exv4w11



 



Exhibit
4.11





Execution Copy




CUSIP Number for the Revolving Credit Loans: 313551AQ6

CUSIP Number for the Tranche B Term Loans: 313551AN3

CUSIP Number for the Tranche C Term Loans: 313551AP8




TERM LOAN AND REVOLVING CREDIT AGREEMENT

 






among




FEDERAL-MOGUL CORPORATION,




as Borrower,




THE LENDERS PARTY HERETO,




CITICORP USA, INC.,




as Administrative Agent




and




JPMORGAN CHASE BANK, N.A.,




as Syndication Agent




and




WACHOVIA CAPITAL  FINANCE CORPORATION and WELLS FARGO FOOTHILL, LLC.,




as Co-Documentation Agents




 






CITIGROUP GLOBAL MARKETS INC.




J.P. MORGAN SECURITIES INC.,




As Joint Lead Arrangers and Bookrunners




Dated as of December 27, 2007




 









 






TABLE OF CONTENTS




	 	 	 	 	 
	 	 	 	PAGE	 
	ARTICLE I DEFINITIONS

	 
	 	 	 	 
	Section 1.01. Defined Terms
	 	 	2	 
	Section 1.02. Terms Generally
	 	 	48	 
	 
	 	 	 	 
	ARTICLE II AMOUNT AND TERMS OF CREDIT

	 
	 	 	 	 
	Section 2.01. The Loans
	 	 	48	 
	Section 2.02. Borrowing Base
	 	 	49	 
	Section 2.03. Making of Loans
	 	 	49	 
	Section 2.04. Term Letter of Credit Account
	 	 	50	 
	Section 2.05. Letters of Credit
	 	 	51	 
	Section 2.06. Issuance
	 	 	54	 
	Section 2.07. Nature of Letter of Credit Obligations Absolute
	 	 	55	 
	Section 2.08. Swing Line Loans
	 	 	55	 
	Section 2.09. Repayment of Loans and Unreimbursed Draws; Evidence of Debt
	 	 	58	 
	Section 2.10. Interest on Loans
	 	 	59	 
	Section 2.11. Default Interest
	 	 	60	 
	Section 2.12. Termination or Reduction of Commitments and Term Letter of Credit
Deposit Amount.
	 	 	60	 
	Section 2.13. Alternate Rate of Interest
	 	 	61	 
	Section 2.14. Refinancing of Loans
	 	 	61	 
	Section 2.15. Mandatory Prepayments of Revolving Credit Loans
	 	 	62	 
	Section 2.16. Mandatory Prepayments of Term Loans
	 	 	63	 
	Section 2.17. Optional Prepayment of Loans; Reimbursement of Lenders
	 	 	66	 
	Section 2.18. Reserve Requirements; Change in Circumstances
	 	 	67	 
	Section 2.19. Change in Legality
	 	 	68	 
	Section 2.20. Pro Rata Treatment, Application of Payments, etc.
	 	 	69	 
	Section 2.21. Taxes
	 	 	71	 
	Section 2.22. Certain Fees
	 	 	74	 
	Section 2.23. Commitment Fee; Ticking Fee
	 	 	74	 
	Section 2.24. Letter of Credit Fees
	 	 	75	 
	Section 2.25. Nature of Fees
	 	 	75	 
	Section 2.26. Right of Set-Off; Sharing
	 	 	75	 
	Section 2.27. Replacement of Certain Lenders
	 	 	75	 
	Section 2.28. Expansion Option
	 	 	77	 
	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES

	 
	Section 3.01. Financial Condition
	 	 	77	 
	Section 3.02. No Change
	 	 	78	 
	Section 3.03. Existence; Compliance With Law
	 	 	78	 
	Section 3.04. Power; Authorization; Enforceable Obligations
	 	 	78	 






i 









 






	 	 	 	 	 
	 	 	 	PAGE	 
	Section 3.05. No Legal Bar
	 	 	79	 
	Section 3.06. Litigation
	 	 	79	 
	Section 3.07. No Default
	 	 	79	 
	Section 3.08. Ownership of Property; Liens
	 	 	79	 
	Section 3.09. Intellectual Property
	 	 	79	 
	Section 3.10. Taxes
	 	 	80	 
	Section 3.11. Investment Company Act; Other Regulations
	 	 	80	 
	Section 3.12. Subsidiaries
	 	 	80	 
	Section 3.13.
Accuracy of Information, etc.
	 	 	80	 
	Section 3.14. Security Documents
	 	 	80	 
	Section 3.15. Regulation H
	 	 	81	 
	Section 3.16. Environmental Matters
	 	 	81	 
	Section 3.17. Certain Documents
	 	 	82	 
	Section 3.18. Solvency
	 	 	82	 
	Section 3.19. Regulation U
	 	 	83	 
	Section 3.20. Use of Proceeds
	 	 	83	 
	Section 3.21. Labor Matters
	 	 	83	 
	Section 3.22. ERISA
	 	 	83	 
	 
	 	 	 	 
	ARTICLE IV CONDITIONS OF LENDING

	 
	 	 	 	 
	Section 4.01. Conditions to Closing
	 	 	83	 
	Section 4.02. Conditions Precedent to Each Loan, Each Letter of Credit and Each Swing Line Loan
	 	 	89	 
	 
	 	 	 	 
	ARTICLE V AFFIRMATIVE COVENANTS

	 
	 	 	 	 
	Section 5.01. Financial Statements
	 	 	90	 
	Section 5.02. Certificates; Other Information
	 	 	91	 
	Section 5.03. Payment of Obligations
	 	 	93	 
	Section 5.04. Maintenance of Existence; Compliance
	 	 	93	 
	Section 5.05. Maintenance of Property; Insurance
	 	 	94	 
	Section 5.06. Inspection of Property; Books and Records; Discussions
	 	 	94	 
	Section 5.07. Notices
	 	 	94	 
	Section 5.08. Environmental Laws
	 	 	95	 
	Section 5.09. Additional Collateral, Additional Loan Parties, etc.
	 	 	96	 
	Section 5.10. Maintenance of Concentration Account
	 	 	99	 
	Section 5.11. Blocked Accounts
	 	 	99	 
	Section 5.12. Borrowing Base Certificate
	 	 	99	 
	Section 5.13. Use of Proceeds
	 	 	100	 
	Section 5.14. Post-Closing Obligations
	 	 	100	 
	 
	 	 	 	 
	ARTICLE VI NEGATIVE COVENANTS

	 
	 	 	 	 
	Section 6.01. Financial Condition Covenants
	 	 	100	 
	Section 6.02. Indebtedness
	 	 	101	 
	Section 6.03. Liens
	 	 	104	 






ii 









 






	 	 	 	 	 
	 	 	 	PAGE	 
	Section 6.04. Fundamental Changes
	 	 	107	 
	Section 6.05. Disposition of Property
	 	 	108	 
	Section 6.06. Restricted Payments
	 	 	109	 
	Section 6.07. [Reserved]
	 	 	109	 
	Section 6.08. Investments
	 	 	109	 
	Section 6.09. Optional Payments and Modifications of Certain Debt Instruments
	 	 	112	 
	Section 6.10. Transactions with Affiliates
	 	 	112	 
	Section 6.11. Sales And Leasebacks
	 	 	113	 
	Section 6.12. Swap Agreements
	 	 	113	 
	Section 6.13. Changes in Fiscal Periods
	 	 	113	 
	Section 6.14. Negative Pledge Clauses
	 	 	113	 
	Section 6.15. Clauses Restricting Subsidiary Distributions
	 	 	113	 
	Section 6.16. Lines of Business
	 	 	114	 
	Section 6.17. [Reserved]
	 	 	114	 
	Section 6.18. Positive EBITDA Variance
	 	 	114	 
	 
	 	 	 	 
	ARTICLE VII EVENTS OF DEFAULT

	 
	 	 	 	 
	Section 7.01. Events of Default
	 	 	114	 
	 
	 	 	 	 
	ARTICLE VIII THE ADMINISTRATIVE AGENT

	 
	 	 	 	 
	Section 8.01. Administration by Administrative Agent
	 	 	117	 
	Section 8.02. Advances and Payments
	 	 	118	 
	Section 8.03. Sharing of Setoffs
	 	 	118	 
	Section 8.04. Agreement of Required Lenders
	 	 	119	 
	Section 8.05. Liability of Administrative Agent
	 	 	119	 
	Section 8.06. Reimbursement and Indemnification
	 	 	119	 
	Section 8.07. Rights of Administrative Agent
	 	 	120	 
	Section 8.08. Independent Lenders
	 	 	120	 
	Section 8.09. Notice of Transfer
	 	 	120	 
	Section 8.10. Successor Administrative Agent
	 	 	120	 
	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS

	 
	 	 	 	 
	Section 9.01. Notices
	 	 	121	 
	Section 9.02. Survival of Agreement, Representations and Warranties, etc.
	 	 	121	 
	Section 9.03. Successors and Assigns
	 	 	121	 
	Section 9.04. Confidentiality
	 	 	124	 
	Section 9.05. Expenses
	 	 	125	 
	Section 9.06. Indemnity
	 	 	125	 
	Section 9.07. Choice of Law
	 	 	126	 
	Section 9.08. No Waiver
	 	 	126	 
	Section 9.09. Extension of Maturity
	 	 	126	 
	Section 9.10. Amendments, etc.
	 	 	126	 
	Section 9.11. Severability
	 	 	128	 
	Section 9.12. Headings
	 	 	128	 






iii 









 






	 	 	 	 	 
	 	 	 	PAGE	 
	Section 9.13. Execution in Counterparts
	 	 	128	 
	Section 9.14. Prior Agreements
	 	 	128	 
	Section 9.15. Further Assurances
	 	 	128	 
	Section 9.16. Waiver of Jury Trial
	 	 	129	 






	 	 	 	 	 
	Annex A-1

	 	–
	 	Tranche B Commitment Amounts
	Annex A-2

	 	 	 	Tranche C Commitment Amounts
	Annex A-3

	 	–
	 	Revolving Credit Commitment Amounts
	 
	Exhibit A

	 	–
	 	Form of Assignment and Acceptance
	Exhibit B

	 	–
	 	Form of Borrowing Base Certificate
	Exhibit C

	 	–
	 	Form of Collateral Agreement
	Exhibit D

	 	–
	 	Form of Collateral Trust Agreement
	Exhibit E

	 	–
	 	Form of Compliance Certificate
	Exhibit F

	 	–
	 	Form of Domestic Subsidiary Guarantee
	Exhibit G

	 	–
	 	Form of Intercreditor Agreement
	Exhibit H

	 	–
	 	Form of Mortgage
	Exhibit I

	 	–
	 	Form of Opinion of Counsel
	Exhibit J

	 	–
	 	Form of F-M Canada Supplement
	Exhibit K

	 	–
	 	Form of Increasing/Augmenting Lender
Supplement
	 
	 	 	 	 
	Pricing Schedule
	 	 	 	 
	 
	 	 	 	 
	Schedule 1.01A

	 	 	 	Existing Letters of Credit
	Schedule 1.01B

	 	 	 	Foreign Pledge Agreements
	Schedule 1.01C

	 	 	 	Intercompany Loans Owed to U.K. Subsidiaries
	Schedule 1.01D

	 	 	 	Joint Ventures
	Schedule 1.01E

	 	 	 	Mortgaged Properties
	Schedule 1.01F

	 	 	 	Certain Elements of the Collateral Structure
	Schedule 1.01G

	 	 	 	U.K. Subsidiaries Subject to Dissolution
	Schedule 1.01H

	 	 	 	Tax Restructuring
	Schedule 1.01I

	 	 	 	Non-Guarantor Domestic Subsidiaries
	Schedule 3.04

	 	 	 	Consents, Authorizations, Filings and Notices
	Schedule 3.06

	 	 	 	Litigation
	Schedule 3.12

	 	 	 	Subsidiaries
	Schedule 3.14(a)

	 	 	 	Perfection of Security Interests
	Schedule 3.14(b)

	 	 	 	Locations/Offices for Filing of Mortgages
	Schedule 3.16

	 	 	 	Environmental Matters
	Schedule 3.22

	 	 	 	ERISA
	Schedule 4.01(i)

	 	 	 	Landlords’ Consents
	Schedule 4.01(k)

	 	 	 	Environmental Reports
	Schedule 5.14

	 	 	 	Restructuring Foreign Subsidiaries
	Schedule 6.02(f)

	 	 	 	Existing Indebtedness
	Schedule 6.03(f)

	 	 	 	Existing Liens
	Schedule 6.08(l)

	 	 	 	Investments







iv 









 








TERM LOAN AND REVOLVING CREDIT AGREEMENT




     TERM LOAN AND REVOLVING CREDIT AGREEMENT, dated as of December 27, 2007, among FEDERAL-MOGUL
CORPORATION, a Delaware corporation (the “Borrower”), CITICORP USA, INC. (“CUSA”) and each of the
other commercial banks, finance companies, insurance companies or other financial institutions or
funds from time to time party hereto (together with CUSA, collectively, the “Lenders” and
individually, a “Lender”), CUSA, as administrative agent (in such capacity, the “Administrative
Agent”) for the Lenders, JPMORGAN CHASE BANK, N.A., as Syndication Agent, CITIBANK, N.A., as
Fronting Bank, and CUSA, as Swing Line Lender.



INTRODUCTION




     WHEREAS, on October 1, 2001, the Borrower and certain of its domestic subsidiaries (the “U.S.
Debtors”) filed voluntary petitions under the Bankruptcy Code (such term and other capitalized
terms used in these recitals without definition having the meanings set forth in Section
1.01 of this Agreement) with the Bankruptcy Court and continued in the possession of their
assets and in the management of their businesses pursuant to Sections 1107 and 1108 of the
Bankruptcy Code; and



     WHEREAS, on November 21, 2006, the U.S. Debtors, together with certain subsidiaries of the
Borrower organized under the laws of the United Kingdom (collectively, the “Debtors”), filed the
Reorganization Plan; and



     WHEREAS, on November 8, 2007, the Bankruptcy Court entered the Confirmation Order; and



     WHEREAS, on November 13, 2007, the District Court affirmed the Confirmation Order; and



     WHEREAS, it is a condition to effectiveness of the Reorganization Plan that the Borrower enter
into the “Exit Facilities”, and the credit facilities contemplated by this Agreement constitute the
“Exit Facilities”; and



     WHEREAS, the Borrower is willing to secure its obligations under this Agreement and certain
other obligations by granting Liens on substantially all of its assets to the Administrative Agent
as provided in the Security Documents; and



     WHEREAS, the Borrower is willing to cause certain of its current and future Domestic
Subsidiaries to guarantee the foregoing obligations of the Borrower and to secure its guarantee
thereof by granting Liens on substantially all of its assets to the Administrative Agent as
provided in the Security Documents;



     NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained
herein, the parties agree as follows:



 









 





ARTICLE I

DEFINITIONS




     Section 1.01. Defined Terms. As used in this Agreement, the following terms shall have the
meanings specified below.



     “ABR Loan” shall mean any Loan bearing interest at a rate determined by reference to the
Alternate Base Rate in accordance with the provisions of Article II.



     “Account” shall mean any right to payment for goods sold in the ordinary course of business,
regardless of how such right is evidenced and whether or not it has been earned by performance.



     “Account Debtor” shall mean, with respect to any Account, the obligor with respect to such
Account.



     “Acquisition” shall mean any acquisition or series of related acquisitions (including without
limitation, Investments) by any Group Member of (a) more than 50% of the voting stock of any
Person, (b) all or substantially all of the Capital Stock, or substantially all of the assets, of
any Person, or (c) all or substantially all of the assets constituting a division or business line
of any Person.



     “Additional Liquidity Facility” shall mean the credit or loan facility or facilities provided
to one or more other Group Members, and any refinancing, refunding, renewal or extension thereof in
accordance with Section 6.02(v), provided that prior to the Tranche A Term Loan Repayment Date,
such facility or facilities (a) (i) shall be provided on terms which are not unreasonable and
reflect market conditions in the banking or capital markets, as applicable, prevailing at the time
of incurrence of such facility or facilities for comparable companies in the same industry as the
Borrower and its Subsidiaries with long-term debt ratings by S&P and Moody’s equivalent to the
long-term debt ratings of the Borrower, (ii) shall in no event require any repayments or
prepayments thereof at any time prior to the Tranche C Maturity Date and (iii) if they are secured,
any Liens securing them shall be subject to Lien subordination provisions no less favorable to the
Lenders than the terms of the subordination of the “Third Priority Liens” referred to in the
Intercreditor Agreement in relation to the First Priority Liens referred to therein and (b) shall
not be provided by an Affiliate of any Group Member or of any Significant Shareholder unless such
facility is or facilities are (i) provided upon fair and reasonable terms no less favorable to the
relevant Group Member than it would obtain in a comparable arm’s length transaction with a Person
that is not an Affiliate of any Group Member or of any Significant Shareholder and (ii) not
available after a good faith effort by the Group Members to obtain such facility or facilities from
a financial institution that is not an Affiliate of any Group Member or of any Significant
Shareholder. For the avoidance of doubt, the requirements set forth in the foregoing proviso shall
cease to apply from and after the Tranche A Term Loan Repayment Date.



     “Additional Liquidity Facility Agreement” shall mean the credit, loan or other agreement
entered into by one or more Group Members governing any Additional Liquidity Facility, together
with all instruments and other agreements entered into by any Group Member



2









 







in connection therewith, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with Section 6.09.



     “Adjusted Eligible Accounts Receivable” shall mean Eligible Accounts Receivable, minus the
Dilution Reserve.



     “Adjusted Excess Cash Flow” shall have the meaning set forth in the Intercreditor Agreement.



     “Adjusted LIBOR Rate” shall mean, with respect to any Eurodollar Borrowing for any Interest
Period, an interest rate per annum (rounded to the nearest 1/100 of 1%) equal to the quotient of
(a) the LIBOR Rate in effect for such Interest Period divided by (b) a percentage (expressed as a
decimal) equal to 100% minus Statutory Reserves. For purposes hereof, the term “LIBOR Rate” shall
mean, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Page
3750 of the Moneyline Telerate Markets (or on any successor or substitute page of such Service) at
approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest
Period, as the rate for Dollar deposits with a maturity comparable to such Interest Period. In the
event that such rate is not available at such time for any reason, then the “LIBOR Rate” with
respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which Dollar
deposits in an amount approximately equal to the Loan to be made by CUSA as part of such Borrowing
and for a maturity comparable to such Interest Period are offered by the principal London office of
Citibank in immediately available funds to prime banks in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest
Period.



     “Adjusted Positive EBITDA Variance” shall have the meaning set forth in the Intercreditor
Agreement.



     “Administrative Agent” shall have the meaning set forth in the introductory paragraph to this
Agreement.



     “Affected Lender” shall have the meaning set forth in Section 2.27.



     “Affiliate” shall mean, as to any Person, any other Person which, directly or indirectly, is
in control of, is controlled by, or is under common control with, such Person. For purposes of
this definition, a Person (a “Controlled Person”) shall be deemed to be “controlled by” another
Person (a “Controlling Person”) if the Controlling Person possesses, directly or indirectly, power
to direct or cause the direction of the management and policies of the Controlled Person, whether
by contract or otherwise. A Person shall not be deemed to be a Controlling Person of another
Person solely by reason of such former Person beneficially owning voting equity securities of such
latter Person representing less than 10% in voting power of all voting equity securities of such
latter Person.



     “Agreement” shall mean this Term Loan and Revolving Credit Agreement, as the same may from
time to time be amended, restated, modified or supplemented.



     “Alternate Base Rate” shall mean, for any day, a rate per annum (rounded to the nearest 1/100
of 1%) equal to the higher of (a) the Citibank Rate for such day and (b) the Federal Funds



3









 







Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a
change in the Citibank Rate or the Federal Funds Rate shall be effective on the effective date of
such change in the Citibank Rate or the Federal Funds Rate, respectively.



     “Alternative Currency” shall mean (i) Euros, (ii) Pounds Sterling and (iii) any other currency
(other than Dollars, Euros and Pounds Sterling) that the Administrative Agent and the Fronting Bank
shall agree in their discretion is an “Alternative Currency” for purposes of this Agreement.



     “ALTA” shall have the meaning set forth in Section 4.01(q).



     “AM Finished Goods” shall mean Finished Goods, manufactured by a Loan Party for sale to an
Account Debtor that is an after-market retailer or distributor of goods of that kind, as determined
by the Administrative Agent in its reasonable credit judgment.



     “Amounts” shall have the meaning set forth in Section 2.21(a).



     “Anticipated Japanese Consolidation” shall mean, with respect to three of the Japanese
manufacturing, technical and distribution facilities of the Borrower and its Subsidiaries, that are
related primarily to the Borrower’s and its Subsidiaries’ System Protection Group and Aftermarket
operations, the anticipated consolidation of such facilities into one facility that will be located
in Japan.



     “Applicable Amount” shall mean (i) with respect to Adjusted Excess Cash Flow for any fiscal
year, the applicable amount thereof required to be applied to the Term Loans hereunder determined
pursuant to Section 4.4(a)(i) of the Intercreditor Agreement and (ii) with respect to Adjusted
Positive EBITDA Variance for any fiscal year, the applicable amount thereof required to be applied
to the Term Loans hereunder determined pursuant to Section 4.4(a)(ii) of the Intercreditor
Agreement.



     “Applicable Margin” shall mean:



     (a) with respect to Term Loans, a rate per annum equal to (i) for Eurodollar Loans, 1.9375%
and (ii) for ABR Loans, 0.9375%;



     (b) with respect to Revolving Credit Loans, a rate per annum determined in accordance with the
Pricing Schedule;



     (c) with respect to Swing Line Loans, a rate per annum determined in accordance with the
Pricing Schedule; and



     (d) with respect to Commitment Fees payable with respect to the Total Revolving Credit
Commitment, a rate per annum equal to 0.25%.



     “Applicable Premium” shall mean, as of any date upon which a prepayment of Tranche C Term
Loans is to be made pursuant to Section 2.16 or 2.17, the present value at such date, computed
using a discount rate equal to the Treasury Rate plus 50 basis points, of all interest that would
accrue (assuming the Borrower had selected consecutive three-month Interest Periods) on



4









 







the applicable Tranche C Term Loans to be prepaid, from such date to the date which is four
years following the Closing Date (the “Non-Call Expiration Date”), computed using the Adjusted
LIBOR Rate for an Interest Period of three months plus the Applicable Margin with respect to
Eurodollar Loans in effect on such date.



     “Approval Order” shall mean the Order Granting Motion of Debtors and Debtors in Possession for
an Order Pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code for Authority to (A) Enter
into Exit Facility Commitment Letter and Fee Letter, (B) Pay the Fees and Expenses Associated
Therewith and (C) Furnish Related Indemnities entered by the Bankruptcy Court on August 29, 2007.



     “Approved Fund” shall mean, with respect to any Lender that is a fund that invests in bank
loans and similar commercial extensions of credit, any other fund that invests in bank loans and
similar commercial extensions of credit and is managed by the same investment advisor as such
Lender or by a Lender Affiliate of such investment advisor.



     “Arrangers” shall mean CGMI and JPMSI, acting in their capacity as joint lead arrangers and
joint bookrunners.



     “Asset Sale” shall mean any Disposition of property or series of related Dispositions of
property excluding (i) any such Disposition permitted by any clause of Section 6.05 other than
clause (g) and (ii) any other Disposition or series of related Dispositions so long as the Net Cash
Proceeds to all Group Members therefrom (valued at the initial principal amount thereof in the case
of non-cash proceeds consisting of notes or other debt securities and valued at fair market value
in the case of other non-cash proceeds) do not exceed (x) $10,000,000 for any single Disposition or
series of related Dispositions and (y) $50,000,000 in any fiscal year for all Dispositions and
series of related Dispositions excluded pursuant to subclause (x) of this clause (ii).



     “Assignment and Acceptance” shall mean an assignment and acceptance entered into by a Lender
and an Eligible Assignee, and accepted by the Administrative Agent, substantially in the form of
Exhibit A.



     “Augmenting Lender” shall have the meaning set forth in Section 2.28.



     “Available AM Finished Goods” at any date of determination shall be equal to the product of
(i) Eligible AM Finished Goods multiplied by (ii) 85% of the Net Orderly Liquidation Rate in effect
(based on the then most recent independent inventory appraisal) on such date of determination.



     “Available Goods-In-Transit” at any date of determination shall be equal to the product of (i)
Eligible Goods-In-Transit multiplied by (ii) 50% of the Net Orderly Liquidation Rate in effect
(based on the then most recent independent inventory appraisal) on such date of determination.



     “Available OE Finished Goods” at any date of determination shall be equal to the product of
(i) Eligible OE Finished Goods multiplied by (ii) 85% of the Net Orderly Liquidation



5









 







Rate in effect (based on the then most recent independent inventory appraisal) on such date of
determination.



     “Available Raw Materials” at any date of determination shall be equal to the product of (i)
Eligible Raw Materials multiplied by (ii) 85% of the Net Orderly Liquidation Rate in effect (based
on the then most recent independent inventory appraisal) on such date of determination.



     “Available Work-In-Process” at any date of determination shall be equal to the product of (i)
Eligible Work-In-Process multiplied by (ii) 85% of the Net Orderly Liquidation Rate in effect
(based on the then most recent independent inventory appraisal) on such date of determination.



     “Average Monthly Revolving Credit Facility Availability” shall mean, for any fiscal month, the
average daily Revolving Credit Facility Availability for such fiscal month.



     “Bankruptcy Code” shall mean The Bankruptcy Reform Act of 1978, as heretofore and hereafter
amended, and codified as 11 U.S.C. Section 101 et seq.



     “Bankruptcy Court” shall mean the United States Bankruptcy Court for the District of Delaware
or any other court having jurisdiction over the Cases from time to time.



     “Board” shall mean the Board of Governors of the Federal Reserve System of the United States.



     “Board-Approved Investment” shall mean an Investment made pursuant to Section 6.08(t).



     “Board Majority” shall mean, in respect of any action of the board of directors of the
Borrower, a majority of the directors on the board of directors of the Borrower constituting a
quorum, present and voting with respect to such action, where a quorum is no less than a majority
of the total number of directors constituting the board of directors of the Borrower as such total
number is designated by the By-Laws and Certificate of Incorporation of the Borrower.



     “Borrower” shall have the meaning set forth in the introductory paragraph to this Agreement.



     “Borrowing” shall mean a Revolving Credit Borrowing, a Term Borrowing or a Swing Line
Borrowing, as the context may require.



     “Borrowing Base” shall mean, at the time of any determination, an amount equal to the sum,
without duplication, of (a) 85% of Adjusted Eligible Accounts Receivable plus (b) Available Raw
Materials, plus (c) Available OE Finished Goods, plus (d) Available AM Finished Goods, plus (e)
Available Goods-In-Transit, plus (f) Available Work-In-Process. The Borrowing Base at any time
shall be determined by reference to the most recent Borrowing Base Certificate delivered to the
Administrative Agent pursuant to Section 5.12 of this Agreement. Subject to the limitations and
requirements set forth in Section 9.10 of this Agreement, standards of eligibility and reserves and
advance rates of the Borrowing Base may be revised and adjusted



6









 







from time to time by the Administrative Agent in its reasonable credit judgment, with any
changes in such standards to be effective three (3) Business Days after delivery of notice thereof
to the Borrower.



     “Borrowing Base Addition Amount” shall mean, with respect to each Permitted Acquisition, an
amount equal to the increase in the Borrowing Base that results from giving effect to the
consummation of such Acquisition on a pro forma basis, as determined in consultation with the
Administrative Agent based on internal audits or inventory appraisals performed by an independent
inventory appraisal firm reasonably satisfactory to the Administrative Agent; provided that, such
increase to the Borrowing Base shall be calculated based on the highest level of inventory,
accounts receivables and other borrowing base components determined on any date within the twelve
months preceding such Permitted Acquisition if the Borrower shall have delivered to the
Administrative Agent such information as the Administrative Agent shall reasonably request to
demonstrate such inventory, accounts receivables and other borrowing base components on such date.



     “Borrowing Base Certificate” shall mean a certificate substantially in the form of Exhibit B
hereto (with such changes therein as may be required by the Administrative Agent from time to time
to reflect the components of and reserves against the Borrowing Base as provided for hereunder from
time to time), executed and certified as accurate and complete by a Financial Officer, which shall
include appropriate exhibits, schedules and supporting documentation, and additional reports (i) as
outlined in Exhibit B, (ii) as requested by the Administrative Agent, and (iii) as provided in
Section 5.12.



     “Borrowing Base Collateral” shall mean Accounts, Inventory and the proceeds thereof.



     “Borrowing Base Priority Obligations” shall have the meaning set forth in the Intercreditor
Agreement.



     “Business Day” shall mean any day other than a Saturday, Sunday or other day on which banks in
the State of New York are required or permitted to close (and, for a Letter of Credit, any day
other than a day on which the Fronting Bank issuing such Letter of Credit is closed); provided,
however, that when used in connection with a Eurodollar Loan, the term “Business Day” shall also
exclude any day on which banks are not open for dealings in dollar deposits on the London interbank
market.



     “Calculation Date” shall mean (i) each day on which a Revolving Credit Borrowing or a Swing
Line Borrowing is proposed to be made, (ii) each day on which an R/C Letter of Credit is proposed
to be issued, (iii) each day on which a Revolving Credit Loan or a Swing Line Loan is to be repaid,
(iv) each day on which a draft is drawn under an R/C Letter of Credit, (v) any date on which the
Total Revolving Credit Usage exceeds 85% of the lesser of (x) the Total Revolving Credit Commitment
and (y) the Borrowing Base, and (vi) the last calendar day of each month.



     “Canadian Dollars” shall mean lawful currency of the Dominion of Canada.



     “Capital Expenditures” shall mean, for any period, with respect to any Person, the aggregate
of all expenditures by such Person and its Subsidiaries for the acquisition or leasing (pursuant to
a capital lease) of fixed or capital assets or additions to equipment (including



7









 







replacements, capitalized repairs and improvements during such period) that should be
capitalized under GAAP on a consolidated balance sheet of such Person and its Subsidiaries;
provided that any Permitted Acquisitions shall in no event constitute Capital Expenditures.



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



     “Cases” shall mean the cases of the U.S. Debtors that were filed on October 1, 2001 and were
pending under Chapter 11 of the Bankruptcy Code prior to the date hereof.



     “Cash Equivalents” shall mean (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 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-1 by S&P or P-1 by 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 one year 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; (g) money market
mutual or similar funds that invest exclusively in assets satisfying the requirements of any of
clauses (a) through (f) of this definition; (h) money market funds that (i) comply with the
criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are
rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000; (i)
debt securities of an issuer rated at least A-1 by S&P or P-1 by Moody’s, or carrying an equivalent
rating by a nationally recognized rating agency and (j) solely with respect to any Foreign
Subsidiary, in addition to the investments described in clauses (a) through (i), any investment of
the type described in clause (a) issued or unconditionally guaranteed by any government of any
country in which such



8









 







Foreign Subsidiary conducts any operations, any investment of the type described in clause (b)
issued by any commercial bank organized under the laws of any country in which such Foreign
Subsidiary conducts any operations, any investment of the type described in clause (c) or clause
(e) that has ratings issued by any internationally recognized rating agency equivalent to those set
forth in such clause and any investment of the type described in clause (g) that satisfies the
requirements of any of the other investments described in this clause (j).



     “Cash Management Obligations” shall have the meaning set forth in the Collateral Agreement.



     “CGMI” shall mean Citigroup Global Markets Inc., and its successors.



     “Change of Control” shall mean:



     (a) at any time any “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”)) other than Permitted Holders
shall become the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange
Act), directly or indirectly, of more than 50% of the aggregate outstanding Class A Common Stock
and Class B Common Stock; or



     (b) at any time during which Thornwood holds any Class A Common Stock, (i) the aggregate
amount of Class A Common Stock held by Thornwood shall be less than 66 2/3% of the aggregate amount
of Class A Common Stock held by Thornwood on the Effective Date and (ii) a person or group (other
than Permitted Holders) shall be the beneficial owner of at least 35% of the aggregate outstanding
Class A Common Stock and Class B Common Stock; or



     (c) at any time (i) the majority of the seats on the board of directors of the Borrower is
occupied by Persons who were neither (x) nominated or appointed by the board of directors of the
Borrower as of the Closing Date nor (y) appointed or nominated by directors described in clause (x)
and (ii) a person or group (other than Permitted Holders) shall be the beneficial owner of
at least 35% of the aggregate outstanding Class A Common Stock and Class B Common Stock.



     For the avoidance of doubt, in no event shall any direct or indirect transfer of any Class A Common
Stock or any other Capital Stock of the Borrower, by Thornwood or any of its Affiliates to any
Affiliate of Thornwood or to Thornwood, give rise to or be deemed a “Change of Control” hereunder.



     “Channeling Injunction” shall mean the Third Party Injunction substantially on the terms set
forth in Section 9.3.2 of the Reorganization Plan as in existence on November 14, 2007 and which
shall be issued and entered by the Bankruptcy Court and affirmed by the District Court as part of
the Confirmation Order; provided that Protected Parties referred to in such Third Party Injunction
need not include any Excluded Subsidiary.



     “Citibank” shall mean Citibank, N.A., a national banking association, and its successors.



9









 





     “Citibank Rate” shall mean the rate of interest per annum publicly announced from time to time
by Citibank as its base rate in effect at its principal office in New York City; each change in the
Citibank Rate shall be effective on the date such change is publicly announced.



     “Class” (a) when used with respect to Lenders, shall refer to whether such Lenders are Term
Loan Lenders or Revolving Credit Lenders, (b) when used with respect to Term Loan Lenders, shall
refer to whether such Term Loan Lenders are Tranche B Lenders or Tranche C Lenders, (c) when used
with respect to Commitments, shall refer to whether such Commitments are Tranche B Commitments,
Tranche C Commitments or Revolving Credit Commitments, (d) when used with respect to Term Loan
Commitments, shall refer to whether such Term Loan Commitments are Tranche B Commitments or Tranche
C Commitments, (e) when used with respect to Loans or a Borrowing, shall refer to whether such
Loans, or the Loans comprising such Borrowing, are Tranche B Term Loans, Tranche C Term Loans or
Revolving Credit Loans, (f) when used with respect to Term Loans or a Term Borrowing, shall refer
to whether such Term Loans, or the Term Loans comprising such Term Borrowing, are Tranche B Term
Loans or Tranche C Term Loans, (g) when used with respect to Letters of Credit, shall refer to
whether such Letters of Credit are Term Letters of Credit or R/C Letters of Credit and (h) when
used with respect to Letter of Credit Outstandings, shall refer to whether such Letter of Credit
Outstandings are Term Letter of Credit Outstandings or R/C Letter of Credit Outstandings.



     “Class A Common Stock” shall mean the Class A Common Stock, par value $0.01 of the Borrower.



     “Class B Common Stock” shall mean the Class B Common Stock, par value $0.01, of the Borrower.



     “Class Percentage” shall mean at any time (a) when used with respect to any Tranche B Lender,
the percentage obtained by dividing (x) the aggregate outstanding principal amount of such Tranche
B Lender’s Tranche B Term Loans at such time by (y) the aggregate outstanding principal amount of
all Tranche B Term Loans at such time, (b) when used with respect to any Tranche C Lender, the
percentage obtained by dividing (x) the aggregate outstanding principal amount of such Tranche C
Lender’s Tranche C Term Loans at such time by (y) the aggregate outstanding principal amount of all
Tranche C Term Loans at such time and (c) when used with respect to any Revolving Credit Lender,
the percentage obtained by dividing such Revolving Credit Lender’s Revolving Credit Commitment at
such time by the Total Revolving Credit Commitment at such time (or, if the Total Revolving Credit
Commitment has been terminated, the percentage obtained by dividing the sum of such Revolving
Credit Lender’s outstanding principal amount of Revolving Credit Loans, aggregate amount of
participations in Swing Line Loans and R/C Letter of Credit Outstandings by the Total Revolving
Credit Usage, in each case at such time).



     “Closing Date” shall mean the date on which this Agreement has been executed and the
conditions precedent set forth in Section 4.01 have been satisfied or waived, which date is
December 27, 2007.



     “Code” shall mean the Internal Revenue Code of 1986, as amended.



10









 





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



     “Collateral Agreement” shall mean the Collateral Agreement among the Loan Parties and the
Collateral Trustee, substantially in the form of Exhibit C.



     “Collateral Trustee” shall mean Citibank, in its capacity as collateral agent under the
Collateral Trust Agreement, together with any of its successors.



     “Collateral Trust Agreement” shall mean the Collateral Trust Agreement among the Loan Parties,
the Collateral Trustee, the Administrative Agent, the Tranche A Administrative Agent referred to
therein and the PIK Agent referred to therein, substantially in the form of Exhibit D.



     “Commitment” shall mean a Tranche B Commitment, a Tranche C Commitment or a Revolving Credit
Commitment.



     “Commitment Fee” shall have the meaning set forth in Section 2.23(a).



     “Commonly Controlled Entity” shall mean 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.



     “Company Voluntary Arrangements” shall mean, collectively, (i) the proposals dated June 23,
2006 for company voluntary arrangements in respect of T&N Limited, a company incorporated in
England and Wales and a Subsidiary of the Borrower, and forty-eight other U.K. Subsidiaries which
are Group Members, and (ii) the proposals dated June 23, 2006 for company voluntary arrangements in
respect of Federal-Mogul Global Growth Limited, a company organized under the laws of England, and
F-M UK Holding Limited, a company organized under the laws of England, which proposals in each case
became effective in accordance with the laws of England and Wales on October 11, 2006.



     “Compliance Certificate” shall mean a certificate duly executed by a Responsible Officer
substantially in the form of Exhibit E.



     “Concentration Account” shall have the meaning set forth in Section 5.10.



     “Confidential Information Memorandum” shall mean the Confidential Information Memorandum dated
December 2007 and furnished to certain Lenders.



     “Confirmation Order” shall mean that certain order confirming the Reorganization Plan pursuant
to applicable sections of the Bankruptcy Code entered by the Bankruptcy Court on November 8, 2007
and affirmed by the District Court on November 13, 2007.



     “Consolidated Amortization” shall mean, for any period, the aggregate amount of scheduled
payments required to be made during such period on account of principal of Indebtedness of Group
Members (including without limitation, scheduled principal payments in



11









 







respect of the Term Loans and the Tranche A Term Loans and payments of revolving loans
accompanying scheduled reductions of the corresponding commitments, but excluding, (x) any
scheduled principal payments in respect of Specified Indebtedness, and (y) any final scheduled
principal payment in respect of Indebtedness (other than Specified Indebtedness), provided that,
for purposes of calculating Consolidated Amortization for any period of four fiscal quarters which
includes the final scheduled principal payment of any such Indebtedness, Consolidated Amortization
shall be deemed to include an amount equal to the scheduled principal payment immediately preceding
such date of final scheduled principal payment in lieu of the final scheduled principal payment).



     “Consolidated Debt Service Coverage Ratio” shall mean, on the last day of any fiscal quarter
of the Borrower, the ratio of (a) Consolidated EBITDA for the period of four fiscal quarters ending
on such day, less the aggregate amount of Capital Expenditures incurred by the Group Members during
such period in accordance with GAAP (excluding the principal amount of Indebtedness incurred in
connection with such Capital Expenditures and any such Capital Expenditures financed with the
proceeds of any Reinvestment Deferred Amount or Positive EBITDA Variance) to (b) the sum of (i)
Consolidated Interest Expense for the period of four fiscal quarters ending on such day, (ii)
Consolidated Amortization for the immediately succeeding four fiscal quarters of the Borrower and
(iii) the aggregate amount of dividends paid on any class of the Borrower’s Capital Stock during
the period of four fiscal quarters ending on such day.



     “Consolidated EBITDA” shall mean, for any period, Consolidated Net Income 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) depreciation expense, (b) amortization
expense, (c) expenses or losses resulting from LIFO adjustments for inventory valuation in
accordance with GAAP, (d) income tax expense, (e) interest expense, (f) extraordinary losses, (g)
any non-recurring charge or restructuring charge which in accordance with GAAP is excluded from the
calculation of operating income, provided that the aggregate amount of charges added to
Consolidated EBITDA for any period pursuant to this clause (g) that are cash charges or
expenditures during such period or could reasonably be expected to become a cash charge or
expenditure in any future period shall not exceed $60,000,000 for such period, (h) the cumulative
effect of any changes in accounting principles, as shown on the Borrower’s consolidated statement
of income for such period, (i) amounts payable under any key employee retention program implemented
during the Cases, (j) any pension contribution expense in respect of defined benefit plans, (k) any
non-recurring Chapter 11 expenses and (l) any other non-cash charges not included in operating
income or in clauses (f) or (g) and minus, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (i) interest income, (ii) extraordinary gains,
(iii) any income tax credits (to the extent not netted from income tax expense), (iv) any income
resulting from LIFO adjustments or inventory valuation in accordance with GAAP, (v) any pension
income and gains in respect of defined benefit plans, (vi) any other non-cash income or gains, and
(vii) the income, if any, attributable to Minority Interests, all as determined on a consolidated
basis. In addition, “Consolidated EBITDA” for any period shall be subject to any adjustment with
respect to such period required to be made by the Borrower’s independent certified public
accountants as a result of “fresh start” accounting and set forth in reasonable detail in a
certificate of a Responsible Officer delivered to the Administrative Agent.



12









 





     “Consolidated First Priority Leverage Ratio” shall mean, as of the last day of any period of
four consecutive fiscal quarters, the ratio of (a) the portion of Consolidated Senior Debt on such
day that is secured by Liens on the Collateral having the same priority as the “First Priority
Liens” referred to in the Intercreditor Agreement, less the aggregate amount of unrestricted cash
and Cash Equivalents of the Group Members on such day in excess of Minimum Cash on such day, to (b)
Consolidated EBITDA for such period.



     “Consolidated Interest Coverage Ratio” shall mean, on the last day of any fiscal quarter of
the Borrower, the ratio of (a) Consolidated EBITDA for the period of four fiscal quarters ending on
such day, to (b) Consolidated Interest Expense for the period of four fiscal quarters ending on
such day.



     “Consolidated Interest Expense” shall mean, for any period, the consolidated cash interest
expense of the Group Members for such period (but excluding any such interest expense in respect of
Specified Indebtedness and any upfront fees paid with respect to the debt financings evidenced by
this Agreement, the Tranche A Term Loan Agreement as in effect on the Closing Date and the Senior
Subordinated Notes Indenture as in effect on the Closing Date), determined on a consolidated basis
in accordance with GAAP, less interest income.



     “Consolidated Net Income” shall mean, for any period, the consolidated net income (or loss) of
the Group Members, determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded the income (or loss) of any Subsidiary accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with any Group Member.



     “Consolidated Senior Debt” shall mean all Consolidated Total Debt other than the Senior
Subordinated Notes and Permitted Subordinated Indebtedness.



     “Consolidated Senior Leverage Ratio” shall mean, as of the last day of any period of four
consecutive fiscal quarters, the ratio of (a) Consolidated Senior Debt on such day, less the
aggregate amount of unrestricted cash and Cash Equivalents of the Group Members on such day in
excess of Minimum Cash on such day to (b) Consolidated EBITDA for such period.



     “Consolidated Total Debt” shall mean, at any date, the aggregate principal amount of all
Indebtedness of the Group Members at such date, determined on a consolidated basis minus Specified
Indebtedness.



     “Contra Reserve” shall mean, at any date, a reserve determined in the Administrative Agent’s
reasonable credit judgment, based upon the estimated amount of Accounts wherein the Account Debtor
(i) is a creditor of a Loan Party, (ii) has, has asserted or is reasonably expected to assert a
right of set-off against a Loan Party or (iii) has disputed or is reasonably expected to dispute
its liability (whether by chargeback or otherwise) or made, or is reasonably expected to make any
claim with respect to the Account or any other Account of a Loan Party which has not been resolved,
in each case, without duplication, to the extent of the amount owed by such Loan Party to the
Account Debtor, the amount of such actual or asserted right of set-off, or the amount of such
dispute or claim, as the case may be.



