collateral shall be or become evidenced by any Instrument, Certificated Security or Chattel Paper
(as defined in the Uniform Commercial Code in the State of New York), forthwith deliver such
Instrument, Certificated Security or Chattel Paper to the Administrative Agent, duly indorsed in a
manner satisfactory to the Administrative Agent, to be held as Collateral pursuant to the Guarantee
and Collateral Agreement.




          (b) Maintain the security interest created by the Guarantee and Collateral Agreement as a
perfected security interest having at least the priority described in Section 4.19 of this
Agreement and
defend such security interest against the claims and demands of all Persons whomsoever (other
than holders of Permitted Liens).




          (c) At any time and from time to time, upon the written request of the Administrative Agent,
and at the sole expense of the Borrower, promptly and duly execute and deliver, and have recorded,
such further instruments and documents and take such further actions as the Administrative Agent
may reasonably request for the purpose of obtaining or preserving the full benefits of the
Guarantee and Collateral Agreement and of the rights and powers therein granted, including, without
limitation, (i) the filing of any financing or continuation statements under the Uniform Commercial
Code (or other similar laws) in effect in any jurisdiction with respect to the security interests
created by the Guarantee and Collateral Agreement and (ii) in the case of Investment Property (as
defined in the Uniform Commercial Code in the State of New York) with a fair market value in excess
of $1,000,000, taking any actions necessary to enable the Administrative Agent to obtain “control”
(within the meaning of the applicable Uniform Commercial Code) with respect thereto, limited, in
the case of Investment Property that is the Capital Stock of a Foreign Subsidiary, to 65% of such
Investment Property.




          (d) If any Loan Party becomes entitled to receive or receives any certificate (including,
without limitation, any certificate representing a dividend or a distribution in connection with
any reclassification, increase or reduction of capital or any certificate issued in connection with
any




 









 





54


reorganization) in respect of the Capital Stock of any Issuer (as defined in the Guarantee and
Collateral Agreement), whether in addition to, in substitution of, as a conversion of, or in
exchange for, any shares of the Pledged Stock, or otherwise in respect thereof, deliver the same
forthwith to the Administrative Agent in the exact form received, duly indorsed by such Loan Party
to the Administrative Agent, if required, together with an undated stock power covering such
certificate duly executed in blank by such Loan Party, to be held by the Administrative Agent,
subject to the terms of the Guarantee and Collateral Agreement, as additional collateral security
for the Obligations. If any sums are paid upon or in respect of the Investment Property upon the
liquidation or dissolution of any Issuer, other than pursuant to a transaction permitted by Section
7.4, cause such sums to be paid over to the Administrative Agent to be held by it under the
Guarantee and Collateral Agreement as additional collateral security for the Obligations, and in
case any distribution of capital shall be made on or in respect of the Investment Property, or any
property shall be distributed upon or with respect to the Investment Property pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, cause the property so distributed, unless otherwise subject to a perfected security
interest in favor of the Administrative Agent, to be delivered to the Administrative Agent to be
held by it under the Guarantee and Collateral Agreement as additional collateral security for the
Obligations, to the extent required by the Guarantee and Collateral Agreement. If any sums of
money or property so paid or distributed in respect of the Investment Property shall be received by
any Loan Party, other than pursuant to a transaction permitted by Section 7.4, hold such money or
property in trust for the Secured Parties, segregated from other funds of such Loan Party, as
additional collateral security for the Obligations, until such money or property is paid or
delivered to the Administrative Agent. Notwithstanding the foregoing, the Loan Parties shall not
be required to pay over to the Administrative Agent or deliver to the Administrative Agent as
Collateral any proceeds of any liquidation or dissolution of any Issuer, or any distribution of
capital or property in respect of any Investment Property, to the extent that the proceeds thereof
are applied toward prepayment of Loans and reduction of Commitments if and to the extent required
by this Agreement.




          (e) In the case of each Loan Party which is an Issuer, (i) comply with the terms of this
Agreement and the Guarantee and Collateral Agreement relating to the Pledged Securities issued by
it insofar as such terms are applicable to it, (ii) notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 6.12(d) with respect to the
Pledged Securities issued by it and (iii) the terms of Sections 6.3(c) of the Guarantee and
Collateral Agreement shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 6.3(c) of the Guarantee and Collateral Agreement with respect to the Pledged
Securities issued by it.




          (f) In the case of each Loan Party which is an Issuer and is also a partnership or a limited
liability company (i) ensure that none of the terms of any equity interest issued by it provides
that such equity interest is a “security” within the meaning of Sections 8-102 and 8-103 of the New
York Uniform Commercial Code (a “Security”), (ii) refrain from taking any action to cause
or permit any such equity interest to become a Security and (iii) refrain from issuing any
certificate representing any such equity interest, unless, in each case, all required actions have
been or substantially concurrently are taken to cause the Administrative Agent to have “control”
(within the meaning of Section 8-106 of the UCC) of such Security.




          (g) Except as could not reasonably be expected to have a Material Adverse Effect, either
itself or through licensees (i) continue to use each Trademark in order to maintain such Trademark
in full force free from any claim of abandonment for non-use, (ii) maintain the quality of products
and services offered under such Trademark, (iii) use such Trademark with the appropriate notice of
registration and all other notices and legends required by applicable Requirements of Law, (iv) not
adopt or use any mark which is confusingly similar or a colorable imitation of such Trademark
unless the Administrative Agent, for the ratable benefit of the Secured Parties, shall obtain a
perfected security





 









 





55



interest in such mark pursuant to the Guarantee and Collateral Agreement, and
(v) not do any act or knowingly omit to do any act whereby such Trademark may become invalidated or
impaired in any way.




          (h) Except as could not reasonably be expected to have a Material Adverse Effect, not do any
act, or omit to do any act, whereby any Patent may become forfeited, abandoned or dedicated to the
public.




          (i) Except as could not reasonably be expected to have a Material Adverse Effect, (i) employ
each Copyright, (ii) not do any act or knowingly omit to do any act whereby any of the Copyrights
may become invalidated or otherwise impaired and (iii) not do any act whereby any of the Copyrights
may fall into the public domain.




          (j) Except as could not reasonably be expected to have a Material Adverse Effect, take all
reasonable and necessary steps, including, without limitation, in any proceeding before the United
States Patent and Trademark Office, the United States Copyright Office or any similar office or
agency in any other country or any political subdivision thereof, to maintain and pursue each
application relating to any Intellectual Property (and to obtain the relevant registration) and to
maintain each registration of the Intellectual Property, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability.




          (k) In the event that any material Intellectual Property is infringed, misappropriated or
diluted by a third party, (i) take such actions as the Borrower shall reasonably deem appropriate
under the circumstances to protect such Intellectual Property and (ii) if such infringement,
misappropriation or dilution could reasonably be expected to have a Material Adverse Effect,
promptly notify the Administrative Agent after it learns thereof.




          (l) If any Loan Party shall at any time commence a suit, action or proceeding with respect to
any Commercial Tort Claim held by it with a value which such Loan Party reasonably believes to be
of $1,000,000 or more, promptly notify the Administrative Agent thereof in a writing signed by such
Loan Party and describing the details thereof and grant to the Administrative Agent for the benefit
of the Secured Parties in such writing a security interest therein and in the proceeds thereof, all
upon the terms of the Guarantee and Collateral Agreement.




SECTION 7. NEGATIVE COVENANTS




          The Borrower hereby agrees that, so long as the Commitments remain in effect, any Letter of
Credit remains outstanding that has not been cash-collateralized or backstopped on terms and
conditions acceptable to the Administrative Agent and the Issuing Lender in their sole discretion
or any Loan or other amount is owing to any Lender or any Agent hereunder, the Borrower shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly:




          7.1 Financial Condition Covenants.




          (a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as at the
last day of any period of four consecutive fiscal quarters of the Borrower ending with any fiscal
quarter set forth below to exceed the ratio set forth below opposite such fiscal quarter:





 









 





56




	 	 	 
	 	 	Consolidated
	Fiscal Quarter	 	Leverage Ratio
	FQ3 2006
	 	5.25:1.00
	FQ4 2006
	 	5.25:1.00
	FQ1 2007
	 	5.25:1.00
	FQ2 2007
	 	5.25:1.00
	FQ3 2007
	 	5.00:1.00
	FQ4 2007
	 	5.00:1.00
	FQ1 2008
	 	5.00:1.00
	FQ2 2008
	 	5.00:1.00
	FQ3 2008
	 	4.90:1.00
	FQ4 2008
	 	4.75:1.00
	FQ1 2009
	 	4.60:1.00
	FQ2 2009
	 	4.50:1.00
	FQ3 2009
	 	4.40:1.00
	FQ4 2009
	 	4.10:1.00
	FQ1 2010
	 	3.75:1.00
	FQ2 2010
	 	3.75:1.00
	FQ3 2010
	 	3.50:1.00
	FQ4 2010 and thereafter
	 	3.50:1.00






          (b) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest Coverage
Ratio for any period of four consecutive fiscal quarters of the Borrower ending with any fiscal
quarter set forth below to be less than the ratio set forth below opposite such fiscal quarter:




	 	 	 
	 	 	Consolidated Interest Coverage
	Fiscal Quarter	 	Ratio
	FQ3 2006
	 	2.25:1.00
	FQ4 2006
	 	2.25:1.00
	FQ1 2007
	 	2.25:1.00
	FQ2 2007
	 	2.25:1.00
	FQ3 2007
	 	2.25:1.00
	FQ4 2007
	 	2.30:1.00
	FQ1 2008
	 	2.40:1.00
	FQ2 2008
	 	2.50:1.00
	FQ3 2008
	 	2.50:1.00
	FQ4 2008
	 	2.50:1.00
	FQ1 2009
	 	2.60:1.00
	FQ2 2009
	 	2.65:1.00
	FQ3 2009
	 	2.75:1.00
	FQ4 2009
	 	2.80:1.00
	FQ1 2010
	 	3.00:1.00
	FQ2 2010
	 	3.00:1.00
	FQ3 2010
	 	3.00:1.00
	FQ4 2010 and thereafter
	 	3.00:1.00