     “Contractual Obligation” shall mean, as to any Person, any provision of any security issued by
such Person or of any agreement, instrument or other undertaking to which such



13









 







Person is a party or by which it or any of its property is bound; provided that such security,
agreement, instrument or undertaking requires aggregate payments by such Person of at least
$75,000,000 pursuant to the terms thereof.



     “CUSA” shall have the meaning set forth in the introductory paragraph to this Agreement.



     “Default” shall mean any of the events specified in Article VII, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been satisfied.



     “Dilution Factors” shall mean, without duplication, and excluding any items included in the
Rebate Reserve, with respect to any period, the aggregate amount of all deductions, credit memos,
returns, adjustments, allowances, bad debt write-offs and other non-cash credits which are recorded
to reduce accounts receivable in a manner consistent with current and historical accounting
practices of the Loan Parties.



     “Dilution Ratio” shall mean, at any date, the amount (expressed as a percentage) equal to (a)
the aggregate amount of the applicable Dilution Factors for the twelve (12) most recently ended
fiscal months divided by (b) total gross sales for the twelve (12) most recently ended fiscal
months or such other amount as may be determined by the Administrative Agent in its reasonable
credit judgment in the event the Loan Parties are unable to calculate dilution effectively in the
manner contemplated.



     “Dilution Reserve” shall mean, at any date, the product of (i) the applicable Dilution Ratio
minus 5% (which amount shall not be less than zero) multiplied by (ii) the Eligible Accounts
Receivable on such date.



     “DIP Facility” shall mean the credit facility provided to the Borrower and certain of its
Subsidiaries pursuant to the Credit and Guaranty Agreement dated as of November 23, 2005 among the
Borrower, the Subsidiaries of the Borrower party thereto, the lenders from time to time party
thereto and Citicorp USA, Inc., as administrative agent for such lenders, as amended from time to
time, together with all instruments and other agreements entered into by the Borrower or any of its
Subsidiaries in connection therewith.



     “Disclosure Statement” shall mean the Disclosure Statement, in the form approved by the
Bankruptcy Court on June 4, 2004, and as supplemented by that certain Supplemental Disclosure
Statement Describing Fourth Amended Joint Plan of Reorganization dated February 7, 2007 (which
Supplemental Disclosure Statement was approved by the Bankruptcy Court by order entered on February
6, 2007), describing the Reorganization Plan and distributed to the parties in interest in
connection with voting on the Reorganization Plan.



     “Disposition” shall mean, with respect to any property, any sale, lease, sale and leaseback,
assignment, conveyance, transfer or other disposition thereof. The terms “Dispose” and “Disposed
of” shall have correlative meanings.



     “District Court” shall mean the United States District Court for the District of Delaware or
the unit thereof having jurisdiction over the matter in question.



14









 





     “Dollar Equivalent” shall mean on any date (i) with respect to the undrawn stated amount of
any R/C Letter of Credit that is denominated in Dollars, the undrawn stated amount thereof, (ii)
with respect to the undrawn stated amount of any R/C Letter of Credit that is denominated in an
Alternative Currency, the equivalent of such amount in Dollars determined at the Exchange Rate,
(iii) with respect to the drawn and unreimbursed amounts under any R/C Letter of Credit that is
denominated in Dollars, the drawn and unreimbursed amounts thereof and (iv) with respect to the
drawn and unreimbursed amounts under any R/C Letter of Credit that is denominated in an Alternative
Currency, the equivalent of such drawn and unreimbursed amounts in Dollars determined at the
Exchange Rate, in each case as of the most recent Calculation Date occurring on or prior to such
date.



     “Dollars” and “$” shall mean lawful money of the United States.



     “Domestic Subsidiary” shall mean any Subsidiary incorporated, organized or formed under the
laws of any jurisdiction of the United States.



     “Domestic Subsidiary Guarantee” shall mean the Domestic Subsidiary Guarantee to be executed
and delivered by each Guarantor that is a Domestic Subsidiary (other than the Non-Guarantor
Domestic Subsidiaries), substantially in the form of Exhibit F.



     “Effective Date” shall mean December 27, 2007, being the date on which the Reorganization Plan
became effective as provided therein.



     “Eligible Accounts Receivable” shall mean, at the time of any determination thereof, each
Account of a Loan Party that satisfies the following criteria at the time of creation and continues
to meet the same at the time of such determination: such Account (i) has been invoiced to, and
represents the bona fide amounts due to any Loan Party from, the purchaser of goods or services, in
each case originated in the ordinary course of business of such Loan Party and (ii) in each case is
subject to the Loan Parties’ corporate accounts receivable credit and collection policies,
procedures and practices and (iii) is not ineligible for inclusion in the calculation of the
Borrowing Base pursuant to any of clauses (a) through (r) below or otherwise deemed by the
Administrative Agent in its reasonable credit judgment in good faith to be ineligible for inclusion
in the calculation of the Borrowing Base as described below. In computing the amount of Eligible
Accounts Receivable, an amount equal to the Contra Reserve and the Rebate Reserve shall be
subtracted. Non-Core Accounts Receivable shall not constitute Eligible Accounts Receivable.
Without limiting the foregoing, to qualify as Eligible Accounts Receivable, an Account shall
indicate no Person other than a Loan Party as payee or remittance party. In determining the amount
to be so included, the face amount of an Account shall be reduced by, without duplication, to the
extent not reflected in such face amount, (i) the amount of all accrued and actual discounts,
claims, credits or credits pending, promotional program allowances, price adjustments, finance
charges or other allowances (including any amount that the Loan Parties, as applicable, may be
obligated to rebate to a customer pursuant to the terms of any agreement or understanding (written
or oral)), (ii) the aggregate amount of all limits and deductions provided for in this definition
and elsewhere in this Agreement and (iii) the aggregate amount of all cash received in respect of
such Account but not yet applied by the Loan Parties to reduce the amount of such Account. Unless
otherwise approved from time to time in writing by the Administrative



15









 







Agent (subject to the limitations and requirements set forth in Section 9.10), no Account
shall be an Eligible Account Receivable if, without duplication:



     (a) the relevant Loan Party does not have sole lawful and absolute title to such Account; or



     (b) except for Accounts subject to the Extended Terms Eligible Amount, (i) it is unpaid more
than ninety (90) days from the original date of invoice or sixty (60) days from the original due
date or (ii) it has been written off the books of the Loan Parties or has been otherwise designated
on such books as uncollectible; or



     (c) more than 50% in face amount of all Accounts of the same Account Debtor are ineligible
pursuant to clause (b) above; or



     (d) the Account Debtor is insolvent or the subject of any bankruptcy case or insolvency
proceeding of any kind or is of uncertain credit quality, as determined by the Administrative Agent
in its reasonable credit judgment; or



     (e) the Account is not payable in Dollars or Canadian Dollars or the Account Debtor is either
not organized under the laws of the United States or Canada, any State or Province thereof, or the
District of Columbia or is located outside or has its principal place of business or substantially
all of its assets outside the United States or Canada, except to the extent the Account is
supported by an irrevocable letter of credit reasonably satisfactory to the Administrative Agent
(as to form, substance and issuer) and assigned to and directly drawable by the Administrative
Agent; provided, however, that Accounts not to exceed $30,000,000 at any time outstanding may be
eligible despite the fact that the Account Debtor is not organized under the laws of the United
States or Canada, any State or Province thereof or the District of Columbia, or is located, has its
principal place of business or has substantially all of its assets outside the United States or
Canada, and no letter of credit has been issued to support such Accounts; or



     (f) the Account Debtor is the United States or any department, agency or instrumentality
thereof, unless the relevant Loan Party duly assigns its rights to payment of such Account to the
Administrative Agent pursuant to the Assignment of Claims Act of 1940, as amended, which assignment
and related documents and filings shall be in form and substance satisfactory to the Administrative
Agent; or



     (g) the Account is supported by a security deposit (to the extent received from the applicable
Account Debtor), progress payment, retainage or other similar advance made by or for the benefit of
the applicable Account Debtor, in each case to the extent thereof; or



     (h) (i) it is not subject to a valid and perfected first priority Lien in favor of the
Administrative Agent for the benefit of the Lenders, subject to no other Liens other than Liens
permitted by Section 6.03 or (ii) it does not otherwise conform in all material respects to the
representations and warranties contained in the Loan Documents relating to Accounts; or



     (i) such Account was invoiced in advance of goods or services provided, or twice, or the
income associated with such Account has not been earned; or



16









 





     (j) such Account is classified as a note receivable by the Loan Parties in accordance with the
Loan Parties’ current and historical practices; or



     (k) the sale to the Account Debtor is on a bill-and-hold, guaranteed sale, sale-and-return,
ship-and-return, sale on approval or consignment or other similar basis or made pursuant to any
other written agreement providing for repurchase or return of any merchandise which has been
claimed to be defective or otherwise unsatisfactory; or



     (l) the Account represents a progress-billing or otherwise does not represent a completed
sale; or



     (m) the Account Debtor is an Affiliate (other than an Eligible Affiliate) of any of the Loan
Parties; or



     (n) such Account was not paid in full, and the Loan Party created a new receivable for the
unpaid portion of the Account, without the agreement of the customer, and other Accounts
constituting chargebacks, debit memos and other adjustments for unauthorized deductions; or



     (o) the Account is due and payable more than one hundred eighty (180) days from the original
date of invoice; or



     (p) the Account is created on cash on delivery terms; or



     (q) the Account does not comply in all material respects with the requirements of all
applicable laws and regulations, whether Federal, state or local; or



     (r) as to all or any part of such Account, a check, promissory note, draft, trade acceptance
of other instrument for the payment of money has been received, presented for payment and returned
uncollected for any reason.



     Notwithstanding the foregoing, all Accounts of any single Account Debtor and its Affiliates
which, in the aggregate exceed (i) 20%, in respect of Account Debtors whose securities are rated
Investment Grade by either of Moody’s or S&P, or (ii) 10%, in respect of all other Account Debtors,
of the total amount of all Eligible Accounts Receivable at the time of any determination shall be
deemed not to be Eligible Accounts Receivable to the extent of such excess. In determining the
aggregate amount of Accounts from the same Account Debtor that are unpaid more than ninety (90)
days from the date of invoice or more than sixty (60) days from the due date pursuant to clause (b)
above, there shall be excluded the amount of any net credit balances relating to Accounts with
invoice dates more than ninety (90) days prior to the date of determination or more than sixty (60)
days from the due date. Furthermore, no Account shall be an Eligible Account Receivable if it is
for goods that have been sold under a purchase order or pursuant to the terms of a contract or
other agreement or understanding (written or oral) that indicates that any Person other than a Loan
Party has or has had or has purported to have or have had an ownership interest in such goods.



     “Eligible Affiliate” means any Affiliate of any of the Loan Parties, provided that (a) the
Group Members, individually or in the aggregate, do not own, control or hold, directly or



17









 







indirectly, Capital Stock in such Affiliate representing 50% or more of the equity or 50% or
more of the voting power, or, in the case of a partnership, 50% of the general or limited
partnership interests of such Affiliate, (b) the accounts of such Affiliate are not consolidated
with those of the Borrower in the Borrower’s consolidated financial statements (and are not
required to be so consolidated in accordance with GAAP) and (c) each Account due to any Loan Party
from such Affiliate requires payment for the goods sold or leased or the services rendered in the
ordinary course of business to such Affiliate in cash and on terms that are no less favorable to
such Loan Party than those that could be obtained at such time in arm’s length dealings with a
Person who is not an Affiliate of such Loan Party.



     “Eligible AM Finished Goods” shall mean, on any date, Eligible Inventory (other than
Goods-In-Transit) composed of AM Finished Goods on such date as shown on the Loan Parties’
perpetual inventory records in accordance with their current and historical accounting practices,
minus Inventory Reserves with respect thereto.



     “Eligible Assignee” shall mean (i) a commercial bank having total assets in excess of
$1,000,000,000; (ii) a finance company, insurance company or other financial institution or fund,
in each case reasonably acceptable to the Administrative Agent, which in the ordinary course of
business extends credit of the type contemplated herein and has total assets in excess of
$200,000,000 and whose becoming an assignee would not constitute a prohibited transaction under
Section 4975 of ERISA; (iii) an Approved Fund; (iv) a Lender Affiliate; and (v) any other financial
institution satisfactory to the Borrower and the Administrative Agent, and in the case of any
assignment of a Revolving Credit Commitment, to the Fronting Bank and the Swing Line Lender.



     “Eligible Goods-In-Transit” shall mean, on any date, Eligible Inventory composed of
Goods-In-Transit, as determined by the Administrative Agent in its reasonable credit judgment, on
such date as shown on the Loan Parties’ perpetual inventory records in accordance with current and
historical accounting practices, minus Inventory Reserves with respect thereto.



     “Eligible Inventory” shall mean, on any date, the Inventory Value of all Inventory owned by
the Loan Parties on such date deemed by the Administrative Agent in its reasonable credit judgment
in good faith to be eligible for inclusion in the calculation of the Borrowing Base. Eligible
Inventory shall exclude remanufactured parts and Inventory referred to as “cores inventory”.
Unless otherwise from time to time approved in writing by the Administrative Agent (subject to the
limitations and requirements set forth in Section 9.10), no Inventory shall be deemed Eligible
Inventory if (and without duplication):



     (a) it is not owned solely by the Loan Parties or the Loan Parties do not have sole and good,
valid and unencumbered title thereto; or



     (b) it is not located in the United States (or, if F-M Canada becomes a Loan Party in
accordance with Section 5.09(e), with respect to Inventory owned by F-M Canada, such Inventory is
not located in the United States or Canada); or



     (c) it is not located on or in, and is not in transit to, (i) property owned or leased by the
Loan Parties or (ii) a contract warehouse specified on a schedule attached to the Collateral



18









 







Agreement and segregated or otherwise separately identifiable from goods of all others, if
any, stored on the premises; or



     (d) it is not subject to a valid and perfected first priority Lien in favor of the
Administrative Agent, except, with respect to Inventory stored at sites described in clause (c)
above, for Liens for unpaid rent or normal and customary warehousing charges, in each case, not yet
paid, to the extent of such unpaid rent or charges; or



     (e) it is goods returned or rejected due to quality issues by the Loan Parties’ customers or
goods in transit to third parties (other than to warehouse sites described in clause (c) above); or



     (f) it is not in good condition, does not meet all material standards imposed by any
Governmental Authority having regulatory authority over it, is defective, is seconds or thirds or
stale, or is obsolete or slow moving or unmerchantable, or does not otherwise conform in all
material respects to the representations and warranties contained in the Loan Documents; or



     (g) it is located at any operating facility that the Loan Parties plan to close, or at any
operating facility that is closed, within thirty (30) days from the date of determination of the
most recent Borrowing Base; or



     (h) it is comprised of film, pallets, and/or other shipping materials or supplies, repair
parts, fuel, cartons used in production or other containers, and any other such material not used
for sale; or



     (i) the Loan Parties classify such item as a sample item on their perpetual inventory records,
or the Loan Parties use such item for display; or



     (j) it is a discontinued product or component thereof; or



     (k) any portion of the Inventory Value thereof is attributable to intercompany profit among
the Loan Parties or their Affiliates; or



     (l) it is damaged or marked for return to vendor; or



     (m) it is consigned but still accounted for in the Loan Parties’ perpetual inventory records.



     “Eligible OE Finished Goods” shall mean, on any date, Eligible Inventory (other than
Goods-In-Transit) composed of OE Finished Goods on such date as shown on the Loan Parties’
perpetual inventory records in accordance with their current and historical accounting practices,
minus Inventory Reserves with respect thereto.



     “Eligible Raw Materials” shall mean, on any date, Eligible Inventory (other than
Goods-In-Transit) composed of Raw Materials to be used in the production of finished goods
inventory for sale, as determined by the Administrative Agent in its reasonable credit judgment, on
such date as shown on the Loan Parties’ perpetual inventory records in accordance with current and
historical accounting practices, minus Inventory Reserves with respect thereto.



19









 





     “Eligible Work-In-Process” shall mean, on any date, Eligible Inventory (other than
Goods-In-Transit) composed of Work-In-Process, as determined by the Administrative Agent in its
reasonable credit judgment, on such date as shown on the Loan Parties’ perpetual inventory records
in accordance with current and historical accounting practices, minus Inventory Reserves with
respect thereto.



     “Environmental Laws” shall mean any and all laws, rules, orders, regulations, statutes,
ordinances, guidelines, codes, decrees, requirements of any Governmental Authority or other
Requirements of Law (including without limitation, common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the environment, or
employee safety, or the use, generation, storage, release, emission, presence or transportation of
any pollutants, contaminants, toxic or hazardous substances or wastes, in each case as has been, is
now or may at any time hereafter be in effect.



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



     “Equity Proceeds” shall mean the Net Cash Proceeds of any issuance of Capital Stock by the
Borrower.



     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.



     “ERISA Affiliate” shall mean any trade or business (whether or not incorporated) which is a
member of a group of which the Borrower is a member and which is under common control within the
meaning of Section 414(b) or (c) of the Code and the regulations promulgated and rulings issued
thereunder.



     “Eurocurrency Liabilities” shall have the meaning assigned thereto in Regulation D issued by
the Board, as in effect from time to time.



     “Eurodollar Borrowing” shall mean a Borrowing comprised of Eurodollar Loans.



     “Eurodollar Loan” shall mean any Loan bearing interest at a rate determined by reference to
the Adjusted LIBOR Rate in accordance with the provisions of Article II.



     “Euros” shall mean the lawful currency of the European Union.



     “Event of Default” shall have the meaning set forth in Article VII.



     “Exchange Rate” shall mean, with respect to any amount denominated in an Alternative Currency
on any Calculation Date, the rate at which such Alternative Currency may be exchanged into Dollars,
as set forth at approximately 11:00 a.m., London time, on such date on the Reuters World Currency
Page for such Alternative Currency. In the event that such rate does not appear on any Reuters
World Currency Page, the Exchange Rate with respect to such Alternative Currency shall be
determined by reference to such other publicly available service for displaying exchange rates as
may be agreed upon by the Administrative Agent and the



20









 







Borrower or, in the absence of such agreement, such Exchange Rate shall instead be calculated
on the basis of the arithmetical mean of the buy and sell spot rates of exchange of the
Administrative Agent for such Alternative Currency on the London market at 11:00 a.m., London time,
on such date for the purchase of Dollars with such Alternative Currency, for delivery two Business
Days later; provided, that if at the time of any such determination, for any reason, no such spot
rate is being quoted, the Administrative Agent, after consultation with the Borrower, may use any
reasonable method it deems appropriate to determine such rate, and such determination shall be
conclusive absent manifest error.



     “Excluded Subsidiary” shall mean (i) any Foreign Subsidiary and any Domestic Subsidiary which
is a Subsidiary of a Foreign Subsidiary in respect of which either (a) the pledge of more than 66%
of the Capital Stock of such Foreign Subsidiary (or, in the case of a Domestic Subsidiary which is
a Subsidiary of a Foreign Subsidiary, the pledge of any Capital Stock of such Domestic Subsidiary)
as Collateral or (b) the guaranteeing by such Subsidiary of, or the pledging of assets by such
Subsidiary to secure, the Obligations, would, in the good faith judgment of the Borrower, result in
adverse tax consequences to any Group Member or would be unlawful for such Subsidiary and (ii) FM
International, LLC, so long as 66% of its Capital Stock is pledged under the Security Documents and
such entity has no operations other than holding the Capital Stock of any Foreign Subsidiary.



     “Existing DIP Letters of Credit” shall mean all letters of credit issued pursuant to the DIP
Facility, outstanding immediately prior to the Closing Date and listed on Part A of Schedule 1.01A.



     “Existing Fronting Bank” shall mean each of Citibank and JPMorgan Chase Bank, N.A., in its
capacity as issuer of Existing Letters of Credit.



     “Existing Letters of Credit” shall mean the Existing DIP Letters of Credit and the Existing
Prepetition Letters of Credit.



     “Existing Prepetition Letters of Credit” shall mean all letters of credit issued pursuant to
the Prepetition Credit Agreement, outstanding immediately prior to the Closing Date and listed on
Part B of Schedule 1.01A.



     “Extended Terms Customer” shall mean, on any date, Account Debtors which have terms of sales
greater than ninety (90) days, but not greater than one hundred eighty (180) days.



     “Extended Terms Eligible Amount” shall mean, on any date, for each Extended Terms Customer,
Accounts which are less than one day past due, arising as a result of the sale of goods with
payment terms in excess of ninety (90) days and not greater than one hundred eighty (180) days.



     “Factoring Arrangements” shall mean any arrangements between an Excluded Subsidiary and a
third party (other than an Affiliate) under which the Receivables of such Excluded Subsidiary are
factored on a non-recourse basis.



     “Factoring Basket” shall mean, on any date, an amount equal to the greater of (i) $400,000,000
and (ii) $400,000,000 times the Factoring Growth Rate on such date.



21









 





     “Factoring Growth Rate” shall mean, on any date, the ratio of (i) the collective sales of the
Group Members outside of the United States for the period of twelve consecutive months most
recently ended prior to such date and for which such figure has been reported by the Borrower to
the Administrative Agent, expressed at the Borrower’s accounting rate as in effect on the last day
of such period (which accounting rate shall be determined by the Borrower in good faith consistent
with the manner in which such rate has been determined by the Borrower prior to the Closing Date)
to (ii) $3,000,000,000.



     “Fair Market Consideration” shall mean, with respect to any Acquisition, the aggregate fair
market value of all consideration paid or payable by the Group Members, including (x) the fair
market value of any Investments made in the subject Person or in such assets subject of such
Acquisition and (y) the incurrence by the Group Members of any Indebtedness associated therewith,
but excluding the fair market value of any Capital Stock of any Group Members included in any such
consideration.



     “Federal Funds Rate” shall mean, for any day, the rate per annum (rounded upward, if
necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published on the next succeeding Business Day by the Federal Reserve Bank
of New York, provided that (i) if such day is not a Business Day, the Federal Funds Rate for such
day shall be such rate on such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (ii) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average rate quoted to Citibank on
such day on such transactions as determined by the Administrative Agent.



     “Fee Letter” shall have the meaning set forth in Section 2.22.



     “Fees” shall collectively mean the Commitment Fees, Letter of Credit Fees, the Ticking Fees
and other fees referred to in Sections 2.22, 2.23 and 2.24.



     “Financial Officer” shall mean the Chief Financial Officer, Controller, Treasurer or Assistant
Treasurer of the Borrower.



     “Finished Goods” shall mean goods to be sold by the Loan Parties in the ordinary course of
business.



     “F-M Canada” shall mean Federal-Mogul Canada Limited, a Canadian corporation.



     “F-M Canada Addition Date” shall have the meaning set forth in Section 5.09(f).



     “Foreign Credit Facilities” shall mean credit facilities to be made available to Excluded
Subsidiaries of the Borrower to fund their respective operations; provided that such credit
facilities are not secured by any assets of any Loan Party.



     “Foreign Pledge Agreements” shall mean (a) the pledge agreements described on Schedule 1.01B
and (b) any other pledge agreement, in form and substance reasonably



22









 







satisfactory to the Administrative Agent, pursuant to which shares of Foreign Subsidiaries may
be pledged from time to time.



     “Foreign Subsidiary” shall mean a Subsidiary which is incorporated or organized under the laws
of a jurisdiction outside of the United States.



     “Foreign Subsidiary Guarantee” shall mean any guarantee, in form and substance reasonably
satisfactory to the Administrative Agent, by a Foreign Subsidiary of the Obligations that may be
executed and delivered to the Collateral Trustee, including without limitation pursuant to Sections
5.09(e) and 5.09(f).



     “Fronting Bank” shall mean Citibank or such other commercial bank as may agree with Citibank
to act in such capacity for the Lenders and, solely with respect to any Existing Letter of Credit,
the Existing Fronting Bank issuing the same.



     “GAAP” shall mean accounting principles generally accepted in the United States and applied in
accordance with Section 1.02.



     “General Investment Basket” shall mean, at any date, an amount equal to (i) $250,000,000 minus
(ii) the aggregate amount of Investments made pursuant to Section 6.08(u) on or prior to such date
plus (iii) the aggregate amount of distributions of cash and Cash Equivalents with respect to any
Investment made pursuant to Section 6.08(u) that have been received on or prior to such date by the
Group Member that holds such Investment.



     “Goods-In-Transit” shall mean Inventory that is in transit to a location specified in clause
(c) of the definition of Eligible Inventory.



     “Governmental Authority” shall mean any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative
functions of or pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).



     “Group Members” shall mean the Borrower and its Subsidiaries.



     “Guarantee Obligation” shall mean, as to any Person (the “guaranteeing person”), any
obligation, including a reimbursement, counterindemnity or similar obligation, of the guaranteeing
Person that guarantees or in effect guarantees, or which is given to induce the creation of a
separate obligation by another Person (including any bank under any letter of credit) that
guarantees or in effect guarantees, 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 any obligation of the guaranteeing person, whether or not
contingent, (a) to purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) 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



23









 







such primary obligation or (d) 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 (x) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (y) 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.



     “Guarantees” shall mean the Foreign Subsidiary Guarantees and the Domestic Subsidiary
Guarantee.



     “Guarantor” shall mean each Domestic Subsidiary (other than the Non-Guarantor Domestic
Subsidiaries) of the Borrower and each other Subsidiary of the Borrower that is party to one of the
Guarantees.



     “Hedging Obligations” shall have the meaning set forth in the Intercreditor Agreement.



     “Increasing Lender” shall have the meaning set forth in Section 2.28.



     “Indebtedness” shall mean, at any time and with respect to any Person, 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 (x) current trade payables incurred in
the ordinary course of such Person’s business and (y) property, including inventory, and services
purchased, and expense accruals (other than trade payables) and deferred compensation items
arising, in each case, in the ordinary course of such Person’s business), (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 or in respect of acceptances,
letters of credit, surety bonds or similar arrangements, (g) the liquidation value of all
redeemable preferred Capital Stock of such Person which is mandatorily redeemable prior to the
Tranche C Maturity Date, (h) all Guarantee Obligations of such Person in respect of obligations of
the kind referred to in clauses (a) through (g) above or (j) below, (i) all obligations of the kind
referred to in clauses (a) through (h) above or (j) below 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 accounts and contract rights) owned by such Person, whether or not such Person
has assumed or become liable for the payment of such obligation, and (j) all obligations of such
Person in respect of Swap Agreements. The Indebtedness of any Person (i) shall include the
Indebtedness of any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity solely to the extent such



24









 







Indebtedness is required to be reflected on the balance sheet of such Person in accordance
with GAAP and (ii) shall not include in any event any Joint Venture Put Obligation.



     “Indemnified Liabilities” shall have the meaning set forth in Section 9.06.



     “Indemnified Party” shall have the meaning set forth in Section 9.06.



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



     “Intellectual Property” shall mean all rights, priorities and privileges relating to
intellectual property, whether arising under United States, multinational or foreign laws or
otherwise, including copyrights, copyright licenses, patents, patent licenses, 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.



     “Intercompany Basket” shall mean, at any date prior to the Tranche A Term Loan Repayment Date,
an amount equal to (i) $850,000,000 minus (ii) the aggregate outstanding principal amount on such
date of Intercompany Loans made pursuant to Section 6.08(h)(ii) minus (iii) the aggregate amount of
Investments (other than Intercompany Loans) made pursuant to Section 6.08(h)(ii) after the Closing
Date and on or prior to such date minus (iv) the aggregate amount of operating leases (measured on
the basis of the fair market value of the assets subject thereto) outstanding pursuant to Section
6.05(j)(iii) plus (v) the aggregate amount of distributions in cash and Cash Equivalents with
respect to any Investment (other than Intercompany Loans) made pursuant to Section 6.08(h)(ii) that
have been received after the Closing Date and on or prior to such date by the Group Member that
holds such Investment. From and after the Tranche A Term Loan Repayment Date, the Intercompany
Basket shall cease to apply.



     “Intercompany Basket Sublimit” shall mean, at any date prior to the Tranche A Term Loan
Repayment Date, an amount equal to (i) $350,000,000 minus (ii) the aggregate amount of Investments
(other than Intercompany Loans) made pursuant to Section 6.08(h)(ii) after the Closing Date and on
or prior to such date plus (iii) the aggregate amount of distributions in cash and Cash Equivalents
with respect to any Investment (other than Intercompany Loans) made pursuant to Section 6.08(h)(ii)
that have been received after the Closing Date and on or prior to such date by the Group Member
that holds such Investment. From and after the Tranche A Term Loan Repayment Date, the
Intercompany Basket Sublimit shall cease to apply.



     “Intercompany Loan” shall mean any Indebtedness for borrowed money owed by any Group Member to
any other Group Member.



     “Intercompany Loan Notes” shall mean (i) that certain note dated June 11, 1999 and payable by
Federal-Mogul, S.A., a French company, to AE International Ltd. in the original principal amount of
142,404,240 French francs, (ii) that certain note dated August 31, 1998 and payable by
Federal-Mogul, S.A. to T&N International Ltd. in the original principal amount of 488,163,908
French francs, (iii) that certain note dated August 31, 1998 and payable by Federal-Mogul, S.A. to
AE International Ltd in the original principal amount of 904,841,256 French francs, (iv) that
certain note dated July 8, 1998 and payable by Federal-Mogul Holding



25









 







Deutschland GmbH, a German company, to AE International Ltd in the original principal amount
of 126,979,412 Deutschmarks, (v) that certain note dated July 8, 1998 and payable by Federal-Mogul
Holding Deutschland GmbH to T&N International Ltd. in the original principal amount of 611,020,588
Deutschmarks, and (vi) that certain note dated May 22, 2001 and payable by Federal Mogul S.p.A., an
Italian company, to T&N International Ltd. in the original
principal amount of €111,627,744.



     “Intercompany Loan Owed to U.K. Subsidiaries” shall mean any Intercompany Loan of the Borrower
or any of its Subsidiaries other than the U.K. Subsidiaries owing to any U.K. Subsidiary and
outstanding on the Closing Date, as set forth on Schedule 1.01C.



     “Intercreditor Agreement” shall mean the Intercreditor Agreement among the Exit Administrative
Agent referred to therein, the Tranche A Administrative Agent referred to therein, the PIK Agent
referred to therein, the Collateral Trustee, the Borrower and each of the other Loan Parties party
thereto, substantially in the form of Exhibit G.



     “Interest Payment Date” shall mean (i) as to any Eurodollar Loan, the last day of the
applicable Interest Period, provided that with respect to Interest Periods exceeding three months,
interest shall be payable on the three-month anniversary of the first day of the Interest Period
and on the last day of the Interest Period, (ii) as to any ABR Loan (other than a Swing Line Loan),
the first calendar day of each April, July, October and January and the date on which any ABR Loans
are refinanced with Eurodollar Loans pursuant to Section 2.14 and (iii) as to any Swing Line Loan,
the last calendar day of each month.



     “Interest Period” shall mean, as to any Borrowing of Eurodollar Loans, the period commencing
on the date of such Borrowing (including as a result of a refinancing of ABR Loans) or on the last
day of the preceding Interest Period applicable to such Borrowing and ending on either (i) the
numerically corresponding day (or if there is no corresponding day, the last day) in the calendar
month that is one, two, three or six months thereafter, as the Borrower may elect in the related
notice delivered pursuant to Section 2.03(b) or 2.14 or (ii) such other Business Day chosen by the
Borrower that is agreed to by the Administrative Agent and each of the Lenders (which agreement
shall not be unreasonably withheld); provided, however, that (i) if any Interest Period would end
on a day which shall not be a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the next preceding Business Day, (ii) no
Interest Period with respect to any Borrowing of Term Loans of either Class shall end later than
the Tranche B Maturity Date or the Tranche C Maturity Date, as applicable, and (ii) no Interest
Period with respect to any Borrowing of Revolving Credit Loans shall end later than the Revolving
Credit Maturity Date.



     “Inventory” shall mean all Raw Materials, Work-in-Process, and Finished Goods held by the Loan
Parties in the normal course of business.



     “Inventory Reserves” shall mean the following, each as determined by the Administrative Agent
in its reasonable credit judgment from time to time:



26









 





     (a) a reserve for shrink, or discrepancies that arise pertaining to inventory quantities on
hand between the Loan Parties’ perpetual accounting system and physical counts of the Inventory,
but not less than 2% of the Eligible Inventory; or



     (b) a reserve for slow move, obsolete or excess Inventory; or



     (c) a reserve for favorable standard cost variances; or



     (d) a reserve for amounts owing to landlords or warehousemen for Inventory stored at leased
facilities or public warehouses which are not the subject of an access agreement acceptable to the
Administrative Agent, in the amount of (i) to the extent the Loan Parties are able to determine the
Loan Parties’ average monthly rental expense for such facility, two (2) times the Loan Parties’
average monthly rental expense for such facility or (ii) in all other events, the Inventory Value
of the Inventory stored at such leased facilities or public warehouses; or



     (e) a reserve for Inventory located at contractors’ or vendors’ facilities in the amount of
the Inventory Value of such Inventory; or



     (f) any other reserve as deemed appropriate by the Administrative Agent in its reasonable
credit judgment from time to time; or



     (g) a reserve for vendor rebates; or



     (h) a reserve for lower of cost or market.



     “Inventory Value” shall mean a dollar amount equal to the lesser of (i) the actual cost of
Inventory determined on a basis consistent with GAAP and with the Loan Parties’ current and
historical accounting practice or (ii) the market value of such Inventory.



     “Investments” shall have the meaning set forth in Section 6.08.



     “Investment Grade” shall mean either (i) at least Baa3 by Moody’s (or the then equivalent) or
(ii) at least BBB- by S&P (or the then equivalent).



     “Joint Venture” shall mean each Affiliate of the Borrower listed on Schedule 1.01D and any
other Person not a Subsidiary in which any Group Member obtains an ownership interest to the extent
permitted by Section 6.08(j).



     “Joint Venture Basket” shall mean, at any date, an amount equal to (i) $400,000,000 minus (ii)
the aggregate amount of Investments made pursuant to Section 6.08(j)(ii) after the Closing Date and
on or prior to such date minus (iii) the aggregate amount of operating leases (measured on the
basis of the fair market value of the assets subject thereto) outstanding pursuant to Section
6.05(j)(ii) after the Closing Date and on or prior to such date plus (iv) the aggregate amount of
distributions in cash and Cash Equivalents with respect to any Investment made pursuant to Section
6.08(j)(ii) that have been received after the Closing Date and on or prior to such date by the
Group Member that holds such Investment.



27









 





     “Joint Venture Put Obligation” shall mean any obligation of any Group Member (i) to purchase
any Capital Stock of any Person that is a Joint Venture on the Closing Date, which Capital Stock is
not owned by a Group Member on the Closing Date, so long as such obligation is in existence on the
Closing Date and has been disclosed by the Borrower to the Lenders prior to the Closing Date, (ii)
to purchase any Capital Stock of any Person that is a Joint Venture on the Closing Date, which
Capital Stock is not owned by a Group Member on the Closing Date and where such obligation to
purchase Capital Stock arises after the Closing Date, or (iii) to purchase any Capital Stock of any
Joint Venture formed after the Closing Date, which Capital Stock is not owned by a Group Member on
the date of formation of such new Joint Venture; provided, however, that the aggregate amount of
obligations described in the preceding clause (ii) or (iii) for any single such Joint Venture shall
not exceed $50,000,000 (with the amount of any non-cash obligations to be estimated by the Borrower
in good faith).



     “JPMSI” shall mean J.P. Morgan Securities Inc., and its successors.



     “Lender” and “Lenders” shall have the respective meanings set forth in the introductory
paragraph to this Agreement and, as the context requires, includes the Fronting Bank, the Swing
Line Lender and any Augmenting Lender.



     “Lender Affiliate” shall mean, (a) with respect to any Lender, (i) an Affiliate of such Lender
or (ii) any entity (whether a corporation, partnership, trust or otherwise) that is engaged in
making, purchasing, holding or otherwise investing in loans and similar extensions of credit in the
ordinary course of its business and is administered or managed by a Lender or an Affiliate of such
Lender and (b) with respect to any Lender that is a fund which invests in loans and similar
extensions of credit, any other fund that invests in loans and similar extensions of credit and is
managed by the same investment advisor as such Lender or by an Affiliate of such investment
advisor.



     “Letter of Credit” shall mean any R/C Letter of Credit or any Term Letter of Credit.



     “Letter of Credit Account” shall mean the R/C Letter of Credit Account or the Term Letter of
Credit Account.



     “Letter of Credit Fees” shall mean the fees payable in respect of Letters of Credit pursuant
to Section 2.24.



     “Letter of Credit Outstandings” shall mean, at any time, the R/C Letter of Credit Outstandings
or the Term Letter of Credit Outstandings or both, as the context may require.



     “Leverage Ratio” shall mean, on any date, the ratio of (a) Consolidated Total Debt on such
date, less the aggregate amount of unrestricted cash and Cash Equivalents of the Group Members on
such date in excess of Minimum Cash on such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters most recently ended prior to such date and with respect to which the
Borrower has delivered the financial statements required to be delivered by it pursuant to Sections
5.01(a) or 5.01(b), as applicable.



28









 





     “Lien” shall mean any mortgage, pledge, security interest, encumbrance, lien or charge of any
kind whatsoever (including any conditional sale or other title retention agreement or any lease in
the nature thereof).



     “Loan” shall mean a Term Loan or a Revolving Credit Loan, as the context may require and,
unless specified, shall not include Swing Line Loans.



     “Loan Documents” shall mean this Agreement, the Letters of Credit, the Security Documents, the
Guarantees and any other instrument or agreement executed and delivered in connection herewith.



     “Loan Parties” shall mean the Borrower and the Guarantors.



     “Material Adverse Effect” shall mean a material adverse effect on (a) the business, property,
operations or financial condition of the Group Members taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the rights or remedies of
the Administrative Agent or the Lenders hereunder or thereunder.



     “Material Environmental Loss” shall mean (a) costs to the Group Members, in the aggregate, for
investigative, removal and remedial costs, compliance costs, compensatory damages, natural resource
damages, punitive damages, fines, penalties, and (b) any other losses to the Group Members, that in
the aggregate would have a Material Adverse Effect, arising out of any Environmental Law or any
liabilities or obligations with respect to any Materials of Environmental Concern.



     “Materials of Environmental Concern” shall mean any gasoline or petroleum (including crude oil
or any fraction thereof) or petroleum products, polychlorinated biphenyls, urea-formaldehyde
insulation, asbestos, molds, pollutants, contaminants, radioactivity, any hazardous or toxic
substances or wastes and any other substances that are regulated pursuant to or would reasonably be
expected to give rise to liability under any Environmental Law.



     “Minimum Cash” shall mean, at any date, an amount equal to the lesser of (a) the aggregate
amount of unrestricted cash and Cash Equivalents held by Group Members at such date, and (b)
$160,000,000.



     “Minority Interests” shall mean any shares of stock of any class of a Subsidiary of the
Borrower (other than directors’ qualifying shares if required by law) that are not owned by
Borrower or one of its Subsidiaries; Minority Interest shall be valued in accordance with GAAP.



     “Monthly Payment Date” shall mean the last Business Day of each calendar month.



     “Moody’s” shall mean Moody’s Investors Service, Inc. or any successor to the rating agency
business thereof.



     “Mortgaged Properties” shall mean the real properties listed on Schedule 1.01E under the
heading “Mortgaged Properties”, as to which the Collateral Trustee, for the benefit of the Term
Loan Lenders, shall be granted a Lien pursuant to the Mortgages and the Collateral



29









 







Trustee, for the benefit of the Revolving Credit Lenders, shall be granted a Lien pursuant to
the Mortgages (such Liens to be separate and distinct from each other).



     “Mortgages” shall mean each of the mortgages and deeds of trust made by any Loan Party in
favor of the Collateral Trustee, for the benefit of the Lenders and the other secured parties
referred to therein, substantially in the form of Exhibit H (with such changes thereto as shall be
advisable or are customary under the law of the jurisdiction in which such mortgage or deed of
trust is to be recorded).



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



     “Multiple Employer Plan” shall mean a Single Employer Plan, which (i) is maintained for
employees of a Borrower or an ERISA Affiliate and at least one Person other than such Borrower and
its ERISA Affiliates or (ii) was so maintained and in respect of which a Borrower or an ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such Plan has been
or were to be terminated.



     “Net Cash Proceeds” shall mean (a) in connection with any Asset Sale (other than the
liquidation of a Joint Venture or the Disposition of Senior Subordinated Notes purchased pursuant
to a Permitted Open Market Purchase) or any Recovery Event or any transaction that would constitute
an Asset Sale but for clause (ii) of the definition thereof, the gross 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, and, with respect to any Asset Sale consisting of the
Disposition of all or substantially all of the assets of a business or business unit of the
Borrower or any of its Subsidiaries, net proceeds from the liquidation or sale of accounts
receivable or inventory of such business or business unit), net of (i) attorneys’ fees,
accountants’ fees, investment banking fees, (ii) amounts required to be applied to the repayment of
(x) Indebtedness secured by a Lien expressly permitted hereunder on any asset that is the subject
of such Asset Sale or Recovery Event (other than any Lien created pursuant to a Security Document
and excluding, in any event, any Lien securing the “Second Priority Obligations” or the “Third
Priority Obligations” referred to in the Intercreditor Agreement) and (y) solely if such Asset Sale
or Recovery Event is consummated by a Foreign Subsidiary, any other Indebtedness permitted
hereunder, including without limitation any Foreign Credit Facility and any Indebtedness of any
parent or Subsidiary of such Foreign Subsidiary, but excluding any Indebtedness owed to any Group
Member, (iii) other customary fees and expenses actually incurred in connection therewith and (iv)
taxes paid or reasonably estimated to be payable as a result thereof and as a result of
distributing such proceeds to the Borrower (after taking into account any available tax credits or
deductions and any tax sharing arrangements), (b) in connection with any issuance or sale of
Capital Stock to a Person that is not a Group Member or any incurrence of Indebtedness to a Person
that is not a Group Member, the cash proceeds received from such issuance or incurrence, net of (i)
attorneys’ fees, accountants’ fees, investment banking fees, underwriting discounts and commissions
and (ii) other customary fees and expenses actually incurred in connection therewith and net of
taxes paid or reasonably estimated to be payable as a result of distributing such proceeds to the
Borrower (after taking into account any available tax credits or deductions and any tax sharing
arrangements), (c) in



30









 







connection with the liquidation of a Joint Venture, the gross proceeds thereof in the form of
cash and Cash Equivalents received by any Group Member in excess of the fair market value of the
aggregate of all Investments made in such Joint Venture by any Group Member at any time and net of
(i) attorneys’ fees, accountants’ fees, investment banking fees, (ii) amounts required to be
applied to the repayment of (x) Indebtedness secured by a Lien expressly permitted hereunder on any
asset that is the subject of such liquidation (other than any Lien created pursuant to a Security
Document and excluding, in any event, any Lien securing the “Second Priority Obligations” or the
“Third Priority Obligations” referred to in the Intercreditor Agreement) and (y) solely if such
Asset Sale or Recovery Event is consummated by a Foreign Subsidiary, any other Indebtedness
permitted hereunder, including without limitation any Foreign Credit Facility and any Indebtedness
of any parent or Subsidiary of such Foreign Subsidiary, but excluding any Indebtedness owed to any
Group Member, (iii) other customary fees and expenses actually incurred in connection therewith and
(iv) taxes paid or reasonably estimated to be payable as a result thereof and as a result of
distributing such proceeds to the Borrower (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (d) in connection with the Disposition of Senior
Subordinated Notes purchased by any Group Member pursuant to a Permitted Open Market Purchase, an
amount equal to the purchase price paid by such Group Member pursuant to such Permitted Open Market
Purchase (whether or not the aggregate amount of proceeds thereof is equal to such purchase price).
Notwithstanding the foregoing, the “Net Cash Proceeds” of a Foreign Subsidiary shall not include
any amounts to the extent such amount may not be distributed (by way of dividends, intercompany
loans or otherwise) to the Borrower or a Domestic Subsidiary because doing so would (1) violate
legal restrictions binding upon such Foreign Subsidiary, (2) violate contractual restrictions
contained in agreements with third parties (other than Affiliates) entered into in good faith and
binding upon such Foreign Subsidiary or (3) result in adverse tax consequences to the Borrower.



     “Net Orderly Liquidation Rate” shall mean, at any time with respect to any domestic Inventory,
the quotient (expressed as a percentage) of (i) the Net Orderly Liquidation Value of such Inventory
divided by (ii) the gross inventory cost of such Inventory, determined on the basis of the then
most recently conducted inventory appraisal performed by an independent inventory appraisal firm
reasonably satisfactory to the Administrative Agent.



     “Net Orderly Liquidation Value” shall mean, at any time, with respect to any domestic
Inventory, the net liquidation value of such Inventory as then most recently determined, based on
the then most recently conducted inventory appraisal performed by an independent inventory
appraisal firm reasonably satisfactory to the Administrative Agent.



     “Non-Call Expiration Date” shall have the meaning specified in the definition of “Applicable
Premium”.



     “Non-Consenting Lender” shall have the meaning specified in Section 2.27.



     “Non-Core Accounts Receivable” shall mean, at the time of any determination, without
duplication, (i) receivables arising from transactions that are not in the ordinary course of
business, including equipment and equipment parts sales, (ii) Accounts arising from transactions
other than sales to customers who are not Affiliates of any of the Loan Parties of automobile,
truck, aviation, farm or construction vehicle parts manufactured by the Loan Parties, on usual



31









 







and customary terms, in a manner consistent with historical sales practices, (iii) non-trade
receivables and (iv) miscellaneous and sundry receivables.



     “Non-Guarantor Domestic Subsidiaries” shall mean those Domestic Subsidiaries identified on
Schedule 1.01I.



     “Not Otherwise Applied” shall mean on any date, with respect to any amount of Equity Proceeds
or Permitted Subordinated Indebtedness Proceeds, that such amount was not (i) required to be
applied to prepay the Tranche B Term Loans pursuant to Section 2.16 (it being understood that
Section 2.16 does not require the Borrower to prepay the Tranche B Term Loans with any Equity
Proceeds), or the Tranche A Term Loans pursuant to the terms thereof, (ii) applied to optionally
prepay the Loans pursuant to Section 2.16 or the Tranche A Term Loans pursuant to the terms thereof
and (iii) previously applied to make a Restricted Payment pursuant to Section 6.06(f) or to make an
Investment pursuant to Section 6.08(v). The Borrower shall promptly notify the Administrative
Agent of any application of such amount contemplated by clause (iii) of this definition.



     “Obligations” shall mean (a) the due and punctual payment of principal of and interest on the
Loans and Swing Line Loans and the reimbursement of all amounts drawn under Letters of Credit and
(b) the due and punctual payment of the Fees and all other present and future, fixed or contingent,
monetary obligations of the Borrower to the Lenders and the Administrative Agent under the Loan
Documents.



     “OE Finished Goods” shall mean Finished Goods, manufactured by Loan Parties pursuant to an
order by an Account Debtor, for use in such Account Debtor’s (original equipment) manufacturing
processes, as determined by the Administrative Agent in its reasonable credit judgment.



     “Organizational Documents” shall mean (i) with respect to any corporation, its certificate or
articles of incorporation, as amended, and its by-laws, as amended, (ii) with respect to any
limited partnership, its certificate of limited partnership or formation, as amended, and its
partnership agreement, as amended, (iii) with respect to any general partnership, its partnership
agreement, as amended, (iv) with respect to any limited liability company, its certificate of
formation or articles of organization, as amended, and its operating agreement, as amended, and (v)
with respect to any unlimited liability company, its certificate of formation, as amended, and its
memorandum and articles of association, as amended. In the event any term or condition of this
Agreement or any other Loan Document requires any Organizational Document to be certified by a
secretary of state of similar governmental official, the reference to any such “Organizational
Document” shall only be to a document of a type customarily certified by such governmental
official.



     “Other Taxes” shall have the meaning set forth in Section 2.21.



     “Other Unsecured Claims” shall mean all unsecured claims under the Reorganization Plan.



     “PBGC” shall mean the Pension Benefit Guaranty Corporation, or any successor agency or entity
performing substantially the same functions.



32









 





     “Permitted Acquisition” shall mean any Acquisition, if such Acquisition complies with the
following criteria:



     (a) no Default or Event of Default shall have occurred or be continuing either prior to or
after giving effect to the consummation of such Acquisition and the incurrence by the Group Members
of any Indebtedness associated therewith, and the Borrower shall have delivered to the
Administrative Agent prior to the consummation of such Acquisition a certificate of a Responsible
Officer to such effect;



     (b) (i) the Fair Market Consideration is less than $50,000,000 or (ii) the Fair Market
Consideration is greater than or equal to $50,000,000 and (I) the Pre-Transaction Coverage Ratio
shall be, and the Consolidated Debt Service Coverage Ratio, determined on a Pro Forma Basis, shall
be, equal to or greater than (X) 1.25 to 1.00, for any such Acquisition consummated on or prior to
the third anniversary of the Closing Date or (Y) 1.10 to 1.00, for any such Acquisition consummated
after the third anniversary of the Closing Date or (II) the Pre-Transaction Coverage Ratio shall be
less than (X) 1.25 to 1.00 for any such Acquisition consummated on or prior to the third
anniversary of the Closing Date or (Y) 1.10 to 1.00, for any such Acquisition consummated after the
third anniversary of the Closing Date and the Consolidated Debt Service Coverage Ratio, determined
on a Pro Forma Basis, shall not be less than the Pre-Transaction Coverage Ratio, and, in the case
of each of the foregoing, the Borrower shall have delivered to the Administrative Agent prior to
the consummation of such Acquisition such financial information as the Administrative Agent shall
reasonably request to demonstrate such compliance;



     (c) if the Fair Market Consideration is greater than $100,000,000, the Borrower shall have
delivered to the Administrative Agent prior to the consummation of such Acquisition a certificate
of a Responsible Officer, certifying that such Acquisition has been approved by a Board Majority;



     (d) after giving effect to the consummation of such Acquisition and to the incurrence by the
Group Members of any Indebtedness associated therewith, if such Acquisition is consummated at any
time when the Borrower is required to comply with any covenant in Section 6.01, the Borrower, shall
be in compliance, determined on a Pro Forma Basis, with such covenant in Section 6.01, and the
Borrower shall have delivered to the Administrative Agent prior to the consummation of such
Acquisition such financial information as the Administrative Agent shall reasonably request to
demonstrate such pro forma compliance; and



     (e) any Person whose Capital Stock is directly or indirectly acquired shall be, after giving
effect to such Acquisition, a direct or an indirect Subsidiary of the Borrower.



     “Permitted Asset Sale” shall mean any Asset Sale by any Group Member, if such Asset Sale
complies with the following criteria:



     (a) no Default or Event of Default shall have occurred and be continuing either prior to or
after giving effect to the consummation of such Asset Sale, and the Borrower shall have delivered
to the Administrative Agent prior to the consummation of such Asset Sale a certificate of a
Responsible Officer to such effect;



33









 





     (b) (i) the aggregate fair market value of all consideration paid to the Group Members in
respect of such Asset Sale is less than $50,000,000, or (ii) the aggregate fair market value of all
consideration paid to the Group Members in respect of such Asset Sale is greater than or equal to
$50,000,000 and, if such Asset Sale is consummated at any time when the Borrower is required to
comply with any covenant in Section 6.01, prior to and after giving effect to the consummation of
such Asset Sale, the Borrower shall be in compliance, on a Pro Forma Basis, with such covenant in
Section 6.01 (and the Borrower shall have delivered to the Administrative Agent prior to the
consummation of such Asset Sale such financial information as the Administrative Agent shall
reasonably request to demonstrate such pro forma compliance) or (iii) all the Net Cash Proceeds of
such Asset Sale are applied in whole to prepay the Loans, to the extent required by Section 2.16;



     (c) the consideration received by the Group Members in respect of such Asset Sale shall at
least be equal to the fair market value of the assets being Disposed and shall consist of at least
662/3% in cash and Cash Equivalents provided, that up to $25,000,000 of Asset Sales per fiscal year
may be Permitted Asset Sales without meeting the requirements of this clause (c); and



     (d) the aggregate fair market value of all consideration received by the Group Members in
connection with all such Asset Sales shall not, in any fiscal year prior to the fiscal year in
which the Tranche A Term Loan Repayment Date occurs, exceed the sum of (i) $200,000,000
plus (ii) all such consideration applied by a Group Member in making Permitted Net Cash
Proceeds Reinvestments, without the prior written consent of the number of Lenders specified in
Section 9.10.



     “Permitted Designated Subordinated Indebtedness” shall mean Permitted Subordinated
Indebtedness that (x) shall mature at least six months after the Tranche C Maturity Date as in
effect on the date of incurrence of such Permitted Subordinated Indebtedness and (y) shall not
require any principal payments thereof prior to the date that is six months after the Tranche C
Maturity Date as in effect on the date of incurrence of such Permitted Subordinated Indebtedness.



     “Permitted Holders” shall mean Federal-Mogul Asbestos Personal Injury Trust and Thornwood,
which are holders of Class A Common Stock and Class B Common Stock of the Borrower on the Effective
Date pursuant to the Reorganization Plan.



     “Permitted Net Cash Proceeds Reinvestments” shall mean (i) assets (“replacement assets”) to be
acquired or built with the Net Cash Proceeds of any Recovery Event (but not any Asset Sale), so
long as (x) such replacement assets are to be used for substantially the same purpose as the assets
that were subject to the relevant Recovery Event (“subject assets”) and (y) such replacement assets
are to be located in the United States to the extent that the subject assets were located in the
United States prior to such Recovery Event and (ii) assets to be acquired or built with the Net
Cash Proceeds of any Asset Sale or Recovery Event that are useful in the business of the Borrower
but that do not comply with the criteria set forth in clause (i) of this definition.



     “Permitted Open Market Purchase” shall mean any purchase by any Group Member in the open
market (including without limitation, a privately negotiated purchase) of Senior



34









 







Subordinated Notes for less than the face amount thereof at the time of such purchase,
together with accrued and unpaid interest thereon, provided that (a) any such purchase is
consummated pursuant to the terms of this Agreement and (b) either (i) such Senior Subordinated
Notes are canceled upon consummation of such purchase or (ii) an amount equal to the purchase price
paid by such Group Member to purchase such Senior Subordinated Notes is applied upon the
Disposition thereof to prepay the Tranche B Term Loans in accordance with Section 2.16(a) if any
such purchased Senior Subordinated Notes are thereafter Disposed of by such Group Member.



     “Permitted Receivables Facility” shall mean the receivables facility or facilities created
under the Permitted Receivables Facility Documents, providing for the sale or pledge by the
Borrower and/or one or more other Receivables Sellers of Permitted Receivables Facility Assets
(thereby providing financing to the Borrower and the Receivables Sellers) to the Receivables Entity
(either directly or through another Receivables Seller), which in turn shall sell or pledge
interests in the respective Permitted Receivables Facility Assets to third-party investors pursuant
to the Permitted Receivables Facility Documents (with the Receivables Entity permitted to issue
investor certificates, purchased interest certificates or other similar documentation evidencing
interests in the Permitted Receivables Facility Assets) in return for the cash used by the
Receivables Entity to purchase the Permitted Receivables Facility Assets from the Borrower and/or
the respective Receivables Sellers, in each case as more fully set forth in the Permitted
Receivables Facility Documents.



     “Permitted Receivables Facility Assets” shall mean (i) Receivables (whether now existing or
arising in the future) of the Borrower and its Subsidiaries which are transferred or pledged to the
Receivables Entity pursuant to the Permitted Receivables Facility and any related Permitted
Receivables Related Assets which are also so transferred or pledged to the Receivables Entity and
all proceeds thereof and (ii) loans to the Borrower and its Subsidiaries secured by Receivables
(whether now existing or arising in the future) and any related Permitted Receivables Related
Assets of the Borrower and its Subsidiaries which are made pursuant to the Permitted Receivables
Facility.



     “Permitted Receivables Facility Documents” shall mean each of the documents and agreements
entered into in connection with the Permitted Receivables Facility, including all documents and
agreements relating to the issuance, funding and/or purchase of certificates and purchased
interests, all of which documents and agreements shall be in form and substance reasonably
customary for transactions of this type, in each case as such documents and agreements may be
amended, modified, supplemented, refinanced or replaced from time to time so long as (i) any such
amendments, modifications, supplements, refinancings or replacements do not impose any conditions
or requirements on the Borrower or any of its Subsidiaries that are more restrictive in any
material respect than those in existence immediately prior to any such amendment, modification,
supplement, refinancing or replacement, and (ii) any such amendments, modifications, supplements,
refinancings or replacements are not adverse in any material respect to the interests of the
Lenders.



     “Permitted Receivables Related Assets” shall mean any assets that are customarily transferred
or in respect of which security interests are customarily granted in connection with customary
financing transactions involving the sale or pledge of accounts receivable.



35









 





     “Permitted Subordinated Indebtedness” shall mean Indebtedness of the Borrower (i) which shall
be contractually subordinated to the Obligations, (ii) which shall have subordination and other
terms (other than economic terms), taken as a whole, no less favorable to the Lenders in any
material respect than the terms of the Senior Subordinated Notes in relation to the Obligations and
(iii) if such Indebtedness is secured, any Liens securing such Indebtedness shall be subject to
Lien subordination provisions, taken as a whole, no less favorable to the Lenders in any material
respect than the terms of the subordination of the “Third Priority Liens” referred to in the
Intercreditor Agreement in relation to the “First Priority Liens” referred to therein.



     “Permitted Subordinated Indebtedness Proceeds” shall mean the Net Cash Proceeds of any
Permitted Designated Subordinated Indebtedness incurred by a Group Member.



     “Person” shall mean any natural person, corporation, division of a corporation, partnership,
trust, joint venture, association, company, estate, unincorporated organization or government or
any agency or political subdivision thereof.



     “Plan” shall mean, at a particular time, any employee benefit plan that is covered by Title IV
of 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.



     “Positive EBITDA Variance” shall have the meaning set forth in the Intercreditor Agreement.



     “Pounds Sterling” shall mean the lawful currency of the United Kingdom.



     “PP&E Collateral” shall mean any Collateral other than Borrowing Base Collateral.



     “PP&E Priority Obligations” shall have the meaning set forth in the Intercreditor Agreement.



     “Pre-Approved Assignee” shall mean, with respect to any proposed assignment pursuant to
Section 9.03(b), an Eligible Assignee that is (i) a Lender immediately prior to such assignment,
(ii) a Lender Affiliate of the assigning Lender, (iii) an Approved Fund of a Person that is a
Lender immediately prior to such assignment, or (iv) a Person at least 50% owned by the assigning
Lender or by a common parent of the assigning Lender and the Person described in clause (iii).



     “Prepayment Application Date” shall mean, with respect to any mandatory prepayment pursuant to
Section 2.16(c) and Section 2.16(d), one hundred and fifteen (115) days after the end of the fiscal
year with respect to which such prepayment is made.



     “Prepetition Credit Agreement” shall mean that certain Fourth Amended and Restated Credit
Agreement dated as of December 29, 2000, as amended, among the Borrower, each Foreign Subsidiary
Borrower (as defined therein), the banks and other financial institutions from time to time parties
thereto, and JPMorgan Chase Bank, National Association, formerly known as The Chase Manhattan Bank,
as lead arranger, book manager and administrative agent, as in effect immediately prior to the
Closing Date.



36









 





     “Pre-Transaction Coverage Ratio” shall mean, with respect to any Acquisition, the Consolidated
Debt Service Coverage Ratio immediately prior to giving effect to the consummation of such
Acquisition, and the incurrence by the Group Members of any Indebtedness associated therewith,
calculated based upon Consolidated EBITDA for the four fiscal quarters most recently ended for
which financial statements are available.



     “Pricing Schedule” shall mean the Pricing Schedule attached hereto.



     “Proceeds Investment” shall mean an Investment made pursuant to Section 6.08(v).



     “Proceeds Investment Basket” shall mean, on any date, an amount equal to (i) the aggregate
amount of Equity Proceeds and Permitted Subordinated Indebtedness Proceeds that have been applied
to make Investments pursuant to Section 6.08(v) on or prior to such date (so long as, at the time
any such Investment was made, such Equity Proceeds or Permitted Subordinated Indebtedness Proceeds
were Not Otherwise Applied) plus (ii) the aggregate amount of distributions in cash and
Cash Equivalents with respect to any Investment made pursuant to Section 6.08(v) that have been
received on or prior to such date by the Group Member that holds such Investment.



     “Pro Forma Balance Sheet” shall have the meaning set forth in Section 3.01(a).



     “Pro Forma Basis” shall mean, with respect to any calculation of any covenant contained in
Section 6.01 in connection with any Acquisition or Asset Sale (including any financial test set
forth in the definition of “Permitted Acquisition”), such covenant calculated on a pro forma basis
after giving effect to the consummation of such Acquisition, and to the incurrence by the Group
Members of any Indebtedness associated therewith, or such Asset Sale, as the case may be, as if
such Acquisition or Asset Sale, as the case may be, had occurred on the first day of the period of
four consecutive fiscal quarters most recently ended for which the financial statements are
available and, if such calculation is made in connection with any Acquisition, with adjustments for
(i) non-recurring or one-time expenses or charges that have actually been incurred and (ii)
expenses or charges that have actually been incurred but would not have been incurred if the
relevant Acquisition had been consummated on the first day of such period, in each case as
determined by the Borrower in good faith.



     “Projections” shall have the meaning set forth in Section 5.02(c).



     “Raw Materials” shall mean any raw materials or Supplies used or consumed in the manufacture,
packing or shipping of goods to be sold by the Loan Parties in the ordinary course of business.



     “R/C Letter of Credit” shall mean (a) any Existing Letter of Credit designated on Schedule
1.01A as an “R/C Letter of Credit” and (b) any irrevocable letter of credit issued pursuant to
Section 2.05(b)(i), which letter of credit shall be (i) a standby or import documentary letter of
credit, (ii) denominated in Dollars or any Alternative Currency and (iii) otherwise in such form as
may be reasonably approved from time to time by the Administrative Agent and the applicable
Fronting Bank.



37









 





     “R/C Letter of Credit Account” shall mean the account established by the Borrower under the
sole and exclusive control of the Administrative Agent maintained at the office of Citibank at 388
Greenwich Street, New York, New York 10013 designated as the “Federal-Mogul Corporation R/C Letter
of Credit Account” that shall be used solely for the purposes set forth in Sections 2.05(c) and
2.15.



     “R/C Letter of Credit Outstandings” shall mean, at any time, the sum of (i) the Dollar
Equivalent of the aggregate undrawn stated amount of all R/C Letters of Credit then outstanding
plus (ii) the Dollar Equivalent of all amounts theretofore drawn under R/C Letters of Credit and
not then reimbursed.



     “R/C Refunding Borrowing” shall have the meaning set forth in Section 2.05(e).



     “Rebate Reserve” shall mean, at any time of determination, an amount owing or payable to
Account Debtors pursuant to incentive marketing programs or similar programs, as determined by the
Administrative Agent in its reasonable credit judgment from time to time, to the extent not already
deducted in computing the amount of Eligible Receivables.



     “Receivable” shall mean a payment owing to a Person (whether constituting an account, chattel
paper, document, instrument or general intangible) arising from the provision of merchandise, goods
or services by such Person, including the right to payment of any interest or finance charges and
other obligations owing to such Person with respect thereto.



     “Receivables Entity” shall mean a wholly-owned Subsidiary of the Borrower or any of its
Subsidiaries which engages in no activities other than in connection with the financing of accounts
receivable of the Receivables Sellers and which is designated (as provided below) as the
“Receivables Entity” (a) no portion of the Indebtedness or any other obligations (contingent or
otherwise) of which (i) is guaranteed by the Borrower or any other Subsidiary of the Borrower
(excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness)
pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates the Borrower or
any other Subsidiary of the Borrower in any way (other than pursuant to Standard Securitization
Undertakings) or (iii) subjects any property or asset of the Borrower or any other Subsidiary of
the Borrower, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other
than pursuant to Standard Securitization Undertakings, (b) with which neither the Borrower nor any
of its Subsidiaries has any contract, agreement, arrangement or understanding (other than pursuant
to the Permitted Receivables Facility Documents (including with respect to fees payable in the
ordinary course of business in connection with the servicing of accounts receivable and related
assets)) on terms less favorable to the Borrower or such Subsidiary than those that might be
obtained at the time from Persons that are not Affiliates of the Borrower, and (c) to which neither
the Borrower nor any other Subsidiary of the Borrower has any obligation to maintain or preserve
such entity’s financial condition or cause such entity to achieve certain levels of operating
results. Any such designation shall be evidenced to the Administrative Agent by filing with the
Administrative Agent an officer’s certificate of the Borrower certifying that, to the best of such
officer’s knowledge and belief after consultation with counsel, such designation complied with the
foregoing conditions.



38









 





     “Receivables Sellers” shall mean the Borrower and those Subsidiaries (other than Receivables
Entities) that are from time to time party to the Permitted Receivables Facility Documents.



     “Recovery Event” shall mean any settlement of or payment in respect of any property or
casualty insurance claim or any condemnation proceeding relating to any asset of any Group Member.



     “Register” shall have the meaning set forth in Section 9.03(d).



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



     “Reinvestment Deferred Amount” shall mean, with respect to any Reinvestment Event, the
aggregate Net Cash Proceeds received by any Group Member in connection therewith that are not
applied to prepay the Term Loans pursuant to Section 2.16(b) as a result of the delivery of a
Reinvestment Notice.



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



     “Reinvestment Notice” shall mean a written notice executed by a Responsible Officer stating
that no Event of Default has occurred and is continuing and 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 make a Permitted Net Cash Proceeds Reinvestment, and
specifying whether such Permitted Net Cash Proceeds Reinvestment is one described in clause (i) or
(ii) of the definition thereof.



     “Reinvestment Prepayment Amount” shall mean, as of any Reinvestment Prepayment Date with
respect to any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to such Reinvestment Prepayment Date to make Permitted Net Cash Proceeds
Reinvestments.



     “Reinvestment Prepayment Date” shall mean, with respect to any Reinvestment Event, the earlier
of (a) the date on which the report referred to in Section 5.02(f) for the fiscal quarter in which
the twelve month anniversary of the date on which the Borrower has delivered the Reinvestment
Notice with respect to such Reinvestment Event occurs is (i) required to be delivered to the
Lenders or (ii) actually delivered to the Lenders and (b) the date on which the Borrower shall have
determined not to, or shall have otherwise ceased to, apply all or any portion of the relevant
Reinvestment Deferred Amount to make the Permitted Net Cash Proceeds Reinvestment identified in the
relevant Reinvestment Notice.



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



     “Reorganization Plan” shall mean the Fourth Amended Joint Plan of Reorganization proposed by
the Debtors, the Unsecured Creditors Committee, the Asbestos Claimants Committee, the Equity
Committee, the Future Claimants Representative and JPMorgan Chase Bank, National Association, as
administrative agent for the holders of the Bank Claims, as



39









 







amended or modified from time to time (whether any such amendment or modification is effected
through an amendment or modification to the Reorganization Plan itself or through the Confirmation
Order), so long as any such amendment or modification does not materially adversely affect the
Lenders.



     “Reportable Event” shall mean 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 PBGC Reg. § 4043.



     “Required Lenders” shall mean, at any time, Lenders holding in excess of 50% of the sum of (i)
the Total Revolving Credit Commitment (or, if the Total Revolving Credit Commitment shall have
terminated, the Total Revolving Credit Usage), (ii) the aggregate outstanding principal amount of
the Term Loans and (iii) the Total Term Loan Commitment (if any), in each case at such time.



     “Required Revolving Credit Lenders” shall mean, at any time, Revolving Credit Lenders holding
in excess of 50% of the Total Revolving Credit Commitment (or, if the Total Revolving Credit
Commitment shall have terminated, in excess of 50% of the Total Revolving Credit Usage) at such
time.



     “Required Term Lenders” shall mean, at any time, Term Loan Lenders holding in excess of 50% of
the sum of the aggregate outstanding principal amount of the Term Loans and the Total Term Loan
Commitment (if any) at such time.



     “Requirement of Law” shall mean, as to any Person, its Organizational Documents, and 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” shall mean the chief executive officer, president, chief financial
officer or treasurer of the Borrower, but in any event, with respect to financial matters, the
chief financial officer or treasurer of the Borrower.



     “Restricted Payments” shall have the meaning set forth in Section 6.06.



     “Revolving Credit Availability Period” shall mean the period from and including the Closing
Date to but excluding the Revolving Credit Maturity Date (or, if earlier, the date on which the
Total Revolving Credit Commitment terminates pursuant to Section 2.12 or Section 7.01).



     “Revolving Credit Borrowing” shall mean a borrowing consisting of simultaneous Revolving
Credit Loans of the same Type and, in the case of Eurodollar Loans, having the same Interest
Period, made by each of the Revolving Credit Lenders pursuant to Section 2.01(b).



     “Revolving Credit Commitment” shall mean, as to each Revolving Credit Lender, its obligation
to (a) make Revolving Credit Loans to the Borrower pursuant to Section 2.01(b), (b) purchase
participations in R/C Letter of Credit Outstandings, and (c) purchase participations in Swing Line
Loans, in an aggregate principal amount at any one time outstanding not to exceed



40









 







the amount set forth opposite such Lender’s name on Annex A-3 under the caption “Revolving
Credit Commitment” or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable, as such amount may be reduced from time to time pursuant to Section
2.12, increased from time to time pursuant to Section 2.28, or otherwise adjusted from time to time
in accordance with this Agreement.



     “Revolving Credit Facility Availability” shall mean, at any time, an amount equal to (a) the
Borrowing Base at such time, minus (b) the Total Revolving Credit Usage at such time.



     “Revolving Credit Lender” shall mean, at any time, any Lender that has a Revolving Credit
Commitment at such time.



     “Revolving Credit Loan” shall have the meaning set forth in Section 2.01(b).



     “Revolving Credit Maturity Date” shall mean December 27, 2013.



     “S&P” shall mean Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies,
Inc., or any successor to the rating agency business thereof.



     “SEC” shall mean the Securities and Exchange Commission and any successor thereto.



     “Security Documents” shall mean, collectively, the Collateral Agreement, the Foreign Pledge
Agreements, the Mortgages and all other security documents hereafter delivered to the Collateral
Trustee 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 Notes” shall mean (i) the Senior Subordinated Secured Notes due 2018
issued on the Closing Date pursuant to the Senior Subordinated Notes Indenture in effect on the
Closing Date and (ii) any Indebtedness permitted under Section 6.02(n) that is incurred after the
Closing Date to refinance, replace, refund, renew or extend in whole or in part the Indebtedness
described in clause (i), other than the Term Loans.



     “Senior Subordinated Notes Indenture” shall mean (i) the Indenture, dated as of the date
hereof, entered into by the Borrower and certain of its Subsidiaries in connection with the
issuance of the Senior Subordinated Notes, together with all instruments and other agreements
entered into by the Borrower or such Subsidiaries in connection therewith, and (ii) any other
credit agreement, loan agreement, note agreement, promissory note, indenture, or other agreement or
instrument evidencing or governing the terms of any indebtedness or other financial accommodation
that is hereafter incurred to refinance, replace, refund, renew or extend in whole or in part the
Indebtedness and other obligations outstanding under any of the agreements described in clause (i),
together with all instruments and other agreements entered into by the Borrower or such
Subsidiaries in connection therewith; provided that any agreement or instrument described in this
clause (ii) shall not contain any financial covenants, negative covenants or events of default that
are materially more restrictive than those set forth in this Agreement, in each case as the same
may be amended, supplemented or otherwise modified from time to time in accordance with Section
6.09. Any reference to the Senior Subordinated Notes Indenture hereunder shall be deemed a
reference to each of the Senior Subordinated Notes Indentures then extant.



41









 





     “Significant Shareholder” shall mean any beneficial holder or group of affiliated beneficial
holders of securities representing 30% or more of the voting power of the Borrower.



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



     “Specified Indebtedness” shall mean, on any date or for any period, (i) Intercompany Loans,
(ii) Indebtedness described in clause (f) of the definition thereof, so long as such Indebtedness
is contingent and (iii) any Indebtedness described in clause (j) of the definition thereof and
Indebtedness permitted under Sections 6.02(i), 6.02(k) and 6.02(m), unless any such Indebtedness
described in this clause (iii) would be required to be reflected as debt on the consolidated
balance sheet of the Borrower on such date and the payments associated therewith would be required
to be included as interest expense on the consolidated income statement of the Borrower for such
period, in each case in accordance with GAAP.



     “Standard Securitization Undertakings” shall mean representations, warranties, covenants and
indemnities entered into by the Borrower or any Subsidiary thereof in connection with the Permitted
Receivables Facility which are reasonably customary in an accounts receivable financing
transaction.



     “Statutory Reserves” shall mean on any date the percentage (expressed as a decimal)
established by the Board and any other banking authority which is the then stated maximum rate for
all reserves (including but not limited to any emergency, supplemental or other marginal reserve
requirements) applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency Liabilities (or any successor category of liabilities under Regulation D issued by the
Board, as in effect from time to time). Such reserve percentages shall include, without
limitation, those imposed pursuant to said Regulation. The Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in such percentage.



     “Strategic Plan” shall have the meaning set forth in Section 5.02(d).



     “Subsidiary” shall mean, with respect to any Person (referred to in this definition as the
“parent”), any corporation, association or other business entity (whether now existing or hereafter
organized) of which at least a majority of the securities or other ownership interests having
ordinary voting power for the election of directors is, at the time as of which any determination
is being made, owned or controlled by the parent or one or more subsidiaries of the parent. Unless
otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall
refer to a Subsidiary or Subsidiaries of the Borrower.



     “Super-majority Revolving Credit Lenders” shall mean at any time, Revolving Credit Lenders
holding in excess of 66 2/3% of the Total Revolving Credit Commitment (or, if the Total Revolving
Credit Commitment shall have terminated, in excess of 66 2/3% of the Total Revolving Credit Usage)
at such time.



     “Supplies” shall mean film, packaging and/or shipping supplies or materials not otherwise
directly used in the production of Finished Goods.



42









 





     “Swap Agreement” shall mean any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk or value or any
similar transaction or any combination of these transactions; provided that no phantom stock or
similar plan providing for payments only on account of services provided by current or former
directors, officers, employees or consultants of any Group Member shall be a “Swap Agreement”.



     “Sweep Period” shall mean each period commencing on the first date following the Closing Date
(or the last day of the prior Sweep Period) on which Revolving Credit Facility Availability is less
than $25,000,000 and continuing thereafter until the first date on which Revolving Credit Facility
Availability shall have been greater than $50,000,000 for the immediately preceding 60 consecutive
days.



     “Swing Line Borrowing” shall mean a borrowing of a Swing Line Loan pursuant to Section 2.08.



     “Swing Line Lender” shall mean CUSA in its capacity as provider of Swing Line Loans, or any
successor swing line lender hereunder.



     “Swing Line Loan” shall have the meaning set forth in Section 2.08(a).



     “Tax Restructuring” shall mean (a) the transactions set forth in Schedule 1.01H and (b) any
additional transactions to restructure the Borrower’s foreign operations after the Closing Date so
long as (i) the Borrower shall have provided all information relating to such additional
transactions under this clause (b) as the Administrative Agent shall have requested and (ii)
consummation of such additional transactions under this clause (b) shall not have an impact that is
material and adverse on the structure or the value of the Collateral set forth in Schedule 1.01F,
in each case as determined by the Administrative Agent in its reasonable credit judgment.



     “Taxes” shall have the meaning set forth in Section 2.21.



     “Term Availability Period” means the period from and including the Closing Date to and
including the day falling 60 days after the Closing Date.



     “Term Borrowing” shall mean a borrowing consisting of simultaneous Term Loans of the same
Class and Type and, in the case of Eurodollar Loans, having the same Interest Period made by each
of the Term Loan Lenders of the applicable Class pursuant to Section 2.01(a).



     “Term Letter of Credit” shall mean (a) any Existing Letter of Credit designated on Schedule
1.01A as a “Term Letter of Credit” and (b) any irrevocable letter of credit issued pursuant to
Section 2.05(b)(ii), which letter of credit shall be (i) a standby or import documentary letter of
credit, (ii) denominated in Dollars and (iii) otherwise in such form as may be reasonably approved
from time to time by the Administrative Agent and the applicable Fronting Bank.



43









 





     “Term Letter of Credit Account” shall mean the account established by the Borrower pursuant to
Section 2.04(a) under the sole and exclusive control of the Administrative Agent maintained at the
office of Citibank at 388 Greenwich Street, New York, New York 10013 designated as the
“Federal-Mogul Corporation Term Letter of Credit Account”.



     “Term Letter of Credit Deposit Amount” shall mean, at any time, the total amount on deposit in
the Term Letter of Credit Account pursuant to the terms of this Agreement. The Term Letter of
Credit Deposit Amount shall be $50,000,000 on the Closing Date. The Term Letter of Credit Deposit
Amount may be reduced or otherwise adjusted from time in accordance with the terms of this
Agreement.



     “Term Letter of Credit Outstandings” shall mean, at any time, the sum of (i) the aggregate
undrawn stated amount of all Term Letters of Credit then outstanding plus (ii) all amounts
theretofore drawn under Term Letters of Credit and not then reimbursed.



     “Term Loan Commitment” shall mean a Tranche B Commitment or a Tranche C Commitment.



     “Term Loan Commitments” shall mean the Tranche B Commitments and the Tranche C Commitments.



     “Term Loan Lender” shall mean, at any time, any Lender that has a Tranche B Commitment, a
Tranche C Commitment or an outstanding Term Loan at such time.



     “Term Loans” shall mean the Tranche B Term Loans and the Tranche C Term Loans.



     “Termination Event” shall mean (i) a “reportable event”, as such term is described in Section
4043 of ERISA and the regulations issued thereunder (other than a “reportable event” not subject to
the provision for 30-day notice to the PBGC under Section 4043 of ERISA or such regulations) or an
event described in Section 4068 of ERISA excluding events described in Section 4043(c)(9) of ERISA
or 29 CFR §§ 2615.21 or 2615.23, or (ii) the withdrawal of the Borrower or any ERISA Affiliate from
a Multiple Employer Plan during a plan year in which it was a “substantial employer”, as such term
is defined in Section 4001(c) of ERISA, or the incurrence of liability by the Borrower or any ERISA
Affiliate under Section 4064 of ERISA upon the termination of a Multiple Employer Plan, or (iii)
providing notice of intent to terminate a Plan pursuant to Section 4041(c) of ERISA or the
treatment of a Plan amendment as a termination under Section 4041 of ERISA, or (iv) the institution
of proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA, or (v) any other event
or condition which would reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan, or the imposition
of any liability under Title IV of ERISA (other than for the payment of premiums to the PBGC).



     “Thornwood” shall mean Thornwood Associates Limited Partnership and its Affiliates. For the
avoidance of doubt, Icahn Enterprises L.P. shall be deemed to be an Affiliate of Thornwood.



     “Ticking Fee” shall have the meaning set forth in Section 2.23(b).



44









 





     “Total Revolving Credit Commitment” shall mean, at any time, the sum of the Revolving Credit
Commitments of all Revolving Credit Lenders at such time. The Total Revolving Credit Commitment
shall be $540,000,000 on the Closing Date, as such amount may be adjusted from time to time in
accordance with the terms of this Agreement.



     “Total Revolving Credit Usage” shall mean, at any time, the sum of the aggregate principal
amount of the Revolving Credit Loans and Swing Line Loans then outstanding plus the then aggregate
R/C Letter of Credit Outstandings.



     “Total Term Loan Commitment” shall mean, at any time, the sum of (i) the Total Tranche B
Commitment and (ii) the Total Tranche C Commitment at such time. The Total Term Loan Commitment
shall be $2,960,000,000 on the Closing Date.



     “Total Tranche B Commitment” shall mean, at any time, the sum of the Tranche B Commitments at
such time. The Total Tranche B Commitment shall be $1,960,000,000 on the Closing Date.



     “Total Tranche C Commitment” shall mean, at any time, the sum of the Tranche C Commitments at
such time. The Total Tranche C Commitment shall be $1,000,000,000 on the Closing Date.



     “Tranche A Term Loan Agreement” shall mean (i) the Tranche A Term Loan Agreement dated as of
the Closing Date among the Borrower, the lenders from time to time party thereto and JPMorgan Chase
Bank, N.A., as administrative agent, together with all instruments and other agreements entered
into by any Group Member in connection therewith, and (ii) any other credit agreement, loan
agreement, note agreement, promissory note, indenture, or other agreement or instrument evidencing
or governing the terms of any indebtedness or other financial accommodation that is hereafter
incurred to refinance, replace, refund, renew or extend in whole or in part the Indebtedness and
other obligations outstanding under any of the agreements described in clause (i), together with
all instruments and other agreements entered into by the Borrower or such Subsidiaries in
connection therewith; provided that any agreement or instrument described in this clause (ii) shall
not contain any financial covenants, negative covenants or events of default that are materially
more restrictive than those set forth in this Agreement; in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with Section 6.09. Any
reference to the Tranche A Term Loan Agreement hereunder shall be deemed a reference to each of the
Tranche A Term Loan Agreements then extant.



     “Tranche A Term Loan Repayment Date” shall mean the date on which the Tranche A Term Loans
described in clause (i) of the definition thereof have been paid in full.



     “Tranche A Term Loans” shall mean (i) the loans deemed made pursuant to the Tranche A Term
Loan Agreement in effect on the Closing Date and (ii) any Indebtedness permitted under Section
6.02(o) that is incurred after the Closing Date to refinance, replace, refund, renew or extend in
whole or in part the Indebtedness described in clause (i), other than the Term Loans.



45









 





     “Tranche B Commitment” shall mean, with respect to each Tranche B Lender, its obligation, if
any, to make Tranche B Term Loans to the Borrower pursuant to Section 2.01(a), in an aggregate
principal amount not to exceed the amount set forth opposite such Lender’s name on Annex A-1 under
the caption “Tranche B Commitment” or in the Assignment and Assumption pursuant to which such
Lender becomes a party hereto, as applicable, as such amount may be reduced from time to time
pursuant to Section 2.12 or otherwise adjusted from time to time in accordance with this Agreement.



     “Tranche B Lender” shall mean a Lender with a Tranche B Commitment or an outstanding Tranche B
Term Loan.



     “Tranche B Maturity Date” shall mean December 27, 2014; provided that effective December 27,
2013, the Tranche B Maturity Date shall be December 27, 2013 unless by December 27, 2013 the
Tranche A Term Loans described in clause (i) of the definition thereof have been (x) repaid in full
with the proceeds of Term Loans or (y) repaid in full or refinanced, replaced, refunded, renewed or
extended in whole and the terms of the Indebtedness (if any) refinancing, replacing, refunding or
renewing such Tranche A Term Loans require no principal payments thereof prior to at least six
months after December 27, 2013.



     “Tranche B Repayment Date” shall mean the first date on which (i) the Tranche B Commitment
shall have been permanently reduced to $0 pursuant to Section 2.12(b) and (ii) the Tranche B Term
Loans shall have been repaid in full.



     “Tranche B Term Loan” shall have the meaning set forth in Section 2.01(a).



     “Tranche C Commitment” shall mean, with respect to each Tranche C Lender, its obligation, if
any, to make Tranche C Term Loans to the Borrower pursuant to Section 2.01(a), in an aggregate
principal amount not to exceed the amount set forth opposite such Lender’s name on Annex A-2 under
the caption “Tranche C Commitment” or in the Assignment and Assumption pursuant to which such
Lender becomes a party hereto, as applicable, as such amount may be reduced from time to time
pursuant to Section 2.12 or otherwise adjusted from time to time in accordance with this Agreement.



     “Tranche C Lender” shall mean a Lender with a Tranche C Commitment or an outstanding Tranche C
Term Loan.



     “Tranche C Maturity Date” shall mean December 27, 2015; provided that effective December 27,
2013, the Tranche C Maturity Date shall be December 27, 2013 unless by December 27, 2013 the
Tranche A Term Loans described in clause (i) of the definition thereof have been (x) repaid in full
with the proceeds of Term Loans or (y) repaid in full or refinanced, replaced, refunded, renewed or
extended in whole and the terms of the Indebtedness (if any) refinancing, replacing, refunding or
renewing such Tranche A Term Loans require no principal payments thereof prior to at least six
months after December 27, 2013.



     “Tranche C Term Loan” shall have the meaning set forth in Section 2.01(a).



     “Transferee” shall have the meaning set forth in Section 2.21.



46









 





     “Treasury Rate” shall mean at any date, the yield to maturity as of such date of United States
Treasury securities with a constant maturity (as compiled and published in the most recent Federal
Reserve Statistical Release H.15 (519) that has become publicly available at least two Business
Days prior to such date (or, if such Statistical Release is no longer published, any publicly
available source of similar market data)) most nearly equal to the period from such date to the
Non-Call Expiration Date; provided, however, that if the period from such date to the Non-Call
Expiration Date is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year will be used.



     “Type” when used in respect of any Loan or Borrowing shall refer to the Rate of interest by
reference to which interest on such Loan or on the Loans comprising such Borrowing is determined.
For purposes hereof, “Rate” shall mean the Adjusted LIBOR Rate and the Alternate Base Rate.



     “UCC” shall have the meaning set forth in the Collateral Trust Agreement.



     “U.K. Administration” shall have the meaning set forth in the definition of “U.K.
Subsidiaries”.



     “U.K. Dissolution” shall mean the winding up or striking off of (x) those U.K. Subsidiaries
listed on Schedule 1.01G hereto or (y) any other U.K. Subsidiary which is no longer trading and
which has gross assets (as shown in the most recent set of audited accounts) of less than £10,000.



     “U.K. Settlement Agreement” shall mean that certain agreement dated September 26, 2005 among
the Borrower, T&N Limited, certain bankruptcy plan proponents, High River Limited Partnership, the
Pension Protection Fund and James J. Gleave, Simon V. Freakley and Gary P. Squires of Kroll Limited
and their successors as joint administrators of T&N Limited, appointed by order of the High Court
of Justice of England and Wales.



     “U.K. Subsidiaries” shall mean those Subsidiaries of the Borrower which are organized under
the laws of any jurisdiction in the United Kingdom and which have been the subject of
administration petitions under the U.K. Insolvency Act 1986 (collectively, and including upon the
grant of such petitions, the “U.K. Administration”) and are debtors in cases pending under Chapter
11 of the Bankruptcy Code.



     “United States” shall mean the United States of America.



     “Unused Total Revolving Credit Commitment” shall mean, at any time, (i) the Total Revolving
Credit Commitment less (ii) the Total Revolving Credit Usage, in each case at such time.



     “U.S. Debtors” shall have the meaning set forth in the first WHEREAS clause.



     “Wagner Lighting Divestiture” shall mean a Disposition consisting of the sale by the Borrower
and its Subsidiaries of certain assets located in the United States related to the Wagner Lighting
Group, including manufacturing equipment related thereto but excluding the sale of the “Wagner”
brand.



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     “Wholly Owned Subsidiary” shall mean, 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” shall mean any Guarantor that is a Wholly Owned Subsidiary
of the Borrower.



     “Work-in-Process” shall mean goods to be sold by the Loan Parties in the ordinary course of
business, which are currently in the process of being manufactured.



     Section 1.02. Terms Generally. The definitions in Section 1.01 shall apply equally to both
the singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. References to agreements or
other Contractual Obligations shall, unless otherwise specified, be deemed to refer to such
agreements, or other Contractual Obligations, as amended, supplemented or otherwise modified from
time to time. All references herein to Sections, Exhibits and Schedules shall be deemed references
to Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. Except as otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to time; provided,
however, that for purposes of determining compliance with any covenant set forth in Article VI,
such terms shall be construed in accordance with GAAP as in effect on the date of this Agreement
applied on a basis consistent with the application used in the Borrower’s audited financial
statements referred to in Section 3.01(b).



ARTICLE II

AMOUNT AND TERMS OF CREDIT




     Section 2.01. The Loans.