          7.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:




          (a) Indebtedness of any Loan Party pursuant to any Loan Document;




          (b) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary Guarantor to the
Borrower or any other Subsidiary;





 









 




57





          (c) Indebtedness (including, without limitation, Capital Lease Obligations) secured by Liens
permitted by Section 7.3(g) in an aggregate principal amount not to exceed $12,500,000 at any one
time outstanding;




          (d) Indebtedness outstanding on the date hereof and listed on Schedule 7.2(d) and any
refinancings, refundings, renewals or extensions thereof (without any shortening of the maturity of
any principal amount thereof); provided that any Indebtedness incurred in connection with
any refinancing, refunding, renewals or extensions that increase the principal amount thereof shall
only be permitted pursuant to this Section 7.2(d) to the extent of the principal amount of such
Indebtedness as of the date hereof;




          (e) Guarantee Obligations made in the ordinary course of business by the Borrower or any of
its Subsidiaries of obligations of the Borrower or any Subsidiary Guarantor;




          (f) (i) (x) Indebtedness of the Borrower in respect of the Senior Subordinated Notes in an
aggregate principal amount not to exceed $230,000,000 and (y) Guarantee Obligations of any
Subsidiary Guarantor in respect of such Indebtedness (provided that such Guarantee
Obligations are subordinated to the obligations of such Subsidiary Guarantor under the Guarantee
and Collateral Agreement to the same extent as the obligations of the Borrower in respect of the
Senior Subordinated Notes are subordinated to the Obligations) and (ii) and any refinancings,
refundings, renewals or extensions of any Indebtedness described in the foregoing clause (i)
(provided that (A) the principal amount thereof is not increased, (B) the weighted average
life to maturity of the principal amount thereof is not decreased, nor the final maturity thereof
shortened, (C) the obligations of the Borrower and its Subsidiaries in respect of such Indebtedness
are subordinated to the Obligations to the same extent as the obligations of the Borrower and its
Subsidiaries in respect of the Senior Subordinated Notes, (D) the interest rate applicable to and
fees payable in connection with such Indebtedness is not in excess of that payable in respect of
the Senior Subordinated Notes, and (E) such Indebtedness otherwise contains terms which are, when
taken as a whole, at least as favorable to the Borrower and its Subsidiaries as the terms of the
Indebtedness described in the foregoing clause (i));




          (g) Indebtedness of any Loan Party pursuant to (x) the Original Acquisition Agreement as in
effect on the Original Closing Date, (y) the Acquisition Agreement or (z) the agreement for any
other acquisition permitted under Section 7.8(h);




          (h) Indebtedness of Excluded Subsidiaries in respect of local lines of credit, letters of
credit, bank guarantees, factoring arrangements, sale/leaseback transactions and similar extensions
of credit not to exceed an aggregate outstanding principal amount at any one time equal to of the
sum of (x) $25,000,000 plus (y) 5% of Consolidated EBITDA of the Borrower for each fiscal
year for which financial statements have been delivered pursuant to Section 6.1(a) prior to the
incurrence of such Indebtedness;




          (i) Indebtedness of Excluded Subsidiaries owing to any Loan Party, provided that the
Permitted Foreign Investment Amount at such time after giving effect thereto does not exceed the
Maximum Investment Amount;




          (j) (i) Guarantee Obligations by Loan Parties of obligations of Excluded Subsidiaries,
provided that the aggregate outstanding Permitted Foreign Investment Amount at such time
after giving effect thereto does not exceed the Maximum Investment Amount and (ii) Guarantee
Obligations by Excluded Subsidiaries of obligations of Excluded Subsidiaries;






 









 






58



          (k) Indebtedness of the Borrower under Permitted Seller Notes issued as consideration in
connection with an acquisition permitted under Section 7.8(h);




          (l) Indebtedness of the Borrower or any of its Subsidiaries in respect of workers’
compensation claims, self-insurance obligations, performance, bid and surety bonds and completion
guaranties, in each case in the ordinary course of business;




          (m) Indebtedness of the Borrower or any of its Subsidiaries arising from the honoring by a
bank or other financial institution of a check, draft or similar instrument inadvertently drawn by
the Borrower or such Subsidiary in the ordinary course of business against insufficient funds, so
long as such Indebtedness is repaid within five Business Days; and




          (n) additional unsecured indebtedness of the Borrower or any of its Subsidiaries not to exceed
an aggregate outstanding principal amount of $15,000,000 at any time.




          7.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any
of its Property, whether now owned or hereafter acquired, except for:




          (a) Liens for taxes not yet due or which are being contested in good faith by appropriate
proceedings, provided that adequate reserves with respect thereto (if required by GAAP) are
maintained on the books of the Borrower or its Subsidiaries, as the case may be, in conformity with
GAAP;




          (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business which are not overdue for a period of more than 30 days
or that are being contested in good faith by appropriate proceedings;




          (c) pledges or deposits in connection with workers’ compensation, unemployment insurance and
other social security legislation;




          (d) deposits to secure the performance of bids, trade contracts (other than for borrowed
money), leases, subleases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of business;




          (e) easements, rights-of-way, restrictions and other similar encumbrances incurred in the
ordinary course of business that, in the aggregate, are not substantial in amount and which do not
in any case materially detract from the value of the Property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower or any of its Subsidiaries;




          (f) Liens in existence on the date hereof listed on Schedule 7.3(f), securing Indebtedness
permitted by Section 7.2(d) or obligations described on Schedule 7.3(f), provided that no
such Lien is spread to cover any additional Property after the Closing Date and that the amount of
Indebtedness secured thereby is not increased;




          (g) Liens securing Indebtedness of the Borrower or any other Subsidiary incurred pursuant to
Section 7.2(c) to finance the acquisition of fixed or capital assets, provided that (i)
such Liens shall be created substantially simultaneously with the acquisition of such fixed or
capital assets and (ii) such Liens do not at any time encumber any Property other than the Property
financed by such Indebtedness and the proceeds thereof;




          (h) Liens created pursuant to the Security Documents;





 









 







 59


          (i) any interest or title of a lessor under any lease entered into by the Borrower or any
other Subsidiary in the ordinary course of its business and covering only the assets so leased;




          (j) Liens arising from judgments in circumstances not constituting an Event of Default under
Section 8(h);




          (k) Liens on property or assets acquired pursuant to an acquisition permitted under Section
7.8(h) (and proceeds thereof) or assets of a Subsidiary of Borrower in existence at the time such
Subsidiary is acquired pursuant to an acquisition permitted under Section 7.8(h) (and proceeds
thereof);




          (l) Liens on Property or assets of Excluded Subsidiaries securing Indebtedness permitted by
this Agreement to be incurred by such Subsidiaries;




          (m) receipt of progress payments and advances from customers in the ordinary course of
business to the extent same creates a Lien on the related inventory and proceeds thereof;




          (n) Liens on receivables and related assets (including proceeds thereof) which are being sold
pursuant to factoring arrangements permitted under Section 7.5(m) or (n); and




          (o) other Liens with respect to obligations that do not exceed $7,000,000 at any one time
outstanding.




          7.4 Limitation on Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution),
or Dispose of all or substantially all of its Property or business, except that:




          (a) any Subsidiary of the Borrower may be merged or consolidated with or into the Borrower
(provided that the Borrower shall be the continuing or surviving corporation) or with or
into any Subsidiary Guarantor (provided that (i) the Subsidiary Guarantor shall be the
continuing or surviving corporation or (ii) simultaneously with such transaction, the continuing or
surviving corporation shall become a Subsidiary Guarantor and the Borrower shall comply with
Section 6.10 in connection therewith);




          (b) any Subsidiary of the Borrower may Dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any Subsidiary Guarantor;




          (c) acquisitions permitted under Section 7.8(h) may be consummated;




          (d) any Excluded Subsidiary of the Borrower may be merged or consolidated with or into, or be
liquidated into, another Excluded Subsidiary of the Borrower;




          (e) any Excluded Subsidiary of the Borrower may Dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to any other Excluded Subsidiary; and




          (f) Dispositions permitted by Section 7.5 may be consummated.




          7.5 Limitation on Disposition of Property. Dispose of any of its Property (including,
without limitation, receivables and leasehold interests), whether now owned or hereafter acquired,
or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary’s Capital Stock to
any Person, except:





 









 






60



          (a) the Disposition of obsolete or worn out property in the ordinary course of business;




          (b) the sale of inventory in the ordinary course of business;




          (c) Dispositions permitted by Section 7.4(a), (b), (d) or (e), Section 7.6 or Section 7.8;




          (d) the sale or issuance of any Subsidiary’s Capital Stock to the Borrower or any Subsidiary
Guarantor (or, in the case of the Capital Stock of an Excluded Subsidiary, to any other
Subsidiary);




          (e) the Disposition of other assets having a fair market value not to exceed $25,000,000 in
the aggregate subsequent to the Closing Date (provided that any such Disposition must be
for at least 75% cash which is received at the time of closing thereof), provided that the
Net Cash Proceeds of any such Disposition are applied to the prepayment of the Loans to the extent
required by Section 2.12(b);




          (f) any Recovery Event, provided, that the requirements of Section 2.12(b) are
complied with in connection therewith;




          (g) the sale by Excluded Subsidiaries (without recourse) of receivables (and related assets)
pursuant to factoring arrangements entered into in the ordinary course of business;




          (h) leases, occupancy agreements and subleases of real property in the ordinary course of
business;




          (i) licenses or sublicenses in the ordinary course of business of intellectual property;




          (j) the Disposition by any Excluded Subsidiary of any of its Property in an arms’-length
transaction for the fair market value thereof;




          (k) the Disposition by the Borrower or any Subsidiary Guarantor of any of its Property to any
Excluded Subsidiary or Joint Venture; provided that, (i) to the extent the consideration
paid by such Excluded Subsidiary or Joint Venture is less than the fair market value thereof, the
Borrower shall be in compliance with the provisions of Section 7.8(k) or (l), as applicable and
(ii) any Net Cash Proceeds of any such Disposition are applied to the prepayment of the Loans to
the extent required by Section 2.12(b);




          (l) the Disposition by any Loan Party of any equity interest of any Excluded Subsidiary held
by such Loan Party in an arms’-length transaction for the fair market value thereof;




          (m) (i) the Borrower and its Subsidiaries may sell and grant Liens in receivables and related
assets (including proceeds thereof) arising from goods and services provided to Honeywell
International, Inc. and its affiliates, pursuant to factoring arrangements entered into in the
ordinary course of business and (ii) the Borrower and its Subsidiaries may sell receivables
pursuant to receivables sales programs arranged by the account debtors in respect of such
receivables, provided, that (x) the aggregate amount of receivables sold pursuant to this
clause (ii) in any fiscal quarter of the Borrower shall not to exceed 15% of the aggregate amount
of receivables of the Loan Parties generated during the immediately preceding four fiscal quarters
(which aggregate amount of receivables shall include the receivables of the Target and its
Subsidiaries that are Loan Parties on a pro forma basis) and (y) the annual
percentage





 









 





61



discount on the face amount of receivables sold in any such sale pursuant to this clause
(ii) shall not exceed a percentage equal to the Eurodollar Rate for a three month Interest Period
commencing on the date of such sale plus the Applicable Margin then applicable to Eurodollar Loans
under the Revolving Credit Facility;




          (n) the AutoZone Factoring Arrangement, the Advanced Auto Parts Factoring Arrangement and the
CarQuest Factoring Arrangement shall be permitted; and




          (o) Disposition of Non-Core Assets (provided that any such Disposition must be for at
least 75% cash which is received at the time of closing thereof), provided that the Net
Cash Proceeds of any such Disposition are applied to the prepayment of the Loans to the extent
required by Section 2.12(b).




          7.6 Limitation on Restricted Payments. Declare or pay any dividend on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any Capital Stock of the Borrower or
any Subsidiary, whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in obligations of the
Borrower or any Subsidiary, or enter into any derivatives or other transaction with any financial
institution, commodities or stock exchange or clearinghouse (a “Derivatives Counterparty”)
obligating the Borrower or any Subsidiary to make payments to such Derivatives Counterparty as a
result of any change in market value of any such Capital Stock (collectively, “Restricted
Payments”), except that:




          (a) any Subsidiary may make Restricted Payments to the Borrower or any Subsidiary Guarantor;




          (b) the Borrower may make Restricted Payments in the form of common stock of the Borrower;




          (c) the Borrower may purchase the Borrower’s common stock or common stock options from present
or former officers or employers of the Borrower or any Subsidiary upon the death, disability of
termination of employment of such officer or employer, provided, that the aggregate amount
of payments under this paragraph subsequent to the Closing Date (net of any proceeds received by
the Borrower subsequent to the date hereof in connection with resales of any common stock or common
stock options so purchased) shall not exceed $20,000,000;




          (d) the Borrower may pay dividends to Holdings to permit Holdings to (i) pay corporate
overhead expenses incurred in the ordinary course of business not to exceed $1,250,000 in any
fiscal year and (ii) pay any taxes which are due and payable by Holdings and the Borrower as part
of a consolidated group;




          (e) any non-Wholly Owned Subsidiary of the Borrower may declare and pay cash dividends to its
equity holders generally so long as the Borrower or its respective Subsidiary which owns the equity
interests in the Subsidiary paying such dividends receives at least its proportionate share thereof
(based upon its relative holding of the equity interests in the Subsidiary paying such dividends
and taking into account the relative preferences, if any, of the various classes of equity interest
of such Subsidiary);




          (f) Excluded Subsidiaries may make Restricted Payments to other Excluded Subsidiaries;




 









 





62




          (g) so long as no Default or Event of Default has occurred and is continuing, the Borrower may
purchase fractional shares of the Borrower’s common stock arising out of stock dividends, splits or
combinations or business combinations; and




          (h) the Target may make Restricted Payments required to be made by the Acquisition Agreement.




          7.7 Limitation on Capital Expenditures. Make any Capital Expenditure, except Capital
Expenditures of the Borrower and its Subsidiaries in the ordinary course of business not exceeding
for any fiscal year the sum of (x) $60,000,000 plus (y) the aggregate amount of Net Cash
Proceeds reinvested by the Borrower and its Subsidiaries during such fiscal year in connection with
a Reinvestment Notice to the extent such reinvestment constitutes Capital Expenditures;
provided, that (i) up to 50% of any such amount referred to above for any period specified
above, if not so expended in the period for which it is permitted, may be carried over for
expenditure in the next succeeding such period and (ii) Capital Expenditures made during any period
specified above shall be deemed made, first, in respect of amounts permitted for such
period as provided above and second, in respect of amounts carried over from the prior
period pursuant to subclause (i) above.




          7.8 Limitation on Investments. Make any advance, loan, extension of credit (by way of
guaranty or otherwise) or capital contribution to, or purchase any Capital Stock, bonds, notes,
debentures or other debt securities of,
or any assets constituting an ongoing business from, or make any other investment in, any
other Person (all of the foregoing, “Investments”), except:




          (a) extensions of trade credit in the ordinary course of business;




          (b) investments in Cash Equivalents and by Excluded Subsidiaries in Foreign Cash Equivalents;




          (c) Investments arising in connection with the incurrence of Indebtedness permitted by Section
7.2(b) and (e);




          (d) loans and advances to officers, directors and employees of Holdings, the Borrower or any
Subsidiaries of the Borrower in the ordinary course of business (including, without limitation, for
travel, entertainment and relocation expenses) in an aggregate amount for Holdings, the Borrower
and Subsidiaries of the Borrower not to exceed $3,000,000 at any one time outstanding;




          (e) the Acquisition;




          (f) Investments in assets useful in the Borrower’s business made by the Borrower or any of its
Subsidiaries with the proceeds of any Reinvestment Deferred Amount;




          (g) Investments (other than those relating to the incurrence of Indebtedness permitted by
Section 7.8(c)) by the Borrower or any of its Subsidiaries in the Borrower or any Person that,
prior to such Investment, is a Subsidiary Guarantor;




          (h) Permitted Acquisitions for consideration (whether in cash, Permitted Seller Notes, Capital
Stock or property) not exceeding $65,000,000 in the aggregate for all such Permitted Acquisitions
subsequent to the Closing Date;




          (i) Investments (including debt obligations) received in the ordinary course of business by
the Borrower or any Subsidiary in connection with the bankruptcy or reorganization of




 









 





63



suppliers and
customers and in settlement or delinquent obligations of, and other disputes with, customers and
suppliers arising out of the ordinary course of business;




          (j) Investments by any Excluded Subsidiary in other Excluded Subsidiaries;




          (k) [Reserved];




          (l) Investments by any Loan Party in Excluded Subsidiaries (including Investments consisting
of Dispositions of Property to such Excluded Subsidiary to the extent the consideration paid by
such Excluded Subsidiary for such Property is less than the fair market value thereof, as
reasonably determined by the Borrower), provided that the aggregate outstanding Permitted
Foreign Investment Amount at such time after giving effect thereto does not exceed the Maximum
Investment Amount;




          (m) Investments in existence on the Closing Date and listed on Schedule 7.8, without giving
effect to any additions thereto or replacements thereof;




          (n) Investments so long as the aggregate amount thereof (determined as the amount originally
advanced, loaned or otherwise invested, less any returns on the respective investment not to exceed
the original amount invested) at no time exceeds $2,500,000;




          (o) Subsidiaries may be established or created, if (A) to the extent such new Subsidiary is a
Domestic Subsidiary, such Subsidiary complies with the provisions of Section 6.10(c) and (B) if
such new Subsidiary is an Excluded Subsidiary, such Subsidiary complies with the provisions of
Section 6.10(d), provided, that, in each case, to the extent such new Subsidiary is created
solely for the purpose of consummating a merger transaction pursuant to an acquisition permitted by
Section 7.8(h), and such new Subsidiary at no time holds any assets or liabilities other than any
merger consideration contributed to it contemporaneously with the closing of such merger
transactions, such new Subsidiary shall not be required to take the actions set forth in Section
6.10(c) or Section 6.10(d), as applicable, until the respective acquisition is consummated (at
which time the surviving entity of the respective merger transaction shall be required to so comply
within ten Business Days);




          (p) Investments of Borrower or any Subsidiary under Hedge Agreements permitted hereunder; and




          (q) Investments of any Person in existence at the time such Person becomes a Subsidiary of the
Borrower; provided such Investment was not made in connection with or anticipation of such Person
becoming a Subsidiary of the Borrower.




          7.9 Limitation on Optional Payments and Modifications of Debt Instruments, etc. (a)
Make any optional or voluntary payment, prepayment, repurchase or redemption of, or otherwise
voluntarily or optionally defease, the Senior Subordinated Notes, or segregate funds for any such
payment, prepayment, repurchase, redemption or defeasance (except in each case in connection with
any refinancing permitted by Section 7.2(f)), or enter into any derivative or other transaction
with any Derivatives Counterparty obligating the Borrower or any Subsidiary to make payments to
such Derivatives Counterparty as a result of any change in market value of the Senior Subordinated
Notes; provided that, notwithstanding the foregoing provisions of this clause (a), the
Borrower shall be permitted to repurchase Senior Subordinated Notes in an aggregate principal
amount of up to $75,000,000 subsequent to the Closing Date so long as after giving pro
forma effect to each such purchase, the Consolidated Senior Leverage Ratio would be less
than or equal to 2.00:1:00, (b) amend, modify or otherwise change, or consent or agree to any
amendment, modification, waiver or other change to, any of the terms of the Senior Subordinated
Notes (other than any such amendment, modification, waiver or




 









 





64



other change which (i) would extend
the maturity or reduce the amount of any payment of principal thereof, reduce the rate or extend
the date for payment of interest thereon or relax any covenant or other restriction applicable to
the Borrower or any of its Subsidiaries and (ii) does not involve the payment of a consent fee),
(c) designate any Indebtedness (other than the Obligations) as “Designated Senior Indebtedness” for
the purposes of the Senior Subordinated Note Indenture or (d) amend its certificate of
incorporation in any manner reasonably determined by the Administrative Agent to be adverse to the
Lenders.