     (a) The Term Borrowings. Subject to the terms and conditions set forth herein, each Tranche B
Lender severally agrees to make one or more loans (each such loan, a “Tranche B Term Loan”) to the
Borrower in an aggregate amount not to exceed such Tranche B Lender’s Tranche B Commitment, and
each Tranche C Lender severally agrees to make one or more loans (each such loan, a “Tranche C Term
Loan”) to the Borrower in an aggregate amount not to exceed such Tranche C Lender’s Tranche C
Commitment. Amounts borrowed under this Section 2.01(a) and repaid or prepaid may not be
reborrowed. Term Loans may be ABR Loans or Eurodollar Loans, as further provided herein.



     (b) The Revolving Credit Borrowings. Subject to the terms and conditions set forth herein,
each Revolving Credit Lender severally agrees to make loans to the Borrower (each such loan, a
“Revolving Credit Loan”) from time to time, on any Business Day during the Revolving Credit
Availability Period, in an aggregate principal amount outstanding at any time not to exceed, when
added to such Revolving Credit Lender’s Class Percentage of (i) the then aggregate R/C Letter of
Credit Outstandings and (ii) the then outstanding principal amount of all Swing Line Loans, the
amount of such Lender’s Revolving Credit Commitment. At no time shall the Total Revolving Credit
Usage exceed the Total Revolving Credit Commitment. Within the limits of each Lender’s Revolving
Credit Commitment, and subject to the other terms and



48









 







conditions hereof, the Borrower may borrow under this Section 2.01(b), prepay under Section
2.17 and reborrow under this Section 2.01(b). Revolving Credit Loans may be ABR Loans or
Eurodollar Loans, as further provided herein.



     Section 2.02. Borrowing Base. Notwithstanding any other provision of this Agreement to the
contrary, the Total Revolving Credit Usage shall not at any time exceed the lesser of (i) the Total
Revolving Credit Commitment and (ii) the Borrowing Base, and no Revolving Credit Loan or Swing Line
Loan shall be made or R/C Letter of Credit issued in violation of the foregoing.



     Section 2.03. Making of Loans.



     (a) Except as contemplated by Section 2.13, Term Loans and Revolving Credit Loans shall be
either ABR Loans or Eurodollar Loans as the Borrower may request subject to and in accordance with
this Section 2.03; provided that all Term Loans made pursuant to the same Term Borrowing and all
Revolving Credit Loans made pursuant to the same Revolving Credit Borrowing shall, unless otherwise
specifically provided herein, be Term Loans or Revolving Credit Loans, as applicable, of the same
Type. Each Lender may fulfill its Commitment of any Class with respect to any Eurodollar Loan or
ABR Loan by causing any lending office of such Lender to make such Loan; provided that any such use
of a lending office shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement. Each Lender shall, subject to its overall policy
considerations, use reasonable efforts (but shall not be obligated) to select a lending office
which will not result in the payment of increased costs by the Borrower pursuant to Sections 2.18
or 2.21. No more than fifteen (15) Borrowings of Eurodollar Loans may be outstanding at any time.



     (b) The Borrower shall give the Administrative Agent prior written, telex, facsimile or
telephonic (confirmed promptly in writing) notice of each Term Borrowing and Revolving Credit
Borrowing hereunder (other than an R/C Refunding Borrowing) of at least three (3) Business Days for
Eurodollar Loans and one (1) Business Day for ABR Loans. Such notice shall be irrevocable and
shall (i) specify the Class of the proposed Borrowing, (ii) specify the amount of the proposed
Borrowing (which shall be (x) $878,000,000, in the case of the Term Borrowing on the Closing Date,
(y) in a minimum amount of $25,000,000, in the case of a Term Borrowing, or $5,000,000, in the case
of a Revolving Credit Borrowing and (z) in an amount which is integral multiple of $1,000,000),
(iii) specify the date of the proposed Borrowing (which date (x) shall be a Business Day, (y) in
the case of the initial Term Borrowing, shall be the Closing Date and (z) in the case of any other
Term Borrowing, shall be January 2, 2008 or thereafter), and (iv) contain disbursement
instructions. Such notice, to be effective, must be received by the Administrative Agent not later
than 12:00 noon, New York City time, on the third Business Day in the case of Eurodollar Loans and
the first Business Day in the case of ABR Loans, preceding the date on which such Borrowing is to
be made. Such notice shall specify whether the Borrowing then being requested is to be a Borrowing
of ABR Loans or Eurodollar Loans. If no election is made as to the Type of Loan, such notice shall
be deemed a request for a Borrowing of ABR Loans. Each Term Borrowing shall be allocated first, to
Tranche C Term Loans to the extent of the Total Tranche C Commitment and second, to Tranche B Term
Loans to the extent of the Total Tranche B Commitment. Each Borrowing of any Class shall be made
ratably from the Lenders of such Class in accordance with their respective Commitments of such
Class. The Administrative Agent shall promptly notify each Lender of the relevant Class of its



49









 







proportionate share of such Borrowing, the date of such Borrowing, the Type of Borrowing being
requested and the Interest Period or Interest Periods applicable thereto, as appropriate. On the
Borrowing date specified in such notice, each Lender of the relevant Class shall make its share of
the Borrowing available at the office of the Administrative Agent at Penn’s Way, New Castle,
Delaware 19720, no later than 12:00 noon, New York City time, in immediately available funds. Upon
receipt of the funds made available by the Lenders to fund any Borrowing hereunder, the
Administrative Agent shall disburse such funds in the manner specified in the notice of Borrowing
delivered by the Borrower, subject to Section 2.04(b)(i).



     Section 2.04. Term Letter of Credit Account.



     (a) Establishment of Term Letter of Credit Account. On or prior to the Closing Date, the
Borrower shall establish the Term Letter of Credit Account. Amounts on deposit in the Term Letter
of Credit Account shall be invested, or caused to be invested, by the Administrative Agent as set
forth in subsection (d) below.



     (b) Deposits in Term Letter of Credit Account. The following amounts will be deposited in the
Term Letter of Credit Account at the following times:




     (i) on the Closing Date, the Administrative Agent, on behalf of the Borrower,
shall deposit in the Term Letter of Credit Account proceeds of Tranche C Term Loans
in an aggregate amount of $50,000,000; and




     (ii) on any date on which the Administrative Agent or the Fronting Bank
receives any payment from the Borrower to replenish an amount previously withdrawn
from the Term Letter of Credit Account to reimburse the Fronting Bank with respect
to a payment made by it under a Term Letter of Credit pursuant to Section 2.05(e),
the Administrative Agent or the Fronting Bank shall deposit in the Term Letter of
Credit Account the amount of such payment; provided that the Borrower shall have no
right to make any such payment after the fifth Business Day after the date on which
the Borrower has been notified that the applicable payment by the Fronting Bank has
been made.



     (c) Withdrawals from and Closing of Term Letter of Credit Account. Amounts on deposit in the
Term Letter of Credit Account shall be withdrawn and distributed as follows:




     (i) on any date on which the Fronting Bank is to be reimbursed by the Borrower
for any payment made by the Fronting Bank with respect to a Term Letter of Credit,
the Administrative Agent shall, unless the Borrower shall have so reimbursed the
Fronting Bank in cash in accordance with Section 2.05(e), withdraw from the Term
Letter of Credit Account an amount equal to the amount of such payment, and make
such amount available to the Fronting Bank;




     (ii) upon any reduction of the Term Letter of Credit Deposit Amount pursuant to
Section 2.12(a), the Administrative Agent shall withdraw from the Term Letter of
Credit Account an amount equal to the amount of such reduction and make such funds
available to the Borrower; and



50









 






     (iii) upon the Tranche C Maturity Date and the expiration or cancellation of
all outstanding Term Letters of Credit (or cash collateralization thereof at 105%
pursuant to arrangements reasonably satisfactory to the Administrative Agent), the
Administrative Agent (x) shall withdraw from the Term Letter of Credit Account the
aggregate amount then on deposit therein and make such funds available to the
Borrower; and (y) shall close the Term Letter of Credit Account.



     (d) Investment of Term Letter of Credit Deposit Amount. The Administrative Agent shall, on
behalf of the Borrower, invest the Term Letter of Credit Deposit Amount in Citi Institutional Cash
Reserves Class O Shares or such other investments as the Administrative Agent and the Borrower
shall agree to from time to time. The return earned on the Term Letter of Credit Deposit Amount
will be paid by the Administrative Agent to the Borrower monthly in arrears on each Monthly Payment
Date. No Lender shall have any obligation under or in respect of the provisions of this Section
2.04(d).



     Section 2.05. Letters of Credit.



     (a) On the Closing Date, each of Citibank and JPMorgan Chase Bank, N.A., in their respective
capacities as issuers of Existing DIP Letters of Credit, shall be deemed, without further action by
any party hereto, to have sold to each of the Revolving Credit Lenders, and each Revolving Credit
Lender shall be deemed, without further action by any party hereto, to have purchased from each of
them, a participation (on the terms specified in this Section 2.05) in each Existing DIP Letter of
Credit issued by them equal to such Revolving Credit Lender’s Class Percentage thereof.
Concurrently with such sale, the participations in the Existing DIP Letters of Credit sold pursuant
to the terms of the DIP Facility to the lenders party thereto shall be automatically cancelled
without further action by any of the parties hereto. Each Revolving Credit Lender acknowledges and
agrees that its obligation to acquire participations in Existing DIP Letters of Credit pursuant to
this subsection is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or reduction or termination of
the Revolving Credit Commitments, and that each payment by a Revolving Credit Lender to acquire
such participations shall be made without any offset, abatement, withholding or reduction
whatsoever. On the Closing Date, the participations in the Existing Prepetition Letters of Credit
sold by the applicable Existing Fronting Bank pursuant to the terms of the Prepetition Credit
Agreement to the lenders party thereto shall be automatically cancelled without further action by
any of the parties hereto.



     (b) (i) Upon the terms and subject to the conditions herein set forth, the Borrower may
request the Fronting Bank, at any time and from time to time during the Revolving Credit
Availability Period, to issue, and, subject to the terms and conditions contained herein, the
Fronting Bank shall issue, for the account of the Borrower one or more R/C Letters of Credit in
support of obligations of the Borrower or one or more Subsidiaries, provided that no R/C Letter of
Credit shall be issued if after giving effect to such issuance (A) the aggregate R/C Letter of
Credit Outstandings would exceed $150,000,000, and (B) the Total Revolving Credit Usage would
exceed the lesser of (x) the Total Revolving Credit Commitment and (y) the Borrowing Base, and
provided further that no Letter of Credit shall be issued if the Fronting Bank shall have



51









 







received notice from the Administrative Agent or the Required Revolving Credit Lenders that
the conditions to such issuance have not been met.




     (ii) Upon the terms and subject to the conditions herein set forth, the
Borrower may request the Fronting Bank, at any time and from time to time from the
Closing Date and prior to the Tranche C Maturity Date (or, if earlier, the date on
which the Term Letter of Credit Deposit Amount shall have been reduced to $0
pursuant to Section 2.12), to issue, and, subject to the terms and conditions
contained herein, the Fronting Bank shall issue, for the account of the Borrower one
or more Term Letters of Credit in support of obligations of the Borrower or one or
more Subsidiaries, provided that no Term Letter of Credit shall be issued if after
giving effect to such issuance the aggregate Term Letter of Credit Outstandings
would exceed the lesser of (x) the Term Letter of Credit Deposit Amount and (y)
$50,000,000, and provided further that no Term Letter of Credit shall be issued if
the Fronting Bank shall have received notice from the Administrative Agent that the
conditions to such issuance have not been met.



     (c) No R/C Letter of Credit shall expire later than the earlier of (i) one year from the
issuance thereof, and (ii) five (5) days before the Revolving Credit Maturity Date, and no Term
Letter of Credit shall expire later than the earlier of (iii) one year from the issuance thereof,
and (iv) five (5) days before the Tranche C Maturity Date as in effect on the date of any proposed
issuance, provided that if the Revolving Credit Maturity Date (or the earlier date of termination
of the Total Revolving Credit Commitment) or the Tranche C Maturity Date (or the earlier date on
which the Term Letter of Credit Deposit Amount shall have been reduced to $0 pursuant to Section
2.12), as the case may be, shall occur prior to the expiration of any R/C Letter of Credit or Term
Letter of Credit, as applicable, the Borrower shall, at or prior to such date, except as the
Administrative Agent may otherwise agree in writing, (i) cause all Letters of Credit of the
relevant Class which expire after such date to be returned to the Fronting Bank undrawn and marked
“canceled” or (ii) either (x) provide a “back-to-back” letter of credit to the Fronting Bank in a
form reasonably satisfactory to the Fronting Bank (in its reasonable credit judgment), issued by a
bank reasonably satisfactory to the Fronting Bank (in its reasonable credit judgment), in an amount
equal to 105% of the then undrawn stated amount of all outstanding Letters of Credit of such Class
issued by the Fronting Bank and/or (y) deposit cash in the applicable Letter of Credit Account for
the Letters of Credit of such Class in an amount which, together with any amounts then held in such
Letter of Credit Account, is equal to 105% of the then undrawn stated amount of all Letter of
Credit Outstandings of the relevant Class, as collateral security for the Borrower’s reimbursement
obligations in connection therewith, such cash to be remitted to the Borrower upon the expiration,
cancellation or other termination or satisfaction of such reimbursement obligations.



     (d) The Borrower shall pay to the Fronting Bank, in addition to such other fees and charges as
are specifically provided for in Section 2.24 hereof, such fees and charges in connection with the
issuance and processing of the Letters of Credit issued by the Fronting Bank as are customarily
imposed by the Fronting Bank from time to time in connection with letter of credit transactions.



52









 





     (e) The Fronting Bank shall notify the Borrower of each draft drawn under a Letter of Credit.
Drafts drawn under each Letter of Credit shall be reimbursed by the Borrower in Dollars (and, in
the case of any R/C Letter of Credit denominated in an Alternative Currency, in an amount equal to
the Dollar Equivalent of such draft) not later than the first Business Day following the date on
which the Borrower receives notice from the Fronting Bank of a draw and shall bear interest (1)
from the date of draw until the first Business Day following the date on which the Borrower
receives notice from the Fronting Bank of a draw at a rate per annum equal to (x) if such draft is
drawn under an R/C Letter of Credit, the Alternate Base Rate plus the Applicable Margin with
respect to Revolving Credit Loans and (y) if such draft is drawn under a Term Letter of Credit, the
Alternate Base Rate plus the Applicable Margin with respect to Term Loans and (2) thereafter until
reimbursed in full at a rate per annum equal to (x) if such draft is drawn under an R/C Letter of
Credit, the Alternate Base Rate plus the Applicable Margin with respect to Revolving Credit Loans
plus 2% and (y) if such draft is drawn under a Term Letter of Credit, the Alternate Base Rate plus
the Applicable Margin with respect to Term Loans plus 2%, in each case computed on the basis of the
actual number of days elapsed over a year of 360 days. The Borrower shall effect such
reimbursement (i) with respect to drafts drawn under any R/C Letter of Credit, (x) if such draft is
drawn prior to the Revolving Credit Maturity Date (or the earlier date of termination of the Total
Revolving Credit Commitment), in cash or through a Revolving Credit Borrowing (an “R/C Refunding
Borrowing”) without the satisfaction of the conditions precedent set forth in Section 4.02 or (y)
if such draft is drawn on or after the Revolving Credit Maturity Date (or the earlier date of
termination of the Total Revolving Credit Commitment), in cash and (ii) with respect to drafts
drawn under any Term Letter of Credit, in cash; provided that unless the Borrower shall have
notified the Administrative Agent and the Fronting Bank of its intent to reimburse any such drawing
on a Term Letter of Credit in cash on or before the first Business Day following the date on which
the Borrower has been notified of the draw (and shall have actually made such reimbursement in cash
to the Fronting Bank on such date), the Borrower’s obligation to reimburse the Fronting Bank with
respect to such drawing shall be satisfied by funds withdrawn by the Administrative Agent from the
Term Letter of Credit Account and transferred to the Fronting Bank in accordance with Section
2.04(c)(i) (and the Borrower hereby irrevocably authorizes and instructs the Administrative Agent
to make such withdrawals and transfers). Each Revolving Credit Lender agrees to make the Revolving
Credit Loans pursuant to any Revolving Credit Borrowing described in clause (i)(x) of the
immediately preceding sentence notwithstanding a failure to satisfy the applicable lending
conditions thereto or the provisions of Sections 2.01 or 2.27.



     (f) Immediately upon the issuance of any R/C Letter of Credit by the Fronting Bank, the
Fronting Bank shall be deemed to have sold to each Revolving Credit Lender and each such Revolving
Credit Lender shall be deemed unconditionally and irrevocably to have purchased from the Fronting
Bank, without recourse or warranty, an undivided interest and participation, to the extent of such
Revolving Credit Lender’s Class Percentage, in such Letter of Credit, each drawing thereunder and
the obligations of the Borrower under this Agreement with respect thereto. Upon any change in the
Revolving Credit Commitments pursuant to Section 9.03(b), it is hereby agreed that with respect to
all R/C Letter of Credit Outstandings, there shall be an automatic adjustment to the participations
hereby created to reflect the new Class Percentage of the assigning and assignee Revolving Credit
Lenders. Any action taken or omitted by the Fronting Bank under or in connection with a Letter of
Credit, if taken or omitted in the absence



53









 







of gross negligence or willful misconduct, shall not create for the Fronting Bank any
resulting liability to any other Lender.



     (g) In the event that the Fronting Bank makes any payment under any Letter of Credit and the
Borrower shall not have reimbursed such amount in full to the Fronting Bank pursuant to this
Section, the Fronting Bank shall promptly notify the Administrative Agent, which, in the case of a
payment under an R/C Letter of Credit, shall promptly notify each Revolving Credit Lender of such
failure, and, in the case of a payment under an R/C Letter of Credit, each Revolving Credit Lender
shall promptly and unconditionally pay to the Administrative Agent for the account of the Fronting
Bank the amount of such Revolving Credit Lender’s Class Percentage of such unreimbursed payment in
Dollars (determined, in the case of any R/C Letter of Credit denominated in an Alternative
Currency, on the date such draft is drawn) and in same day funds. If the Fronting Bank so notifies
the Administrative Agent, and the Administrative Agent so notifies the Revolving Credit Lenders
prior to 11:00 a.m. (New York City time) on any Business Day, then each of the Revolving Credit
Lenders shall make available to the Fronting Bank in Dollars such Revolving Credit Lender’s Class
Percentage of the amount of such payment on such Business Day in same day funds. If and to the
extent any Revolving Credit Lender shall not have so made its Class Percentage of the amount of
such payment available to the Fronting Bank, such Lender agrees to pay to the Fronting Bank,
forthwith on demand such amount, together with interest thereon, for each day from such date until
the date such amount is paid to the Administrative Agent for the account of the Fronting Bank at
the Federal Funds Rate. The failure of any Revolving Credit Lender to make available to the
Fronting Bank its Class Percentage of any payment under any R/C Letter of Credit shall not relieve
any other Revolving Credit Lender of its obligation hereunder to make available to the Fronting
Bank its Class Percentage of any payment under any R/C Letter of Credit on the date required, as
specified above, but no other Lender shall be responsible for the failure of any Revolving Credit
Lender to make available to the Fronting Bank such Revolving Credit Lender’s Class Percentage of
any such payment. Whenever the Fronting Bank receives a payment of a reimbursement obligation with
respect to an R/C Letter of Credit as to which it has received any payments from the Revolving
Credit Lenders pursuant to this paragraph, the Fronting Bank shall pay to each Revolving Credit
Lender which has paid its Class Percentage thereof, in Dollars and in same day funds, an amount
equal to such Revolving Credit Lender’s Class Percentage thereof.



     (h) On each Calculation Date, the Fronting Bank shall determine the R/C Letter of Credit
Outstandings and shall give the Administrative Agent and the Borrower notice thereof.



     (i) The amendment, extension or renewal of a Letter of Credit or a request from the Borrower
therefor shall for purposes of this Agreement be deemed the issuance (or request therefor) of a
Letter of Credit as so amended, extended or renewed. No Existing Fronting Bank, in such capacity,
shall be under any obligation to amend, renew or extend any Existing Letter of Credit.



     Section 2.06. Issuance. Whenever the Borrower desires the Fronting Bank to issue a Letter of
Credit of either Class, it shall give to the Fronting Bank and the Administrative Agent at least
two (2) Business Days’ prior written (including telegraphic, telex, facsimile or cable
communication) notice (or such shorter period as may be agreed upon by the Administrative Agent,
the Borrower and the Fronting Bank) specifying the date on which the proposed Letter of



54









 







Credit is to be issued (which shall be a Business Day), the Class of such Letter of Credit,
the stated amount of the Letter of Credit so requested, the expiration date of such Letter of
Credit, the name and address of the beneficiary thereof and, if such proposed Letter of Credit is
an R/C Letter of Credit to be denominated in an Alternative Currency, such Alternative Currency.



     Section 2.07. Nature of Letter of Credit Obligations Absolute. The Borrower’s reimbursement
obligations with respect to drawings made under any Letter of Credit shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation: (i) any lack of validity or enforceability of such
Letter of Credit; (ii) the existence of any claim, setoff, defense or other right which the
Borrower may have at any time against a beneficiary of such Letter of Credit or, in the case of a
drawing made under an R/C Letter of Credit, against any of the Revolving Credit Lenders, whether in
connection with this Agreement, the transactions contemplated herein or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under a Letter of Credit of either
Class proving to be forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; (iv) payment by the Fronting Bank of any Letter
of Credit of either Class against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit; (v) any other circumstance or
happening whatsoever, which is similar to any of the foregoing; or (vi) the fact that any Event of
Default shall have occurred and be continuing. Nothing in this Section 2.07 shall be construed to
limit any claim the Borrower may have against the Fronting Bank for any direct damages suffered by
the Borrower that are caused by the Fronting Bank’s gross negligence or willful misconduct in the
performance of its duties in such capacity.



     Section 2.08. Swing Line Loans.



     (a) The Swing Line. Subject to the terms and conditions set forth herein (including without
limitation Section 2.02), the Swing Line Lender agrees to make loans (each such loan, a “Swing Line
Loan”) to the Borrower from time to time on any Business Day (other than the Closing Date) until
the Revolving Credit Maturity Date in an aggregate amount not to exceed at any time outstanding
$50,000,000, notwithstanding the fact that such Swing Line Loans, when aggregated with the Class
Percentage of the Revolving Credit Lender acting as Swing Line Lender of the outstanding principal
amount of the Revolving Credit Loans and R/C Letter of Credit Outstandings, may exceed the amount
of such Lender’s Revolving Credit Commitment; provided that after giving effect to any Swing Line
Loan and the risk participations purchased by the Revolving Credit Lenders as set forth in the last
sentence of this paragraph, the aggregate outstanding principal amount of the Revolving Credit
Loans of any Revolving Credit Lender, plus such Revolving Credit Lender’s Class Percentage of the
R/C Letter of Credit Outstandings, plus such Revolving Credit Lender’s Class Percentage of the
outstanding principal amount of all Swing Line Loans shall not exceed such Revolving Credit
Lender’s Revolving Credit Commitment. Within the foregoing limits, and subject to the other terms
and conditions hereof, the Borrower may borrow, prepay and reborrow under this Section 2.08. Each
Swing Line Loan shall be an ABR Loan. Immediately upon the making of a Swing Line Loan, each
Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal
to the product of such Revolving Credit Lender’s Class Percentage times the principal amount of
such Swing Line Loan.



55









 





     (b) Borrowing Procedures. The Borrower shall give the Swing Line Lender and the
Administrative Agent prior written, telex, facsimile or telephonic (confirmed promptly in writing)
notice of each Swing Line Borrowing hereunder not later than 12:00 noon, New York City time, on the
requested borrowing date; such notice shall be irrevocable and shall specify (i) the amount to be
borrowed, which shall be a minimum of $100,000, and (ii) the requested borrowing date, which shall
be a Business Day. Promptly after receipt by the Swing Line Lender of any telephonic notice of
Swing Line Borrowing, the Swing Line Lender will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has also received such notice of Swing Line
Borrowing and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or
in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by
telephone or in writing) from the Administrative Agent (including at the request of any Revolving
Credit Lender) prior to 2:00 p.m., New York City time, on the date of the proposed Swing Line
Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the
limitations set forth in the proviso to the first sentence of Section 2.08(a), or (B) that one or
more of the applicable conditions specified in Section 4.02 is not then satisfied, then, subject to
the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m., New York
City time, on the borrowing date specified in the notice of Swing Line Borrowing, make the amount
of its Swing Line Loan available to the Borrower.



     (c) Repayment, Interest. The Borrower shall repay each Swing Line Loan on the Revolving
Credit Maturity Date; provided that on each day that a Revolving Credit Borrowing is made, the
Borrower shall repay Swing Line Loans then outstanding in an aggregate principal amount equal to
the amount of such Revolving Credit Borrowing (or, if less, all Swing Line Loans then outstanding).
Each Swing Line Loan shall bear interest as set forth in Section 2.10.



     (d) Prepayment. The Borrower may, upon notice to the Swing Line Lender (with a copy to the
Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in
whole or in part without premium or penalty; provided that (1) such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 1:00 p.m., New York City time, on the
date of the prepayment, and (2) any such prepayment shall be in a minimum principal amount of
$100,000. Each such notice shall specify the date and amount of such prepayment. If such notice
is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified
in such notice shall be due and payable on the date specified therein.



     (e) Refinancing of Swing Line Loans. (i) At any time the Borrower may request, or the Swing
Line Lender in its sole and absolute discretion may request, on behalf of the Borrower (which
hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each
Revolving Credit Lender make an ABR Loan in an amount equal to such Revolving Credit Lender’s Class
Percentage of the amount of Swing Line Loans then outstanding; provided that if the aggregate
principal amount of Swing Line Loans outstanding on the last Business Day of any week exceeds
$15,000,000, then the Swing Line Lender shall make such request on such last Business Day of such
week. Such request shall be made in writing and in accordance with the requirements of Section
2.03(b), without regard to the minimum and multiples specified therein for the principal amount of
ABR Loans, but subject to Section 2.02 and the conditions set forth in Section 4.02. The Swing
Line Lender shall furnish the Borrower with a copy of the applicable



56









 







written request described in the preceding sentence promptly after delivering such request to
the Administrative Agent. Each Revolving Credit Lender shall make an amount equal to its Class
Percentage of the amount specified in such request available to the Administrative Agent in
immediately available funds for the account of the Swing Line Lender at the office of the
Administrative Agent not later than 1:00 p.m., New York City time, on the day specified in such
request, whereupon, subject to Section 2.08(e)(ii), each Revolving Credit Lender that so makes
funds available shall be deemed to have made an ABR Loan to the Borrower in such amount. The
Administrative Agent shall remit the funds so received to the Swing Line Lender.




     (ii) If for any reason any Swing Line Loan cannot be refinanced by such a
Revolving Credit Borrowing in accordance with Section 2.08(e)(i), the request for
ABR Loans submitted by the Swing Line Lender as set forth herein shall be deemed to
be a request by the Swing Line Lender that each of the Revolving Credit Lenders fund
its risk participation in the relevant Swing Line Loan and each Revolving Credit
Lender’s payment to the Administrative Agent for the account of the Swing Line
Lender pursuant to Section 2.08(e)(i) shall be deemed payment in respect of such
participation.




     (iii) If any Revolving Credit Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender any amount required to
be paid by such Revolving Credit Lender pursuant to the foregoing provisions of this
Section 2.08(c) by the time specified in Section 2.08(e)(i), the Swing Line Lender
shall be entitled to recover from such Revolving Credit Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the period
from the date such payment is required to the date on which such payment is
immediately available to the Swing Line Lender at a rate per annum equal to the
applicable Federal Funds Rate from time to time in effect. A certificate of the
Swing Line Lender submitted to any Revolving Credit Lender (through the
Administrative Agent) with respect to any amounts owing under this clause (iii)
shall be conclusive absent manifest error.




     (iv) Each Revolving Credit Lender’s obligation to make Revolving Credit Loans
or to purchase and fund risk participations in Swing Line Loans pursuant to this
Section 2.08(c) shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or other
right which such Revolving Credit Lender may have against the Swing Line Lender, the
Borrower or any other Person for any reason whatsoever, (B) the occurrence of any
event or circumstance which with the passage of time or giving of notice or both
would constitute an Event of Default, or (C) any other occurrence, event or
condition, whether or not similar to any of the foregoing; provided that each
Revolving Credit Lender’s obligation to make Revolving Credit Loans pursuant to this
Section 2.08(e)(i) is subject to the conditions set forth in Section 4.02 (other
than delivery by the Borrower of a notice of Borrowing). No such funding of risk
participations shall relieve or otherwise impair the obligation of the Borrower to
repay Swing Line Loans, together with interest as provided herein.



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     (f) Repayment of Participations. At any time after any Revolving Credit Lender has purchased
and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment
on account of such Swing Line Loan, the Swing Line Lender will distribute to such Lender its Class
Percentage of such payment (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender’s risk participation was funded) in the same funds as
those received by the Swing Line Lender.



     (g) Interest for Account of Swing Line Lender. The Swing Line Lender shall be responsible for
invoicing the Borrower for interest on the Swing Line Loans. Until each Revolving Credit Lender
funds its ABR Loan or risk participation pursuant to this Section 2.08 to refinance such Revolving
Credit Lender’s Class Percentage of any Swing Line Loan, interest in respect of such Class
Percentage shall be solely for the account of the Swing Line Lender.



     (h) Payments Directly to Swing Line Lender. The Borrower shall make all payments of principal
and interest in respect of the Swing Line Loans directly to the Swing Line Lender.



     Section 2.09. Repayment of Loans and Unreimbursed Draws; Evidence of Debt.



     (a) Term Loans. The Borrower shall repay to the Administrative Agent (i) for the ratable
account of the Tranche B Lenders the aggregate principal amount of all Tranche B Term Loans
outstanding in twenty-eight (28) consecutive quarterly installments, the first twenty-seven (27) of
which shall be in the amount of 0.25% of total funded Tranche B Term Loans as of the date on which
the Tranche B Commitment shall have been automatically and permanently reduced to $0 pursuant to
Section 2.12(b) and the last of which shall be in the aggregate principal amount of the Tranche B
Term Loans then outstanding and (ii) for the ratable account of the Tranche C Lenders the aggregate
principal amount of all Tranche C Term Loans outstanding in thirty-two (32) consecutive quarterly
installments, the first thirty-one (31) of which shall be in the amount of 0.25% of total funded
Tranche C Term Loans as of the date on which the Tranche C Commitment shall have been automatically
and permanently reduced to $0 pursuant to Section 2.12(b) and the last of which shall be in the
aggregate principal amount of the Tranche C Term Loans then outstanding. Each of the foregoing
installments shall be reduced as a result of the application of prepayments of the Term Loans in
accordance with the order of priority set forth in Section 2.16(e). Each such payment shall be
made on each Quarterly Payment Date; provided that the final principal repayment installment of the
Term Loans of each Class shall be made (i) in the case of the Tranche B Term Loans, on the Tranche
B Maturity Date (including the date that shall be the Tranche B Maturity Date by operation of the
proviso in the definition of “Tranche B Maturity Date”) and (ii) in the case of the Tranche C Term
Loans, on the Tranche C Maturity Date, and in any event the final principal repayment installment
with respect to the Term Loans of each Class shall be in an amount equal to the aggregate principal
amount of the Term Loans of such Class outstanding on the date of the applicable final principal
repayment installment. “Quarterly Payment Date” shall mean (1) the last Business Day of the
calendar month in which the 90th day after the Closing Date occurs and (2) the last
Business Day of each calendar month that is the third calendar month after the one in which the
immediately preceding Quarterly Payment Date has occurred.




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     (b) Revolving Credit Loans. The Borrower shall repay to the Administrative Agent for the
ratable account of the Revolving Credit Lenders on the Revolving Credit Maturity Date the aggregate
principal amount of all of the Revolving Credit Loans outstanding on such date.



     (c) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the Indebtedness of the Borrower to such Lender resulting from each Loan made by such
Lender or participation in each Letter of Credit or Swing Line Loan in which such Lender is
participating, including the amounts of principal and interest payable and paid to such Lender from
time to time hereunder.



     (d) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender’s share thereof.



     (e) The entries made in the accounts maintained pursuant to paragraph (c) or (d) of this
Section shall be prima facie evidence of the existence and amounts of the obligations recorded
therein; provided that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of the Borrower to
repay the Loans or drafts drawn under any Letter of Credit in accordance with the terms of this
Agreement.



     (f) Any Lender may request that Loans made by it be evidenced by a promissory note. In such
event, the Borrower shall execute and deliver to such Lender a promissory note payable to the order
of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) in a
form furnished by the Administrative Agent and reasonably acceptable to the Borrower. Thereafter,
the Loans evidenced by such promissory note and interest thereon shall at all times (including
after assignment pursuant to Section 9.03(b)) be represented by one or more promissory notes in
such form payable to the order of the payee named therein (or, if such promissory note is a
registered note, to such payee and its registered assigns).



     Section 2.10. Interest on Loans.



     (a) Subject to the provisions of Section 2.11, each ABR Loan shall bear interest (computed,
for ABR Loans wherein the Alternate Base Rate is determined by reference to the Federal Funds Rate,
on the basis of the actual number of days elapsed over a year of 360 days, and otherwise computed
on the basis of the actual number of days elapsed over a year of 365 days) at a rate per annum
equal to the Alternate Base Rate plus the Applicable Margin.



     (b) Subject to the provisions of Section 2.11, each Eurodollar Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per
annum equal, during each Interest Period applicable thereto, to the Adjusted LIBOR Rate for such
Interest Period in effect for such Borrowing plus the Applicable Margin.



     (c) Subject to the provisions of Section 2.11, each Swing Line Loan shall bear interest
(computed, for ABR Loans wherein the Alternate Base Rate is determined by reference



59









 







to the Federal Funds Rate, on the basis of the actual number of days elapsed over a year of
360 days, and otherwise computed on the basis of the actual number of days elapsed over a year of
365 days) at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin.



     (d) Accrued interest on all Loans and Swing Line Loans shall be payable in arrears on each
Interest Payment Date applicable thereto, at maturity (whether by acceleration or otherwise), after
such maturity on demand and upon any repayment or prepayment thereof (on the amount repaid or
prepaid).



     Section 2.11. Default Interest. If the Borrower shall default in the payment of the principal
of or interest on any Loan or Swing Line Loan or in the payment of any other amount becoming due
hereunder (other than the reimbursement pursuant to Section 2.05(e) of any draft drawn under a
Letter of Credit, which shall be governed by the provisions of such Section), whether at stated
maturity, by acceleration or otherwise, the Borrower shall on demand from time to time pay
interest, to the extent permitted by law, on such defaulted amount up to (but not including) the
date of actual payment (after as well as before judgment) at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 360 days) equal to 2% above the then
applicable rate.



     Section 2.12. Termination or Reduction of Commitments and Term Letter of Credit Deposit
Amount.



     (a) Optional. Upon at least two (2) Business Days’ prior written notice to the Administrative
Agent, the Borrower may at any time (i) in whole permanently terminate, or from time to time in
part permanently reduce, the Unused Total Revolving Credit Commitment, (ii) in whole permanently
terminate, or from time to time in part permanently reduce, the Term Letter of Credit Deposit
Amount, provided that immediately after giving effect thereto, the Term Letter of Credit Deposit
Amount shall not be less than the Term Letter of Credit Outstandings or (iii) during the Term
Availability Period, in whole permanently terminate, or from time to time in part permanently
reduce, the Total Tranche B Commitment or the Total Tranche C Commitment. Each such reduction of
the Unused Total Revolving Credit Commitment, the Term Letter of Credit Deposit Amount, the Total
Tranche B Commitment or the Total Tranche C Commitment shall be in the principal amount of
$5,000,000 or any integral multiple of $1,000,000 in excess thereof. Any reduction or termination,
as applicable, of the Unused Total Revolving Credit Commitment pursuant to this Section 2.12 shall
be deemed to be a reduction or termination, as applicable, in the amount of such reduction or
termination of the Total Revolving Credit Commitment and shall be applied pro rata to reduce the
Revolving Credit Commitment of each Revolving Credit Lender. Any reduction or termination, as
applicable, of the Total Tranche B Commitment or the Total Tranche C Commitment pursuant to this
Section 2.12 shall be applied pro rata to reduce the Tranche B Commitment or the Tranche C
Commitment of each Term Loan Lender, as the case may be. Simultaneously with each reduction or
termination, as applicable, of the Unused Total Revolving Credit Commitment, the Total Tranche B
Commitment or the Total Tranche C Commitment, as the case may be, pursuant to this Section 2.12,
the Borrower shall pay to the Administrative Agent for the account of each Revolving Credit Lender
the Commitment Fee, and for the account of each Tranche B Lender and Tranche C Lender the Ticking
Fee (if any), accrued on the amount of the Unused Revolving Credit Commitment, the



60









 







Tranche B Commitment and the Tranche C Commitment, as applicable, of such Lender so terminated
or reduced through the date thereof.



     (b) Mandatory. On the date of each Term Borrowing, the Term Loan Commitments of the
applicable Class shall be automatically and permanently reduced by the amount of such Term
Borrowing. The Tranche B Commitment and the Tranche C Commitment of each Term Loan Lender, shall
be automatically and permanently reduced to $0 at the close of business on the date which is the
earliest of (i) the last day of the Term Availability Period, (ii) the date on which the Borrower
shall have borrowed the full amount of the Tranche B Commitments and the Tranche C Commitments, and
(iii) the date on which the Borrower shall have made a fourth Borrowing of Term Loans; provided,
however, that solely for the purposes of this clause (iii), Borrowings of Tranche B Term Loans and
Tranche C Term Loans made on the same date shall be deemed to constitute a single Borrowing of Term
Loans. The Total Revolving Credit Commitment shall be automatically and permanently reduced to $0
and the Borrower shall pay the Revolving Credit Loans and Swing Line Loans in full and, if any R/C
Letter of Credit remains outstanding, comply with Section 2.05(c), in each case on the Revolving
Credit Maturity Date. The Term Letter of Credit Deposit Amount shall be automatically and
permanently reduced to the extent the Borrower shall not have replenished the Term Letter of Credit
Account in accordance with Section 2.04(b)(ii).



     Section 2.13. Alternate Rate of Interest. In the event, and on each occasion, that on the day
two (2) Business Days prior to the commencement of any Interest Period for a Eurodollar Loan, the
Administrative Agent shall have determined (which determination shall be conclusive and binding
upon the Borrower absent manifest error) that reasonable means do not exist for ascertaining the
applicable Adjusted LIBOR Rate, the Administrative Agent shall, as soon as practicable thereafter,
give written or telegraphic notice of such determination to the Borrower and the Lenders of the
applicable Class, and any request by the Borrower for a Borrowing of Eurodollar Loans (including
pursuant to a refinancing with Eurodollar Loans) pursuant to Section 2.03 or 2.14 shall be deemed a
request for a Borrowing of ABR Loans. After such notice shall have been given and until the
circumstances giving rise to such notice no longer exist, each request for a Borrowing of
Eurodollar Loans shall be deemed to be a request for a Borrowing of ABR Loans.



     Section 2.14. Refinancing of Loans. The Borrower shall have the right, at any time, on three
(3) Business Days’ prior irrevocable written notice to the Administrative Agent (which notice, to
be effective, must be received by the Administrative Agent not later than 1:00 p.m., New York City
time, on the third Business Day preceding the date of any refinancing), (x) to refinance (without
the satisfaction of the conditions set forth in Section 4.02 as a condition to such refinancing)
any outstanding Borrowing or Borrowings of Loans of one Type (or a portion thereof) of any Class
with a Borrowing of Loans of the other Type of such Class or (y) to continue an outstanding
Borrowing of Eurodollar Loans of any Class for an additional Interest Period, subject to the
following:



     (a) as a condition to the refinancing of ABR Loans with Eurodollar Loans and to the
continuation of Eurodollar Loans for an additional Interest Period, no Event of Default shall have
occurred and be continuing at the time of such refinancing;



61









 





     (b) if less than a full Borrowing of Loans shall be refinanced, such refinancing shall be made
pro rata among the Lenders of the relevant Class in accordance with the respective principal
amounts of the Loans comprising such Borrowing held by such Lenders immediately prior to such
refinancing;



     (c) the aggregate principal amount of Loans being refinanced shall be at least $5,000,000 or
any integral multiple of $1,000,000 in excess thereof, provided that no partial refinancing of a
Borrowing of Eurodollar Loans shall result in the Eurodollar Loans remaining outstanding pursuant
to such Borrowing being less than $5,000,000 in aggregate principal amount;



     (d) each Lender of the relevant Class shall effect each refinancing by applying the proceeds
of its new Eurodollar Loan or ABR Loan, as the case may be, to its Loan being refinanced;



     (e) the Interest Period with respect to a Borrowing of Eurodollar Loans effected by a
refinancing or in respect to the Borrowing of Eurodollar Loans being continued as Eurodollar Loans
shall commence on the date of refinancing or the expiration of the current Interest Period
applicable to such continuing Borrowing, as the case may be;



     (f) unless the Borrower makes the reimbursement payment provided for under Section 2.17(b), a
Borrowing of Eurodollar Loans may be refinanced only on the last day of an Interest Period
applicable thereto; and



     (g) each request for a refinancing with a Borrowing of Eurodollar Loans which fails to state
an applicable Interest Period shall be deemed to be a request for an Interest Period of one month.



In the event that the Borrower shall not give notice to refinance any Borrowing of Eurodollar
Loans, or to continue such Borrowing as Eurodollar Loans, or shall not be entitled to refinance or
continue such Borrowing as Eurodollar Loans, in each case as provided above, such Borrowing shall
automatically be refinanced with a Borrowing of ABR Loans at the expiration of the then-current
Interest Period. The Administrative Agent shall, after it receives notice from the Borrower,
promptly give each Lender notice of any refinancing, in whole or part, of any Loan made by such
Lender.



     Section 2.15. Mandatory Prepayments of Revolving Credit Loans.



     (a) If at any time the aggregate principal amount of the outstanding Revolving Credit Loans
and Swing Line Loans plus the aggregate R/C Letter of Credit Outstandings exceeds the lesser of (x)
the Total Revolving Credit Commitment or (y) the Borrowing Base, the Borrower will within one (1)
Business Day (i) prepay the Revolving Credit Loans and Swing Line Loans (by prepaying Swing Line
Loans first, until all outstanding Swing Line Loans are prepaid, and then prepaying Revolving
Credit Loans) in an amount necessary to cause the aggregate principal amount of the outstanding
Revolving Credit Loans and Swing Line Loans plus the aggregate R/C Letter of Credit Outstandings,
including unreimbursed draws, to be equal to or less than the lesser of (x) the Total Revolving
Credit Commitment and (y) the Borrowing Base, and (ii) if, after giving effect to the prepayment in
full of the Revolving Credit Loans and Swing Line



62









 







Loans, the aggregate R/C Letter of Credit Outstandings in excess of the amount of cash held in
the R/C Letter of Credit Account exceeds the lesser of (x) the Total Revolving Credit Commitment or
(y) the Borrowing Base, deposit into the R/C Letter of Credit Account an amount equal to 105% of
the amount by which the aggregate R/C Letter of Credit Outstandings in excess of the amount of cash
held in the R/C Letter of Credit Account so exceeds the lesser of (x) the Total Revolving Credit
Commitment or (y) the Borrowing Base. Any such amount deposited in the R/C Letter of Credit
Account pursuant to this Section 2.15(a) shall, unless an Event of Default has occurred and is
continuing, be made available or refunded to the Borrower by the Administrative Agent to the extent
at any time the lesser of (x) the Total Revolving Credit Commitment and (y) the Borrowing Base
exceeds the aggregate principal amount of the outstanding Revolving Credit Loans and Swing Line
Loans plus the aggregate R/C Letter of Credit Outstandings.



     (b) Within three (3) Business Days of receipt by a Group Member of the Net Cash Proceeds of
any Asset Sale or Recovery Event that results from the sale or other disposition of Accounts that
are Collateral or Inventory that is Collateral, an amount equal to 100% of such Net Cash Proceeds
shall be applied to prepay the Revolving Credit Loans and Swing Line Loans then outstanding (by
prepaying Swing Line Loans first, until all outstanding Swing Line Loans are prepaid, and then
prepaying Revolving Credit Loans). No prepayment made pursuant to this Section 2.15(b) shall
reduce the Total Revolving Credit Commitment, and amounts prepaid pursuant to this Section 2.15(b)
may be reborrowed, subject to the other terms and conditions hereof.