          7.10 Limitation on Transactions with Affiliates. Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of Property, the rendering of
any service or the payment of any management, advisory or similar fees, with any Affiliate (other
than the Borrower or any Subsidiary Guarantor) unless such transaction is (a) otherwise not
prohibited by this Agreement, (b) in the ordinary course of business of the Borrower or such
Subsidiary, as the case may be, and (c) upon fair and reasonable terms no less favorable to the
Borrower or such Subsidiary, as the case may be, than it would obtain in a comparable arm’s length
transaction with a Person that is not an Affiliate. Notwithstanding the foregoing, (i) the
Borrower and its Subsidiaries may pay fees and expenses to the Sponsor and its Control Investment
Affiliates pursuant to the Management Agreement, (ii) the Borrower and its Subsidiaries may enter
into any transaction with an
Affiliate that is expressly permitted by the terms of this Agreement to be entered into by the
Borrower or such Subsidiary with an Affiliate and (iii) the Borrower and its Subsidiaries may
without being subject to the foregoing requirements of this Section enter into transactions with
any Person, a director of which is also a director of the Borrower, provided that such director
abstains from voting as a director of the Borrower on any matter involving such other Person, and
(iv) transaction fees in connection with the Acquisition in an aggregate amount previously
disclosed to the Administrative Agent shall be permitted.




          7.11 Limitation on Sales and Leasebacks. Enter into any arrangement with any Person
providing for the leasing by the Borrower or any Subsidiary of real or personal property which, as
a part of the same transaction, has been or is to be sold or transferred by the Borrower or such
Subsidiary to such Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of the Borrower or such
Subsidiary, except for sale and leaseback transactions involving Property having a book value not
exceeding $15,000,000 subsequent to the Closing Date.




          7.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year of the Borrower
to end on a day other than December 31 or change the Borrower’s method of determining fiscal
quarters.




          7.13 Limitation on Negative Pledge Clauses. Enter into or suffer to exist or become
effective any agreement that prohibits or limits the ability of the Borrower or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of its Property or
revenues, whether now owned or hereafter acquired, to secure the Obligations or, in the case of any
guarantor, its obligations under the Guarantee and Collateral Agreement, other than:




          (a) this Agreement and the other Loan Documents;




          (b) the Senior Subordinated Note Indenture (and the instruments or agreements governing any
Indebtedness permitted pursuant to Section 7.2(f)(ii));




          (c) any agreements governing any purchase money Liens or Capital Lease Obligations otherwise
permitted hereby (in which case, any prohibition or limitation shall only be effective against the
assets financed thereby);




 









 






65



          (d) any agreements regarding Indebtedness of any Excluded Subsidiary (in which case, any
prohibition or limitation shall only be effective against the assets of such Excluded Subsidiary
and its Subsidiaries);




          (e) customary provisions in joint venture agreements and similar agreements that restrict the
transfer of assets of, or equity interests in, Joint Ventures;




          (f) licenses or sublicenses by the Borrower and its Subsidiaries of intellectual property in
the ordinary course of business (in which case, any prohibition or limitation shall only be
effective against the intellectual property subject thereto); and




          (g) prohibitions and limitations in effect on the date hereof and listed on Schedule 7.13.




          7.14 Limitation on Restrictions on Subsidiary Distributions. Enter into or suffer to
exist or become effective any consensual encumbrance or restriction on the ability of any
Subsidiary to (a) make Restricted Payments in respect of any Capital Stock of such Subsidiary held
by, or pay any Indebtedness owed to, the Borrower or any other Subsidiary, (b) make Investments in
the Borrower or any other Subsidiary or (c) transfer any of its assets to the Borrower or any other
Subsidiary, except for such encumbrances or restrictions existing under or by reason of:





     (i) any restrictions existing under the Loan Documents;




     (ii) any restrictions with respect to a Subsidiary imposed pursuant to an agreement
that has been entered into in connection with the Disposition of all or substantially all of
the Capital Stock or assets of such Subsidiary;




     (iii) any restrictions set forth in the Senior Subordinated Note Indenture (and the
instruments or agreements governing any Indebtedness permitted pursuant to Section
7.2(f)(ii));




     (iv) any restrictions contained in agreements related to Indebtedness of any Excluded
Subsidiary (in which case such restriction shall relate only to such Excluded Subsidiary and
its Subsidiaries),




     (v) customary provisions in joint venture agreements and similar agreements that
restrict the transfer of equity interests in Joint Ventures (which are not Subsidiaries of
the Borrower) (in which case such restrictions shall relate only to assets of, or equity
interests in, such Joint Venture);




     (vi) any restrictions regarding licenses or sublicenses by the Borrower and its
Subsidiaries of intellectual property in the ordinary course of business (in which case
such restriction shall relate only to such intellectual property); and




     (vii) with respect to restrictions described in clause (c) of this Section 7.14,
restrictions contained in agreements governing Indebtedness permitted by Sections 7.2(c) and
7.2(d) hereof.



          7.15 Limitation on Lines of Business. Enter into any business, either directly or
through any Subsidiary, except for those businesses in which the Borrower and its Subsidiaries are
engaged on the date of this Agreement or that are reasonably related thereto or are reasonable
extensions thereof.





 









 






66



          7.16 Limitation on Hedge Agreements. Enter into any Hedge Agreement other than Hedge
Agreements entered into in the ordinary course of business, and not for speculative purposes, to
protect against changes in interest rates, currency exchange rates, commodity prices or the
exchange of nominal interest obligations.




          7.17 Limitation on Activities of Holdings. Not permit Holdings to (a) conduct,
transact or otherwise engage in any business or operations other than those incidental to its
ownership of the Capital Stock of the Borrower, (b) incur,
create, assume or suffer to exist any Indebtedness, except (i) nonconsensual obligations
imposed by operation of law, (ii) obligations in respect of taxes imposed on Holdings as a member
of a consolidated group, (iii) indebtedness and obligations of Holdings pursuant to the Loan
Documents to which it is a party, (iv) obligations with respect to its Capital Stock, (v)
Indebtedness subordinated to the Obligations on terms reasonably satisfactory to the Administrative
Agent in an aggregate principal amount of up to $12,500,000, (vi) guarantees, letters of credit and
performance bonds in support of the operations of the Borrower and its Subsidiaries, and (vii) up
to $7,000,000 in aggregate principal amount of other Indebtedness, or (c) own, lease, manage or
otherwise operate (other than through ownership of the Borrower and its Subsidiaries) any
properties or assets, other than (i) cash and Cash Equivalents and deposit and securities accounts
comprised of cash and cash equivalents, (ii) the ownership of shares of Capital Stock of the
Borrower, (iii) other assets, not material in amount, incidental to the operations of Holdings as
the holding company of the Borrower and (iv) other assets with an aggregate fair market value of
not more than $5,000,000.




SECTION 8. EVENTS OF DEFAULT




          If any of the following events shall occur and be continuing:




          (a) The Borrower shall fail to pay any principal of any Loan or Reimbursement Obligation when
due in accordance with the terms hereof; or the Borrower shall fail to pay any interest on any Loan
or Reimbursement Obligation, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes due in accordance with
the terms hereof or thereof; or




          (b) Any representation or warranty made or deemed made by any Loan Party herein or in any
other Loan Document or that is contained in any certificate, document or financial or other
statement furnished by it at any time under or in connection with this Agreement or any such other
Loan Document shall prove to have been inaccurate in any material respect on or as of the date made
or deemed made or furnished; or




          (c) Any Loan Party shall default in the observance or performance of any agreement contained
in clause (i) or (ii) of Section 6.4(a) (with respect to the Borrower only), Section 6.7(a) or
Section 7; or




          (d) Any Loan Party shall default in the observance or performance of any other agreement
contained in this Agreement or any other Loan Document (other than as provided in paragraphs (a)
through (c) of this Section), and such default shall continue unremedied for a period of 30 days
after notice thereof to the Borrower from the Administrative Agent or any Lender; or




          (e) The Borrower or any of its Subsidiaries shall (i) default in making any payment of any
principal of any Indebtedness for Borrowed Money (excluding the Loans and Reimbursement
Obligations) on the scheduled or original due date with respect thereto; or (ii) default in making
any payment of any interest on any such Indebtedness for Borrowed Money beyond the period of grace,
if any, provided in the instrument or agreement under which such Indebtedness was created; or (iii)
default




 









 






67


in the observance or performance of any other agreement or condition relating to any such
Indebtedness for Borrowed Money or contained in any instrument or agreement evidencing, securing or
relating thereto, the effect of which default is to cause, or to permit the holder or beneficiary
of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with
the giving of notice if required, such Indebtedness to become due prior to its stated maturity or
to become subject to a mandatory offer to purchase by the obligor thereunder or (in the case of any
such Indebtedness constituting a Guarantee Obligation) to become payable; provided, that a
default described in clause (i),
(ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of Default
unless, at such time, one or more defaults of the type described in clauses (i), (ii) and (iii) of
this paragraph (e) shall have occurred and be continuing with respect to Indebtedness the
outstanding principal amount of which exceeds in the aggregate $12,500,000; or




          (f) Holdings, the Borrower or any of its Material Subsidiaries shall commence any case,
proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have
an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian, conservator or other similar official for it or for
all or any substantial part of its assets, or Holdings, the Borrower or any of its Material
Subsidiaries shall make a general assignment for the benefit of its creditors; or (ii) there shall
be commenced against Holdings, the Borrower or any of its Material Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above that (A) results in the
entry of an order for relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against
Holdings, the Borrower or any of its Material Subsidiaries any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets that results in the entry of an order for any such relief that
shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) Holdings, the Borrower or any of its Material Subsidiaries shall take any
action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) Holdings, the Borrower or any of its
Material Subsidiaries shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or




          (g) (i) Any Person shall engage in any “prohibited transaction” (as defined in Section 406 of
ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated funding deficiency”
(as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan,
or any Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings
shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required Lenders, likely to result in
the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any Commonly Controlled Entity
shall, or in the reasonable opinion of the Required Lenders shall be likely to, incur any liability
in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan
or (vi) any other event or condition shall occur or exist with respect to a Plan; and in each case
in clauses (i) through (vi) above, such event or condition, together with all other such events or
conditions, if any, could reasonably be expected to have a Material Adverse Effect; or




          (h) One or more judgments or decrees shall be entered against Holdings, the Borrower or any of
its Material Subsidiaries involving for Holdings, the Borrower and its Material




 









 





68



Subsidiaries taken
as a whole a liability (not paid or covered by insurance or by an indemnity from a Solvent
indemnitor) of $12,500,000 or more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 30 days from the entry thereof; or




          (i) Except to the extent resulting from the gross negligence or willful misconduct of the
Administrative Agent, any of the Security Documents shall cease, for any reason (other than by
reason of the express release thereof pursuant to Section 10.15), to be in full force and effect in
any material
respect, or any Loan Party shall so assert, or any Lien created by any of the Security
Documents shall cease in any material respect to be enforceable and of the same effect and priority
purported to be created thereby (other than by reason of the express release thereof pursuant to
Section 10.15); or




          (j) The guarantee contained in Section 2 of the Guarantee and Collateral Agreement shall
cease, for any reason (other than by reason of the express release thereof pursuant to Section
10.15), to be in full force and effect or any Loan Party shall so assert; or




          (k) Any Change of Control shall occur; or




          (l) The Senior Subordinated Notes or the guarantees thereof shall cease, for any reason, to be
validly subordinated to the Obligations or the obligations of the Subsidiary Guarantors under the
Guarantee and Collateral Agreement, as the case may be, as provided in the Senior Subordinated Note
Indenture, or any Loan Party shall so assert;



then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or
(ii) of paragraph (f) above with respect to the Borrower, automatically the Commitments shall
immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement and the other Loan Documents (including, without limitation, all amounts
of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit
shall have presented the documents required thereunder) shall immediately become due and payable,
and (B) if such event is any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Majority Revolving Credit Facility Lenders, the Administrative
Agent may, or upon the request of the Majority Revolving Credit Facility Lenders, the
Administrative Agent shall, by notice to the Borrower declare the Revolving Credit Commitments to
be terminated forthwith, whereupon the Revolving Credit Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower, declare
the Loans hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) to be due and payable forthwith, whereupon the same
shall immediately become due and payable. In the case of all Letters of Credit with respect to
which presentment for honor shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time deposit in a cash collateral account opened by the
Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused
portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay other obligations of the Borrower then due and owing hereunder and
under the other Loan Documents. After all such Letters of Credit shall have expired or been fully
drawn upon, all Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the Borrower (or such other
Person as may be lawfully entitled thereto).





 









 







 69


SECTION 9. THE AGENTS




          9.1 Appointment. Each Lender hereby irrevocably designates and appoints the Agents as
the agents of such Lender under this Agreement and the other Loan Documents, and each Lender
irrevocably authorizes each Agent, in such capacity, to take such action on its behalf under the
provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform such duties as
are expressly delegated to such Agent by the terms of this Agreement and the other Loan Documents,
together with such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, no Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist against any Agent.




          9.2 Delegation of Duties. Each Agent may execute any of its duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties. No Agent shall be
responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.




          9.3 Exculpatory Provisions. Neither any Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted from its or such
Person’s own gross negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by any Loan Party or
any officer thereof contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received by the Agents under
or in connection with, this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party to perform its obligations hereunder or thereunder.
The Agents shall not be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions of, this Agreement
or any other Loan Document, or to inspect the properties, books or records of any Loan Party.




          9.4 Reliance by Agents. Each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any instrument, writing, resolution, notice, consent, certificate,
affidavit, letter, telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Loan Parties), independent accountants and other experts selected by
such Agent. The Agents may deem and treat the payee of any Note as the owner thereof for all
purposes unless such Note shall have been transferred in accordance with Section 10.6 and all
actions required by such Section in connection with such transfer shall have been taken. Each
Agent shall be fully justified in failing or refusing to take any action under this Agreement or
any other Loan Document unless it shall first receive such advice or concurrence of the Required
Lenders (or, if so specified by this Agreement, all Lenders or any other instructing group of
Lenders specified by this Agreement) as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense that may be incurred by
it by reason of taking or continuing to take any such action. Each Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so specified by this
Agreement, all Lenders or any other instructing group of Lenders
specified by this Agreement), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the Loans.




 









 





70




          9.5 Notice of Default. No Agent shall be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless such Agent shall have received
notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event
of Default and stating that such notice is a “notice of default”. In the event that the
Administrative Agent shall receive such a notice, the Administrative Agent shall give notice
thereof to the Lenders. The Administrative Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required Lenders (or, if so
specified by this Agreement, all Lenders or any other instructing group of Lenders specified by
this Agreement); provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Lenders.




          9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges that
neither any of the Agents nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates have made any representations or warranties to it and that no act
by any Agent hereafter taken, including any review of the affairs of a Loan Party or any affiliate
of a Loan Party, shall be deemed to constitute any representation or warranty by any Agent to any
Lender. Each Lender represents to the Agents that it has, independently and without reliance upon
any Agent or any other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their affiliates and
made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the time, continue to make
its own credit analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder,
no Agent shall have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial or otherwise),
prospects or creditworthiness of any Loan Party or any affiliate of a Loan Party that may come into
the possession of such Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.




          9.7 Indemnification. The Lenders agree to indemnify each Agent in its capacity as
such (to the extent not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to their respective Aggregate Exposure Percentages in effect
on the date on which indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans shall have been paid
in full, ratably in accordance with such Aggregate Exposure Percentages immediately prior to such
date), for, and to save each Agent harmless from and against, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (including, without limitation, at any time following the payment
of the Loans) be imposed on, incurred
by or asserted against such Agent in any way relating to or arising out of, the Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted
by such Agent under or in connection with any of the foregoing; provided that no Lender
shall be liable for the payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final
and nonappealable decision of a court of competent jurisdiction to have resulted from such Agent’s
gross negligence or willful misconduct. The agreements in this Section shall survive the payment
of the Loans and all other amounts payable hereunder.




 









 





71




          9.8 Agent in Its Individual Capacity. Each Agent and its affiliates may make loans
to, accept deposits from and generally engage in any kind of business with any Loan Party as though
such Agent were not an Agent. With respect to its Loans made or renewed by it and with respect to
any Letter of Credit issued or participated in by it, each Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as
though it were not an Agent, and the terms “Lender” and “Lenders” shall include each Agent in its
individual capacity.




          9.9 Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 30 days’ notice to the Lenders and the Borrower. If the Administrative
Agent shall resign as Administrative Agent under this Agreement and the other Loan Documents, then
the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section 8(f) with respect
to the Borrower shall have occurred and be continuing) be subject to approval by the Borrower
(which approval shall not be unreasonably withheld or delayed), whereupon such successor agent
shall succeed to the rights, powers and duties of the Administrative Agent, and the term
“Administrative Agent” shall mean such successor agent effective upon such appointment and
approval, and the former Administrative Agent’s rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of the Loans. If no
successor agent has accepted appointment as Administrative Agent by the date that is 30 days
following a retiring Administrative Agent’s notice of resignation, the retiring Administrative
Agent shall, in consultation with the Borrower, appoint a successor Administrative Agent (which
successor agent shall be a financial institution of nationally-recognized standing that, in the
ordinary course of business, performs functions equivalent to those of the Administrative Agent
hereunder), and the retiring Administrative Agent’s resignation shall become effective only upon
such appointment. After any retiring Administrative Agent’s resignation as Administrative Agent,
the provisions of this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the other Loan Documents.




          9.10 Authorization to Release Liens and Guarantees. The Administrative Agent is
hereby irrevocably authorized by each of the Lenders to effect any release of Liens or guarantee
obligations contemplated by Section 10.15.




          9.11 The Joint Lead Arrangers; the Syndication Agent; the Co-Documentation Agents.
None of the Joint Lead Arrangers, the Syndication Agent, or any of the Co-Documentation Agents, in
their respective capacities as such, shall have any duties or responsibilities, or shall incur any
liability, under this Agreement or the other Loan Documents.




SECTION 10. MISCELLANEOUS




          10.1 Amendments and Waivers. Neither this Agreement or any other Loan Document, nor
any terms hereof or thereof may be amended, supplemented or modified except in accordance with the
provisions of this Section 10.1. The Required Lenders and each Loan Party party to the relevant
Loan Document may, or (with the written consent of the Required Lenders) the Agents and each Loan
Party party to the relevant Loan Document may, from time to time, (a) enter into written
amendments, supplements or modifications hereto and to the other Loan Documents (including
amendments and restatements hereof or thereof) for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or of the
Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions as may be specified
in the instrument of waiver, any of the requirements of this Agreement or the other Loan Documents
or any





 









 





72



Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall:





	 	(i)	 	forgive or reduce any principal amount or
extend or postpone the final scheduled date of maturity of any Loan or
Reimbursement Obligation, extend the scheduled date of any amortization
payment in respect of any Tranche D Term Loan, reduce the stated rate
of any interest or fee payable hereunder (it being understood that any
amendment or modification to the financial definitions in this
Agreement shall not constitute a reduction in fees or the rate of
interest) or extend the scheduled date of any payment thereof, or
increase the amount or extend the expiration date of any Commitment of
any Lender (it being understood that waivers or modifications of
conditions precedent, covenants, Defaults or Events of Default or of a
mandatory reduction in the Commitments shall not constitute an increase
or extension of a Commitment), in each case without the consent of each
Lender directly and adversely affected thereby;
	 
	 	(ii)	 	amend, modify or waive any provision of this
Section without the consent of each Lender directly and adversely
affected thereby;
	 
	 	(iii)	 	reduce any percentage specified in the
definition of Required Lenders, consent to the assignment or transfer
by the Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents, release all or substantially
all of the Collateral or release all or substantially all of the
Subsidiary Guarantors from their guarantee obligations under the
Guarantee and Collateral Agreement, in each case without the consent of
all Lenders;
	 
	 	(iv)	 	reduce the percentage specified in the
definition of Majority Facility Lenders with respect to any Facility
without the written consent of all Lenders under such Facility;
	 
	 	(v)	 	amend, modify or waive any provision of Section
9 without the consent of any Agent directly and adversely affected
thereby;
	 
	 	(vi)	 	amend, modify or waive any provision of Section
2.6 or 2.7 without the written consent of the Swing Line Lender;
	 
	 	(vii)	 	amend, modify or waive any provision of
Section 2.18 without the consent of each Lender directly and adversely
affected thereby; or
	 
	 	(viii)	 	amend, modify or waive any provision of Section 3 without the consent
of each Issuing Lender directly and adversely affected thereby.