     (c) Without duplication of any prepayment of the Revolving Credit Loans and the Swing Line
Loans made pursuant to Sections 2.15(a) or 2.15(b), at the close of each Business Day during each
Sweep Period the Administrative Agent shall apply any amounts then on deposit in the Concentration
Account to prepay the Revolving Credit Loans and Swing Line Loans then outstanding (by prepaying
Swing Line Loans first, until all outstanding Swing Line Loans are prepaid, and then prepaying
Revolving Credit Loans), subject to the provisions of Sections 2.20(b) and 2.20(c), and the
Borrower hereby authorizes the Administrative Agent to do so. No prepayment made pursuant to this
Section 2.15(c) shall reduce the Total Revolving Credit Commitment, and amounts prepaid pursuant to
this Section 2.15(c) may be reborrowed, subject to the other terms and conditions hereof.



     Section 2.16. Mandatory Prepayments of Term Loans.



     (a) Prior to the Tranche A Term Loan Repayment Date, except as set forth in the immediately
succeeding sentence with respect to the incurrence of Permitted Subordinated Indebtedness, an
amount equal to 100% of the Net Cash Proceeds of any incurrence of Indebtedness of any Loan Party
(excluding any Indebtedness permitted to be incurred under Section 6.02) shall be applied to the
prepayment of the Tranche B Term Loans as set forth in Section 2.16(e) on the date of such
incurrence. Prior to the Tranche A Term Loan Repayment Date, an amount equal to 100% of the Net
Cash Proceeds of any incurrence of Permitted Subordinated Indebtedness (including Permitted
Designated Subordinated Indebtedness) of any Loan Party shall be applied to the prepayment of the
Tranche B Term Loans as set forth in Section 2.16(e) on the 121st day (the “Payment
Date”) after the date of such incurrence (as such date may be extended pursuant to the proviso set
forth at the end of this sentence) to the extent



63









 







such Net Cash Proceeds are (i) not from the issuance of Permitted Designated Subordinated
Indebtedness and (ii) not used prior to such 121st day to make (u) a Capital Expenditure, (v) a
Restricted Payment, (w) a Board-Approved Investment or a Proceeds Investment (in either case so
long as the Borrower shall have complied with the provisions of Section 5.09, to the extent
applicable, with respect to any assets acquired by any Group Member pursuant to such Board-Approved
Investment or Proceeds Investment, as the case may be), (x) a Permitted Acquisition (so long as the
Borrower shall have complied with the provisions of Section 5.09, to the extent applicable, with
respect to any assets acquired by any Group Member pursuant to such Permitted Acquisition), (y)
Permitted Open Market Purchases or (z) a repayment of the Tranche A Term Loans; provided that if on
such 121st day a Board-Approved Investment, a Proceeds Investment, a Permitted
Acquisition or Permitted Open Market Purchases shall not have been consummated but one or more
Group Members shall have entered into a binding letter of intent or definitive purchase
documentation with respect thereto (or, with respect to Permitted Open Market Purchases, shall have
made a binding offer, subject to the conditions set forth therein), then the Payment Date shall be
extended to the 181st day after such incurrence, and on such day the relevant Net Cash
Proceeds shall be applied to the prepayment of the Tranche B Term Loans as specified above to the
extent such Net Cash Proceeds are not used prior to such 181st day to consummate (x) a
Board-Approved Investment or a Proceeds Investment (in either case so long as the Borrower shall
have complied with the provisions of Section 5.09, to the extent applicable, with respect to any
assets acquired by any Group Member pursuant to such Board-Approved Investment or Proceeds
Investment, as the case may be), (y) a Permitted Acquisition (so long as the Borrower shall have
complied with the provisions of Section 5.09, to the extent applicable, with respect to any assets
acquired by any Group Member pursuant to such Permitted Acquisition), or (z) Permitted Open Market
Purchases.



     (b) Unless a Reinvestment Notice is delivered to the Administrative Agent within three (3)
Business Days after the day of receipt by a Group Member of the Net Cash Proceeds of any Asset Sale
or Recovery Event that results from the sale or other disposition of, or payment with respect to,
any of the Collateral (including without limitation the PP&E Collateral, but excluding Accounts
that are Collateral or Inventory that is Collateral), an amount equal to 100% of such Net Cash
Proceeds shall be applied to the prepayment of the Tranche B Term Loans (or, if the Tranche B
Repayment Date has occurred, the Tranche C Term Loans) as set forth in Section 2.16(e) within ten
(10) Business Days after the day of receipt of any such Net Cash Proceeds by any Group Member;
provided that no prepayment of the Term Loans of either Class shall be required to be made pursuant
to this subsection until the amount of Net Cash Proceeds to be applied to make such prepayment is
at least equal to $10,000,000. If a Reinvestment Notice is timely delivered pursuant to the
immediately preceding sentence, on each Reinvestment Prepayment Date, an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event shall be applied to
the prepayment of the Term Loans of the applicable Class as set forth in Section 2.16(e).



     (c) Commencing with the fiscal year of the Borrower ending December 31, 2008, and ending with
the fiscal year preceding the fiscal year in which the Tranche A Term Loan Repayment Date occurs,
the Applicable Amount of the Adjusted Excess Cash Flow for any fiscal year of the Borrower shall be
applied to the prepayment of the Tranche B Term Loans as set forth in Section 2.16(e) on the
Prepayment Application Date.



64









 





     (d) Commencing with the fiscal year of the Borrower ending December 31, 2008, and ending with
the fiscal year preceding the fiscal year in which the Tranche A Term Loan Repayment Date occurs,
the Applicable Amount of the Adjusted Positive EBITDA Variance for any fiscal year of the Borrower
shall be applied to the prepayment of the Tranche B Term Loans as set forth in Section 2.16(e) on
the Prepayment Application Date.



     (e) Any amount of Net Cash Proceeds, any Applicable Amount of the Adjusted Excess Cash Flow,
any Applicable Amount of the Adjusted Positive EBITDA Variance or any other amount required to be
applied to the prepayment of the Term Loans of either Class pursuant to this Section 2.16 shall be
allocated ratably among the Term Loan Lenders of the applicable Class ratably in accordance with
their respective Term Loans of such Class. Each prepayment of Term Loans of either Class made
pursuant to this Section 2.16 shall be applied to reduce ratably the then remaining principal
repayment installments of the Term Loans of such Class (including the final installment of such
Term Loans due on the Tranche B Maturity Date or the Tranche C Maturity Date, as applicable) set
forth in Section 2.09(a). The application of any prepayment of the Term Loans pursuant to this
Section 2.16 shall be made, first, to ABR Loans (until all ABR Loans are paid in full) and, second,
to Eurodollar Loans.



     (f) The Borrower shall notify the Administrative Agent in writing of any mandatory prepayment
of Term Loans required to be made pursuant to clauses (a) through (d) of this Section 2.16 (the
aggregate amount of such prepayment to be made in any single instance, a “Term Payment Amount”) at
least five (5) Business Days prior to the date of such prepayment (a “Term Prepayment Date”). Each
such notice shall specify the applicable Term Prepayment Date and provide a reasonably detailed
calculation of the applicable Term Payment Amount. The Administrative Agent will promptly notify
each Term Loan Lender of the applicable Class of the contents of the Borrower’s prepayment notice
and of such Term Loan Lender’s ratable share (such ratable share to be calculated by dividing such
Term Loan Lender’s Term Loans of the applicable Class by the total Term Loans of the applicable
Class then outstanding) of the Term Payment Amount. Any Term Loan Lender of the applicable Class
(a “Declining Lender”) may elect, by delivering, not less than three (3) Business Days prior to the
applicable Term Prepayment Date, a written notice that any mandatory prepayment otherwise required
to be made with respect to the Term Loans held by such Term Loan Lender pursuant to clauses (a)
through (d) of this Section 2.16 not be made, in which event the portion of such prepayment which
otherwise would have been allocated to such Declining Lenders (i) in the case of a prepayment of
Tranche B Term Loans required to be made pursuant to clause (b) of this Section 2.16, shall instead
be applied to prepay Tranche C Term Loans in accordance Sections 2.16(e) and 2.16(f) or (ii) in all
other cases, shall instead be retained by the Borrower (the “Retained Amount”). To the extent that
any portion of the Retained Amount shall not have been used by the Borrower to repay any of its
other Indebtedness by the date (the “Cut-off Date”) that is thirty (30) Business Days after the
applicable Term Prepayment Date, on the Cut-off Date the Borrower shall prepay the Term Loans of
the Declining Lenders of the applicable Class, in an aggregate principal amount equal to such
unused portion (it being understood that no prepayment of Tranche C Term Loans of Declining Lenders
shall be required pursuant to this sentence prior to the Tranche B Repayment Date). Any prepayment
of Tranche C Term Loans required to be made pursuant to the preceding sentence (but not any other
prepayment pursuant to this Section 2.16) prior to the Non-Call Expiration Date shall be
accompanied by the Applicable Premium. It is understood that, pursuant to Section 9.10, any
modification, amendment or waiver of this clause (f) shall



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require the consent of the Required Lenders (and shall not require the consent of any other
group or number of Lenders).



     Section 2.17. Optional Prepayment of Loans; Reimbursement of Lenders.



     (a) Subject to following proviso, the Borrower shall have the right at any time and from time
to time to prepay any Loans without premium or penalty (except for any breakage costs associated
with Eurodollar Loans), in whole or in part; provided, that any such prepayment of Tranche C Term
Loans made prior to the Non-Call Expiration Date shall be accompanied by the Applicable Premium.
All such prepayments shall be made (x) with respect to Eurodollar Loans, upon at least three (3)
Business Days’ prior written, telex, facsimile or telephonic (confirmed promptly in writing) notice
to the Administrative Agent and (y) with respect to ABR Loans on the same Business Day if written,
telex, facsimile or telephonic (confirmed promptly in writing) notice is received by the
Administrative Agent prior to 1:00 p.m., New York City time; provided, however, that (i) each such
partial prepayment shall be in integral multiples of $1,000,000, (ii) no prepayment of Eurodollar
Loans shall be permitted pursuant to this Section 2.17(a) other than on the last day of an Interest
Period applicable thereto unless such prepayment is accompanied by the payment of the amounts
described in clause (i) of the first sentence of Section 2.17(b), and (iii) no partial prepayment
of a Borrowing of Eurodollar Loans shall result in the aggregate principal amount of the Eurodollar
Loans remaining outstanding pursuant to such Borrowing being less than $5,000,000. Each notice of
prepayment shall specify the prepayment date, the principal amount, Class and Type of the Loans to
be prepaid, and in the case of Eurodollar Loans, the Borrowing or Borrowings pursuant to which
made, shall be irrevocable and shall commit the Borrower to prepay such Loans by the amount and on
the date stated therein. The Administrative Agent shall, promptly after receiving notice from the
Borrower hereunder, notify each Lender of the relevant Class of the principal amount of the Loans
held by such Lender which are to be prepaid and the prepayment date. Any partial prepayment of the
Term Loans by the Borrower pursuant to this Section 2.17 shall be applied to reduce the then
remaining principal repayment installments of the Term Loans in forward order of maturity.



     (b) The Borrower shall reimburse each Lender of the relevant Class on demand for any loss
incurred or to be incurred by it in the reemployment of the funds released (i) resulting from any
prepayment (for any reason whatsoever, including, without limitation, refinancing with ABR Loans)
of any Eurodollar Loan required or permitted under this Agreement, if such Loan is prepaid prior to
the last day of the Interest Period for such Loan or (ii) in the event that after the Borrower
delivers a notice of Borrowing under Section 2.03 in respect of Eurodollar Loans, such Loans are
not made on the first day of the Interest Period specified in such notice of Borrowing for any
reason other than a breach by such Lender of its obligations hereunder. Such loss shall be the
amount as reasonably determined by such Lender as the excess, if any, of (A) the amount of interest
which would have accrued to such Lender on the amount so paid or not borrowed at a rate of interest
equal to the Adjusted LIBOR Rate for such Loan, for the period from the date of such payment or
failure to borrow to the last day (x) in the case of a payment or refinancing with ABR Loans prior
to the last day of the Interest Period for such Loan, of the then current Interest Period for such
Loan, or (y) in the case of such failure to borrow, of the Interest Period for such Loan which
would have commenced on the date of such failure to borrow, over (B) the amount of interest which
would have accrued to such Lender on such amount by placing such amount on



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deposit for a comparable period with leading banks in the London interbank market. Each
Lender of the relevant Class shall deliver to the Borrower from time to time one or more
certificates setting forth the amount of such loss as determined by such Lender.



     (c) In the event the Borrower fails to prepay any Loan on the date specified in any prepayment
notice delivered pursuant to Section 2.17(a), the Borrower on demand by any Lender of the relevant
Class shall pay to the Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any loss, cost or expenses incurred by reason of the acquisition of
deposits or other funds by such Lender to fulfill deposit obligations incurred in anticipation of
such prepayment, but without duplication of any amounts paid under Section 2.17(b). Each Lender of
the relevant Class shall deliver to the Borrower from time to time one or more certificates setting
forth the amount of such loss as determined by such Lender.



     Section 2.18. Reserve Requirements; Change in Circumstances.



     (a) Notwithstanding any other provision herein, if after the date of this Agreement any change
in applicable law or regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration thereof (whether or not
having the force of law) shall change the basis of taxation of payments to any Lender of the
principal of or interest on any Eurodollar Loan made by such Lender or any fees or other amounts
payable hereunder (other than changes in respect of Taxes, Other Taxes and taxes imposed on, or
measured by, the net income or overall gross receipts or franchise taxes of such Lender by the
jurisdiction in which such Lender has its principal office or in which the applicable lending
office for such Eurodollar Loan is located or by any political subdivision or taxing authority
therein, or by any other jurisdiction or by any political subdivision or taxing authority therein
other than a jurisdiction in which such Lender would not be subject to tax but for the execution
and performance of this Agreement), or shall impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the account of or credit
extended by such Lender (except any such reserve requirement which is reflected in the Adjusted
LIBOR Rate) or shall impose on such Lender or the London interbank market any other condition
affecting this Agreement or the Eurodollar Loans made by such Lender, and the result of any of the
foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan
or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of
principal, interest or otherwise) by an amount deemed by such Lender to be material, then the
Borrower will pay to such Lender in accordance with paragraph (c) below such additional amount or
amounts as will compensate such Lender for such additional costs incurred or reduction suffered.



     (b) If the adoption or effectiveness after the date hereof of any law, rule, regulation or
guideline regarding capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any governmental authority, central
bank or comparable agency charged with the interpretation or administration thereof, or compliance
by any Lender (or any lending office of such Lender) or any Lender’s holding company with any
request or directive regarding capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any,
as a consequence of this Agreement, the Loans made by such Lender



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pursuant hereto, such Lender’s Commitment hereunder or the issuance of, or participation in,
any Letter of Credit or participation in any Swing Line Loan by such Lender to a level below that
which such Lender or such Lender’s holding company could have achieved but for such adoption,
change or compliance (taking into account Lender’s policies and the policies of such Lender’s
holding company with respect to capital adequacy) by an amount deemed by such Lender to be
material, then from time to time the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender’s holding company for any such reduction
suffered.



     (c) A certificate of each Lender setting forth such amount or amounts as shall be necessary to
compensate such Lender or its holding company as specified in paragraph (a) or (b) above, as the
case may be, shall be delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay each Lender the amount shown as due on any such certificate delivered to it
within ten (10) days after its receipt of the same. Any Lender receiving any such payment shall
promptly make a refund thereof to the Borrower if the law, regulation, guideline or change in
circumstances giving rise to such payment is subsequently deemed or held to be invalid or
inapplicable.



     (d) Failure on the part of any Lender to demand compensation for any increased costs or
reduction in amounts received or receivable or reduction in return on capital with respect to any
period shall not constitute a waiver of such Lender’s right to demand compensation with respect to
such period or any other period; provided that the Borrower shall not be required to compensate a
Lender pursuant to this Section 2.18 for any increased costs or reductions incurred more than 180
days prior to the date that such Lender notifies the Borrower of the change in law giving rise to
such increased costs or reductions, as the case may be, and of such Lender’s intention to claim
compensation therefor; provided further that, if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.



     Section 2.19. Change in Legality.



     (a) Notwithstanding anything to the contrary contained elsewhere in this Agreement, if (x) any
change after the date of this Agreement in any law or regulation or in the interpretation thereof
by any Governmental Authority charged with the administration thereof shall make it unlawful for a
Lender to make or maintain a Eurodollar Loan or to give effect to its obligations as contemplated
hereby with respect to a Eurodollar Loan or (y) at any time any Lender determines that the making
or continuance of any of its Eurodollar Loans has become impracticable as a result of a contingency
occurring after the date hereof which adversely affects the London interbank market or the position
of such Lender in such market, then, by written notice to the Borrower, such Lender may (i) declare
that Eurodollar Loans will not thereafter be made by such Lender hereunder, whereupon any request
by the Borrower for a Eurodollar Borrowing shall, as to such Lender only, be deemed a request for
an ABR Loan unless such declaration shall be subsequently withdrawn; and (ii) require that all
outstanding Eurodollar Loans made by it be converted to ABR Loans, in which event all such
Eurodollar Loans shall be automatically converted to ABR Loans as of the effective date of such
notice as provided in paragraph (b) below. In the event any Lender shall exercise its rights under
clause (i) or (ii) of this paragraph (a), all payments and prepayments of principal which would
otherwise have been



68









 







applied to repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the ABR Loans made by
such Lender in lieu of, or resulting from the conversion of, such Eurodollar Loans.



     (b) For purposes of this Section 2.19, a notice to the Borrower by any Lender pursuant to
paragraph (a) above shall be effective, if lawful, and if any Eurodollar Loans shall then be
outstanding, on the last day of the then-current Interest Period, otherwise, such notice shall be
effective on the date of receipt by the Borrower.



     Section 2.20. Pro Rata Treatment, Application of Payments, etc.



     (a) All payments and repayments of principal, interest and Applicable Premium in respect of
Loans of any Class (except as provided in Sections 2.16(f), 2.18 and 2.19) shall be made for the
pro rata benefit of the Lenders of such Class in accordance with their respective Class
Percentages. All payments of Commitment Fees and Letter of Credit Fees (other than those payable
to a Fronting Bank) shall be made for the pro rata benefit of the Revolving Credit Lenders in
accordance with their Revolving Credit Commitments. All payments of Ticking Fees in respect of the
Total Tranche B Commitment and the Total Tranche C Commitment shall be made for the pro rata
benefit of the Term Loan Lenders of each applicable Class in accordance with their Tranche B
Commitments or Tranche C Commitments, as applicable. All payments by the Borrower hereunder shall
be (i) except as otherwise provided in Section 2.21, net of any tax applicable to the Borrower and
(ii) made in Dollars in immediately available funds, without defense, setoff or counterclaim and
free of any restriction or condition, at the office of the Administrative Agent by 12:00 noon, New
York City time, on the date on which such payment shall be due. Interest in respect of any Loan
hereunder shall accrue from and including the date of such Loan to but excluding the date on which
such Loan is paid in full or converted to a Loan of a different Type.



     (b) All proceeds from the sale of, or other realization upon, all or any part of the PP&E
Collateral (including without limitation any such proceeds received by the Administrative Agent
from the Collateral Trustee pursuant to Section 3.4(b) of the Collateral Trust Agreement) pursuant
to the exercise of remedies with respect to such Collateral shall be applied as follows:



     First, to pay the then unreimbursed expenses (if any) of the Administrative Agent in
connection with such sale or other realization, including reasonable compensation to agents of and
counsel for the Administrative Agent, and all other expenses, fees, advances and indemnities then
payable to the Administrative Agent (including amounts then due and payable to the Administrative
Agent pursuant to Section 9.05 of this Agreement);



     Second, to pay interest, Ticking Fees and Applicable Premium then due with respect to
the Term Loans of each Class, in each case pro rata among the Term Loan Lenders of each Class, and
to pay interest on any other PP&E Priority Obligations pro rata among the holders of such other
PP&E Priority Obligations, until such interest, Ticking Fees and Applicable Premium have each been
paid in full;



     Third, to pay the then outstanding principal amount of the Term Loans of each Class,
in each case pro rata among the Term Loan Lenders of each Class, and the then outstanding



69









 







principal amount of any other PP&E Priority Obligations pro rata among the holders of such
other PP&E Priority Obligations, until each such amount has been paid in full;



     Fourth, to pay interest then due with respect to the Swing Line Loans, until such
interest has been paid in full;



     Fifth, to pay the then outstanding principal amount of the Swing Line Loans, until
such amount has been paid in full;



     Sixth, to pay interest then due with respect to the Revolving Credit Loans, interest
then due with respect to the then drawn amounts under R/C Letters of Credit that have not been
reimbursed by the Loan Parties, interest then due with respect to any other Borrowing Base Priority
Obligations, Commitment Fees with respect to the Revolving Credit Commitments and letter of credit
fees with respect to the R/C Letters of Credit, in each case pro rata among the Revolving Credit
Lenders, until such interest and such fees have each been paid in full;



     Seventh, to pay the then outstanding principal amount of the Revolving Credit Loans
and the then drawn amounts under R/C Letters of Credit that have not been reimbursed by the Loan
Parties, and to pay the then outstanding principal amount of any other Borrowing Base Priority
Obligations (or, in the case of Cash Management Obligations owed to any Lender (or any Person that
was an affiliate of a Lender at the time of incurrence thereof) and Hedging Obligations owed to any
Lender (or any Person that was an affiliate of a Lender at the time of incurrence thereof), to cash
collateralize same (at 105%)), pro rata among the holders thereof, until such amounts have each
been paid in full or cash collateralized in full; and



     Eighth, to cash collateralize outstanding R/C Letters of Credit until an amount equal
to 105% of the then undrawn stated amount of all outstanding R/C Letters of Credit has been
deposited in the R/C Letter of Credit Account.



     (c) All proceeds from the sale of, or other realization upon, all or any part of the Borrowing
Base Collateral (including without limitation any such proceeds received by the Administrative
Agent from the Collateral Trustee pursuant to Section 3.4(b) of the Collateral Trust Agreement)
pursuant to the exercise of remedies with respect to such Collateral shall be applied as follows:



     First, to pay the then unreimbursed expenses (if any) of the Administrative Agent in
connection with such sale or other realization, including reasonable compensation to agents of and
counsel for the Administrative Agent, and all other expenses, fees, advances and indemnities then
payable to the Administrative Agent (including amounts then due and payable to the Administrative
Agent pursuant to Section 9.05 of this Agreement);



     Second, to pay interest then due with respect to the Swing Line Loans, until such
interest has been paid in full;



     Third, to pay the then outstanding principal amount of the Swing Line Loans, until
such amount has been paid in full;



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     Fourth, to pay interest then due with respect to the Revolving Credit Loans, interest
then due with respect to the then drawn amounts under R/C Letters of Credit that have not been
reimbursed by the Loan Parties, interest then due with respect to any other Borrowing Base Priority
Obligations, Commitment Fees with respect to the Revolving Credit Commitments and letter of credit
fees with respect to the R/C Letters of Credit, in each case pro rata among the Revolving Credit
Lenders, until such interest and such fees have each been paid in full;



     Fifth, to pay the then outstanding principal amount of the Revolving Credit Loans and
the then drawn amounts under R/C Letters of Credit that have not been reimbursed by the Loan
Parties, and to pay the then outstanding principal amount of any other Borrowing Base Priority
Obligations (or, in the case of Cash Management Obligations owed to any Lender (or any Person that
was an affiliate of a Lender at the time of incurrence thereof) and Hedging Obligations owed to any
Lender (or any Person that was an affiliate of a Lender at the time of incurrence thereof), to cash
collateralize same (at 105%)), pro rata among the holders thereof, until such amounts have each
been paid in full or cash collateralized in full;



     Sixth, to cash collateralize outstanding R/C Letters of Credit until an amount equal
to 105% of the then undrawn stated amount of all outstanding R/C Letters of Credit has been
deposited in the R/C Letter of Credit Account;



     Seventh, to pay interest, Ticking Fees and Applicable Premium then due with respect to
the Term Loans of each Class, in each case pro rata among the Term Loan Lenders of each Class, and
to pay interest on any other PP&E Priority Obligations pro rata among the holders of such other
PP&E Priority Obligations, until such interest, Ticking Fees and Applicable Premium have each been
paid in full; and



     Eighth, to pay the then outstanding principal amount of the Term Loans of each Class,
in each case pro rata among the Term Loan Lenders of each Class, and the then outstanding principal
amount of any other PP&E Priority Obligations pro rata among the holders of such other PP&E
Priority Obligations, until each such amount has been paid in full.



     (d) If, in the event that both PP&E Collateral and Borrowing Base Collateral are subject to a
sale or other realization upon all or any part of the Collateral pursuant to the exercise of
remedies with respect to Collateral in a single transaction or series of related transactions, the
aggregate sales price shall not have been allocated between PP&E Collateral and Borrowing Base
Collateral disposed of in such transaction or series of transactions in any agreement with respect
to such sale or other realization then, solely for purposes of Sections 2.20(b) and 2.20(c), the
aggregate sales price shall be allocated as follows: the portion allocable to the PP&E Collateral
shall be the fair market value thereof, and the balance of the aggregate sales price shall be
allocable to Borrowing Base Collateral (unless the Required Term Lenders and the Required Revolving
Credit Lenders shall, among themselves, agree to any other allocation, in which case such
allocation shall govern).



     Section 2.21. Taxes.



     (a) Except as otherwise provided in this Section 2.21, any and all payments by the Borrower
hereunder shall be made free and clear of and without deduction for any and all current



71









 







or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding (i) taxes imposed on or measured by the net income, net profit or
overall gross receipts of the Administrative Agent or any Lender (or any transferee or assignee
thereof, including a participation holder (any such entity being called a “Transferee”)) and
franchise taxes imposed on the Administrative Agent or any Lender (or Transferee) by the United
States or any jurisdiction under the laws of which the Administrative Agent or any such Lender (or
Transferee) is organized or in which the applicable lending office of any such Lender (or
Transferee) or applicable office of the Administrative Agent, is located or any political
subdivision thereof or by any other jurisdiction or by any political subdivision or taxing
authority therein other than a jurisdiction in which the Administrative Agent or such Lender (or
Transferee) would not be subject to tax but for the execution and performance of this Agreement and
(ii) taxes, levies, imposts, deductions, charges or withholdings (“Amounts”) with respect to
payments hereunder to a Lender (or Transferee) or the Administrative Agent in accordance with laws
in effect on the later of the date of this Agreement and the date such Lender (or Transferee) or
the Administrative Agent becomes a Lender (or Transferee or Administrative Agent, as the case may
be) but not excluding, with respect to such Lender (or Transferee) or the Administrative Agent, any
increase in such Amounts solely as a result of any change in such laws occurring after such later
date or any Amounts that would not have been imposed but for actions (other than actions
contemplated by this Agreement) taken by the Borrower after such later date (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as “Taxes”). If the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to the Lenders (or any Transferee) or the Administrative
Agent, (i) the sum payable shall be increased by the amount necessary so that after making all
required deductions (including deductions applicable to additional sums payable under this Section)
such Lender (or Transferee) or the Administrative Agent (as the case may be) shall receive an
amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxing authority or other Governmental Authority in accordance with applicable law.



     (b) In addition, the Borrower agrees to pay any current or future stamp or documentary taxes
or any other excise or property taxes, charges, assessments or similar levies that arise from any
payment made hereunder or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or any other Loan Document (hereinafter referred to as “Other Taxes”).



     (c) The Borrower will indemnify each Lender (or Transferee) and the Administrative Agent for
the full amount of Taxes and Other Taxes paid by such Lender (or Transferee) or the Administrative
Agent, as the case may be, and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted by the relevant taxing authority or other Governmental Authority. Such
indemnification shall be made within thirty (30) days after the date any Lender (or Transferee) or
the Administrative Agent, as the case may be, makes written demand therefor. If a Lender (or
Transferee) or the Administrative Agent shall become aware that it is entitled to receive a refund
in respect of Taxes or Other Taxes as to which it has been indemnified by the Borrower pursuant to
this Section, it shall promptly notify the Borrower of the availability of such refund and shall,
within thirty (30) days after receipt of a request by the Borrower, apply for



72









 







such refund at the Borrower’s expense. If any Lender (or Transferee) or the Administrative
Agent receives a refund in respect of any Taxes or Other Taxes as to which it has been indemnified
by the Borrower pursuant to this Section, it shall promptly notify the Borrower of such refund and
shall, within thirty (30) days after receipt of a request by the Borrower (or promptly upon
receipt, if the Borrower has requested application for such refund pursuant hereto), repay such
refund to the Borrower (to the extent of amounts that have been paid by the Borrower under this
Section with respect to such refund plus interest that is received by the Lender (or Transferee) or
the Administrative Agent as part of the refund), net of all out-of-pocket expenses of such Lender
(or Transferee) or the Administrative Agent and without additional interest thereon; provided that
the Borrower, upon the request of such Lender (or Transferee) or the Administrative Agent, agrees
to return such refund (plus penalties, interest or other charges) to such Lender (or Transferee) or
the Administrative Agent in the event such Lender (or Transferee) or the Administrative Agent is
required to repay such refund, and such Lender (or Transferee) or the Administrative Agent shall
certify to the Borrower that such refund has in fact been so repaid and provide evidence of such
repayment reasonably satisfactory to the Borrower. Nothing contained in this sub-Section (c) shall
require any Lender (or Transferee) or the Administrative Agent to make available any of its tax
returns (or any other information relating to its taxes that it deems to be confidential).



     (d) Within thirty (30) days after the date of any payment of Taxes or Other Taxes withheld by
the Borrower in respect of any payment to any Lender (or Transferee) or the Administrative Agent,
the Borrower will furnish to the Administrative Agent, at its address referred to on the signature
pages hereof, the original or a certified copy of a receipt evidencing payment thereof.



     (e) Without prejudice to the survival of any other agreement contained herein, the agreements
and obligations contained in this Section 2.21 shall survive the payment in full of the principal
of and interest on all Loans made hereunder.



     (f) Each Lender (and Transferee) and the Administrative Agent shall, if not a United States
Person (as such term is defined in Section 7701(a)(30) of the Code), on or prior to the Closing
Date (in the case of each Lender listed on the signature pages hereof on the Closing Date) or on or
prior to the date of the Assignment and Acceptance pursuant to which it becomes a Lender (in the
case of each other Lender), deliver to the Borrower and the Administrative Agent such certificates,
documents and other evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including two original copies of (A) Internal Revenue Service Form W-9 (unless such Lender
(or Transferee) or the Administrative Agent is an “exempt recipient” as defined in Treasury
Regulations Section 1.6049-4(c) for which no withholding is required) or (B) Internal Revenue
Service Forms W-8BEN or W-8ECI and any other certificate or statement of exemption required by
Treasury Regulations, properly completed and duly executed by such Lender (or Transferee) or the
Administrative Agent to establish that such payment is (i) not subject to United States Federal
withholding tax under the Code because such payment is effectively connected with the conduct by
such Lender (or Transferee) or the Administrative Agent of a trade or business in the United States
or (ii) totally exempt from United States Federal withholding tax or subject to a reduced rate of
such tax under a provision of an applicable tax treaty. Unless the Borrower and the Administrative
Agent have received forms or other documents satisfactory to them indicating that such payments
hereunder are not



73









 







subject to United States Federal withholding tax or are subject to such tax at a rate reduced
by an applicable tax treaty, the Borrower or the Administrative Agent shall withhold taxes from
such payments at the applicable statutory rate.



     (g) The Borrower shall not be required to pay any additional amounts to any Lender (or
Transferee) or the Administrative Agent in respect of United States Federal withholding tax
pursuant to sub-Section (a) above if the obligation to pay such additional amounts would not have
arisen but for a failure by such Lender (or Transferee) or the Administrative Agent to comply with
the provisions of sub-Section (f) above.



     (h) Any Lender (or Transferee) or the Administrative Agent claiming any additional amounts
payable pursuant to this Section 2.21 shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document requested by the Borrower or to change
the jurisdiction of its applicable lending office if the making of such a filing or change would
avoid the need for or reduce the amount of any such additional amounts that may thereafter accrue
and would not, in the sole determination of such Lender (or Transferee) or the Administrative
Agent, be otherwise materially disadvantageous to such Lender (or Transferee) or the Administrative
Agent.



     Section 2.22. Certain Fees. The Borrower shall pay to the Administrative Agent, for the
respective accounts of CGMI, JPMSI, the Administrative Agent and the Lenders, the fees set forth in
that certain fee letter dated February 23, 2007 among the Administrative Agent, the Arrangers and
the Borrower (the “Fee Letter”) at the times set forth therein.



     Section 2.23. Commitment Fee; Ticking Fee.



     (a) The Borrower shall pay to the Revolving Credit Lenders a commitment fee (the “Commitment
Fee”) for the period from and including the Closing Date to but excluding the Revolving Credit
Maturity Date (or the earlier date of termination of the Total Revolving Credit Commitment)
calculated (on the basis of the actual number of days elapsed over a year of 360 days) at a rate
equal to the Applicable Margin on the average daily Unused Total Revolving Credit Commitment during
the preceding quarter. The issuance of R/C Letters of Credit shall be treated as usage of the
Total Revolving Credit Commitment. Such Commitment Fee, to the extent then accrued, shall be
payable (x) quarterly in arrears on the first calendar day of each April, July, October and
January, (y) on the Revolving Credit Maturity Date (or the earlier date of termination of the Total
Revolving Credit Commitment) and (z) as provided in Section 2.12 hereof, upon any reduction or
termination in whole or in part of the Total Revolving Credit Commitment.



     (b) The Borrower shall pay a ticking fee (the “Ticking Fee”) (i) to the Tranche B Lenders for
the period from and including the 30th day following the Closing Date to and including the date of
termination of the Tranche B Commitment and (ii) to the Tranche C Lenders for the period from and
including the 30th day following the Closing Date to and including the date of termination of the
Tranche C Commitment, in each case calculated (on the basis of the actual number of days elapsed
over a year of 360 days) at the rate of 0.75% per annum on the Total Tranche B Commitment or the
Total Tranche C Commitment, as the case may be. Such fee shall be payable to the Tranche B Lenders
on the date of termination of the




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Tranche B Commitment and to the Tranche C Lenders on the date of termination of the Tranche C
Commitment.




     Section 2.24. Letter of Credit Fees. The Borrower shall pay with respect to each R/C Letter
of Credit (i) to the Administrative Agent on behalf of the Revolving Credit Lenders a fee
calculated (on the basis of the actual number of days elapsed over a year of 360 days) at a rate
per annum equal to the Applicable Margin for Revolving Credit Loans that are Eurodollar Loans on
the undrawn stated amount thereof, and (ii) to the Fronting Bank its customary fees for issuance,
amendments and processing referred to in Section 2.05. In addition, the Borrower agrees to pay the
Fronting Bank for its account a fronting fee in respect of each Letter of Credit issued by the
Fronting Bank, for the period from and including the date of issuance of such Letter of Credit to
and including the date of termination of such Letter of Credit, computed at the rate of 0.125% per
annum, and payable at times to be determined by the Fronting Bank, the Borrower and the
Administrative Agent. Accrued fees described in clause (i) of the first sentence of this paragraph
in respect of each R/C Letter of Credit shall be due and payable quarterly in arrears on the first
day of each April, July, October and January and on the Revolving Credit Maturity Date, or such
earlier date as the Total Revolving Credit Commitment is terminated. Accrued fees described in
clause (ii) of the first sentence of this paragraph in respect of each Letter of Credit shall be
payable at times to be determined by the Fronting Bank, the Borrower and the Administrative Agent.



     Section 2.25. Nature of Fees. All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for the respective accounts of the Administrative
Agent and the applicable Lenders, as provided herein and in the Fee Letter. Once paid, none of the
Fees shall be refundable under any circumstances.



     Section 2.26. Right of Set-Off; Sharing. Subject to the provisions of Section 7.01, upon the
occurrence and during the continuance of any Event of Default, the Administrative Agent and each
Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other Indebtedness at any time owing by the Administrative Agent and
each such Lender to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under the Loan Documents, irrespective of
whether or not such Lender shall have made any demand under any Loan Document and although such
obligations may not have been accelerated. Each Lender and the Administrative Agent agrees
promptly to notify the Borrower after any such set-off and application made by such Lender or by
the Administrative Agent, as the case may be, provided that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of each Lender and the
Administrative Agent under this Section are in addition to other rights and remedies which such
Lender and the Administrative Agent may have upon the occurrence and during the continuance of any
Event of Default.



     Section 2.27. Replacement of Certain Lenders. In the event a Lender (“Affected Lender”) shall
have: (i) failed to fund its Class Percentage (in the case of any Revolving Credit Loan) or its
ratable share in the case of any Term Loan (calculated on the basis of the amount of its Commitment
of the applicable Class as a percentage of the total Commitments of the applicable Class) requested
by the Borrower or to fund its Class Percentage of any unreimbursed



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payment made by the Fronting Bank, which such Lender is obligated to fund under the terms of
this Agreement and which failure has not been cured, (ii) requested compensation from the Borrower
under Section 2.18 with respect to increased costs or capital or under Section 2.21 to recover
Taxes, Other Taxes or other additional costs incurred by such Lender which, in any case, are not
being incurred generally by the other Lenders, (iii) delivered a notice pursuant to Section 2.19
claiming that such Lender is unable to extend Eurodollar Loans to the Borrower for reasons not
generally applicable to the other Lenders or (iv) become a Non-Consenting Lender, then, in any
case, the Borrower or the Administrative Agent may make written demand on such Affected Lender
(with a copy to the Administrative Agent in the case of a demand by the Borrower and a copy to the
Borrower in the case of a demand by the Administrative Agent) for the Affected Lender to assign,
and such Affected Lender shall use commercially reasonable efforts to assign (at par, unless
otherwise consented to by the applicable Affected Lender) pursuant to one or more duly executed
Assignments and Acceptances five (5) Business Days after the date of such demand, to one or more
Eligible Assignees which the Borrower or the Administrative Agent, as the case may be, shall have
engaged for such purpose (“Replacement Lender”), all of such Affected Lender’s rights and
obligations under this Agreement and the other Loan Documents (including, without limitation, its
Commitment of each Class, all Loans owing to it, all of its participation interests (if any) in
Existing Letters of Credit and Swing Line Loans, and its obligation to participate in additional
Letters of Credit and Swing Line Loans hereunder) in accordance with Section 9.03(b). The
Administrative Agent agrees, upon the occurrence of such events with respect to an Affected Lender
and upon the written request of the Borrower, to use its reasonable efforts to obtain the relevant
Commitments from one or more Eligible Assignees to act as a Replacement Lender. The Administrative
Agent is authorized to execute one or more of such Assignments and Acceptances as attorney-in-fact
for any Affected Lender failing to execute and deliver the same within five (5) Business Days after
the date of such demand. Further, with respect to such assignment the Affected Lender shall have
concurrently received, in cash, all amounts due and owing to the Affected Lender hereunder or under
any other Loan Document, including, without limitation, the aggregate outstanding principal amount
of the Loans owed to such Lender, together with accrued interest thereon through the date of such
assignment, amounts payable under Section 2.18 with respect to such Affected Lender and
compensation payable under Section 2.23 in the event of any replacement of any Affected Lender
under clause (ii) or clause (iii) of this Section 2.27; provided that upon such Affected Lender’s
replacement, such Affected Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.18, 9.05 and 9.06, as well as to any fees accrued for its
account hereunder and not yet paid, and shall continue to be obligated under Section 8.06 with
respect to losses, obligations, liabilities, damages, penalties, actions, judgments, costs,
expenses or disbursements for matters which occurred prior to the date the Affected Lender is
replaced. In the event that (i) the Borrower or the Administrative Agent has requested the Lenders
to consent to a departure or waiver of any provisions of the Loan Documents or to agree to any
amendment thereto, (ii) the consent, waiver or amendment in question requires the agreement of all
affected Lenders in accordance with the terms of Section 9.10 or all the Lenders with respect to a
certain class of the Loans and (iii) the Required Lenders (and/or the Required Revolving Credit
Lenders or the Required Term Lenders, as the case may be) have agreed to such consent, waiver or
amendment, then any Lender who does not agree to such consent, waiver or amendment shall be deemed
a “Non-Consenting Lender.”



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     Section 2.28. Expansion Option. The Borrower may from time to time elect to increase the
Total Revolving Credit Commitment in a minimum amount of $5,000,000 so long as, after giving effect
thereto, the aggregate increase in the Total Revolving Credit Commitment pursuant to this Section
2.28 does not exceed the sum of (a) $100,000,000 and (b) the aggregate amount of Borrowing Base
Addition Amounts. The Borrower may arrange for any such increase to be provided by one or more
Lenders (each Lender so agreeing to a Revolving Credit Commitment or an increase in its Revolving
Credit Commitment, an “Increasing Lender”), or by one or more new banks, financial institutions or
other entities (each such new bank, financial institution or other entity, an “Augmenting Lender”),
to increase their existing Revolving Credit Commitments, or extend Revolving Credit Commitments, as
the case may be; provided that (i) each Augmenting Lender shall be subject to the approval of the
Borrower and the approval of the Administrative Agent, not to be unreasonably withheld in either
case, and (ii) the Borrower, such Increasing Lender or Augmenting Lender (as the case may be) and
the Administrative Agent execute an agreement substantially in the form of Exhibit K hereto.
Increases and new Commitments created pursuant to this Section 2.28 shall become effective on the
date agreed by the Borrower, the Administrative Agent and the relevant Increasing Lenders or
Augmenting Lenders (it being understood that no consent of any other Lender shall be required) and
the Administrative Agent shall notify each Lender thereof. On the effective date of any increase
in the Total Revolving Credit Commitment, (i) each relevant Increasing Lender and Augmenting Lender
shall make available to the Administrative Agent such amounts in immediately available funds as the
Administrative Agent shall determine, for the benefit of the other Revolving Credit Lenders, as
being required in order to cause, after giving effect to such increase and the use of such amounts
to make payments to such other Revolving Credit Lenders, each Revolving Credit Lender’s portion of
the outstanding Revolving Credit Loans of all the Revolving Credit Lenders to equal its Class
Percentage, and (ii) the Borrower shall be deemed to have repaid and reborrowed all outstanding
Revolving Loans as of the date of any increase in the Commitments (with such reborrowing to consist
of the Types of Revolving Credit Loans, with related Interest Periods if applicable, specified in a
notice delivered by the Borrower in accordance with the requirements of Section 2.03). The deemed
payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by
the payment of the amounts described in clause (i) of the first sentence of Section 2.17(b), if the
deemed payment occurs other than on the last day of the related Interest Periods.



ARTICLE III

REPRESENTATIONS AND WARRANTIES




     To induce the Administrative Agent and the Lenders to enter into this Agreement, on the
Closing Date the Borrower hereby represents and warrants to the Administrative Agent and each
Lender that:



     Section 3.01. Financial Condition. (a) The unaudited projected pro forma consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at December 31, 2007 (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 Reorganization Plan, (ii) the Term Loans and the Revolving Loans to be
made hereunder on the Closing Date and the issuance of the Letters of Credit to be issued hereunder
on the Closing Date, (iii) the Tranche A Term Loans deemed to



77









 







have been made on the Closing Date, (iv) the Senior Subordinated Notes to be issued on the
Closing Date, and (v) the payment of fees and expenses in connection with the foregoing. The Pro
Forma Balance Sheet has been prepared based on the information available to the Borrower as of the
date of delivery thereof, and presents fairly in all material respects on a pro forma basis the
estimated financial position of Borrower and its consolidated Subsidiaries as at December 31, 2007,
assuming that the events specified in the preceding sentence had actually occurred at such date.