Any such waiver and any such amendment, supplement or modification shall apply equally to each of
the Lenders and shall be binding upon the Loan Parties, the Lenders, the Agents and all future
holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders and the Agents
shall be restored to their former position and rights hereunder and under the other Loan Documents,
and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of Default, or impair any
right consequent thereon. Any such





 









 





73



waiver, amendment, supplement or modification shall be effected
by a written instrument signed by the parties required to sign pursuant to the foregoing provisions
of this Section; provided, that delivery of an executed signature page of any such
instrument by facsimile transmission shall be effective as delivery of a manually executed
counterpart thereof.




          For the avoidance of doubt, this Agreement and any other Loan Document may be amended (or
amended and restated) with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party to each relevant Loan Document (x) to add one or more additional credit
facilities to this Agreement and to permit the extensions of credit from time to time outstanding
thereunder and the accrued interest and fees in respect thereof (collectively, the “Additional
Extensions of Credit”) to share ratably in the benefits of this Agreement and the other Loan
Documents with the Tranche D Term Loans and Revolving Extensions of Credit and the accrued interest
and fees in respect thereof and (y) to include appropriately the Lenders holding such credit
facilities in any determination of the Required Lenders and Majority Revolving Facility Lenders.




          10.2 Notices. All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when delivered, or three Business
Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of the Borrower and the Agents, as follows and (b) in the case
of the Lenders, as set forth in an administrative questionnaire delivered to the Administrative
Agent or, in the case of a Lender which becomes a party to this Agreement pursuant to an Assignment
and Acceptance, in such Assignment and Acceptance or (c) in the case of any party, to such other
address as such party may hereafter notify to the other parties hereto:




	 	 	 	 	 
	 

	 	The Borrower:
	 	United Components, Inc.
	 

	 	 	 	14601 Highway 41N
	 

	 	 	 	Evansville, Indiana 47725
	 

	 	 	 	Attention: Chief Financial Officer
	 

	 	 	 	Telecopy: (812) 867-4157
	 

	 	 	 	Telephone: (812) 867-4156
	 
	 	 	 	 
	 

	 	with a copy to:
	 	The Carlyle Group
	 

	 	 	 	1001 Pennsylvania Avenue, N.W.
	 

	 	 	 	Suite 200
	 

	 	 	 	Washington, D. C. 20004
	 

	 	 	 	Attention: Mr. Ian Fujiyama
	 

	 	 	 	Telecopy: 202-347-1818
	 

	 	 	 	Telephone: 202-347-2626
	 
	 	 	 	 
	 

	 	The Syndication Agent:
	 	JPMorgan Chase Bank, N.A.
	 

	 	 	 	Loan & Agency Services
	 

	 	 	 	1111 Fannin-10th Floor
	 

	 	 	 	Houston, Texas 77002
	 

	 	 	 	Attention: Debbie Meche
	 

	 	 	 	Telecopy: 713-750-2938
	 

	 	 	 	Telephone: 713-750-7917






 









 




74



	 	 	 	 	 
	 

	 	with a copy to:
	 	JPMorgan Chase Bank, N.A.
	 

	 	 	 	270 Park Avenue – 4th Floor
	 

	 	 	 	New York, New York 10017
	 

	 	 	 	Attention: Richard Duker
	 

	 	 	 	Telecopy: 212-270-5127
	 

	 	 	 	Telephone: 212-2702-3057
	 
	 	 	 	 
	 

	 	The Administrative Agent:
	 	Lehman Commercial Paper Inc.
	 

	 	 	 	745 Seventh Avenue, 5th Floor
	 

	 	 	 	New York, New York 10019
	 

	 	 	 	Attention: Portfolio Manager – United Components
	 

	 	 	 	Telecopy: 646-834-4997
	 

	 	 	 	Telephone: 212-526-1456
	 
	 	 	 	 
	 

	 	Issuing Lender:
	 	As notified by such Issuing Lender to the Administrative Agent and
the Borrower





provided that any notice, request or demand to or upon the any Agent, the Issuing Lender or
any Lender shall not be effective until received.




          10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of any Agent or any Lender, any right, remedy, power or privilege hereunder
or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.




          10.4 Survival of Representations and Warranties. All representations and warranties
made herein, in the other Loan Documents and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the execution and delivery of this
Agreement and the making of the Loans and other extensions of credit hereunder.




          10.5 Payment of Expenses. The Borrower agrees (a) to pay or reimburse the Administrative Agent, the Syndication Agent
and the Joint Lead Arrangers for all their reasonable, documented out-of-pocket costs and expenses
actually incurred in connection with the syndication of the Facilities (other than fees payable to
syndicate members) and the development, preparation and execution of, and any amendment, supplement
or modification to, this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable documented fees and
disbursements and other charges of Simpson Thacher & Bartlett LLP and, if necessary, one local
counsel per relevant jurisdiction and the portion of the out-of-pocket costs of the Administrative
Agent in respect of the charges of Intralinks that are allocated (ratably based upon the number of
transactions covered by such charges) to the Facilities, (b) to pay or reimburse each Lender and
the Agents for all their documented out-of-pocket costs and expenses incurred in connection with
the enforcement or preservation of any rights under this Agreement, the other Loan Documents and
any other documents prepared in connection herewith or therewith, including, without limitation,
the documented fees and disbursements of counsel to each Lender and of counsel to the Agents, (c)
to pay, indemnify, or reimburse each Lender and the Agents for, and hold each Lender and the Agents
harmless from, any and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in




 









 





75



paying, stamp, excise and other taxes, if any, which may be payable
or determined to be payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify or reimburse each Lender, each
Agent, their respective affiliates, and their respective officers, directors, trustees, employees,
advisors, agents and controlling persons (each, an “Indemnitee”) for, and hold each
Indemnitee harmless from and against any and all other liabilities, obligations, losses, damages,
penalties, costs, expenses or disbursements arising out of any actions, judgments, suits or other
judicial or arbitral proceedings of any kind or nature whatsoever, or any investigation relating
thereto, in each case with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other documents, including,
without limitation, any of the foregoing relating to the use of proceeds of the Loans or the
violation of, noncompliance with or liability under, any Environmental Law applicable to the
operations of the Borrower any of its Subsidiaries or any of the Properties and the fees and
disbursements and other charges of legal counsel in connection with claims, actions or proceedings
by any Indemnitee against the Borrower hereunder (all the foregoing in this clause (d),
collectively, the “Indemnified Liabilities”), provided, that the Borrower shall
have no obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from the gross negligence or willful misconduct of such
Indemnitee or its affiliates, officers, directors, trustees, employees, advisors, agents or
controlling persons. No Indemnitee shall be liable for any damages arising from the use by
unauthorized persons of Information or other materials sent through electronic, telecommunications
or other information transmission systems that are intercepted by such persons (unless such damages
result from the gross negligence or willful misconduct of such Indemnitee or its affiliates,
officers, directors, trustees, employees, advisors, agents or controlling persons) or for any
special, indirect, consequential or punitive damages in connection with the Facilities. All
amounts due under this Section shall be payable not later than 30 days after written demand
therefor. Statements payable by the Borrower pursuant to this Section shall be submitted to United
Components, Inc., Attention: Chief Financial Officer (Telephone No. (618) 445-6011) (Fax No. (618)
456-2260), at the address of the Borrower set forth in Section 10.2, or to such other Person or
address as may be hereafter designated by the Borrower in a notice to the Administrative Agent.
The agreements in this Section shall survive repayment of the Loans and all other amounts payable
hereunder.




          10.6 Successors and Assigns; Participations and Assignments. (a) This Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Agents, all future holders of the Loans and their respective successors and permitted
assigns, except that the Borrower may not assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of the Agents and each Lender.




          (b) Any Lender may, without the consent of the Borrower, in accordance with applicable law, at
any time sell to one or more banks, financial institutions or other entities (each, a
“Participant”) participating interests in any Loan owing to such Lender, any Commitment of
such Lender or any other interest of such Lender hereunder and under the other Loan Documents;
unless consented to by the Borrower, no such participation may be sold to any competitor of the
Borrower and its Subsidiaries. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender’s obligations under this Agreement to the other parties to
this Agreement shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan for all purposes under
this Agreement and the other Loan Documents, and the Borrower and the Agents shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and obligations under
this Agreement and the other Loan Documents. In no event shall any Participant under any such
participation have any right to approve any amendment or waiver of





 









 




76




any provision of any Loan
Document, or any consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would require the consent of all Lenders pursuant to Section
10.1. The Borrower also agrees that each Participant shall be entitled to the benefits of Sections
2.19, 2.20 and 2.21 with respect to its participation in the Commitments and the Loans outstanding
from time to time as if such Participant were a Lender; provided that, in the case of
Section 2.20, such Participant shall have complied with the requirements of said Section, and
provided, further, that no Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such transferor Lender to such
Participant had no such transfer occurred.




          (c) Any Lender (an “Assignor”) may, in accordance with applicable law, at any time and
from time to time assign to any Lender or any affiliate, Related Fund or Control Investment
Affiliate thereof or, with the consent of the Borrower and the Administrative Agent and, in the
case of any assignment of Revolving Credit Commitments, the written consent of the Issuing Lender
and the Swing Line Lender (which, in each case, shall not be unreasonably withheld or delayed)
(provided that the consent of the Borrower need not be obtained with respect to any
assignment during the continuance of an Event of Default), to an additional bank, financial
institution or other entity (an “Assignee”) all or any part of its rights and obligations
under this Agreement pursuant to an Assignment and Acceptance, substantially in the form of Exhibit
E, executed by such Assignee and such Assignor (and, where the consent of the Borrower, the Agents
or the Issuing Lender or the Swing Line Lender is required pursuant to the foregoing provisions,
by the Borrower and such other Persons) and delivered to the Administrative Agent for its
acceptance and recording in the Register; provided that (A) no such assignment to an
Assignee (other than any Lender or any affiliate, Control Investment Affiliate or Related Fund
thereof) shall be in an aggregate principal amount of less than $1,000,000, in the case of
assignments of Loans and Commitments under the Tranche D Term Loan Facility, or $5,000,000, in the
case of assignments of Loans and Commitments under any other Facility (in each case other than in
the case of an assignment of all of a Lender’s interests under this Agreement), unless otherwise
agreed by the Borrower and the Administrative Agent and (B) unless consented to by the Borrower, no
such assignment may be made to any competitor of the Borrower and its Subsidiaries. Any such
assignment need not be ratable as among the Facilities. Upon such execution, delivery, acceptance
and recording, from and after the effective date determined pursuant to such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder with Commitments
and/or Loans as set forth therein, (y) the Assignor thereunder shall, to the extent provided in
such Assignment and Acceptance, be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all of an Assignor’s
rights and obligations under this Agreement, such Assignor shall cease to be a party hereto, except
as to Section 2.19, 2.20 and 10.5 in respect of the period prior to such effective date) and (z)
the Assignee will be treated as a Lender for purposes of Sections 2.19 and 2.20. For purposes of
the minimum assignment amounts set forth in this paragraph, multiple assignments by two or more
Related Funds or Control Investment Affiliates shall be aggregated.




          (d) The Administrative Agent shall, on behalf of the Borrower, maintain at its address
referred to in Section 10.2 a copy of each Assignment and Acceptance delivered to it and a register
(the “Register”) for the recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be presumptively correct, in the absence of manifest error, and the
Borrower, each Agent and the Lenders shall treat each Person whose name is recorded in the Register
as the owner of the Loans and any Notes evidencing such Loans recorded therein for all purposes of
this Agreement. Any assignment of any Loan, whether or not evidenced by a Note, shall be effective
only upon appropriate entries with respect thereto being made in the Register (and each Note shall
expressly so provide). Any assignment or transfer of all or part of a Loan evidenced by a Note
shall be registered on the Register only




 









 





77



upon surrender for registration of assignment or transfer
of the Note evidencing such Loan, accompanied by a duly executed Assignment and Acceptance;
thereupon one or more new Notes in the same aggregate principal amount shall be issued to the
designated Assignee, and the old Notes shall be returned by the Administrative Agent to the
Borrower marked “canceled”. The Register shall be available for inspection by the Borrower or any
Lender (with respect to any entry relating to such Lender’s Loans) at any reasonable time and from
time to time upon reasonable prior notice. If any amendment or waiver relating to this Agreement
or any other Loan Document is pending, at the request of any Lender, the Administrative Agent shall
provide such Lender with a list of the names of all the Lenders. The Administrative Agent shall
advise the Borrower, quarterly and otherwise upon the Borrower’s request, of all assignments
recorded by the Administrative Agent pursuant hereto.




          (e) Upon its receipt of an Assignment and Acceptance executed by an Assignor and an Assignee
(and, in any case where the consent of any other Person is required by Section 10.6(c), by each
such other Person) together with payment to the Administrative Agent of a registration and
processing fee of $3,500 (treating multiple, simultaneous assignments by or to two or more Related
Funds as a single assignment) (except that no such registration and processing fee shall be payable
(y) in connection with an assignment by or to a Lehman Entity or (z) in the case of an Assignee
which is already a Lender or is an affiliate or Related Fund of a Lender or a Person under common
management with a Lender), the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the information
contained therein in the Register and give notice of such acceptance and recordation to the
Borrower. On or prior to such effective date, the Borrower, at its own expense, upon request,
shall execute and deliver to the Administrative Agent (in exchange for the Revolving Credit Note
and/or applicable Tranche D Term Notes, as the case may be, of the assigning Lender) a new
Revolving Credit Note and/or applicable Tranche D Term Notes, as the case may be, to the order of
such Assignee in an amount equal to the Revolving Credit Commitment and/or applicable Tranche D
Term Loans, as the case may be, assumed or acquired by it pursuant to such Assignment and
Acceptance and, if the Assignor has retained a Revolving Credit Commitment and/or Tranche D Term
Loans, as the case may be, upon request, a new Revolving Credit Note and/or Tranche D Term Notes,
as the case may be, to the order of the Assignor in an amount equal to the Revolving Credit
Commitment and/or applicable Tranche D Term Loans, as the case may be, retained by it hereunder.
Such new Note or Notes shall be dated the Closing Date and shall otherwise be in the form of the
Note or Notes replaced thereby.




          (f) For avoidance of doubt, the parties to this Agreement acknowledge that the provisions of
this Section concerning assignments of Loans and Notes relate only to absolute assignments and that
such provisions do not prohibit assignments creating security interests in Loans and Notes,
including, without limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.




          (g) Notwithstanding anything to the contrary contained herein, any Lender (a “Granting
Lender”) may grant to a special purpose funding vehicle (an “SPC”), identified as such
in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower,
the option to provide to the Borrower all or any part of any Loan that such Granting Lender would
otherwise be obligated to make to the Borrower pursuant to this Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPC to make any Loan, (ii) if an SPC elects
not to exercise such option or otherwise fails to provide all or any part of such Loan, the
Granting Lender shall be obligated to make such Loan pursuant to the terms hereof and (iii) the
Granting Lender’s obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, the Granting Lender shall remain solely responsible for the performance thereof,
and the Borrower and the Agents shall continue to deal solely and directly with such Granting
Lender in connection with such Lender’s rights and obligations under this Agreement and the other
Loan Documents. The making of a Loan by an SPC hereunder shall utilize the





 









 






78


Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. Each
party hereto hereby agrees that no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the Granting Lender).
In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other indebtedness of any SPC, it will not
institute against, or join any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United
States or any state thereof. In addition, notwithstanding anything to the contrary in this Section
10.6(g), any SPC may (A) with notice to, but without the prior written consent of, the Borrower and
the Administrative Agent and without paying any processing fee therefor, assign all or a portion of
its interests in any Loans to the Granting Lender, or with the prior written consent of the
Borrower and the Administrative Agent (which consent shall not be unreasonably withheld) to any
financial institutions providing liquidity and/or credit support to or for the account of such SPC
to support the funding or maintenance of Loans, and (B) disclose on a confidential basis any
non-public information relating to its Loans to any rating agency, commercial paper dealer or
provider of any surety, guarantee or credit or liquidity enhancement to such SPC; provided
that non-public information with respect to the Borrower may be disclosed only with the Borrower’s
consent which will not be unreasonably withheld. In the event that the consent of all or any
portion of the Lenders is required pursuant to any provision of any Loan Document at a time when
any Loan is held by any SPC, such SPC and the Granting Lender that would otherwise have been
obligated to make such Loan shall agree between themselves as to which of them shall be entitled to
grant or withhold any consent applicable to such Loan, but such Granting Lender shall communicate
with the Administrative Agent and the Borrower as to the giving or withholding of such consent, and
the parties to the Loan Documents shall be entitled to rely conclusively on the advice by such
Granting Lender as to whether such consent is being granted or withheld. This paragraph (g) may not
be amended without the written consent of any SPC with Loans outstanding at the time of such
proposed amendment.




          10.7 Adjustments; Set-off. (a) Except to the extent that this Agreement provides for
payments to be allocated to a particular Lender or to the Lenders under a particular Facility, if
any Lender (a “Benefitted Lender”) shall at any time receive any payment of all or part of
the Obligations owing to it, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the
nature referred to in Section 8(f), or otherwise), in a greater proportion than any such
payment to or collateral received by any other Lender, if any, in respect of such other Lender’s
Obligations, such Benefitted Lender shall purchase for cash from the other Lenders a participating
interest in such portion of each such other Lender’s Obligations, or shall provide such other
Lenders with the benefits of any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but without interest.




          (b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall
have the right, without prior notice to the Borrower, any such notice being expressly waived by the
Borrower to the extent permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or otherwise after the
expiration of any applicable grace period), to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or final, but not
trust accounts), in any currency, and any other credits, indebtedness or claims, in any currency,
in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the credit or the account of
the Borrower. Each Lender agrees promptly to notify the Borrower and the Administrative Agent
after any such setoff and application made by such




 









 





79



Lender, provided that the failure to
give such notice shall not affect the validity of such setoff and application.




          10.8 Counterparts. This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. Delivery of an executed signature page
of this Agreement or of a Lender Addendum by facsimile transmission shall be effective as delivery
of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.




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




          10.10 Integration. This Agreement and the other Loan Documents represent the entire
agreement of the Borrower, the Agents, the Joint Lead Arrangers and the Lenders with respect to the
subject matter hereof and thereof, and there are no promises, undertakings, representations or
warranties by the Joint Lead Arrangers, any Agent or any Lender relative to subject matter hereof
not expressly set forth or referred to herein or in the other Loan Documents.




          10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.




          10.12 Submission To Jurisdiction; Waivers. The Borrower hereby irrevocably and
unconditionally:




          (a) submits for itself and its Property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the Southern District of New
York, and appellate courts from any thereof;




          (b) consents that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;




          (c) agrees that service of process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in Section 10.2 or at such other address of which
the Administrative Agent shall have been notified pursuant thereto;




          (d) agrees that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other jurisdiction; and




 









 







 80


          (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.