     (b) The audited consolidated balance sheets of the Borrower and its consolidated Subsidiaries
as at December 31, 2006 and December 31, 2005, and the related consolidated statements of income
and of cash flows for the fiscal years ended on such dates, reported on by and accompanied by an
unqualified report from Ernst & Young LLP, present fairly the consolidated financial condition of
the Group Members as at such date, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years then ended. The unaudited consolidated
balance sheet of the Group Members as at September 30, 2007, and the related unaudited consolidated
statements of income and cash flows for the nine-month period ended on such date, present fairly
the consolidated financial condition of the Group Members as at such date, and the consolidated
results of its operations and its consolidated cash flows for the nine-month period then ended
(subject to normal year-end audit adjustments). 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). No Group Member has any material Guarantee Obligations,
contingent liabilities and liabilities for taxes, or any long-term leases or unusual forward or
long-term commitments, including any interest rate or foreign currency swap or exchange transaction
or other obligation in respect of derivatives, that are not (x) reflected in the most recent
financial statements referred to in this paragraph, (y) Swap Agreements permitted by Section 6.12
or (z) the Borrower’s contingent obligation to make a loan to the “Trust” (as defined in the
Reorganization Plan) in an aggregate principal amount of $140,000,000, in accordance with Section
8.22 of the Reorganization Plan.



     Section 3.02. No Change. As of the Closing Date, since December 31, 2006 there has been no
material adverse change in the business, financial condition, operations, or property of the
Borrower or the Borrower and its Subsidiaries, taken as a whole.



     Section 3.03. Existence; Compliance With Law. Each Loan Party (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization, (b) has the
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 except to the extent the failure to so qualify or be in good standing could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect, and (d) is in compliance
with all Requirements of Law except to the extent that the failure to comply therewith could not,
in the aggregate, reasonably be expected to have a Material Adverse Effect.



     Section 3.04. Power; Authorization; Enforceable Obligations. Each Loan Party has the power
and authority, and the legal right, to make, deliver and perform the Loan Documents to



78









 







which it is a party. Each Loan Party has taken all necessary 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 extensions of credit on the terms and conditions of
this Agreement. 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
Reorganization Plan and the extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement or any of the Loan Documents, except (i)
consents, authorizations, filings and notices described in Schedule 3.04, 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 3.14. Each Loan Document has been duly executed and
delivered on behalf of each Loan Party party thereto. This Agreement constitutes, and each other
Loan Document upon execution and delivery will constitute, a legal, valid and binding obligation of
each Loan Party 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).



     Section 3.05. No Legal Bar. The execution, delivery and performance of this Agreement and the
other Loan Documents, and the Loans made hereunder and the Letters of Credit issued hereunder will
not violate any Requirement of Law or any Contractual Obligation of any Loan Party and will not
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).



     Section 3.06. Litigation. Except as disclosed on Schedule 3.06, no litigation, investigation
or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge
of the Borrower, threatened against any Group Member or against any of their respective properties
or revenues (a) that calls into question the validity or enforceability of the Loan Documents or
that seeks to enjoin any of the transactions contemplated thereby, or (b) that could reasonably be
expected to have a Material Adverse Effect.



     Section 3.07. No Default. No Group Member is in default under any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.



     Section 3.08. Ownership of Property; Liens. Each Loan Party has title in fee simple to, or a
valid leasehold interest in, all its real property subject to the Mortgages, and none of its
property is subject to any Lien except as permitted by Section 6.03.



     Section 3.09. Intellectual Property. Each Loan Party owns, or is licensed to use, all
Intellectual Property necessary for the conduct of its business as currently conducted. No
material claim has been asserted and is pending by any Person challenging or questioning the use of
any Intellectual Property or the validity or effectiveness of any Intellectual Property, nor does
the Borrower know of any valid basis for any such claim. To the knowledge of the Borrower, the use
of Intellectual Property by each Loan Party does not infringe on the rights of any Person in any
material respect.



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     Section 3.10. Taxes. Each Group Member has filed or caused to be filed all Federal, material
state and other material tax returns that are required to be filed and has paid all taxes shown to
be due and payable on said returns or on any material assessments made against it or any of its
property 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 reserves in conformity
with GAAP have been provided on the books of the relevant Group Member); no material tax Lien has
been filed with respect to any Group Member, and, to the knowledge of the Borrower, no material
claim is being asserted against any Group Member, with respect to any such tax, fee or other
charge.



     Section 3.11. 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 (other than Regulation X of the Board) that limits its ability to incur
Indebtedness.



     Section 3.12. Subsidiaries. Schedule 3.12 sets forth as of the Closing Date the name and
jurisdiction of incorporation of each Subsidiary and, as to each such Subsidiary, the percentage of
each class of Capital Stock owned by any Loan Party. 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 the Borrower or any other Loan Party, except as created by the Loan Documents or
pursuant to the Reorganization Plan.



     Section 3.13. Accuracy of Information, etc. No statement or information contained in this
Agreement, any other Loan Document or any other document, certificate or statement furnished by or
on behalf of any Loan Party to the Administrative Agent or the Lenders, or any of them, for use in
connection with the transactions contemplated by this Agreement or the other Loan Documents (when
taken as a whole together with the Borrower’s public filings with the SEC), contained as of the
date such statement, information, document or certificate was so furnished, in light of the
circumstances under which they were made, any untrue statement of material fact or omitted to state
a material fact necessary to make the statements contained herein or therein not materially
misleading. Any projections (including the Projections) and pro forma financial information
delivered in connection herewith 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.



     Section 3.14. Security Documents. (a) Each of the Security Documents (other than the
Mortgages) is effective to create in favor of the Collateral Trustee a legal, valid and enforceable
security interest in the Collateral described therein for the benefit of the Term Loan Lenders, and
a legal, valid and enforceable security interest in the Collateral described therein for the
benefit of the Revolving Credit Lenders (each such security interest being separate and distinct
from the other). When the actions described in Schedule 3.14(a) in respect of each such Security
Document have been taken, the Collateral Trustee shall have, pursuant to each such Security



80









 







Document, a fully perfected Lien on, and security interest in, all right, title and interest
of the Loan Parties in such Collateral, as security for the “Term Secured Obligations” described
therein, and a fully perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral, as security for the “Revolver Secured Obligations” described
therein (in either case, to the extent a Lien or security interest can be perfected by taking such
actions under applicable law).



     (b) Each of the Mortgages is effective to create in favor of the Collateral Trustee, for the
benefit of the Term Loan Lenders, a legal, valid and enforceable Lien on the applicable mortgaged
property or trust property described therein and proceeds thereof, and for the benefit of the
Revolving Credit Lenders a legal, valid and enforceable Lien on the applicable mortgaged property
or trust property described therein and proceeds thereof (each such Lien being separate and
distinct from the other) and when each Mortgage is filed in the offices specified on Schedule
3.14(b), the Collateral Trustee shall have, pursuant to such Mortgage, a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in the applicable
mortgaged property or trust property described therein, as security for the “Term Secured
Obligations” described therein, and a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in the applicable mortgaged property or trust property
described therein, as security for the “Revolver Secured Obligations” described therein. Schedule
1.01E lists, as of the Closing Date, each parcel of owned real property and each leasehold interest
in real property located in the United States and held by the Borrower or any Loan Party that is a
Domestic Subsidiary that has a value, in the reasonable opinion of the Borrower, in excess of
$5,000,000.



     Section 3.15. Regulation H. No Mortgage encumbers improved real property that is located in
an area having special flood hazards and in which flood insurance has been made available under the
National Flood Insurance Act of 1968, other than properties for which the Borrower has satisfied
the requirements of clause (iv) of Section 4.01(q).



     Section 3.16. Environmental Matters. Other than (x) as set forth on Schedule 3.16 or (y) for
exceptions to any of the following that, in the aggregate, could not reasonably be expected to
result in a Material Environmental Loss:



     (a) all Group Members: (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 or intended
operations or for any property owned, leased, or otherwise operated by any of them; (iii) are, and
within the period of all applicable statutes of limitation have been, in compliance with all of
their Environmental Permits; and (iv) reasonably believe that: each of their Environmental Permits
will be timely renewed and complied with, without material expense; any additional Environmental
Permits that may be required of any of them will be timely obtained and complied with, without
material expense; and compliance with any Environmental Law that is or is expected to become
applicable to any of them will be timely attained and maintained, without material expense;



     (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 any Group Member or at any other



81









 







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 any Group Member under any applicable
Environmental Law or otherwise result in costs to any Group Member, or (ii) interfere with any
Group Member’s continued operations, or (iii) impair the fair saleable value of any real property
owned or leased by a Group Member;



     (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 any Group
Member is, or to the knowledge of any Group Member will be, named as a party that is pending or, to
the knowledge of any Group Member, threatened; and to the knowledge of any Group Member, there are
no judicial, administrative, or arbitral proceedings under or relating to any Environmental Law
pending or threatened against any Person other than a Group Member that could reasonably be
expected to affect a Group Member;



     (d) no Group Member 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;



     (e) no Group Member 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 of 1980, as amended, or any similar Environmental Law, or
with respect to any Materials of Environmental Concern; and



     (f) no Group Member 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.



     Section 3.17. Certain Documents. The Borrower has delivered to the Administrative Agent a
complete and correct copy of the Tranche A Term Loan Agreement and the Senior Subordinated Notes
Indenture, including any amendments, supplements or modifications with respect to any of the
foregoing.



     Section 3.18. Solvency. Immediately after the transactions to occur on the Closing Date are
consummated and after giving effect to the application of the proceeds of each Loan made on the
Closing Date, (a) the fair value of the assets of the Loan Parties taken as a whole, at a fair
valuation, will exceed their debts and liabilities, subordinated, contingent or otherwise; (b) the
present fair saleable value of the property of the Loan Parties taken as a whole will exceed the
amount that will be required to pay the probable liability of their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities become absolute and
matured; (c) the Loan Parties taken as a whole will be able to pay or refinance their debts and
liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute
and matured; and (d) the Loan Parties taken as a whole will not have unreasonably small capital
with which to conduct the businesses in which they are engaged as such businesses are now conducted
and proposed to be conducted after the Closing Date.



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     Section 3.19. Regulation U. No Group Member is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U).



     Section 3.20. Use of Proceeds. The proceeds of the Revolving Credit Loans and the Term Loans
shall be used (i) to repay on the Closing Date all amounts outstanding under the DIP Facility, (ii)
to pay any post-effective date obligations under the Reorganization Plan or the Company Voluntary
Arrangements; (iii) for working capital; (iv) for other general corporate purposes of the Borrower
and its Subsidiaries; and (v) for payment of any related transaction costs, fees and expenses. The
Letters of Credit shall be issued for general corporate purposes of the Borrower and its
Subsidiaries. The proceeds of the Swing Line Loans shall be used for working capital and other
general corporate purposes of the Borrower.



     Section 3.21. Labor Matters. There are no strikes, lockouts or slowdowns against any Group
Member pending or, to the knowledge of the Borrower, threatened which could reasonably be expected
to have a Material Adverse Effect. The hours worked by and payments made to employees of the
Borrower and its Domestic Subsidiaries have not violated in any material respect the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law dealing with such
matters. All material payments due from any Loan Party, or for which any claim may be made against
any Loan Party, on account of wages and employee health and welfare insurance and other benefits,
have been paid or accrued as a liability on the books of such Loan Party.



     Section 3.22. ERISA. Other than as described on Schedule 3.22, no Termination Event has
occurred or is reasonably expected to occur that, when taken together with all other Termination
Events for which liability is reasonably expected to occur, could reasonably be expected to result
in a Material Adverse Effect.



     Section 3.23. Trading with the Enemy Act; Patriot Act; Foreign Corrupt Practices Act. To the
extent applicable, each Loan Party is in compliance, in all material respects, with the (i) Trading
with the Enemy Act, as amended, and each of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling
legislation or executive order relating thereto and (ii) the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)). No part of the proceeds of the Loans will be used,
directly or indirectly, for any payments to any governmental official or employee, political party,
official of a political party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper advantage, in
violation of the United States Foreign Corrupt Practices Act of 1977, as amended.



ARTICLE IV

CONDITIONS OF LENDING




     Section 4.01. Conditions to Closing. The occurrence of the Closing Date is subject to the
following conditions precedent:



     (a) Loan Agreement; Security Documents. The Administrative Agent shall have received (i) this
Agreement, executed and delivered by the Administrative Agent and the



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Borrower, (ii) the Collateral Agreement, executed and delivered by the Borrower and each
applicable Guarantor, (iii) an Acknowledgement and Consent in the form attached to the Collateral
Agreement, executed and delivered by each Issuer (as defined therein), if any, that is not a Loan
Party (unless otherwise agreed by the Administrative Agent), (iv) the Domestic Subsidiary
Guarantee, executed by each applicable Guarantor, (v) each Foreign Subsidiary Guarantee, executed
and delivered by each applicable Guarantor, (vi) each Foreign Pledge Agreement, executed and
delivered by each applicable Loan Party and (viii) the Collateral Trust Agreement, executed by each
party thereto.



     (b) DIP Facility. The Administrative Agent shall have received reasonably satisfactory
evidence that (i) the commitments under the DIP Facility have been terminated, all letters of
credit issued thereunder (other than the Existing DIP Letters of Credit) shall have expired or been
cancelled, and all amounts outstanding thereunder (including, without limitation, all fees accrued
but unpaid thereunder to the Closing Date, whether or not then payable under the terms thereof)
have been repaid in full (which termination and repayment may be contemporaneous with the
satisfaction of the conditions under this Section and the application of proceeds of any Borrowings
and the issuance of any Letters of Credit to occur on the Closing Date); and (ii) satisfactory
arrangements shall have been made for the termination of all Liens and guarantees granted in
connection therewith.



     (c) [Reserved.]



     (d) Tranche A Term Loan Agreement. The Administrative Agent shall have received a certificate
executed by a Responsible Officer of the Borrower certifying that all conditions precedent to the
effectiveness of the Tranche A Term Loan Agreement shall have been satisfied or waived in
accordance with its terms.



     (e) Senior Subordinated Notes Indenture. The Administrative Agent shall have a certificate
executed by a Responsible Officer of the Borrower certifying that all conditions precedent to the
effectiveness of the Senior Subordinated Notes Indenture shall have been satisfied or waived in
accordance with its terms and the Senior Subordinated Notes shall have been issued.



     (f) Intercreditor Arrangements. The Administrative Agent shall have received the
Intercreditor Agreement, executed and delivered by all parties thereto.



     (g) Reorganization Plan. The Effective Date shall have occurred.



     (h) Pro Forma Balance Sheet; Financial Statements. The Lenders shall have received (i) the
Pro Forma Balance Sheet, (ii) audited consolidated financial statements of the Group Members for
the 2006 and 2005 fiscal years and (iii) unaudited interim consolidated financial statements of the
Group Members for each fiscal month and quarter ended after the date of the latest applicable
financial statements delivered pursuant to clause (ii) of this paragraph as to which such financial
statements are available.



     (i) Approvals. All governmental and third party approvals (including consents from landlords
of real property leased by the Loan Parties in the United States at which Inventory having a value
in excess of $10,000,000 is located as specified on Schedule 4.01(i); provided,



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however, that the Loan Parties shall only be required to exercise commercially reasonable
efforts to obtain any such landlord consents) necessary in connection with this Agreement and the
Reorganization Plan, the continuing operations of the Loan Parties 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 that would restrain, prevent or otherwise impose adverse conditions on the Reorganization
Plan or the transactions contemplated hereby.



     (j) Lien Searches. The Administrative Agent shall have received the results of a recent Lien
search in each of the domestic jurisdictions where (x) the Loan Parties are organized and (y) real
estate of the Loan Parties is located, and such search shall reveal no liens on any of the assets
of the Loan Parties except for Liens permitted by Section 6.03 or discharged on or prior to the
Closing Date pursuant to documentation reasonably satisfactory to the Administrative Agent.



     (k) Environmental Reports. The Administrative Agent shall have received, and shall be
reasonably satisfied with the results of, the Phase I environmental reports regarding environmental
matters that may be attributable to such properties of the Loan Parties listed in Schedule 4.01(k).



     (l) Fees. The Lenders and the Administrative Agent shall have received all fees required to
be paid, and all expenses for which invoices have been presented (including the reasonable fees and
expenses of legal counsel and financial advisors), pursuant to this Agreement, the other Loan
Documents, the Fee Letter, the Approval Order and the Confirmation Order.



     (m) Supporting Documents. The Administrative Agent shall have received for each of the Loan
Parties:




     (i) a copy of such Loan Party’s Organizational Documents, as amended up to and
including the Closing Date, certified as of a recent date by the applicable
Governmental Authority of such Loan Party’s jurisdiction incorporation, organization
or formation;




     (ii) (x) with respect to the Borrower and each Loan Party that is a Domestic
Subsidiary, a good standing certificate from the applicable Governmental Authority
of such Loan Party’s jurisdiction of incorporation, organization or formation and of
the State of Michigan (to the extent such Loan Party is qualified to do business as
a foreign corporation in the State of Michigan), each dated a recent date prior to
the Closing Date and (y) with respect to the Borrower, recent evidence of its
qualification to do business as a foreign corporation in each State of the United
States of America;




     (iii) with respect to any Loan Party that is a Foreign Subsidiary, such
customary evidence of its legal existence, its power and authority to enter into the
Loan Documents to which it is a party and the incumbency and signatures of its



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officers or other representatives and such other documents or evidence as the
Administrative Agent may reasonably request;




     (iv) signature and incumbency certificates of the officers of such Loan Party
executing the Loan Documents to which it is a party, dated as of the Closing Date;




     (v) duly adopted resolutions of the board of directors or similar governing
body of such Loan Party approving and authorizing the execution, delivery and
performance of this Agreement and the other Loan Documents to which it is a party or
by which it or its assets may be bound as of the Closing Date, certified as of the
Closing Date by its secretary or assistant secretary as being in full force and
effect without modification or amendment; and




     (vi) such other similar documents as the Administrative Agent may reasonably
request.



     (n) Opinion of Counsel. The Administrative Agent and the Lenders shall have received the
favorable written opinion of counsel to the Loan Parties substantially in the form of Exhibit I.



     (o) Pledged Stock; Stock Powers; Pledged Notes. The Collateral Trustee shall have received
(i) the certificates representing the shares of Capital Stock pledged pursuant to the Collateral
Agreement and each Foreign Pledge Agreement (to the extent certificated), together with an undated
stock power for each such certificate executed in blank by a duly authorized officer of the pledgor
thereof (or such other instrument of transfer required under local law) and (ii) each promissory
note (if any) pledged to the Collateral Trustee pursuant to the Collateral Agreement and each
Foreign Pledge Agreement endorsed (without recourse) in blank (or accompanied by an executed
transfer form in blank) by the pledgor thereof.



     (p) Filings, Registrations and Recordings. Each document (including any Uniform Commercial
Code financing statement) required by the Collateral Agreement or under law or reasonably requested
by the Collateral Trustee or the Administrative Agent to be filed, registered or recorded in order
to create in favor of the Collateral Trustee a perfected Lien on the Collateral described therein
for the benefit of the Term Loan Lenders and a perfected Lien on the Collateral described therein
for the benefit of the Revolving Credit Lenders, each such Lien to be prior and superior in right
to any other Person (other than with respect to Liens expressly permitted by Section 6.03), shall
be in proper form for filing, registration or recordation.



     (q) Mortgages, etc. (i) The Administrative Agent shall have received a Mortgage with respect
to each Mortgaged Property, executed and delivered by a duly authorized officer of each party
thereto.




     (ii) If requested by the Administrative Agent at least thirty (30) days prior
to the Closing Date, the Administrative Agent shall have received, and the title
insurance company issuing the policy referred to in clause (iii) below (the “Title
Insurance Company”) shall have received, an as-built land survey of the sites of the
Mortgaged Properties dated within three (3) years of the Closing Date,



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by an independent professional licensed land surveyor reasonably satisfactory
to the Administrative Agent and the Title Insurance Company, which surveys shall be
made in accordance with the Minimum Standard Detail Requirements for Land Title
Surveys jointly established and adopted by the American Land Title Association
(“ALTA”) and the American Congress on Surveying and Mapping in 1992, and, without
limiting the generality of the foregoing, there shall be surveyed and shown on such
surveys the following: (A) the locations on such sites of all the buildings,
structures and other improvements and the established building setback lines; (B)
the lines of streets abutting the sites and width thereof; (C) all access and other
easements appurtenant to the sites; (D) all roadways, paths, driveways, easements,
encroachments and overhanging projections and similar encumbrances affecting the
site, whether recorded, apparent from a physical inspection of the sites or
otherwise known to the surveyor; (E) any encroachments on any adjoining property by
the building structures and improvements on the sites; and (F) the flood zone
designations, if any, in which the Mortgaged Properties are located (provided that
if the Administrative Agent determines that it is reasonable to do so, the
Administrative Agent may accept a survey in respect of any parcel of Mortgaged
Property not conforming to the requirements specified above in this clause (ii)).




     (iii) The Administrative Agent shall have received in respect of each Mortgaged
Property a mortgagee’s title insurance policy (or policies) or marked up
unconditional binder for such insurance. Each such policy shall (A) be in an amount
reasonably satisfactory to the Administrative Agent (not to exceed the fair market
value of such property); (B) insure that the Mortgage insured thereby creates a
valid first Lien on such Mortgaged Property free and clear of all defects and
encumbrances, except as permitted by Section 6.03 or as is otherwise reasonably
acceptable to the Administrative Agent; (C) name the Administrative Agent for the
benefit of the Lenders as the insured thereunder; (D) be in the form of ALTA Loan
Policy — 1970 (Amended 10/17/70 and 10/17/84) (or reasonably acceptable equivalent
policies); (E) contain such endorsements and affirmative coverage as the
Administrative Agent may reasonably request; and (F) be issued by title companies
reasonably satisfactory to the Administrative Agent (including any such title
companies acting as co-insurers or reinsurers, at the option of the Administrative
Agent) (provided that if the Administrative Agent determines that it is reasonable
to do so, the Administrative Agent may accept a title insurance policy in respect of
any parcel of Mortgaged Property not conforming to the requirements specified above
in this clause (iii)). The Administrative Agent shall have received evidence
satisfactory to it that all premiums in respect of each such policy, all charges for
mortgage recording tax, and all related expenses, if any, have been paid.




     (iv) If requested by the Administrative Agent at least thirty (30) days prior
to the Closing Date with respect to any Mortgaged Property which includes a material
improvement located within an area designated as flood hazard zone, the
Administrative Agent shall have received (A) a policy of flood insurance that (1)
covers any parcel of improved real property that is encumbered by any



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Mortgage that 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, (2) is written in an amount not less than the outstanding principal amount
of the indebtedness secured by such Mortgage that is reasonably allocable to such
real property or the maximum limit of coverage made available with respect to the
particular type of property under the National Flood Insurance Reform Act of 1994,
whichever is less, and (3) has a term or series of terms ending not later than the
maturity of the Indebtedness secured by such Mortgage and (B) confirmation that the
Borrower has received the notice required pursuant to Section 208(e)(3) of
Regulation H of the Board.




     (v) The Administrative Agent shall have received a copy of all recorded
documents referred to, or listed as exceptions to title in, the title policy or
policies referred to in clause (iii) above and a copy of all other material
documents in the possession of the any Loan Party affecting the Mortgaged
Properties, in each case to the extent required by the Administrative Agent.
Notwithstanding the foregoing, with respect to any Mortgaged Property constituting a
leasehold interest, the obligations of the Borrower to deliver the items described
in this Section 4.01(q) are subject to the Borrower obtaining any consents,
estoppels or other instruments or documents from third parties which are necessary
in order for the Borrower to comply with its obligations in this Section 4.01(q);
provided that the Borrower agrees to exercise reasonable efforts to obtain any such
consents, estoppels or other instruments and documents.




     (vi) The Administrative Agent and the Lenders shall have received the favorable
written opinions of local counsel, acceptable to the Administrative Agent, covering
such matters as the Administrative Agent may reasonably request.



     (r) Insurance. The Administrative Agent shall have received evidence that all insurance
required by Section 5.05 is in effect.



     (s) Confirmation Order. The Administrative Agent shall have received a copy of the
Confirmation Order, certified by a Responsible Officer to be a true, complete and correct copy of
such document, which shall be in full force and effect, shall not have been stayed, reversed,
modified or amended, and shall be final and non-appealable.



     (t) Channeling Injunction. The Administrative Agent shall have received a copy of the
Channeling Injunction, certified by a Responsible Officer to be a true, complete and correct copy
of such document, which shall be in full force and effect, shall not have been stayed, reversed,
modified or amended, and shall be final and non-appealable.



     (u) Prepetition Letters of Credit. With respect to each letter of credit issued under the
Prepetition Credit Agreement and outstanding on the Effective Date, such letter of credit shall
have expired or been cancelled or replaced with Letters of Credit issued hereunder.



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     (v) Representations and Warranties. Each of the representations and warranties made by any
Loan Party in or pursuant to the Loan Documents shall be true and correct on and as of the Closing
Date with the same effect as if made on and as of such date except to the extent such
representations and warranties expressly relate to an earlier date, in which case they shall be
true and correct on and as of such earlier date.



     (w) No Default. No Default or Event of Default shall have occurred and be continuing on the
Closing Date or after giving effect to the Loans deemed made on the Closing Date.



     (x) Closing Documents. The Administrative Agent shall have received all documents required by
this Agreement reasonably satisfactory in form and substance to the Administrative Agent.



     (y) Budget. If requested by the Administrative Agent, the Administrative Agent shall have
received from the Borrower, for distribution to the Lenders, an update to the Borrower’s financial
projections included in the Confidential Information Memorandum detailing the Borrower’s
anticipated cash receipts and disbursements for the period ending on the Tranche C Maturity Date,
and setting forth the anticipated uses of the proceeds of the Loans, which shall be reasonably
satisfactory in form and substance to the Administrative Agent.



     (z) Borrowing Base Certificate. The Administrative Agent shall have received a completed
Borrowing Base Certificate dated the Closing Date and setting forth the Borrowing Base as of the
close of business on a date not earlier that the fifth (5th) Business Day prior to the
Closing Date.



     Section 4.02. Conditions Precedent to Each Loan, Each Letter of Credit and Each Swing Line
Loan. The obligation of the Lenders to make each Loan (other than a Revolving Credit Loan pursuant
to an R/C Refunding Borrowing), of the Fronting Bank to issue, extend or renew each Letter of
Credit and of the Swing Line Lender to make each Swing Line Loan is subject to the following
conditions precedent:



     (a) Notice. The Administrative Agent shall have received a notice with respect to each
Borrowing or the issuance of each Letter of Credit, and the Administrative Agent and the Swing Line
Lender shall have received a notice with respect to each Swing Line Borrowing, as the case may be,
as required by Article II.



     (b) Representations and Warranties. All representations and warranties contained in this
Agreement and the other Loan Documents shall be true and correct in all material respects on and as
of the date of each Borrowing, the issuance of each Letter of Credit or the date of each Swing Line
Borrowing with the same effect as if made on and as of such date except to the extent such
representations and warranties expressly relate to an earlier date, in which case they shall be
true and correct on and as of such earlier date.



     (c) No Default. On the date of each Borrowing, the issuance, extension or renewal of each
Letter of Credit or the date of each Swing Line Borrowing, no Event of Default or event which upon
notice or lapse of time or both would constitute an Event of Default shall have occurred and be
continuing.



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     (d) The Confirmation Order and the Channeling Injunction. Each of the Confirmation Order and
the Channeling Injunction shall be in full force and effect and shall not have been stayed,
reversed, modified or amended in any respect.



     (e) Borrowing Base Certificate. Solely with respect to the making of any Revolving Credit
Loan or Swing Line Loan, or the issuance, extension or renewal of any R/C Letter of Credit, the
Administrative Agent shall have received a Borrowing Base Certificate dated no more than seven (7)
days prior thereto, which Borrowing Base Certificate shall include supporting schedules as required
by the Administrative Agent.



     Each Borrowing, each Swing Line Borrowing and each issuance, extension or renewal of a Letter
of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date
thereof as to the matters specified in paragraphs (b) and (c) of this Section.



ARTICLE V

AFFIRMATIVE COVENANTS




     From the date hereof and for so long as any Commitment shall be in effect, any Loan shall
remain outstanding or any Letter of Credit shall remain outstanding (in a face amount in excess of
the amount of cash then held in the Letter of Credit Account, or in excess of the face amount of
back-to-back letters of credit delivered, in each case pursuant to Section 2.05(c)), or any other
amount shall remain outstanding or unpaid under this Agreement, the Borrower shall and shall cause
each of its Subsidiaries to:



     Section 5.01. Financial Statements. Furnish to the Administrative Agent for delivery to the
Lenders:



     (a) as soon as available, but in any event within one hundred twenty (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 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 Ernst &
Young LLP or other independent certified public accountants of nationally recognized standing; and



     (b) as soon as available, but in any event not later than sixty (60) days after the end of
each of the first three (3) 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 for the previous year, certified by a Responsible Officer as
being fairly stated in all material respects (subject to normal year-end audit adjustments).



     All such financial statements shall be complete and correct in all material respects and shall
be prepared in reasonable detail and in accordance with GAAP applied (except as approved



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by such accountants or officer, as the case may be, and disclosed in reasonable detail
therein) consistently throughout the periods reflected therein and with prior periods.



     Section 5.02. Certificates; Other Information. Furnish to the Administrative Agent:



     (a) concurrently with the delivery of the financial statements referred to in Section 5.01(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 Event of Default as a result of noncompliance with Section 6.01, except as specified in such
certificate;



     (b) concurrently with the delivery of any financial statements pursuant to Section 5.01, (i) a
certificate of a Responsible Officer stating that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in such certificate, (ii) in
connection with any such delivery occurring prior to the Tranche A Term Loan Repayment Date, a
Compliance Certificate containing all information and calculations necessary for determining
compliance with Section 6.01 of this Agreement as of the last day of the fiscal quarter or fiscal
year of the Borrower, as the case may be (it being understood that in the case of annual financial
statements, such Compliance Certificate shall include a calculation of Adjusted Excess Cash Flow
and Adjusted Positive EBITDA Variance for the fiscal year to which such financial statements
relate), (iii) to the extent not previously disclosed to the Administrative Agent, a description of
(x) any Indebtedness owed by any Loan Party to any Excluded Subsidiary, (y) any Indebtedness
permitted under Sections 6.02(g), (j)(ii) or (q) and (z) any Guarantee Obligation in respect of any
Indebtedness permitted under Sections 6.02(g) or (q) to the extent the amount of such Guarantee
Obligation as of the date of incurrence thereof exceeds $10,000,000, in each case incurred since
the date of the most recent report delivered pursuant to this clause (iii) (or, in the case of the
first such report so delivered, since the Closing Date) and (iv) to the extent not previously
disclosed to the Administrative Agent, a description of any change in the jurisdiction of
organization of any Loan Party since the date of the most recent report delivered pursuant to this
clause (iv) (or, in the case of the first such report so delivered, since the Closing Date);



     (c) as soon as available, and in any event no later than February 28 of each fiscal year of
the Borrower, commencing with February 28, 2008, a detailed consolidated budget for such fiscal
year (including a projected consolidated balance sheet of the Group Members as at the end of such
fiscal year, the related consolidated statements of projected cash flow, projected changes in
financial position and projected income and a description of the underlying assumptions applicable
thereto on a business segment basis) (collectively, the “Projections”);



     (d) until the Tranche A Term Loan Repayment Date shall have occurred, as soon as available,
and in any event no later than February 28 of each fiscal year of the Borrower, commencing with
February 28, 2008, a detailed consolidated strategic plan for such fiscal year and each of the
subsequent fiscal years of the Borrower, through and including the fiscal year in which the Tranche
C Maturity Date falls (including a projected consolidated balance sheet of the Group Members as at
the end of each such fiscal year, the related consolidated statements of projected cash flow,
projected changes in financial position and projected income and a description of the underlying
assumptions applicable thereto on a business segment basis (collectively, the “Strategic Plan”)),
which Strategic Plan shall in each case be accompanied by



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a certificate of a Responsible Officer stating that such Strategic Plan is based on reasonable
estimates, information and assumptions and that such Responsible Officer has no reason to believe
that such Strategic Plan is incorrect or misleading in any material respect; for the avoidance of
doubt, there shall be no requirement to deliver a Strategic Plan after the Tranche A Term Loan
Repayment Date;



     (e) as soon as reasonably practical prior to the effectiveness thereof, copies of
substantially final drafts of any proposed amendment, supplement, waiver or other modification with
respect to the Tranche A Term Loan Agreement or the Senior Subordinated Notes Indenture;



     (f) concurrently with the delivery of any financial statements pursuant to Section 5.01(a) or
(b), a report setting forth in reasonable detail all Permitted Asset Sales made and Net Cash
Proceeds received during the fiscal quarter most recently ended, any Reinvestment Notices delivered
in such fiscal quarter with respect to such Permitted Asset Sales and the Reinvestment Deferred
Amount at the end of such fiscal quarter, together with a reasonably detailed summary of the
investment of any Reinvestment Deferred Amount made during such fiscal quarter; and



     (g) promptly, such additional financial and other information, or arrange such periodic
conference calls with the Borrower and its professionals, as the Administrative Agent may from time
to time reasonably request.



          The Borrower hereby agrees that it will provide to the Administrative Agent all information,
documents and other materials that it is obligated to furnish to the Administrative Agent pursuant
to the Loan Documents, including, without limitation, all notices, requests, financial statements,
financial and other reports, certificates and other information materials, but excluding any such
communication that (i) relates to a request for a new, or a conversion of an existing, Borrowing or
other extension of credit (including any election of an interest rate or interest period relating
thereto), (ii) relates to the payment of any principal or other amount due under this Agreement
prior to the scheduled date therefor, (iii) provides notice of any Default or Event of Default or
(iv) is required to be delivered to satisfy any condition contained in Article IV (all such
non-excluded communications being referred to herein collectively as “Communications”), by
transmitting the Communications in an electronic/soft medium in a format acceptable to the
Administrative Agent to oploanswebadmin@citigroup.com. In addition, the Borrower agrees to
continue to provide the Communications to the Administrative Agent in the manner specified in
Section 9.01 and as specified in the other Loan Documents, but only to the extent requested by the
Administrative Agent. The Borrower further agrees that the Administrative Agent may make the
Communications available to the Lenders by posting the Communications on Intralinks or a
substantially similar electronic transmission systems (the “Platform”).



          THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENT PARTIES (AS DEFINED BELOW) DO
NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND
EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF



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MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN CONNECTION WITH THE
COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS
AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR
REPRESENTATIVES (COLLECTIVELY, THE “AGENT PARTIES”) HAVE ANY LIABILITY TO THE BORROWER, ANY LENDER
OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR
INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT,
CONTRACT OR OTHERWISE) ARISING OUT OF THE BORROWER’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF
COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND
IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY
FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.



          The Administrative Agent agrees that the receipt of the Communications by the Administrative
Agent at its e-mail address set forth above shall constitute effective delivery of the
Communications to the Administrative Agent for purposes of the Loan Documents. Each Lender agrees
that notice to it (as provided in the next sentence) specifying that the Communications have been
posted to the Platform shall constitute effective delivery of the Communications to such Lender for
purposes of the Loan Documents. Each Lender agrees (i) to notify the Administrative Agent in
writing (including by electronic communication) from time to time of such Lender’s e-mail address
to which the foregoing notice may be sent by electronic transmission and (ii) that the foregoing
notice may be sent to such e-mail address.



          Nothing herein shall prejudice the right of the Administrative Agent or any Lender to give any
notice or other communication pursuant to any Loan Document in any other manner specified in such
Loan Document.



     Section 5.03. Payment of Obligations. Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its material obligations of
whatever nature, except where the amount or validity thereof is currently being contested in good
faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have
been provided on the books of the relevant Group Member.



     Section 5.04. Maintenance of Existence; Compliance. (a) (i) Preserve, renew and keep in full
force and effect its 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 6.04 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 Contractual Obligations and 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.



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     Section 5.05. Maintenance of Property; Insurance. (a) Keep all property material to the
conduct of its business in good working order and condition, ordinary wear and tear excepted and
(b) maintain with financially sound and reputable insurance companies insurance on all its property
in at least such amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured against in the same
general area by companies engaged in the same or a similar business.



     (b) Cause the Collateral Trustee to at all times be named as loss payee with respect to all
“All Risk” insurance policies and an additional insured (but without any liability for premiums)
under all general liability insurance policies maintained pursuant to Section 5.05(a).



     Section 5.06. 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 dealings and transactions in relation to its business and
activities.



     (b) Permit representatives of the Administrative Agent or employees of any Lender during
normal business hours (i) to visit and inspect any of its properties and examine and make abstracts
from any of its books and records during regular business hours and as often as may reasonably be
desired, but no more than twice per fiscal year so long as no Event of Default is outstanding, and
(ii) to discuss the business, operations, properties and financial and other condition of the Group
Members with officers and employees of the Group Members and with their independent certified
public accountants, in either case on reasonable prior notice and at the expense of the
Administrative Agent or such Lender, provided that at any time after the occurrence and during the
continuance of an Event of Default, the reasonable costs and expenses of such Lender in respect of
any such inspection shall be at the expense of the Borrower.



     (c) Permit any representatives designated by the Administrative Agent (including any
consultants, accountants, lawyers and appraisers retained by the Administrative Agent) to conduct
evaluations and appraisals of the Borrower’s computation of the Borrowing Base and the assets
included in the Borrowing Base and such other assets and properties of the Loan Parties as the
Administrative Agent or Required Revolving Credit Lenders may require, all upon reasonable prior
notice during normal business hours and as often as reasonably requested; provided that such
evaluations shall not be conducted more often than twice during each fiscal year of the Borrower
and such appraisals shall not be conducted more often than once during each fiscal year of the
Borrower (exclusive in each case of any evaluations and appraisals conducted while an Event of
Default has occurred and is continuing). The Borrower shall pay the reasonable fees (including
reasonable and customary internally allocated fees of employees of the Administrative Agent as to
which invoices have been furnished) and expenses of any such representatives retained by the
Administrative Agent as to which invoices have been furnished to conduct any such evaluation or
appraisal (it being understood that all such reasonable fees and expenses described in this
sentence shall be in addition to the collateral monitoring fee described in the Fee Letter).



     Section 5.07. Notices. Promptly give notice to the Administrative Agent and each Lender of:




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     (a) the occurrence of any Default or Event of Default of which any Loan Party has knowledge;



     (b) any default or event of default under any Contractual Obligation of any Group Member of
which any Loan Party has knowledge;



     (c) any litigation, investigation or proceeding affecting any Group Member (other than any
litigation or investigation in which any Group Member is the plaintiff or complainant) (i) in
which the amount involved is $25,000,000 or more and not covered by insurance, (ii) in which
injunctive or similar relief is sought, except any such litigation which the Borrower, in
consultation with its counsel, has determined in good faith would not reasonably be expected to
have a Material Adverse Effect, or (iii) which relates to any Loan Document;



     (d) the following events, as soon as reasonably possible and in any event within forty five
(45) days after any Loan Party has knowledge thereof: (i) the occurrence of any Reportable Event
with respect to any Single Employer Plan, a failure to make any required 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 of, any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other material 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) (i) any development, event, or condition that, individually or in the aggregate with other
developments, events or conditions, could reasonably be expected to result in the Group Members
sustaining, in the aggregate, a Material Environmental Loss; (ii) any notice that any Governmental
Authority may deny any application for a material Environmental Permit sought by, or revoke or
refuse to renew any material Environmental Permit held by, any Group Member which denial,
revocation or refusal could reasonably be expected to result in a Material Environmental Loss; and
(iii) any Governmental Authority has identified any Group Member as a potentially responsible party
under any Environmental Law for the cleanup of Materials of Environmental Concern at any location,
whether or not owned, leased or operated by any Group Member which identification could reasonably
be expected to result in a Material Environmental Loss; and



     (f) any development or event that has had or could reasonably be expected to have a Material
Adverse Effect promptly after any Loan Party has knowledge thereof.



     Each notice pursuant to this Section 5.07 shall be accompanied by a statement of a Responsible
Officer setting forth details of the occurrence referred to therein and stating what action the
relevant Group Member proposes to take with respect thereto.



     Section 5.08. Environmental Laws. (a) Comply in all material respects with, and use
reasonable efforts to ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws, and obtain and comply in all material respects with
and maintain, and use reasonable efforts to ensure that all tenants and subtenants obtain and
comply in all material respects with and maintain, any and all Environmental Permits.



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     (b) Conduct and complete all investigations, studies, sampling and testing, and all remedial,
removal and other actions required under Environmental Laws and promptly comply in all material
respects with all orders and directives of all Governmental Authorities regarding Environmental
Laws, except where the requirement to comply is being contested in good faith.



     (c) Generate, use, treat, store, release, dispose of, and otherwise manage Materials of
Environmental Concern in a manner that would not reasonably be expected to result in a Material
Environmental Loss; and take reasonable efforts to prevent any other Person from generating, using,
treating, storing, releasing, disposing of, or otherwise managing Materials of Environmental
Concern in a manner that could reasonably be expected to result in a Material Environmental Loss.



     (d) Promptly deliver to the Administrative Agent any environmental reports regarding
environmental matters affecting any Group Member which are delivered by any Group Member in
connection with the Tranche A Term Loan Agreement. 



     Section 5.09. Additional Collateral, Additional Loan Parties, etc. (a) With respect to any
property acquired after the Closing Date by any Loan Party that is not a Foreign Subsidiary (other
than (x) property that would constitute “Excluded Assets” as defined in the Collateral Agreement,
(y) any property described in paragraph (b), (c) or (d) below and (z) any property subject to a
Lien expressly permitted by Section 6.03(g) as to which the Collateral Trustee does not have a
perfected Lien for the benefit of the Term Loan Lenders and a perfected Lien for the benefit of the
Revolving Lenders, promptly (i) execute and deliver to the Collateral Trustee and the
Administrative Agent such amendments to the Collateral Agreement or such other documents as the
Collateral Trustee or the Administrative Agent deems necessary or advisable to grant to the
Collateral Trustee, for the benefit of the Term Loan Lenders, a security interest in such property
and for the benefit of the Revolving Credit Lenders, a security interest in such property (such
security interests to be separate and distinct from each other) and (ii) take all actions necessary
to perfect each such security interest, including the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the applicable Security Document or by law.



     (b) With respect to any fee interest in any real property having a value (together with
improvements thereof), in the reasonable opinion of the Borrower, of $5,000,000 or greater acquired
after the Closing Date by any Loan Party (other than any such real property subject to a Lien
expressly permitted by Sections 6.03(g) or 6.03(v) (but, in the case of any property subject to any
Lien permitted by Section 6.03(v), solely if the terms of such Lien prohibit the granting of a Lien
to secure the Obligations)), promptly (i) execute and deliver a Mortgage, in favor of the
Collateral Trustee, for the benefit of the Term Loan Lenders and for the benefit of the Revolving
Lenders, covering such real property, (ii) if requested by the Collateral Trustee or the
Administrative Agent, provide the Lenders, with respect to each Mortgage, with (x) a mortgagee’s
title insurance policy covering such real property in an amount at least equal to the purchase
price of such real property and otherwise consistent with the provisions of Section 4.01(q)(iii) as
well as a current ALTA survey thereof, together with a surveyor’s certificate and (y) use its
reasonable efforts to cause to be provided any consents or estoppels reasonably deemed necessary by
the Collateral Trustee or the Administrative Agent in connection with each such Mortgage, each of
the foregoing in form and substance reasonably satisfactory to the



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Collateral Trustee and the Administrative Agent and (iii) if requested by the Collateral
Trustee or the Administrative Agent, deliver to the Collateral Trustee and 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 Collateral Trustee and the
Administrative Agent. With respect to all Mortgaged Properties, maintain a policy of flood
insurance as described in Section 4.01(q)(iv) to the extent such policy was delivered pursuant to
Section 4.01(q)(iv) or any other provision of any Loan Document.



     (c) With respect to any new Subsidiary (other than an Excluded Subsidiary) created or acquired
after the Closing Date by any Group Member (which, for the purposes of this paragraph (c), shall
include any existing Subsidiary that ceases to be an Excluded Subsidiary), promptly (i) execute and
deliver to the Collateral Trustee and the Administrative Agent such amendments to the Collateral
Agreement as the Collateral Trustee or the Administrative Agent deems necessary to grant to the
Collateral Trustee, for the benefit of the Term Loan Lenders, a security interest in such property
and for the benefit of the Revolving Credit Lenders, a security interest in such property (such
security interests to be separate and distinct from each other), (ii) deliver to the Collateral
Trustee the certificates representing such Capital Stock (to the extent certificated), together
with undated stock powers, in blank, executed and delivered by a duly authorized officer of the
relevant Group Member, (iii) cause such new Subsidiary (A) to become a party to the Domestic
Guarantee Agreement and the Collateral Agreement, (B) to take all actions necessary to perfect each
such security interest, including the filing of Uniform Commercial Code financing statements in
such jurisdictions as may be required by the applicable Security Document or by law and (C) to
deliver to the Collateral Trustee and the Administrative Agent each of the documents specified in
Section 4.01(m) (with references in such Section to “Closing Date” being deemed references to the
date on which all the other requirements of this clause (c) are satisfied)), and (iv) if requested
by the Collateral Trustee or the Administrative Agent, deliver to the Collateral Trustee and 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 Collateral Trustee and
the Administrative Agent.



     (d) With respect to any new Excluded Subsidiary created or acquired after the Closing Date by
any Loan Party, promptly (i) execute and deliver to the Collateral Trustee and the Administrative
Agent such amendments to the Collateral Agreement or the applicable Foreign Pledge Agreement, or
such new Foreign Pledge Agreement, as the Collateral Trustee or the Administrative Agent deems
necessary to grant to the Collateral Trustee, for the benefit of the Term Loan Lenders, a security
interest in the Capital Stock of such new Subsidiary that is owned by any such Group Member and for
the benefit of the Revolving Credit Lenders, a security interest in such Capital Stock (such
security interests to be separate and distinct from each other); provided that in no event shall
more than 66% of the total outstanding voting Capital Stock of any such new Subsidiary be required
to be so pledged, (ii) deliver to the Collateral Trustee the certificates representing such Capital
Stock (to the extent certificated), together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the relevant Group Member, and take such other action as
may be necessary to perfect the Administrative Agent’s security interest therein, and (iii) if
requested by the Collateral Trustee or the Administrative Agent, deliver to the Collateral Trustee
and 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 Collateral Trustee
and the Administrative Agent.



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     (e) Without duplication of any obligation set forth in the foregoing clauses of this Section
5.09, with respect to any Subsidiary of the Borrower that at any time pledges any property to
secure the obligations of any Loan Party under the Tranche A Loan Agreement or the Senior
Subordinated Notes Indenture, or incurs any Guarantee Obligations with respect to any such
obligation, promptly (i) execute and deliver to the Collateral Trustee and the Administrative Agent
such amendments to the Collateral Agreement as the Collateral Trustee or the Administrative Agent
deems necessary to grant to the Collateral Trustee, for the benefit of the Term Loan Lenders, a
security interest in such property and for the benefit of the Revolving Credit Lenders, a security
interest in such property (such security interests to be separate and distinct from each other),
(ii) to the extent any such property is Capital Stock, deliver to the Collateral Trustee the
certificates representing such Capital Stock (to the extent certificated), together with undated
stock powers, in blank, executed and delivered by a duly authorized officer of the relevant Group
Member, (iii) cause such Subsidiary (A) to become a party to the Domestic Guarantee Agreement and
the Collateral Agreement, (B) to take all actions necessary to perfect each such security interest,
including the filing of Uniform Commercial Code financing statements in such jurisdictions as may
be required by the applicable Security Document or by law and (C) to deliver to the Collateral
Trustee and the Administrative Agent each of the documents specified in Section 4.01(m) (with
references in such Section to “Closing Date” being deemed references to the date on which all the
other requirements of this clause (e) are satisfied), and (iv) if requested by the Collateral
Trustee or the Administrative Agent, deliver to the Collateral Trustee and 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 Collateral Trustee and the
Administrative Agent.



     (f) The Borrower shall have the right to request that F-M Canada, a wholly-owned Subsidiary of
the Borrower, become a “Guarantor” and a “Loan Party” under this Agreement, a party to a Foreign
Subsidiary Guarantee and a “Grantor” under the Collateral Agreement, and that its accounts
receivable and inventory be included in the Borrowing Base. Any such request shall be made in
writing to the Administrative Agent, and the Administrative Agent shall determine, in its
reasonable credit judgment, whether to agree to such request. If the Administrative Agent shall
agree to any such request, F-M Canada shall become an additional Guarantor and Loan Party under the
Loan Documents (and be subject to all the obligations of a “Guarantor” and a “Loan Party” under the
Loan Documents and a “Grantor” under the Collateral Agreement) on the date of satisfaction of the
following conditions (the “F-M Canada Addition Date”):



     (i) the Administrative Agent shall have received (i) a supplement to this
Agreement substantially in the form of Exhibit J hereto, (ii) a Foreign Subsidiary
Guarantee and (iii) an Assumption Agreement with respect to the Collateral
Agreement, substantially in the form of Annex I to the Collateral Agreement, in each
case duly executed and delivered by F-M Canada;



     (ii) the Administrative Agent shall have received for F-M Canada such corporate
documents, resolutions and certificates as the Administrative Agent shall have
reasonably requested;



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     (iii) the Administrative Agent shall have received evidence satisfactory to it
that all assets of F-M Canada that would constitute “Collateral” under the
Collateral Agreement shall be subject to a valid and perfected security interest in
favor of the Collateral Trustee for the benefit of the Term Loan Lenders and a valid
and perfected security interest in favor of the Collateral Trustee for the benefit
of the Revolving Credit Lenders (such security interests to be separate and distinct
from each other); and



     (iv) the Administrative Agent shall have received such other approvals,
opinions of counsel (including without limitation opinions with respect to creation
and perfection of security interests) or documents as the Administrative Agent may
request in its discretion in connection with the addition of F-M Canada as a
Guarantor and a Loan Party under the Loan Documents and a Grantor under the
Collateral Agreement.



     From and after the F-M Canada Addition Date, the Borrowing Base shall include the accounts
receivable and the inventory of F-M Canada, on the terms and subject to the conditions specified by
the Administrative Agent in its reasonable credit judgment.



     Section 5.10. Maintenance of Concentration Account. On or prior to the 10th Business Day
after the Closing Date (which 10 day period of time may be extended by the Administrative Agent in
its reasonable discretion), establish and maintain with the Administrative Agent an account (the
“Concentration Account”) to be used by the Loan Parties as their principal domestic concentration
or sweep account(s) into which shall be deposited during each Sweep Period the available balances
from the Loan Parties’ operating accounts at the end of each Business Day, net of disbursements
paid in the ordinary course of business during such Business Day. Amounts on deposit in the
Concentration Account shall be applied as set forth in Section 2.15(c) during each Sweep Period.



     Section 5.11. Blocked Accounts. Within 90 days of the Closing Date (which 90 day period of
time may be extended by the Administrative Agent in its reasonable discretion), subject all of the
Loan Parties’ lockboxes and accounts that are maintained for the purposes of collecting Receivables
of the Loan Parties and that have been identified by the Administrative Agent and the Loan Parties
(and any other lockboxes and accounts that serve the same purpose as any lockboxes and accounts so
identified) to blocked account agreements reasonably acceptable to the Administrative Agent, each
of which blocked account agreements shall require at all times during each Sweep Period the daily
transfer of all amounts in the subject blocked account constituting Collateral to the Concentration
Account.



     Section 5.12. Borrowing Base Certificate. Furnish to the Administrative Agent, no later than
(i) four (4) Business Days after the end of each calendar week (each calendar week deemed, for
purposes hereof, to end on a Friday), a completed Borrowing Base Certificate showing the Borrowing
Base as of the close of business on the Friday of such calendar week at all times when Revolving
Credit Facility Availability is less than $100,000,000, (ii) eleven (11) Business Days after the
end of each fiscal month, a completed Borrowing Base Certificate showing the Borrowing Base as of
the close of business on the last day of such fiscal month, and (iii) if requested by the
Administrative Agent, at any other time when the Administrative Agent



99









 







reasonably believes that the then existing Borrowing Base Certificate is materially
inaccurate, as soon as reasonably available but in no event later than eleven (11) Business Days
after such request, a completed Borrowing Base Certificate showing the Borrowing Base as of the
date so requested, in each case with supporting documentation and additional reports with respect
to the Borrowing Base as the Administrative Agent may reasonably request. The components of the
Borrowing Base consisting of inventory shall be updated monthly as of the close of business on the
last Business Day of each fiscal month.



     Section 5.13. Use of Proceeds. Substantially simultaneously with the receipt of proceeds from
any Term Borrowings made after the Closing Date, use such proceeds to prepay or redeem Tranche A
Term Loans and Senior Subordinated Notes, until such time as the Tranche A Term Loans and the
Senior Subordinated Notes have been paid in full.



     Section 5.14. Post-Closing Obligations. Within 90 days after the Closing Date (or such longer
period as the Administrative Agent may agree in its reasonable discretion), the Borrower shall
execute and deliver Foreign Pledge Agreements in respect of the Capital Stock of each of the
Foreign Subsidiaries listed on Schedule 5.14, if and to the extent that such Capital Stock then
constitutes Collateral (as defined in the Collateral Agreement).



ARTICLE VI

NEGATIVE COVENANTS




     From the date hereof and for so long as any Commitment shall be in effect, any Loan shall
remain outstanding or any Letter of Credit shall remain outstanding (in a face amount in excess of
the amount of cash then held in the Letter of Credit Account, or in excess of the face amount of
back-to-back letters of credit delivered, in each case pursuant to
Section 2.05(c)) or any other amount shall remain outstanding or unpaid under this Agreement, the Borrower
shall not, and shall not permit any of its Subsidiaries to, directly or indirectly:



     Section 6.01. Financial Condition Covenants. (a) Consolidated Senior Leverage Ratio. Prior
to the Tranche A Term Loan Repayment Date, permit the Consolidated Senior Leverage Ratio as at the
last day of each period of four consecutive fiscal quarters of the Borrower ending on or after the
last day of the thirteenth fiscal quarter after the Closing Date to exceed 3.90 to 1.00.



     (b) Consolidated Debt Service Coverage Ratio. Prior to the Tranche A Term Loan Repayment
Date, permit the Consolidated Debt Service Coverage Ratio for each period of four consecutive
fiscal quarters of the Borrower ending on or after the last day of the thirteenth fiscal quarter
after the Closing Date to be less than 1.10 to 1.00.



     (c) Consolidated EBITDA. Prior to the Tranche A Term Loan Repayment Date, permit Consolidated
EBITDA for any period of four consecutive fiscal quarters of the Borrower ending with any fiscal
quarter set forth below to be less than the amount set forth below opposite such fiscal quarter:



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	         Fiscal Quarter        	 	      Consolidated EBITDA      
	December 31, 2007
	 	$	700,000,000	 
	March 31, 2008
	 	$	706,250,000	 
	June 30, 2008
	 	$	712,500,000	 
	September 30, 2008
	 	$	718,750,000	 
	December 31, 2008
and each fiscal
quarter thereafter
	 	$	725,000,000	 





For the avoidance of doubt, none of the covenants set forth in this Section 6.01 shall be
applicable from and after the Tranche A Term Loan Repayment Date.




     Section 6.02. Indebtedness. Create, issue, incur, assume, become liable in respect of or
suffer to exist any Indebtedness, except:



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



     (b) (i) Indebtedness of the Borrower to any Subsidiary and of any Guarantor to any Group
Member, (ii) Indebtedness of any Subsidiary that is not a Guarantor to any other Subsidiary that is
not a Guarantor and (iii) any Intercompany Loan Owed to U.K. Subsidiaries;



     (c) (i) Guarantee Obligations of any Group Member of Indebtedness of any Loan Party, and (ii)
Guarantee Obligations of any Subsidiary that is not a Guarantor of Indebtedness of any other
Subsidiary that is not a Guarantor;



     (d) (i) Guarantee Obligations of any Group Member in respect of any Foreign Credit Facility
and other Indebtedness of any Excluded Subsidiary permitted under
Section 6.02(z) and (ii) from and after the
Tranche A Term Loan Repayment Date, Guarantee Obligations of any Group Member of Indebtedness of
any Excluded Subsidiary;



     (e) Guarantee Obligations of any Person which becomes a Subsidiary of any Group Member or is
merged into any Group Member after the date of this Agreement; provided that (i) such Guarantee
Obligation was in existence on the date such Person became a Subsidiary of, or was merged into,
such Group Member, (ii) such Guarantee Obligation was not created in contemplation of such Person
becoming a Subsidiary of, or merging into, such Group Member and (iii) immediately after giving
effect to the acquisition of such Person by such Group Member, no Default or Event of Default shall
have occurred and be continuing;



     (f) Indebtedness outstanding on the date hereof and listed on Schedule 6.02(f) and any
refinancings, replacements, refundings, renewals or extensions thereof (without increasing, or
shortening the maturity of, the principal amount thereof); provided that this Section 6.02(f) shall
not permit the incurrence of any new Indebtedness to refinance, replace, refund, renew or extend
any Indebtedness owing to a Group Member unless the obligee on such new Indebtedness is also a
Group Member;



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     (g) Indebtedness (including, without limitation, purchase money Indebtedness and Capital Lease
Obligations) incurred after the Closing Date to finance Capital Expenditures; provided that the
aggregate principal amount of Indebtedness incurred in reliance on this Section 6.02(g) shall not
exceed $200,000,000 in any fiscal year;



     (h) [Reserved.];



     (i) Indebtedness incurred in the ordinary course of business under travel and expense cards,
corporate purchasing cards and car leasing programs, and Guarantee Obligations of the Borrower with
respect to any such Indebtedness;



     (j) (i) Indebtedness of any Excluded Subsidiary to any Loan Party existing on the Closing
Date, (ii) additional Indebtedness of any Excluded Subsidiary to any Loan Party incurred after the
Closing Date and consisting of Intercompany Loans permitted under Section 6.08(h)(ii) and (iii)
from and after the Tranche A Term Loan Repayment Date, Indebtedness of any Excluded Subsidiary to
any Loan Party;



     (k) Intercompany and third-party Indebtedness incurred in the ordinary course of business in
connection with the cash pooling and/or interest set-off arrangements described in Section 6.03(k);



     (l) Indebtedness in connection with Swap Agreements not prohibited by Section 6.12;



     (m) Indebtedness secured by Liens permitted by Section 6.03(a), (b), (c), (d), (e), (i), (l),
(m) and (n) to the extent the obligations secured thereby constitute Indebtedness;



     (n) (i) Indebtedness of the Borrower in respect of the Senior Subordinated Notes in an
aggregate principal amount not to exceed $306,000,000, (ii) Guarantee Obligations of any Guarantor
in respect of such Indebtedness, provided that such Guarantee Obligations are subordinated to the
same extent as the obligations of the Borrower in respect of the Senior Subordinated Notes, and
(iii) any refinancings, replacements, refundings, renewals or extensions of the foregoing (without
increasing, or shortening the maturity of, the principal amount thereof);



     (o) (i) Indebtedness of the Group Members in respect of the Tranche A Term Loans in an
aggregate principal amount not to exceed $1,330,000,000 (as such amount shall be reduced from time
to time as a result of prepayments and repayments), (ii) Guarantee Obligations of any Group Member
in respect of such Indebtedness, and (iii) any refinancings, replacements, refundings, renewals or
extensions of the foregoing (without increasing the principal amount thereof in effect immediately
prior to such refinancing, replacement, refunding, renewal or extension);



     (p) Other Indebtedness of the Group Members in satisfaction of the Other Unsecured Claims
pursuant to the Reorganization Plan, so long as the aggregate principal amount of Indebtedness
incurred pursuant to this Section 6.02(p) shall not exceed $300,000,000;



     (q) Permitted Subordinated Indebtedness (including Permitted Designated Subordinated
Indebtedness), provided that, so long as the Tranche A Term Loan Repayment



102









 







Date shall not have occurred, (i) the Net Cash Proceeds thereof received by any Group Member
are (A) applied to prepay the Tranche B Term Loans to the extent
required by Section 2.16(a), (B) applied to consummate a Permitted Acquisition as to which the Collateral
Trustee is granted a security interest for the benefit of the Term Loan Lenders and a security
interest for the benefit of the Revolving Credit Lenders (such security interests to be separate
and distinct from each other), on the assets acquired pursuant thereto in accordance with Section
5.09, (C) applied to make a Board-Approved Investment or a Proceeds Investment (so long as the
Borrower shall have complied with the provisions of Section 5.09, to the extent applicable, with
respect to any assets acquired by any Group Member pursuant to such Board-Approved Investment or
Proceeds Investment, as the case may be), (D) applied to consummate Permitted Open Market
Purchases, (E) applied to consummate a repayment of the Tranche A Term Loans or (F) applied to make
a Capital Expenditure or a Restricted Payment, and (ii) after giving effect to the incurrence
thereof, if such Indebtedness is incurred, at any time when the Borrower is required to comply with
any covenant in Section 6.01, the Borrower shall be in compliance with such covenant in Section
6.01 as of the last day of the fiscal quarter then most recently ended prior to the date of such
incurrence (calculated on a pro forma basis to give effect to the incurrence of such Permitted
Subordinated Indebtedness and the applicable event described in clauses (A), (B), (C), (D), (E) or
(F)) as if each had occurred on the last day of such fiscal quarter or the first day of the
relevant period ending on the last day of such fiscal quarter, as applicable;



     (r) Intercompany Loans incurred in order to consummate the Tax Restructuring (including any
Intercompany Loans arising solely as a result of the recharacterization as Indebtedness of any
equity Investment made by any Group Member in any other Group Member and permitted by Section
6.08);



     (s) Indebtedness of any Person which becomes a Subsidiary or is merged into any Group Member
after the date of this Agreement, provided that (i) such Indebtedness was in existence on the date
such Person became a Subsidiary of, or merged into, such Group Member, (ii) such Indebtedness was
not created in contemplation of such Person becoming a Subsidiary of, or merging into, such Group
Member and (iii) immediately after giving effect to the acquisition of such Person by such Group
Member no Default or Event of Default shall have occurred and be continuing;



     (t) Indebtedness of any Group Member owed to any other Group Member and arising solely as a
result of the recharacterization as Indebtedness of any equity Investment made by any Group Member
in any other Group Member and permitted by Section 6.08;



     (u) (i) Indebtedness (including Guarantee Obligations) incurred by the Borrower and the U.K.
Subsidiaries in connection with the Company Voluntary Arrangements, the U.K. Settlement Agreement
and financing the retention of the Intercompany Notes, and (ii) Intercompany Loans from T&N Limited
to any other U.K. Subsidiary or from any U.K. Subsidiary to T&N Limited in the ordinary course of
business and solely in connection with the establishment and operation of the consolidated cash
management system of the U.K. Subsidiaries;



     (v) (i) Indebtedness of the Group Members in respect of the Additional Liquidity Facility,
limited prior to the Tranche A Term Loan Repayment Date to an aggregate principal



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amount at any time, when added to the sum of (x) the Total Revolving Credit Commitment (or, if
the Total Revolving Credit Commitment shall have terminated, the Total Revolving Credit Usage) at
such time and (y) the aggregate outstanding principal amount of the Term Loans at such time, not to
exceed $1,418,000,000, (ii) Guarantee Obligations of any Group Member in respect of such
Indebtedness, and (iii) any refinancings, replacements, refundings, renewals or extensions of the
foregoing;



     (w) Indebtedness in respect of any Permitted Receivables Facility;



     (x) Indebtedness incurred to fund Joint Venture Put Obligations relating to Turkish Joint
Ventures in an aggregate outstanding principal amount not to exceed at any date $200,000,000;



     (y) From and after the Tranche A Term Loan Repayment Date, any other Indebtedness (other than
Indebtedness of an Excluded Subsidiary) so long as the Consolidated Interest Coverage Ratio as of
the last day of the immediately preceding fiscal quarter for the period of four consecutive fiscal
quarters ending on such date, computed on a pro forma basis as if such Indebtedness had been
incurred on the first day of the period of four consecutive fiscal quarters ending on such last
day, equals or exceeds 2.00 to 1.00; provided that the immediately preceding limitation shall not
apply to Indebtedness that is secured by a Lien granted pursuant to
Section 6.03(z)(i).



     (z) Indebtedness of the Group Members not permitted by the foregoing paragraphs of this
Section 6.02 (other than Intercompany Loans) in an aggregate outstanding principal amount for all
Group Members not to exceed at any date $1,000,000,000.



     Section 6.03. Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, whether now owned or hereafter acquired, except:



     (a) Liens for taxes, assessments or governmental charges not yet due or that are being
contested in good faith by appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books of the Borrower or its Subsidiaries, as the case may be, in
conformity with GAAP or in the case of a Subsidiary located outside the United States, general
accounting principles in effect from time to time in its jurisdiction of incorporation;



     (b) carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business that are not overdue for a period of more
than sixty (60) 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, 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, zoning and similar restrictions and other similar encumbrances
or title defects incurred in the ordinary course of business that do not materially



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detract from the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of any Group Member;



     (f) (i) Liens in existence on the date hereof listed on Schedule 6.03(f) securing Indebtedness
in existence on the date hereof and permitted by Section 6.02(f) and (ii) renewals of any Liens
permitted by clause (i) securing Indebtedness permitted by Section 6.02(f) that is a refinancing,
replacement, refunding, renewal or extension of any Indebtedness described in clause (i), provided
that no such Lien permitted by this clause (ii) shall cover any property that is not subject to
such Lien on the date hereof and that the amount of Indebtedness secured thereby is not increased
after the date hereof;



     (g) Liens securing Indebtedness of any Group Member incurred pursuant to Section 6.02(g) to
finance purchase money Indebtedness or any other Capital Expenditure, provided that (i) such Liens
shall be created substantially simultaneously with, or within 60 days after, the making of such
Capital Expenditure and (ii) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness;



     (h) Liens created pursuant to the Security Documents securing the Obligations, the Cash
Management Obligations and the Hedging Obligations;



     (i) Liens in favor of any Governmental Authority to secure progress, advance or other payments
pursuant to any contract or provision of any statute;



     (j) Liens on assets of any Excluded Subsidiary to secure Indebtedness of any Group Member
(including Indebtedness of such Excluded Subsidiary) permitted under
Section 6.02(z);



     (k) Liens created in the ordinary course of business in favor of banks and other financial
institutions on credit balances of any bank accounts of any Group Member held at such banks or
financial institutions, as the case may be, to facilitate the operation of cash pooling and/or
interest set-off arrangements in respect of such bank accounts in the ordinary course of business;



     (l) Liens arising from leases, subleases or licenses granted to others which do not interfere
in any material respect with the business of any Group Member;



     (m) Liens arising by virtue of any statutory or common law provision relating to bankers’
liens, rights of set-off or similar rights and remedies as to deposit accounts;



     (n) any interest or title of a lessor under any lease entered into by any Group Member in the
ordinary course of its business and covering only the assets so leased;



     (o) Liens securing (i) the Tranche A Term Loans, (ii) the Senior Subordinated Notes and (iii)
the Additional Liquidity Facility, and any refinancings, replacements, refundings, renewals or
extensions of any of the foregoing; provided that such Liens are subordinated on terms no less
favorable on the whole than those set forth in the Intercreditor Agreement;



     (p) Liens securing Permitted Receivable Facilities;



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     (q) Liens securing Indebtedness permitted by Section 6.02(b) and Section 6.02(j) on the assets
of the Subsidiaries described therein; provided that any such Liens on assets of any Loan Party
shall be subordinated to any and all Liens securing the Obligations, the Cash Management
Obligations and the Hedging Obligations and any other Liens governed by the Intercreditor Agreement
on terms and conditions reasonably satisfactory to the Administrative Agent in its discretion;



     (r) Liens securing Indebtedness permitted by Section 6.02(i), (r) and (x);



     (s) Liens arising from judgments and attachments in connection with court proceedings,
provided that (i) the attachment or enforcement of such Liens would not result in an Event of
Default hereunder, (ii) such Liens are being contested in good faith by appropriate proceedings,
(iii) no material assets or property of any Group Member is subject to material risk of loss or
forfeiture, and (iv) a stay of execution pending appeal or proceeding for review is in effect;



     (t) Liens on cash or Cash Equivalents to secure the obligations of any Group Member under any
Swap Agreement not prohibited by Section 6.12;



     (u) Liens securing any Permitted Subordinated Indebtedness (including Permitted Designated
Subordinated Indebtedness), so long as such Liens comply with the criteria set forth in clause
(iii) of the definition of “Permitted Subordinated Indebtedness”;



     (v) Liens on property or assets acquired by any Group Member or on property or assets of any
Person which becomes a Subsidiary of a Group Member, in any such case existing at the time of the
acquisition thereof (including acquisition through merger or consolidation);



     (w) with respect to each Mortgaged Property, the Liens permitted in the Mortgage for such
Mortgaged Property;



     (x) Liens created under Section 4.7 of the Collateral Trust Agreement in favor of the
Collateral Trustee;



     (y) Liens granted by the Borrower or a Subsidiary upon one or more Intercompany Loan Notes
securing Indebtedness owing to the Borrower or a Subsidiary;



     (z) from and after the Tranche A Term Loan Repayment Date (i) Liens securing Indebtedness
incurred pursuant to Section 6.02(y) having the same priority as the “First Priority Liens”
referred to in the Intercreditor Agreement, so long as, after giving effect to the incurrence of
such Indebtedness, the Consolidated First Priority Leverage Ratio as of the last day of the
immediately preceding fiscal quarter for the period of four consecutive fiscal quarters ending on
such date, computed on a pro forma basis as if such Indebtedness had been incurred on such last day
of the immediately preceding fiscal quarter, did not exceed 3.50 to 1.00, and (ii) any other Liens
securing Indebtedness incurred pursuant to Section 6.02(y) so long as such Liens are subject to
Lien subordination provisions no less favorable to the Lenders than the terms of the subordination
of the “Second Priority Liens” referred to in the Intercreditor Agreement in relation to the First
Priority Liens referred to therein (except that, for this purpose, the “First



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Priority Standstill Period” referred to therein shall be not less than 180 days and Section
4.4 shall be inapplicable); and



     (aa) Liens not otherwise permitted by this Section so long (x) as neither (i) the aggregate
outstanding principal amount of the obligations secured thereby nor (ii) the aggregate fair market
value (determined as of the date such Lien is incurred) of the assets subject thereto, exceeds as
to all Group Members $150,000,000 at any one time and (y) such Liens do not secure Indebtedness
permitted by Sections 6.02(d), (i), (k), (n), (o), (p), (q), (s), (u) and (v).



     Section 6.04. 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 pursuant to the U.K. Dissolution and the
Company Voluntary Arrangements, and except that:



     (a) (i) any Subsidiary 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 Wholly Owned
Subsidiary Guarantor (provided that the continuing or surviving corporation shall be a Wholly Owned
Subsidiary Guarantor) and (ii) any Subsidiary that is not a Guarantor may be merged with or into
any other Subsidiary (and if such other Subsidiary is a Guarantor the survivor shall be a
Guarantor);



     (b) (i) any Subsidiary may Dispose of any or all of its assets (including, without limitation,
transfers of Intercompany Loans or equity Investments) (A) to the Borrower or any Guarantor (upon
voluntary liquidation or otherwise) or (B) pursuant to a Disposition permitted by Section 6.05,
(ii) any Subsidiary that is not a Guarantor may Dispose of any or all of its assets to any other
Subsidiary; and (iii) from and after the Tranche A Term Loan Repayment Date, any Group Member may
dispose of any or all of its assets to the Borrower or any Subsidiary;



     (c) any Investment expressly permitted by Section 6.08 may be structured as a merger,
consolidation or amalgamation;



     (d) any Subsidiary which has Disposed of all of its assets as permitted under this Section
6.04 and Section 6.05 or otherwise has no assets may be liquidated;



     (e) the Group Members may consummate the transactions contemplated under the Tax
Restructuring;



     (f) any Joint Venture may be liquidated, provided that (x) the assets and liabilities thereof
are distributed to the owners of such Joint Venture, pro rata, in accordance with such owners’
respective equity interests in such Joint Venture and (y) the Net Cash Proceeds thereof are applied
to prepay the Loans, to the extent required by Section 2.15 or Section 2.16, as applicable; and



     (g) any Subsidiary that is not a Guarantor may be liquidated or dissolved so long as the
aggregate book value of the assets of all Subsidiaries that have been dissolved or liquidated
pursuant to this Section 6.04(g) shall be less than 10% of the book value of the consolidated
assets of the Group Members, taken as a whole (as set forth in the most recent audited consolidated
financial statements of the Borrower that have been delivered pursuant to Section



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5.01(a) or, until any audited financial statements have been delivered pursuant to such
Section, the Pro Forma Balance Sheet).




     Section 6.05. Disposition of Property. Dispose of any of its property, 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:



     (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 and Dispositions of Cash
Equivalents in the ordinary course of business;



     (c) Dispositions permitted by Section 6.04;



     (d) Dispositions of Receivables pursuant to Factoring Arrangements, so long as, on the last
day of each calendar month, the aggregate amount of Receivables that have been Disposed of pursuant
thereto and that are then outstanding shall not exceed the Factoring Basket then in effect;



     (e) Dispositions pursuant to sale and leaseback transactions permitted pursuant to Section
6.11;



     (f) the sale or issuance of any Subsidiary’s Capital Stock to the Borrower or any Wholly Owned
Subsidiary Guarantor or the sale or issuance of any Excluded Subsidiary’s Capital Stock to any
other Excluded Subsidiary;



     (g) (i) any Permitted Asset Sales; provided that the Net Cash Proceeds thereof are applied to
prepay the Loans, to the extent required by Section 2.15 or Section 2.16, as applicable and (ii)
any Disposition that does not constitute an “Asset Sale” pursuant to clause (ii) of the definition
thereof;



     (h) Dispositions in connection with the U.K. Dissolution or the Company Voluntary
Arrangements;



     (i) Dispositions constituting Investments permitted by Section 6.08;



     (j) Dispositions consisting of (i) operating leases to Loan Parties, (ii) operating leases to
Joint Ventures of assets at a fair market value in an aggregate amount not to exceed at any date
the Joint Venture Basket then in effect and (iii) operating leases to Excluded Subsidiaries of
assets at a fair market value in an aggregate amount not to exceed at any date the Intercompany
Basket then in effect;



     (k) intercompany Dispositions necessary in order to effect the Tax Restructuring;



     (l) the licensing of Intellectual Property in the ordinary course of business and in a manner
consistent with past practices of the Borrower and its Subsidiaries;



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     (m) transfers of accounts receivable and related rights by F-M Canada to the Borrower;



     (n) involuntary dispositions consisting of property or casualty events or condemnation
proceedings, in each case resulting in a Recovery Event;



     (o) Dispositions of in-plant maintenance, repair and operating and perishable tooling
operations to third parties in connection with the outsourcing and such operations;



     (p) the Wagner Lighting Divestiture; and



     (q) Dispositions of assets pursuant to a Permitted Receivables Facility.



     Section 6.06. Restricted Payments. Declare or pay any dividend (other than dividends payable
solely in common stock of the Person making such 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 any Group Member, 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 any Group Member (collectively,
“Restricted Payments”), except that (a) any Subsidiary may make Restricted Payments to the Borrower
or any Wholly Owned Subsidiary Guarantor, (b) any Subsidiary that is not a Guarantor may make
Restricted Payments to any other Group Member, (c) any Subsidiary may make Restricted Payments to
Persons directly owning Minority Interests, if such Subsidiary shall first have made, or shall
substantially simultaneously make, a Restricted Payment to the Group Member which has an ownership
interest in such Subsidiary in an amount not less than such Group Member’s proportionate share
(based upon such Group Member’s percentage ownership interest in such Subsidiary) of the total
Restricted Payment to be made by such Subsidiary, (d) any Subsidiary may make Restricted Payments
necessary in order to consummate the Tax Restructuring, (e) the Borrower may make Restricted
Payments to members of management pursuant to compensation arrangements typical of companies of
similar size and scope, (f) the Borrower may make any Restricted Payment if, at the time of such
Restricted Payment and after giving effect thereto, the aggregate amount of all Restricted Payments
made by the Borrower pursuant to this clause (f) since the Closing Date would not exceed the sum of
$75,000,000 plus 50% of Consolidated Net Income for the period commencing on the first day of the
fiscal quarter in which the Closing Date falls and ending on the last day of the most recent fiscal
quarter for which financial statements shall have been delivered
pursuant to Section 5.01 (treated for this purpose as a single accounting period), (g) any Group Member
may make Restricted Payments in connection with the Company Voluntary Arrangements, the retention
of the Intercompany Loan Notes (without limiting payments relating to Intercompany Loan Notes in
connection with the Tax Restructuring), and the U.K. Dissolution, and (h) any Group Member may make
Restricted Payments on any date in an aggregate amount not to exceed the aggregate amount of Equity
Proceeds that are Not Otherwise Applied on such date.



     Section 6.07. [Reserved.]



     Section 6.08. Investments. Make any advance, loan, extension of credit (by way of guaranty or
otherwise) or capital contribution of cash or other property to, or purchase any



109









 







Capital Stock,
bonds, notes, debentures or other debt securities of, or any assets constituting a business unit
of, or make any other investment in, any Person (all of the foregoing, “Investments”), except:



     (a) extensions of trade credit and the conversion of overdue trade receivables into notes
receivables, in each case in the ordinary course of business;



     (b) Investments in Cash Equivalents;



     (c) Guarantee Obligations permitted by Section 6.02;



     (d) loans and advances to employees of any Group Member in the ordinary course of business
(including for travel, entertainment and relocation expenses or pursuant to any Plan) in an
aggregate amount for all Group Members not to exceed $10,000,000 at any one time outstanding;



     (e) Investments consisting of Permitted Net Cash Proceeds Reinvestments made by any Group
Member with the proceeds of any Reinvestment Deferred Amount;



     (f) Investments permitted by Sections 6.04(a), (b) and (e);



     (g) Investments consisting of Intercompany Loans permitted under Sections 6.02(b), (k), (t)
and (u);



     (h) (i) Investments by any Loan Party in any Excluded Subsidiary existing on the Closing Date,
(ii) additional Investments by any Loan Party in any Excluded Subsidiary in an aggregate
outstanding amount not to exceed on any date the Intercompany Basket in effect at such date
(calculated after giving effect to all proposed Investments to be made on such date pursuant to
this Section 6.08(h)(ii)); provided that the aggregate amount of Investments (other than
Intercompany Loans) made pursuant to this Section 6.08(h)(ii) and outstanding on any date shall not
exceed the Intercompany Basket Sublimit on such date, (iii) from and after the Tranche A Term Loan
Repayment Date, Investments by any Loan Party in an Excluded Subsidiary, and (iv) Investments in a
Foreign Subsidiary for the purpose of complying with local statutory capitalization requirements in
such Foreign Subsidiary’s host jurisdiction;



     (i) Investments by (i) any Group Member in the Borrower or any Person that, prior to such
investment, is a Guarantor and (ii) any Subsidiary that is not a Guarantor in any Group Member;



     (j) (i) Investments consisting of the Capital Stock of any Person acquired pursuant to any
Joint Venture Put Obligation and (ii) Investments (other than Investments described in clause (i))
in Joint Ventures, including without limitation, Investments in new Joint Ventures, the purchase of
ownership interests in Joint Ventures from Persons that are not Group Members and increases in the
ownership interest of any Group Member in Joint Ventures, in an aggregate outstanding amount not to
exceed at any date the Joint Venture Basket in effect on such date;



     (k) Permitted Acquisitions;



110









 





     (l) (i) Investments outstanding on the date hereof and listed on Schedule 6.08(l), (ii) equity
Investments of any Group Member in any other Group Member and arising solely as a result of the
recharacterization as an equity investment of any Intercompany Loan permitted by Section 6.02 and
(iii) Investments in the form of notes issued by the “Trust” (as defined in the Reorganization
Plan) to the Borrower pursuant to the Reorganization Plan, as follows: (x) a note in the face
amount of $125,000,000 issuable pursuant to Section 8.3.5 of the Reorganization Plan and (y) a note
in the face amount of $140,000,000 issuable pursuant to Section 8.22 of the Reorganization Plan;



     (m) Investments by any Group Member made on or after the Closing Date in existing or potential
suppliers and customers from whom the Borrower reasonably expects to obtain a material commercial
benefit, in an aggregate amount (valued at cost) not to exceed $25,000,000 at any one time
outstanding;



     (n) Investments by any Group Member of any Restricted Payment received by such Person that
consists of equity interests in a Subsidiary; provided that if the initial payor of any such
Restricted Payment is a Guarantor, then the ultimate recipient of such Restricted Payment shall
also be a Guarantor;



     (o) Investments by any Group Member necessary to effect the Tax Restructuring;



     (p) Investments in notes receivable payable to any Group Member by the purchasers of assets
purchased pursuant to Dispositions permitted under Section 6.05;



     (q) Investments by the Borrower in any Subsidiary consisting of the issuance of Letters of
Credit hereunder (and the incurrence by the Borrower of Indebtedness hereunder with respect
thereto) to support obligations of such Subsidiary;



     (r) Investments by a U.K. Subsidiary in another U.K. Subsidiary in connection with the Company
Voluntary Arrangements;



     (s) Investments by the Borrower or any of its Subsidiaries in connection with the Anticipated
Japanese Consolidation in an amount not to exceed $10,000,000;



     (t) Investments not otherwise permitted under paragraphs (a) through (s) of this Section 6.08
so long as (i) prior to the making of any such Investment, the Borrower shall have delivered to the
Administrative Agent a certificate of a Responsible Officer, certifying that such Investment has
been approved by a Board Majority and (ii) immediately after the consummation of any such
Investment, the Revolving Credit Facility Availability shall be equal to at least $200,000,000; it
being understood that at any time at which any Investments made
pursuant to this Section 6.08(t) with respect to
any Person constitutes an Acquisition, such Acquisition must also constitute a Permitted
Acquisition and comply with the definition thereof;



     (u) Investments not otherwise permitted under the foregoing paragraphs (a) through (t) of this
Section 6.08, but excluding Investments in Joint Ventures or in Excluded Subsidiaries,
in an aggregate outstanding amount not to exceed on any date the General Investment Basket in
effect on such date; and



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     (v) On any date, Investments not otherwise permitted under (a) through (u) of this Section
6.08 in an aggregate outstanding amount not to exceed on any date the Proceeds Investment Basket on
such date.



     Section 6.09. Optional Payments and Modifications of Certain Debt Instruments. (a) Make or
offer to make any optional or voluntary payment, prepayment, repurchase or redemption of or
otherwise optionally or voluntarily defease or segregate funds with respect to the Tranche A Term
Loans or Senior Subordinated Notes if at the time a Default or Event of Default has occurred and is
continuing; (b) make or offer to make any optional or voluntary payment, prepayment, repurchase or
redemption of or otherwise optionally or voluntarily defease or segregate funds with respect to (i)
the Additional Liquidity Facility, (ii) any Permitted Subordinated Indebtedness or (iii) any
Indebtedness of a Loan Party incurred under Section 6.02(y) or
Section 6.02(z) that is not secured as permitted under Section 6.03(z)(i),
unless at the time no Default or Event of Default has occurred and is continuing and immediately
after giving effect thereto (and any Indebtedness incurred in connection therewith, and the
application of the proceeds thereof), the Leverage Ratio is not greater than 3.5 to 1.0; (c) amend,
modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or
other change to, any of the terms of (i) the Tranche A Term Loan Agreement or the Additional
Liquidity Facility Agreement in a manner that is materially adverse to the Lenders or (ii) the
Senior Subordinated Note Indenture or any document governing any Permitted Subordinated
Indebtedness (other than any such amendment, modification, waiver or other change that (A) would
extend the maturity or reduce the amount of any payment of principal thereof or reduce the rate or
extend any date for payment of interest thereon and (B) does not involve the payment of a consent
fee); or (d) designate any Indebtedness (other than Consolidated Senior Debt permitted by this
Agreement) as “Designated Senior Debt” or “Guarantor Senior Debt” (or any other defined term having
similar purposes) for the purposes of the Senior Subordinated Note Indenture or any document
governing any Permitted Subordinated Indebtedness.



     Section 6.10. Transactions with Affiliates. Except for the Tax Restructuring, the retention
of the Intercompany Loan Notes (without limiting any transactions in connection with the Tax
Restructuring), or pursuant to the U.K. Dissolution, the Company Voluntary Arrangements or
Permitted Securitization Facility, enter into any material transaction, including 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 Wholly Owned
Subsidiary Guarantor) unless such transaction is (i) otherwise permitted under this Agreement and
(ii) upon fair and reasonable terms no less favorable to the relevant Group Member than it would
obtain in a comparable arm’s length transaction with a Person that is not an Affiliate as
determined in good faith by the Borrower or the relevant Group Member. For the avoidance of doubt
(i) contemporaneous purchases and/or sales by a Group Member and an Affiliate of assets, Capital
Stock, bonds, notes, debentures or other debt securities, and bank loans, participations or similar
obligations at substantially the same price shall not be deemed transactions with an Affiliate
under this Agreement and (ii) in no event shall any direct or indirect transfer of any Class A
Common Stock or any other Capital Stock of the Borrower, by
Thornwood or any of its Affiliates to any Affiliate of Thornwood or to Thornwood, give rise to
or be deemed a “Change of Control” hereunder.



112









 





     Section 6.11. Sales And Leasebacks. Enter into any arrangement with any Person providing for
the leasing by any Group Member of real or personal property that has been or is to be sold or
transferred by such Group Member 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 such
Group Member; provided that (i) any Group Member may consummate a sale and leaseback transactions
in which the transferee is the Borrower or a Wholly Owned Subsidiary Guarantor, and any Subsidiary
which is not a Guarantor may consummate a sale and leaseback transaction in which the transferor is
another Subsidiary which is not a Guarantor and (ii) the Group Members may consummate other sale
and leaseback transactions in an amount not to exceed in the aggregate for all Group Members
$250,000,000.



     Section 6.12. Swap Agreements. Enter into any Swap Agreement, except (a) Swap Agreements
entered into to hedge or mitigate risks in respect of changes in commodity prices or currency
exchange rates to which any Group Member has actual exposure and (b) Swap Agreements entered into
in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from
floating to fixed rates, from one floating rate to another floating rate or otherwise) with respect
to any outstanding or prospective interest-bearing liability or investment of any Group Member from
time to time.



     Section 6.13. 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.



     Section 6.14. Negative Pledge Clauses. Enter into or suffer to exist or become effective any
agreement that prohibits or limits the ability of any Group Member 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 other than (a) this Agreement and the other Loan Documents, (b)
the Tranche A Term Loan Agreement, (c) the Senior Subordinated Note Indenture, (d) 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), (e) any agreements with respect to Indebtedness incurred by the Excluded Subsidiaries and
permitted under Sections 6.02 imposing any such prohibitions or limitations on Excluded
Subsidiaries, (f) any agreement arising pursuant to the Company Voluntary Arrangements, (g) any
agreements binding any Person which becomes a Subsidiary or is merged into any Group Member after
the date of this Agreement, provided that such agreement was in existence on the date such Person
became a Subsidiary of, or merged into, such Group Member and was not entered into in contemplation
of such Person becoming a Subsidiary of, or merging into, such Group Member, (h) any Permitted
Receivables Facility Documents, and (i) any agreements to which any Subsidiary that is not a
wholly-owned Subsidiary is a party that prohibit or limit the ability of such Subsidiary or any of
its Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of its property or
revenues.