          10.13 Acknowledgments. The Borrower hereby acknowledges that:




          (a) it has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents;




          (b) neither the Joint Lead Arrangers, any Agent nor any Lender has any fiduciary relationship
with or duty to the Borrower arising out of or in connection with this Agreement or any of the
other Loan Documents, and the relationship between the Joint Lead Arrangers, the Agents and the
Lenders, on one hand, and the Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and




          (c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by
virtue of the transactions contemplated hereby among the Joint Lead Arrangers, the Agents and the
Lenders or among the Borrower and the Lenders.




          10.14 Confidentiality. Each of the Agents and the Lenders agrees to keep confidential all non-public information
provided to it by any Loan Party pursuant to this Agreement; provided that nothing herein shall
prevent any Agent or any Lender from disclosing any such information (a) to the Joint Lead
Arrangers, any Agent, any other Lender or any affiliate of any thereof, (b) to any Participant or
Assignee (each, a “Transferee”) or prospective Transferee that agrees to comply with the
provisions of this Section or substantially equivalent provisions, (c) to any of its employees,
directors, agents, attorneys, accountants and other professional advisors, (d) to any financial
institution that is a direct or indirect contractual counterparty in swap agreements or such
contractual counterparty’s professional advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty agrees to be bound by the provisions of this
Section), (e) upon the request or demand of any Governmental Authority having jurisdiction over it,
(f) in response to any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (g) in connection with any litigation or similar
proceeding, (h) that has been publicly disclosed other than in breach of this Section, (i) to the
National Association of Insurance Commissioners or any similar organization or any nationally
recognized rating agency that requires access to information about a Lender’s investment portfolio
in connection with ratings issued with respect to such Lender or (j) in connection with the
exercise of any remedy hereunder or under any other Loan Document.




          10.15 Release of Collateral and Guarantee Obligations.




          (a) Notwithstanding anything to the contrary contained herein or in any other Loan Document,
upon request of the Borrower in connection with any Disposition of Property permitted by the Loan
Documents, the Administrative Agent shall (without notice to, or vote or consent of, any Lender, or
any affiliate of any Lender that is a party to any Specified Hedge Agreement) take such actions as
shall be required to release its security interest in any Collateral being Disposed of in such
Disposition, and to release any guarantee obligations under any Loan Document of any Person being
Disposed of in such Disposition, to the extent necessary to permit consummation of such Disposition
in accordance with the Loan Documents.




          (b) Notwithstanding anything to the contrary contained herein or any other Loan Document, when
all Obligations (other than obligations in respect of any Specified Hedge Agreement) have been paid
in full, all Commitments have terminated or expired and no Letter of Credit shall be





 









 




81




outstanding,
unless it has been cash-collateralized or backstopped on terms and conditions acceptable to the
Administrative Agent and the Issuing Lender in their sole discretion, upon request of the Borrower,
the Administrative Agent shall (without notice to, or vote or consent of, any Lender, or any
affiliate of any Lender that is a party to any Specified Hedge Agreement) take such actions as
shall be required to release its security interest in all Collateral, and to release all guarantee
obligations under any Loan Document, whether or not on the date of such release there may be
outstanding Obligations in respect of Specified Hedge Agreements. Any such release of guarantee
obligations shall be deemed subject to the provision that such guarantee obligations shall be
reinstated if after such release any portion of any payment in respect of the Obligations
guaranteed thereby shall be rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of,
or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payment had not been made.




          10.16 Accounting Changes. In the event that any “Accounting Change” (as defined
below) shall occur and such change results in a change in the method of calculation of financial
covenants, standards or terms in this Agreement, then the Borrower and the Administrative Agent
agree to enter into negotiations in order to
amend such provisions of this Agreement so as to equitably reflect such Accounting Change with
the desired result that the criteria for evaluating the Borrower’s financial condition shall be the
same after such Accounting Change as if such Accounting Change had not been made. Until such time
as such an amendment shall have been executed and delivered by the Borrower, the Administrative
Agent and the Required Lenders, all financial covenants, standards and terms in this Agreement
shall continue to be calculated or construed as if such Accounting Change had not occurred.
“Accounting Change” refers to any change in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants or, if applicable, the SEC.




          10.17 Delivery of Lender Addenda. Each initial Revolving Credit Lender became a party
to this Agreement by delivering to the Administrative Agent a Lender Addendum duly executed by such
Lender, the Borrower and the Administrative Agent. Each initial Tranche D Term Loan Lender shall
become a party to this Agreement by delivering to the Administrative Agent a Lender Addendum duly
executed by such Lender, the Borrower and the Administrative Agent. In delivering such Lender
Addendum, each Tranche D Term Loan Lender acknowledges and agrees that such delivery shall also
constitute its consent to the amendment and restatement of the Existing Credit Agreement pursuant
to the terms hereunder.




          10.18 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE LENDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.




          10.19 USA Patriot Act Notice. Each Lender and the Administrative Agent (for itself
and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Patriot Act”), it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and other information
that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in
accordance with the Act. The Borrower shall, and shall cause each of its Subsidiaries to, provide,
to the extent commercially reasonable, such information and take such actions as are reasonably
requested by each Lender and the Administrative Agent to maintain compliance with the Patriot
Act.




 









 








          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the day and year first above written.




	 	 	 	 	 
	 	 	UNITED COMPONENTS, INC.
	 
	 	 	 	 
	 

	 	By:	 	 /s/ Authorized Person
	 

	 	 	 	 
	 

	 	 	 	  Name:
	 

	 	 	 	  Title:
	 
	 	 	 	 
	 	 	LEHMAN BROTHERS INC.,

as a Joint Lead Arranger
	 
	 	 	 	 
	 

	 	By:	 	 /s/ Authorized Person
	 

	 	 	 	 
	 

	 	 	 	  Name:
	 

	 	 	 	  Title:
	 
	 	 	 	 
	 	 	J.P. MORGAN SECURITIES INC.,

as a Joint Lead Arranger
	 
	 	 	 	 
	 

	 	By:	 	 /s/ Authorized Person
	 

	 	 	 	 
	 

	 	 	 	  Name:
	 

	 	 	 	  Title:
	 
	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,

as Syndication Agent
	 
	 	 	 	 
	 

	 	By:	 	 /s/ Authorized Person
	 

	 	 	 	 
	 

	 	 	 	  Name:
	 

	 	 	 	  Title:
	 
	 	 	 	 
	 	 	ABN AMRO BANK N.V.,

as Co-Documentation Agent
	 
	 	 	 	 
	 

	 	By:	 	 /s/ Authorized Person
	 

	 	 	 	 
	 

	 	 	 	  Name:
	 

	 	 	 	  Title:
	 
	 	 	 	 
	 

	 	By:	 	 /s/ Authorized Person
	 

	 	 	 	 
	 

	 	 	 	  Name:
	 

	 	 	 	  Title:





 









 






	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,

as Co-Documentation Agent
	 
	 	 	 	 
	 

	 	By:	 	 /s/ Authorized Person
	 

	 	 	 	 
	 

	 	 	 	  Name:
	 

	 	 	 	  Title:
	 
	 	 	 	 
	 	 	GENERAL ELECTRIC CAPITAL CORPORATION,

as Co-Documentation Agent
	 
	 	 	 	 
	 

	 	By:	 	 /s/ Authorized Person
	 

	 	 	 	 
	 

	 	 	 	  Name:
	 

	 	 	 	  Title:
	 
	 	 	 	 
	 	 	LEHMAN COMMERCIAL PAPER
INC.,

as Administrative Agent
	 
	 	 	 	 
	 

	 	By:	 	 /s/ Authorized Person
	 

	 	 	 	 
	 

	 	 	 	  Name:
	 

	 	 	 	  Title:





 









 






Annex A




PRICING GRID FOR REVOLVING CREDIT LOANS, SWING LINE LOANS




AND COMMITMENT FEES




	 	 	 	 	 	 	 
	 	 	Applicable	 	Applicable	 	 
	 	 	Margin	 	Margin	 	 
	 	 	for Eurodollar	 	for Base	 	Commitment
	Consolidated Leverage Ratio	 	Loans	 	Rate Loans	 	Fee Rate
	 
	3 4.25:1.00
	 	3.250%
	 	2.250%
	 	0.500%
	3 3.75:1.00 but < 4.25:1.00
	 	3.000%
	 	2.000%
	 	0.500%
	3 3.25:1.00 but < 3.75:1.00
	 	2.750%
	 	1.750%
	 	0.500%
	3 2.75:1.00 but < 3.25:1.00
	 	2.500%
	 	1.500%
	 	0.375%
	< 2.75:1.00
	 	2.250%
	 	1.250%
	 	0.375%






          Changes in the Applicable Margin or in the Commitment Fee Rate resulting from changes in the
Consolidated Leverage Ratio shall become effective on the date (the “Adjustment Date”) on
which financial statements are delivered to the Lenders pursuant to Section 6.1 (but in any event
not later than the date such financial statements are required to be delivered) and shall remain in
effect until the next change to be effected pursuant to this paragraph. If any financial
statements referred to above are not delivered within the time periods specified above, then, until
such financial statements are delivered, the Consolidated Leverage Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of this definition be
deemed to be greater than 4.25 to 1.




 









 








SCHEDULE 1.1




MORTGAGED PROPERTY




 









 








SCHEDULE 4.4




CONSENTS, AUTHORIZATIONS, FILINGS AND NOTICES




 









 








SCHEDULE 4.15




SUBSIDIARIES




 









 








SCHEDULE 4.19(a)-1




UCC FILING JURISDICTIONS




	 	 	 
	Loan Party
	 	Filing Office
	 
	 	 





          [Borrower to list name of each Loan Party which is a party to any Security Document and each
filing office in which a UCC financing statement must be filed in respect of such Loan Party and
its collateral]




 









 








SCHEDULE 4.19(a)-2




UCC FINANCING STATEMENTS TO REMAIN ON FILE




 









 








SCHEDULE 4.19(a)-3




UCC FINANCING STATEMENTS TO BE TERMINATED




 









 








SCHEDULE 4.19(b)




MORTGAGE FILING JURISDICTIONS




 









 








SCHEDULE 7.2(d)




EXISTING INDEBTEDNESS




 









 








SCHEDULE 7.3(f)




EXISTING LIENS