     Section 6.15. Clauses Restricting Subsidiary Distributions. Enter into 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, any Group Member, (b) make loans or advances to, or other Investments
in, any Group Member or (c) transfer any of its assets to any Group Member, except for such
encumbrances or restrictions existing under or by reason of (i) any restrictions existing under the



113









 







Loan Documents, (ii) any restrictions existing under the Tranche A Term Loan Agreement, (iii) any
restrictions existing under the Senior Subordinated Note Indenture, (iv) any restriction that
exists or may arise directly as a result of the Company Voluntary Arrangements, (v) any
restrictions (other than those described in clauses (i), (ii), (iii) and iv) in existence on the
date hereof, (vi) 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, (vii) any restrictions relating to Excluded
Subsidiaries imposed in connection with the Indebtedness incurred by the Excluded Subsidiaries and
permitted under Sections 6.02, (viii) any restrictions contained in the terms of any Indebtedness
permitted under Section 6.02(s) or any other agreement binding any Person which becomes a
Subsidiary or is merged into any Group Member after the date of this Agreement, provided that such
agreement was in existence on the date such Person became a Subsidiary of, or merged into, such
Group Member and was not entered into in contemplation of such Person becoming a Subsidiary of, or
merging into, such Group Member, (ix) any restrictions contained in Permitted Receivables Facility
Documents and (x) any restrictions contained in any agreements to which any Subsidiary that is not
a wholly-owned Subsidiary is a party so long as such restrictions apply solely to such Subsidiary
or any of its Subsidiaries.



     Section 6.16. Lines of Business. Enter into any business, either directly or through any
Subsidiary, except for those businesses in which the Group Members are engaged on the date of this
Agreement or that are determined by the Board of Directors of the Borrower to be reasonably related
thereto.



     Section 6.17. [Reserved.]



     Section 6.18. Positive EBITDA Variance. Prior to the Tranche A Term Loan Repayment Date, use
the 33 1/3% of Adjusted Positive EBITDA Variance for any fiscal year of the Borrower not required
to be applied to the Term Loans pursuant to Section 2.16(d) or not applied to consummate Permitted
Open Market Purchases or to repay the Tranche A Term Loans for purposes other than the general
corporate purposes of the Group Members, provided that in any fiscal year of the Borrower where the
Tranche B Term Loans are prepaid from Adjusted Excess Cash Flow
pursuant to Section 2.16(c), and so long as no Default or Event of Default has occurred and is continuing, any Group
Member may use such 33 1/3% of Adjusted Positive EBITDA Variance to make, in such year or any other
year thereafter, Restricted Payments or Investments not otherwise permitted under Sections
6.06 or 6.08, respectively.



ARTICLE VII

EVENTS OF DEFAULT




     Section 7.01. Events of Default. In the case of the happening of any of the following events
and the continuance thereof beyond the applicable period of grace (if any) set forth below (each,
an “Event of Default”):



     (a) any representation or warranty made by the Borrower in this Agreement or in any Loan
Document or any statement or representation made in any report, financial statement, certificate or
other document furnished by the Borrower to the Lenders under or in connection



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with this Agreement,
shall prove to have been false or misleading in any material respect when made or delivered; or



     (b) the Borrower shall fail to pay any principal of any Loan or Swing Line Loan when due in
accordance with the terms hereof; or the Borrower shall fail to pay any interest on any Loan or
Swing Line Loan, or any other amount payable hereunder or under any other Loan Document, within
three Business Days after any such interest or other amount becomes due in accordance with the
terms hereof; or



     (c) any Loan Party shall default in the observance or performance of any agreement contained
in clause (i) or (ii) of Section 5.04(a) (with respect to the Borrower only), Section 5.07(a) or
Article VI of this Agreement; or



     (d) any Loan Party shall default in the observance or performance of (i) Section 5.01 and such
default shall continue unremedied for a period of sixty (60) days after notice to the Borrower from
the Administrative Agent, or (ii) any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this Section 7.01), and such
default shall continue unremedied for a period of 30 days after notice to the Borrower from the
Administrative Agent or the Required Lenders; or



     (e) any Group Member shall (i) default in making any payment of any principal of or interest
on any Indebtedness (including any Guarantee Obligation, but excluding the Loans and Intercompany
Loans) when the same shall become due (giving effect to the applicable period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was created); or (ii) default
in the observance or performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto,
or any other event shall occur or condition exist, the effect of which default or other event or
condition 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 (in the case of any such
Indebtedness constituting a Guarantee Obligation) to become payable and, if any such default is
under any Indebtedness of any Foreign Subsidiary, such default shall continued unremedied or
unwaived for a period of ten days; provided that a default, event or condition described in clause
(i) or (ii) of this paragraph (e) shall not at any time constitute an Event of Default unless, at
such time, one or more defaults, events or conditions of the type described in clauses (i) or (ii)
of this paragraph (e) shall have occurred and be continuing with respect to Indebtedness the
outstanding principal amount of which exceeds in the aggregate $125,000,000; or



     (f) (i) one or more Group Members having assets with an aggregate book value of at least 10%
of the book value of the consolidated assets of the Group Members, taken as a whole (as set forth
in the most recent audited consolidated financial statements of the Borrower that have been
delivered pursuant to Section 5.01(a) or, until any audited financial statements have been
delivered pursuant to such Section, the Pro Forma Balance Sheet) 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



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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, bankruptcy trustee, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its assets, or such Group Member or Group
Members shall make a general assignment for the benefit of its creditors; or (ii) there shall be
commenced against such Group Member or Group Members 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 sixty (60) days; or (iii) there shall be commenced against such Group Member or Group Members
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) such Group Member or Group
Members 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) such Group
Member or Group Members shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; provided that no Event of Default shall have
occurred under this paragraph as a result of any U.K. Subsidiary being in U.K. Administration and
being a debtor in a case pending under Chapter 11 of the Bankruptcy Code, so long as the U.K.
Administration and such case were each in effect on the Closing Date; 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 any Group Member 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, or (v) any Group Member or any Commonly Controlled
Entity shall, or in the reasonable opinion of the Required Lenders is likely to, incur any material
liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan; and in each case in clauses (i) through (v) above, such event or condition,
together with all other such events or conditions, if any, could, in the reasonable judgment of the
Required Lenders, reasonably be expected to have a Material Adverse Effect; or



     (h) one or more judgments or decrees (excluding any judgment or decree in connection with the
implementation of any Company Voluntary Arrangement or the Reorganization Plan) shall be entered
against (i) any Loan Party involving in the aggregate a liability (not paid or fully covered by
insurance as to which the relevant insurance company has acknowledged coverage) of $75,000,000 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 (ii) any Group Member that is not a Loan Party which, individually or in the aggregate
for all such Group Members, could reasonably be expected to have a Material Adverse Effect; or



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     (i) (i) any of the Security Documents or the Intercreditor Agreement shall cease, for any
reason, to be in full force and effect, or any Loan Party or any Affiliate of any Loan Party or any
party to the Intercreditor Agreement shall so assert, or (ii) any Lien securing the Obligations
created by any of the Security Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or



     (j) the Guarantee Agreement shall cease, for any reason, to be in full force and effect or any
Loan Party or any Affiliate of any Loan Party shall so assert; or



     (k) a Change of Control shall occur; or



     (l) the Senior Subordinated Notes or any Permitted Subordinated Indebtedness, or the
guarantees of the Senior Subordinated Indebtedness or any Permitted Subordinated Indebtedness shall
cease, for any reason, to be validly subordinated to the Obligations, the obligations of the
Guarantors under any Guarantee or the Liens securing the Obligations granted pursuant to the
Security Documents, as the case may be; or



     (m) the Borrower shall fail to deliver a certified Borrowing Base Certificate when due and
such default shall continue unremedied for more than five (5) Business Days (it being understood
that an Event of Default under this clause (m) shall be cured upon delivery of the certified
Borrowing Base Certificate that was failed to be delivered or a certified Borrowing Base
Certificate that sets forth the Borrowing Base as of a date more recent that that required by the
Borrowing Base Certificate that was failed to be delivered);



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 Loans and Swing Line
Loans (in each case with accrued interest thereon) and all other amounts owing under this Agreement
and the other Loan Documents shall immediately become due and payable, and (B) if such event is any
other Event of Default, 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, terminate the Commitments and declare the Loans and Swing Line Loans (in each case with
accrued interest thereon) and all other amounts owing under this Agreement and the other Loan
Documents to be due and payable forthwith, whereupon the same shall immediately become due and
payable. Except as expressly provided above in this Section 7.01, presentment, demand, protest and
all other notices of any kind are hereby expressly waived by the Borrower.



ARTICLE VIII

THE ADMINISTRATIVE AGENT




     Section 8.01. Administration by Administrative Agent. The general administration of the Loan
Documents shall be performed by the Administrative Agent. Each Lender hereby irrevocably
authorizes the Administrative Agent, at its discretion, to take or refrain from taking such actions
as agent on its behalf and to exercise or refrain from exercising such powers under
the Loan Documents as are delegated by the terms hereof or thereof, as appropriate, together
with all powers reasonably incidental thereto (including the release of Collateral in connection
with any transaction that is expressly permitted by the Loan Documents). The Administrative Agent



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shall have no duties or responsibilities except as set forth in this Agreement and the remaining
Loan Documents.



     Section 8.02. Advances and Payments. (a) On the date of each Loan of any Class, the
Administrative Agent shall be authorized (but not obligated) to advance, for the account of each of
the Lenders of such Class, the amount of the Loan to be made by such Lender in accordance with its
Commitment hereunder. Should the Administrative Agent do so, each of the Lenders agrees forthwith
to reimburse the Administrative Agent in immediately available funds for the amount so advanced on
its behalf by the Administrative Agent, together with interest at the Federal Funds Rate if not so
reimbursed on the date due from and including such date but not including the date of
reimbursement.



     (b) Any amounts received by the Administrative Agent in connection with this Agreement (other
than amounts to which the Administrative Agent is entitled pursuant to Sections 2.22, 8.06, 9.05
and 9.06), the application of which is not otherwise provided for in this Agreement, shall be
applied, first, in accordance with each Lender’s applicable Class Percentage to pay ratably accrued
but unpaid Ticking Fees, Commitment Fees and Letter of Credit Fees, and second, ratably, (x) in
accordance with each Revolving Credit Lender’s Class Percentage to pay accrued but unpaid interest
and the principal balance outstanding of all Revolving Credit Loans and all unreimbursed Letter of
Credit drawings, (y) in accordance with each Tranche B Lender’s Class Percentage to pay accrued but
unpaid interest and the principal balance outstanding of all Tranche B Term Loans and (z) in
accordance with each Tranche C Lender’s Class Percentage to pay accrued but unpaid interest and the
principal balance outstanding of all Tranche C Term Loans. All amounts to be paid to a Lender by
the Administrative Agent shall be credited to that Lender, after collection by the Administrative
Agent, in immediately available funds either by wire transfer or deposit in that Lender’s
correspondent account with the Administrative Agent, as such Lender and the Administrative Agent
shall from time to time agree.



     Section 8.03. Sharing of Setoffs. Each Lender agrees that if it shall, through the exercise
of a right of banker’s lien, setoff or counterclaim against the Borrower, including, but not
limited to, a secured claim or other security or interest arising from, or in lieu of, such secured
claim and received by such Lender under any applicable bankruptcy, insolvency or other similar law
or otherwise, obtain payment in respect of its Loans of any Class as a result of which the unpaid
portion of its Loans of such Class is proportionately less than the unpaid portion of the Loans of
such Class of any other Lender, (a) such Lender shall promptly purchase at par (and shall be deemed
to have thereupon purchased) from such other Lender a participation in the Loans of such Class of
such other Lender, so that the aggregate unpaid principal amount of each Lender’s Loans of such
Class and such Lender’s participation in Loans of such Class of the other Lenders shall be in the
same proportion to the aggregate unpaid principal amount of all Loans of such Class then
outstanding as the principal amount of its Loans of such Class prior to the obtaining of such
payment was to the principal amount of all Loans of such Class outstanding prior to the obtaining
of such payment and (b) such other adjustments shall be made from time to time as shall be
equitable to ensure that the Lenders share such payment pro-rata, provided that if any such
non-pro-rata payment is thereafter recovered or otherwise set aside, such purchase of
participations
shall be rescinded (without interest). The Borrower expressly consents to the foregoing
arrangements and agrees that any Lender holding (or deemed to be holding) a participation in a Loan
may exercise any and all rights of banker’s lien, setoff (in each case, subject to the same



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notice requirements as pertain to clause (iv) of the remedial provisions of Section 7.01) or counterclaim
with respect to any and all moneys owing by the Borrower to such Lender as fully as if such Lender
was the original obligee thereon, in the amount of such participation.



     Section 8.04. Agreement of Required Lenders. Upon any occasion requiring or permitting an
approval, consent, waiver, election or other action on the part of the Required Lenders, action
shall be taken by the Administrative Agent for and on behalf or for the benefit of all Lenders upon
the direction of the Required Lenders, and any such action shall be binding on all Lenders. No
amendment, modification, consent, or waiver shall be effective except in accordance with the
provisions of Section 9.10.



     Section 8.05. Liability of Administrative Agent. (a) The Administrative Agent, when acting
on behalf of the Lenders, may execute any of its respective duties under this Agreement by or
through any of its respective officers, agents, and employees, and neither the Administrative Agent
nor its directors, officers, agents, employees or Affiliates shall be liable to the Lenders or any
of them for any action taken or omitted to be taken in good faith, or be responsible to the Lenders
or to any of them for the consequences of any oversight or error of judgment, or for any loss,
unless the same shall happen through its gross negligence or willful misconduct. The
Administrative Agent and its respective directors, officers, agents, employees and Affiliates shall
in no event be liable to the Lenders or to any of them for any action taken or omitted to be taken
by them pursuant to instructions received by them from the Required Lenders or in reliance upon the
advice of counsel selected by the Administrative Agent. Without limiting the foregoing, neither
the Administrative Agent, nor any of its respective directors, officers, employees, agents or
Affiliates shall be responsible to any Lender for the due execution, validity, genuineness,
effectiveness, sufficiency, or enforceability of, or for any statement, warranty, or representation
in, this Agreement, any Loan Document or any related agreement, document or order, or shall be
required to ascertain or to make any inquiry concerning the performance or observance by the
Borrower of any of the terms, conditions, covenants, or agreements of this Agreement or any of the
Loan Documents.



     (b) Neither the Administrative Agent nor any of its respective directors, officers, employees,
agents or Affiliates shall have any responsibility to the Borrower on account of the failure or
delay in performance or breach by any Lender or by the Borrower of any of their respective
obligations under this Agreement or any of the Loan Documents or in connection herewith or
therewith.



     (c) The Administrative Agent, in its capacity as Administrative Agent hereunder, shall be
entitled to rely on any communication, instrument, or document reasonably believed by it to be
genuine or correct and to have been signed or sent by a person or persons believed by it to be the
proper person or persons, and the Administrative Agent shall be entitled to rely on advice of legal
counsel, independent public accountants, and other professional advisers and experts selected by
it.



     Section 8.06. Reimbursement and Indemnification. Each Lender agrees (i) to reimburse the
Administrative Agent for such Lender’s Class Percentage of (x) any expenses and fees incurred for
the benefit of the Lenders under this Agreement and any of the Loan Documents, including, without
limitation, counsel fees and compensation of agents and employees for



119









 







services rendered on behalf of the Lenders, and any other expense incurred in connection with the operations or enforcement
thereof not reimbursed by the Borrower and (y) any expenses of the Administrative Agent incurred
for the benefit of the Lenders that the Borrower has agreed to reimburse pursuant to Section 9.05
and has failed to so reimburse and (ii) to indemnify and hold harmless the Administrative Agent and
any of its directors, officers, employees, agents or Affiliates, on demand, in the amount of its
proportionate share, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against it or any of them in any way
relating to or arising out of this Agreement or any of the Loan Documents or any action taken or
omitted by it or any of them under this Agreement or any of the Loan Documents to the extent not
reimbursed by the Borrower (except such as shall result from their respective gross negligence or
willful misconduct).



     Section 8.07. Rights of Administrative Agent. It is understood and agreed that CUSA shall
have the same rights and powers hereunder (including the right to give such instructions) as the
other Lenders and may exercise such rights and powers, as well as its rights and powers under other
agreements and instruments to which it is or may be party, and engage in other transactions with
the Borrower, as though it were not the Administrative Agent of the Lenders under this Agreement.



     Section 8.08. Independent Lenders. Each Lender acknowledges that it has decided to enter into
this Agreement and to make the Loans hereunder based on its own analysis of the transactions
contemplated hereby and of the creditworthiness of the Borrower and agrees that the Administrative
Agent shall bear no responsibility therefor.



     Section 8.09. Notice of Transfer. The Administrative Agent may deem and treat a Lender party
to this Agreement as the owner of such Lender’s portion of the Loans for all purposes, unless and
until a written notice of the assignment or transfer thereof executed by such Lender shall have
been received by the Administrative Agent.



     Section 8.10. Successor Administrative Agent. The Administrative Agent may resign at any time
by giving written notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Administrative Agent, which shall be
reasonably satisfactory to the Borrower. If no successor Administrative Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment, within thirty (30) days
after the retiring Administrative Agent’s giving of notice of resignation, the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which
shall be a commercial bank organized under the laws of the United States or of any State thereof
and having a combined capital and surplus of a least $100,000,000, and which shall be reasonably
satisfactory to the Borrower. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement. After any
retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of
this Article VIII 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. Upon the effectiveness of the retirement
of




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any Administrative Agent, the retiring Administrative Agent may, at its option, (i) transfer
the management of the Term Letter of Credit Account to the successor Administrative Agent or (ii)
close the Term Letter of Credit Account upon the establishment of a new Term Letter of Credit
Account with the successor Administrative Agent (and the successor Administrative Agent shall
establish such new account) and transfer all amounts on deposit in the Term Letter of Credit
Account to such new account.




ARTICLE IX



MISCELLANEOUS




     Section 9.01. Notices. Notices and other communications provided for herein shall be in
writing (including telegraphic, telex, facsimile or cable communication) and shall be mailed,
telegraphed, telexed, transmitted, cabled or delivered to the Borrower at c/o Federal-Mogul
Corporation, World Headquarters, 26555 Northwestern Highway, Southfield, Michigan 48033, Attention:
David A. Bozynski, Telephone: (248) 354-9469 and Telecopy: (248) 354-6746, with copies to Robert L.
Katz, Telephone: (248) 354-9924 and Telecopy: (248) 354-2659, and to any Lender at its address set
forth on Annex A-1, A-2 or A-3, as applicable, and to the Administrative Agent or the Swing Line
Lender at its address set forth on the signature pages hereof, or such other address as such party
may from time to time designate by giving written notice to the other parties hereunder. All
notices and other communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the fifth Business Day after the date when
sent by registered or certified mail, postage prepaid, return receipt requested, if by mail; or
when delivered to the telegraph company, charges prepaid, if by telegram; or when receipt is
acknowledged, if by any telegraphic communications or facsimile equipment of the sender; in each
case addressed to such party as provided in this Section 9.01 or in accordance with the latest
unrevoked written direction from such party; provided, however, that in the case of notices to the
Administrative Agent and the Swing Line Lender, notices pursuant to the preceding sentence with
respect to change of address and pursuant to Article II shall be effective only when received by
the Administrative Agent or the Swing Line Lender, as applicable.



     Section 9.02. Survival of Agreement, Representations and Warranties, etc. All warranties,
representations and covenants made by the Borrower herein or in any certificate or other instrument
delivered by it or on its behalf in connection with this Agreement shall be considered to have been
relied upon by the Lenders and shall survive the making of the Loans herein contemplated regardless
of any investigation made by any Lender or on its behalf and shall continue in full force and
effect so long as any amount due or to become due hereunder is outstanding and unpaid and so long
as the Commitments have not been terminated. All statements in any such certificate or other
instrument shall constitute representations and warranties by the Borrower hereunder with respect
to the Borrower.



     Section 9.03. Successors and Assigns. (a) This Agreement shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent and the Lenders and their respective
successors and assigns. The Borrower may neither assign nor transfer any of its rights or
obligations hereunder without the prior written consent of all of the Lenders. Each Lender may
sell participations to any Person in all or part of any Loan, or all or part of its Commitment, in
which event, without limiting the foregoing, the provisions of Section 2.18 shall inure to the



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benefit of each purchaser of a participation (provided that such participant shall look solely
to the seller of such participation for such benefits and the Borrower’s liability, if any, under
Sections 2.18 and 2.21 shall not be increased as a result of the sale of any such participation)
and the pro rata treatment of payments, as described in Section 2.20, shall be determined as if
such Lender had not sold such participation. In the event any Lender shall sell any participation,
such Lender shall retain the sole right and responsibility to enforce the obligations of the
Borrower relating to the Loans, including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement (provided that such Lender may grant its
participant the right to consent to such Lender’s execution of amendments, modifications or waivers
which (i) reduce any Fees payable hereunder to the Lenders, (ii) reduce the amount of any scheduled
principal payment on any Loan or reduce the principal amount of any Loan or the rate of interest
payable hereunder or (iii) extend the maturity of the Borrower’s obligations hereunder). The sale
of any such participation shall not alter the rights and obligations of the Lender selling such
participation hereunder with respect to the Borrower.




     (b) Each Lender may assign to one or more Lenders or Eligible Assignees all or a portion of
its interests, rights and obligations under this Agreement, provided, however, that (i) with
respect to any assignment of a Term Loan or a Term Loan Commitment to any Person other than a
Pre-Approved Assignee, the Administrative Agent and, so long as no Event of Default or event which
upon notice or lapse of time or both would constitute an Event of Default shall have occurred and
be continuing, the Borrower, must give their respective prior written consent to such assignment,
which consent will not be unreasonably withheld (with a failure by the Borrower to respond within
15 days to a request for such consent being deemed consent by it), (ii) with respect to any
assignment of a Revolving Credit Commitment and corresponding Revolving Credit Loans, R/C Letter of
Credit Outstandings and participations in Swing Line Loans, other than in the case of an assignment
to a Pre-Approved Assignee, the Administrative Agent, the Fronting Bank and, so long as no Event of
Default or event which upon notice or lapse of time or both would constitute an Event of Default
shall have occurred and be continuing, the Borrower, must give their respective prior written
consent to such assignment, which consent will not be unreasonably withheld, (iii) other than in
the case of an assignment to a Pre-Approved Assignee, immediately after giving effect to any such
assignment, (x) the aggregate amount of the Revolving Credit Commitment or the aggregate principal
amount of the Term Loans of either Class of the assigning Lender (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent)
shall, unless otherwise agreed to in writing by the Borrower and the Administrative Agent, be $0 or
at least $1,000,000 and (y) the aggregate amount of the Revolving Credit Commitment or the
aggregate principal amount of the Term Loans of either Class of the assignee Lender (determined as
of the date the Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall, unless otherwise agreed to in writing by the Borrower and the
Administrative Agent, be at least $1,000,000, (iv) any assignment by any Revolving Credit Lender of
all or a portion of its Revolving Credit Commitment shall include an assignment of all or the same
portion of the Revolving Loans, the R/C Letter of Credit Outstandings and the participations in
Swing Line Loans then held by such Revolving Credit Lender (and vice versa), and (v) the parties to
each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register (as defined below), an Assignment and Acceptance with blanks
appropriately completed, together with a processing and recordation fee of $3,500 (for which the
Borrower shall have no liability), provided that, in the case of multiple



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assignments by any Lender that occur substantially contemporaneously, only one such processing
and recordation fee shall be payable to the Administrative Agent. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be within ten (10) Business Days after the execution thereof
(unless otherwise agreed to in writing by the Administrative Agent), (A) 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 and (B) the Lender 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 or the remaining portion of an
assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a
party hereto).




     (c) By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder
and the assignee thereunder confirm to and agree with each other and the other parties hereto as
follows: (i) other than the representation and warranty that it is the legal and beneficial owner
of the interest being assigned thereby free and clear of any adverse claim, such Lender assignor
makes no representation or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or any of the other Loan
Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any of the other Loan Documents; (ii) such Lender assignor makes no
representation or warranty and assumes no responsibility with respect to the financial condition of
the Borrower or the performance or observance by the Borrower of any of their obligations under
this Agreement or any of the other Loan Documents or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement and the
other Loan Documents, together with copies of the financial statements referred to in Section 3.01
and such other documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Administrative Agent, such Lender assignor 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 decisions in taking or not taking action under this Agreement; (v)
such assignee appoints and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the Administrative
Agent by the terms hereof, together with such powers as are reasonably incidental thereto; and (vi)
such assignee agrees that it will perform in accordance with their terms all obligations that by
the terms of this Agreement are required to be performed by it as a Lender.



     (d) The Administrative Agent shall maintain at its office a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and addresses of the
Lenders, the Commitments of the Lenders, the principal amount of the Loans owing to each Lender and
the Letter of Credit Outstandings and participations in Swing Line Loans held by each Lender, in
each case from time to time (the “Register”). The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative Agent and the Lenders shall
treat each Person the name of which is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior notice.



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     (e) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and the
assignee thereunder together with the fee payable in respect thereto, the Administrative Agent
shall, if such Assignment and Acceptance has been completed with blanks appropriately filled and
consented to by the Administrative Agent and the Fronting Bank (to the extent such consent is
required hereunder), (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt written notice thereof to the Borrower
(together with a copy thereof). No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.



     (f) Any Lender may, in connection with any assignment or participation or proposed assignment
or participation pursuant to this Section 9.03, disclose to the assignee or participant or proposed
assignee or participant, any information relating to the Borrower furnished to such Lender by or on
behalf of the Borrower; provided that prior to any such disclosure, each such assignee or
participant or proposed assignee or participant shall agree in writing to be bound by
confidentiality provisions not less restrictive than those contained in Section 9.04.



     (g) The Borrower hereby agrees to actively assist and cooperate with the Administrative Agent
in the Administrative Agent’s efforts to sell participations herein (as described in Section
9.03(a)) and assign to one or more Lenders or Eligible Assignees a portion of its interests, rights
and obligations under this Agreement (as set forth in Section 9.03(b)).



     (h) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any
pledge or assignment of a security interest, provided that no such pledge or assignment of a
security interest shall release a Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.



     Section 9.04. Confidentiality. Each Lender agrees to keep any non-public information
delivered or made available by the Borrower to it confidential from anyone other than persons
employed or retained by such Lender who are or are expected to become engaged in evaluating,
approving, structuring or administering the Loans; provided that nothing herein shall prevent any
Lender from disclosing such information (i) to any of its officers, directors, partners, members or
Affiliates or to any other Lender, provided such officer, director, partner, member or Affiliate
agrees to keep such information confidential in a manner not less restrictive than is required by
the Lenders hereunder, (ii) upon the order of any court or administrative agency, (iii) upon the
request or demand of any regulatory agency or authority or by the National Association of Insurance
Commissioners, (iv) which has been publicly disclosed other than as a result of a disclosure by the
Administrative Agent or any Lender which is not permitted by this Agreement, (v) in connection with
any litigation to which the Administrative Agent, any Lender, or their respective Affiliates may be
a party to the extent reasonably required, (vi) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (vii) to such Lender’s legal counsel and independent
auditors, (viii) to any actual or proposed participant or assignee of all or part of its rights
hereunder subject to the proviso in Section 9.03(f) and (ix) to any direct or indirect contractual
counterparties (or the professional advisors thereto) to any swap or derivative transaction
relating to the Borrower and its obligations (provided such party agrees



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to be bound by confidentiality provisions no less restrictive than those contained in Section
9.04). Each Lender shall notify the Borrower of any required disclosure under clause (ii) of this
Section; provided, however, that the failure of any such Lender to provide such notification shall
not limit, alter or otherwise affect any of the Borrower’s obligations under this Agreement.




     Section 9.05. Expenses. The Borrower agrees to pay all reasonable expenses incurred by the
Administrative Agent and the Arrangers (including, without limitation, the reasonable fees and
disbursements of Davis Polk & Wardwell, counsel for the Arrangers and the Administrative Agent, any
other counsel that the Administrative Agent shall retain and any internal or third-party
appraisers, consultants and auditors advising the Administrative Agent and the Arrangers and their
counsel) in connection with the preparation, execution, delivery and administration of this
Agreement and the other Loan Documents, the making of the Loans and the issuance of the Letters of
Credit, the perfection of the Liens contemplated hereby, the syndication of the transactions
contemplated hereby, the costs, fees and expenses of the Administrative Agent and CGMI in
connection with monthly and other periodic field audits, monitoring of assets (including reasonable
and customary internal collateral monitoring fees) in accordance with Section 5.06 and publicity
expenses, and, following the occurrence of an Event of Default, all expenses incurred by the
Lenders and the Administrative Agent in the enforcement or protection of the rights of any one or
more of the Lenders or the Administrative Agent in connection with this Agreement or the other Loan
Documents, including but not limited to the reasonable fees and disbursements of any counsel for
the Lenders or the Administrative Agent. Such payments by the Borrower shall be made upon delivery
of a statement setting forth such costs and expenses. The obligations of the Borrower under this
Section shall survive the termination of this Agreement and/or the payment of the Loans.



     Section 9.06. Indemnity. The Borrower agrees to indemnify and hold harmless the
Administrative Agent, the Arrangers and the Lenders and their directors, officers, partners,
members, employees, trustees, advisors, agents and Affiliates (each an “Indemnified Party”) from
and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including 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 any Group Member or any property at any time owned, leased, or
in any way used by any Group Member or any entity for which any of them is alleged to be
responsible, and the reasonable fees and expenses of legal counsel in connection with claims,
actions or proceedings by any Indemnified Party against any Loan Party under any Loan Document (all
the foregoing, collectively, the “Indemnified Liabilities”), provided that the Borrower shall have
no obligation hereunder to any Indemnified Party with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities to have resulted from the gross negligence or willful
misconduct of such Indemnified Party. Without limiting the foregoing, and to the extent permitted
by applicable law, the Borrower agrees not to assert and to cause its Subsidiaries not to assert,
and hereby waives and agrees to cause its Subsidiaries to waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or related to
Environmental Laws, that any of them might have by statute or otherwise against any Indemnified
Party. All amounts due under this Section 9.06 shall be



125









 




payable not later than ten (10) days after written demand therefor. Statements payable by the
Borrower pursuant to this Section 9.06 shall be submitted to the Borrower at the address of the
Borrower set forth in Section 9.01, or to such other Person or address as may be hereafter
designated by the Borrower in a written notice to the Administrative Agent. The agreements in this
Section 9.06 shall survive repayment of the Loans and all other amounts payable hereunder.




     Section 9.07. Choice of Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL IN ALL
RESPECTS BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE.



     Section 9.08. No Waiver. No failure on the part of the Administrative Agent or any of the
Lenders to exercise, and no delay in exercising, any right, power or remedy hereunder or any of the
other Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive of
any other remedies provided by law.



     Section 9.09. Extension of Maturity. Should any payment of principal of or interest or any
other amount due hereunder become due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day and, in the case of principal,
interest shall be payable thereon at the rate herein specified during such extension.



     Section 9.10. Amendments, etc. No modification, amendment or waiver of any provision of any
Loan Document, and no consent to any departure by the Borrower or Guarantors therefrom, shall in
any event be effective unless the same shall be in writing and signed by the Required Lenders or,
in the case of any Loan Document other than this Agreement, signed by the Administrative Agent (or
the Collateral Trustee at the instruction or with the consent of the Administrative Agent), with
the written consent, or at the written direction, of the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for which given;
provided, however, that in addition to the consent of the Required Lenders, no such modification or
amendment shall without the written consent (or the written direction) of (A) the Lender affected
thereby (i) increase the Commitment of a Lender (it being understood that a waiver of an Event of
Default shall not constitute an increase in the Commitment of a Lender), (ii) reduce the principal
amount of any Loan (or any unreimbursed Letter of Credit) or the rate of interest payable thereon,
or extend any scheduled date for the payment of principal pursuant to Section 2.09(a), or extend
any date for the payment of interest or Fees hereunder, or reduce any Fees payable hereunder or
extend the Tranche B Maturity Date, the Tranche C Maturity Date or the Revolving Credit Maturity
Date; provided, however, that, notwithstanding the foregoing, only the consent of the Required
Lenders shall be necessary in order to waive the application of the default rate of interest
imposed pursuant to Section 2.11 hereof notwithstanding that any such amendment may have the effect
of reducing the amount of interest or fees payable hereunder or (iii) change the order of
application of proceeds set forth in Section 2.20(b) or Section 2.20(c) or, solely to the extent
used to determine such order of application of proceeds, any defined terms used in such Sections,
(B) all of the Lenders (i) amend or modify any provision of the Loan Documents which provides for
the unanimous consent or approval of all the Lenders, (ii) amend this Section 9.10 (other than
clauses (C), (D), (E), (F) or



126









 




(G)) or the definition of Required Lenders, or (iii) release all or substantially all of the
Collateral from the Liens created under the Security Documents or all or substantially all of the
Guarantors in their respective capacities as guarantors of the Obligations under the Guarantee
Agreements, (C) the Required Revolving Credit Lenders (i) waive the requirement set forth in
Section 4.02(e) with respect to any Revolving Credit Borrowing or the issuance, extension or
renewal of any R/C Letter of Credit, (ii) release any Borrowing Base Collateral (other than all or
substantially all of the Collateral) from the Liens created under the Security Documents or (iii)
amend Section 2.15 (or any definition to the extent used in such Section), (D) the Super-majority
Revolving Credit Lenders, (i) alter the eligibility standards used in determining the Borrowing
Base in a manner which would increase the amount of the Borrowing Base or (ii) increase the advance
rates in the calculation of the Borrowing Base, (E) all of the Revolving Credit Lenders, amend or
modify clauses (C), (D) or (E) of this Section 9.10 or the definitions of Required Revolving Credit
Lenders or Super-majority Revolving Credit Lenders or any other provision of the Loan Documents
which provides for the unanimous consent or approval of the Revolving Credit Lenders, (F) the
Required Term Lenders, (i) amend Section 2.04 (it being understood that any such modification or
amendment of Section 2.04 that is of the type described in clauses (i), (ii) or (iii) of clause (A)
above shall be subject to the provisions of such clause) to the extent it affects the Term Loan
Lenders, (ii) release any PP&E Collateral (other than all or substantially all of the PP&E
Collateral) from the Liens created under the Security Documents or (iii) amend Section 2.16 (or any
definition to the extent used in such Section), and (G) all of the Term Loan Lenders, amend or
modify clauses (F) or (G) of this Section 9.10 or the definition of Required Term Lenders or any
other provision of the Loan Documents which provides for the unanimous consent or approval of the
Term Loan Lenders or (ii) release all or substantially all of the PP&E Collateral from the Liens
created under the Security Documents (and, if the PP&E Collateral shall constitute all or
substantially all of the Collateral, the provisions of clause (B)(iii) shall also apply). No such
modification, amendment or waiver or consent may adversely affect the rights and obligations of
(i) the Administrative Agent, (ii) the Fronting Bank or (iii) the Swing Line Lender, in each case
without its prior written consent. The consent of no Lender shall be required (i) with respect to
any action described in Section 6.3 of the Collateral Trust Agreement (subject to the proviso
contained therein), (ii) to add the obligations of the Loan Parties with respect to Indebtedness
permitted under Section 6.02(q) or Section 6.02(v) as additional “Third Priority Obligations” under
the Security Documents and the Intercreditor Agreement or (iii) to add the obligations of the Loan
Parties with respect to Indebtedness permitted under Section 6.02(y) that is secured by (x) Liens
granted pursuant to Section 6.03(z)(i) as “Additional First Priority Obligations” or (y) Liens
granted pursuant to Section 6.03(z)(ii) as “Additional Junior Priority Obligations”, in each case
under the Security Documents and the Intercreditor Agreement (and each Lender hereby authorizes the
Administrative Agent to enter into, or to instruct the Collateral Trustee to enter into, any
amendments or modifications of the Security Documents or the Intercreditor Agreement, or to
 enter
into additional intercreditor agreements on terms substantially identical to those contained in the
Intercreditor Agreement, to the extent necessary or desirable to give effect to any such
addition). Each assignee shall be bound by any modification, amendment, waiver, or consent
authorized as provided herein, and any consent by a Lender shall bind any Person subsequently
acquiring an interest in the Loans held by such Lender. No amendment to this Agreement shall be
effective against the Borrower unless in writing and signed by the Borrower.




     In addition, notwithstanding the foregoing, this Agreement may be amended with the written
consent of the Administrative Agent, the Borrower and the Lenders providing the



127









 




relevant Replacement Revolving Credit Facility (as defined below) to permit the refinancing of
all Revolving Credit Commitments with a replacement facility under this Agreement, or to permit the
extension of the Revolving Credit Maturity Date (each of the foregoing, a “Replacement Revolving
Credit Facility”); provided that (a) the aggregate amount of commitments under such Replacement
Revolving Credit Commitments shall not exceed the aggregate amount of the replaced Revolving Credit
Commitments, (b) the maturity date of such Replacement Revolving Credit Facility shall not be
earlier than the Revolving Credit Maturity Date at the time of such replacement and (c) the terms
of such Replacement Revolving Credit Facility shall not adversely affect the Term Loans (it being
agreed that the following terms of a Replacement Revolving Credit Facility shall not be deemed to
adversely affect the Term Loans: (i) a maturity date that complies with clause (b) and (ii) pricing
that is in excess of the pricing in effect with respect to the Revolving Credit Commitments
immediately prior to the effectiveness of such Replacement Revolving Credit Facility). The
Administrative Agent shall not unreasonably withhold its consent to a Replacement Revolving Credit
Facility. For the avoidance of doubt, a Replacement Revolving Credit Facility shall not require
the consent of any Person other than the Administrative Agent, the Borrower and the Lenders
providing such Replacement Revolving Credit Facility.




     Section 9.11. Severability. Any provision of this Agreement which 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.



     Section 9.12. Headings. Section headings used herein are for convenience only and are not to
affect the construction of or be taken into consideration in interpreting this Agreement.



     Section 9.13. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but all of which taken together shall
constitute one and the same instrument.



     Section 9.14. Prior Agreements. This Agreement represents the entire agreement of the parties
with regard to the subject matter hereof and the terms of any letters and other documentation
entered into between the Borrower and any Lender or the Administrative Agent prior to the execution
of this Agreement which relate to Loans to be made hereunder shall be replaced by the terms of this
Agreement (except as otherwise expressly provided herein with respect to the Fee Letter).



     Section 9.15. Further Assurances. Whenever and so often as reasonably requested by the
Administrative Agent, the Borrower will promptly execute and deliver or cause to be executed and
delivered all such other and further instruments, documents or assurances, and promptly do or cause
to be done all such other and further things as may be necessary and reasonably required in order
to further and more fully vest in the Administrative Agent all rights, interests, powers, benefits,
privileges and advantages conferred or intended to be conferred by this Agreement and the other
Loan Documents.




128












 





     Section 9.16. Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY OF THE
LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.



     Section 9.17. USA Patriot Act. Each 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 “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 to identify the Borrower in accordance with the Act.



[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]





129









 








     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the day and the year first written.



	 	 	 	 	 
	 	BORROWER:



FEDERAL-MOGUL CORPORATION

 	 
	 	By:  	/s/ David A. Bozynski
 	 
	 	 	Name:  	David A. Bozynski 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	LENDERS:



CITICORP USA, INC., Individually and

   as Administrative Agent

 	 
	 	By:  	/s/ Dale R. Goncher
 	 
	 	 	Name:  	Dale R. Goncher 	 
	 	 	Title:  	Director 	 
	 
	 	CITIBANK, N.A., Individually and as

   Fronting Bank and Existing Fronting

   Bank

 	 
	 	By:  	/s/ Shane V. Azzara
 	 
	 	 	Name:  	Shane V. Azzara 	 
	 	 	Title:  	Director 	 
	 
	 	CITICORP USA, INC., as Revolving

   Credit Lender

 	 
	 	By:  	/s/ Dale R. Goncher
 	 
	 	 	Name:  	Dale R. Goncher 	 
	 	 	Title:  	Director 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	CITICORP USA, INC., as Tranche B

   Lender

 	 
	 	By:  	/s/ Dale R. Goncher
 	 
	 	 	Name:  	Dale R. Goncher 	 
	 	 	Title:  	Director 	 
	 
	 	CITICORP USA, INC., as Tranche C

   Lender

 	 
	 	By:  	/s/ Dale R. Goncher
 	 
	 	 	Name:  	Dale R. Goncher 	 
	 	 	Title:  	Director 	 
	 
	 	JPMORGAN CHASE BANK, N.A., 

Individually and as Existing Fronting

Bank

 	 
	 	By:  	/s/ Marian N. Schulman
 	 
	 	 	Name:  	Marian N. Schulman 	 
	 	 	Title:  	Managing Director 	 
	 
	 	JPMORGAN CHASE BANK, N.A., as

Revolving Credit Lender

 	 
	 	By:  	/s/ Marian N. Schulman
 	 
	 	 	Name:  	Marian N. Schulman 	 
	 	 	Title:  	Managing Director 	 
	 
	 	JPMORGAN CHASE BANK, N.A., as 

Tranche B Lender

 	 
	 	By:  	/s/ Marian N. Schulman
 	 
	 	 	Name:  	Marian N. Schulman 	 
	 	 	Title:  	Managing Director 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as 

Tranche C Lender

 	 
	 	By:  	/s/ Marian N. Schulman
 	 
	 	 	Name:  	Marian N. Schulman 	 
	 	 	Title:  	Managing Director 	 
	 
	 	WELLS FARGO FOOTHILL, LLC, as 

Revolving Credit Lender

 	 
	 	By:  	/s/ Dennis King
 	 
	 	 	Name:  	Dennis King 	 
	 	 	Title:  	Vice President 	 
	 
	 	WACHOVIA CAPITAL FINANCE CORP. 

(CENTRAL), as Revolving Credit Lender

 	 
	 	By:  	/s/ Vicky Geist
 	 
	 	 	Name:  	Vicky Geist 	 
	 	 	Title:  	Director 	 
	 
	 	SIEMENS FINANCIAL SERVICES, INC., as 

Revolving Credit Lender

 	 
	 	By:  	/s/ Mark Picillo
 	 
	 	 	Name:  	Mark Picillo 	 
	 	 	Title:  	Vice President 	 
	 
	 	BANK OF AMERICA, as Revolving Credit 

Lender

 	 
	 	By:  	/s/ Thomas H. Herron
 	 
	 	 	Name:  	Thomas H. Herron 	 
	 	 	Title:  	Senior Vice President 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	FIFTH THIRD BANK, as Revolving Credit 

Lender

 	 
	 	By:  	/s/ Brian Jelinski
 	 
	 	 	Name:  	Brian Jelinski 	 
	 	 	Title:  	Assistant Vice President 	 
	 
	 	UPS CAPITAL CORPORATION, as 

Revolving Credit Lender

 	 
	 	By:  	/s/ John P. Holloway
 	 
	 	 	Name:  	John P. Holloway 	 
	 	 	Title:  	Director of Portfolio Management 	 



 









 






	 	 	 	 	 



PRICING SCHEDULE





     The Applicable Margin with respect to Revolving Credit Loans and Commitment Fees with respect
to the Total Revolving Credit Commitment shall be the rate per annum set forth below in the row
opposite the relevant category and in the column corresponding to the “Pricing Level” that applies
for such day:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Level I	 	Level II	 	Level III
	Revolving Credit
Loans that are
Eurodollar Loans
	 	 	1.50	%	 	 	1.75	%	 	 	2.00	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Revolving Credit
Loans that are
ABR Loans
	 	 	0.50	%	 	 	0.75	%	 	 	1.00	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Swing Line Loans
	 	 	0.50	%	 	 	0.75	%	 	 	1.00	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Commitment Fees
	 	 	0.25	%	 	 	0.25	%	 	 	0.25	%






     For purposes of this Pricing Schedule, the following terms have the following meanings:



     “Level I Pricing” shall apply for any day if, on such day, Average Monthly Revolving Credit
Facility Availability (determined as of the last day of the most recently concluded calendar month)
was equal to or greater than $400,000,000.



     “Level II Pricing” shall apply for any day if, on such day, Average Monthly Revolving Credit
Facility Availability (determined as of the last day of the most recently concluded calendar month)
was equal to or greater than $200,000,000, but less than $400,000,000.



     “Level III Pricing” shall apply for any day if, on such day, Average Monthly Revolving Credit
Facility Availability (determined as of the last day of the most recently concluded calendar month)
was less than $200,000,000.



     “Pricing Level” shall refer to the determination of which of Level I, Level II or Level III
Pricing applies for any day.



     Notwithstanding the foregoing, prior to the receipt by the Administrative Agent of the
Borrowing Base Certificate for the sixth full calendar month after the Closing Date, the Applicable
Margins corresponding to Level II shall apply.