Exhibit 10.1





EXECUTION
COPY




AMENDED
AND RESTATED CREDIT AND SECURITY


AGREEMENT




PNC
BANK, NATIONAL ASSOCIATION


(AS
LENDER, ISSUER AND AGENT)




and




SUCH
OTHER LENDERS WHICH ARE NOW OR HEREAFTER A PARTY HERETO




and




STONERIDGE,
INC.,


(AS
BORROWER),




SUCH
OTHER BORROWERS WHICH ARE NOW OR HEREAFTER A PARTYHERETO




and




SUCH
GUARANTORS WHICH ARE NOW OR HEREAFTER A PARTY HERETO




and




PNC
BANK, NATIONAL ASSOCIATION


(AS
LEAD ARRANGER AND BOOK RUNNER)




Dated
as of September 20, 2010










TABLE
OF CONTENTS
  I.
      RESTATEMENT, DEFINITIONS AND CONSTRUCTION.
                                  
                                  11.1
      Restatement of Credit Facility.
                                  
                                  11.2
      Accounting Terms.
                                  
                                  11.3
      Uniform Commercial Code Terms.
                                  
                                  21.4
      General Terms.
                                  
                                  21.5
      Certain Matters of Construction.
                                  
                                  311.6
      Currency Equivalents.
                                  
                                  321.7
      Addition of Borrowers.
                                  
                                  321.8
      Joinder Amendments.
                                  
                                  321.9
      Classification of New Bolton as a Non-Subsidiary.
                                  
                                  331.10
      Time References.
                                  
                                  33II.
      ADVANCES; PAYMENTS.
                                  
                                  332.1
      Revolving Advances to Borrowers.
                                  
                                  332.2
      Requests For Revolving Advances.
                                  
                                  342.3
      Interest Elections; Conversions of Advances.
                                  
                                  362.4
      Disbursement of Proceeds of Advances.
                                  
                                  372.5
      Repayment of Advances.
                                  
                                  372.6
      Increase in Revolving Commitments.
                                  
                                  382.7
      Voluntary and Mandatory Prepayments; Reduction of
    Commitments.
                                  
                                  392.8
      Statement of Account.
                                  
                                  412.9
      Letters of Credit.
                                  
                                  412.10
      Funding of Advances by Lenders; Sharing of Payments;
      Settlement.
                                  
                                  442.11
      Defaulting Lender.
                                  
                                  452.12
      Funding by Lending Installations.
                                  
                                  462.13
      Use of Proceeds.
                                  
                                  46III.
      INTEREST; FEES; YIELD PROTECTION.
                                  
                                  463.1
      Interest.
                                  
                                  463.2
      Applicable Margins.
                                  
                                  473.3
      Default Rate.
                                  
                                  473.4
      Letter of Credit Fees.
                                  
                                  483.5
      Unused Facility Fees.
                                  
                                  483.6
      Computation of Interest and Fees.
                                  
                                  483.7
      Maximum Charges.
                                  
                                  483.8
      Increased Costs.
                                  
                                  493.9
      Non-Ascertainable Libor Rate; Unavailable Deposits.
                                  
                                  493.10
      Libor Rate Loan Losses.
                                  
                                  503.11
      Capital Adequacy.
                                  
                                  503.12
      Illegality.
                                  
                                  513.13
      Taxes; Withholding; Tax Indemnification.
                                  
                                  51IV.
      COLLATERAL: GENERAL TERMS.
                                  
                                  534.1
      Security Interest in the Collateral.
                                  
                                  534.2
      Perfection of Security Interest.
                                  
                                  534.3
      Disposition of Collateral.
                                  
                                  544.4
      Preservation of Collateral.
                                  
                                  544.5
      Ownership of Collateral.
                                  
                                  544.6
      Defense of Agent’s and Lenders’ Interests.
                                  
                                  544.7
      Books and Records.
                                  
                                  55
  
 4.8
      Financial Disclosure.
                          
                          554.9
      Compliance with Laws.
                          
                          554.10
      Inspection of Premises.
                          
                          564.11
      Insurance.
                          
                          564.12
      Failure to Pay Insurance.
                          
                          574.13
      Payment of Leasehold Obligations.
                          
                          574.14
      Receivables; Investments, Cash Management.
                          
                          584.15
      Maintenance of Equipment.
                          
                          614.16
      Exculpation of Liability.
                          
                          624.17
      Environmental Matters.
                          
                          624.18
      Financing Statements.
                          
                          634.19
      Material Recovery Event.
                          
                          634.20
      Partial Release of Liens.
                          
                          64V.
      REPRESENTATIONS AND WARRANTIES.
                          
                          645.1
      Authority.
                          
                          645.2
      Formation and Qualification/Subsidiaries.
                          
                          655.3
      Officers, Directors, Shareholders, Capitalization.
                          
                          655.4
      Survival of Representations and Warranties.
                          
                          655.5
      FEINs/Tax Returns.
                          
                          655.6
      Financial Statements.
                          
                          665.7
      Corporate Names.
                          
                          665.8
      O.S.H.A. and Environmental Compliance.
                          
                          665.9
      Solvency; No Litigation, Violation of Laws.
                          
                          675.10
      ERISA Compliance.
                          
                          685.11
      Patents, Trademarks, Copyrights and Licenses.
                          
                          685.12
      Licenses and Permits.
                          
                          695.13
      No Burdensome Restrictions.
                          
                          695.14
      No Default Under 2002 Note Indenture or 2010 Note
    Indenture.
                          
                          695.15
      No Labor Disputes.
                          
                          695.16
      Margin Regulations.
                          
                          695.17
      Investment Company Act.
                          
                          705.18
      Disclosure.
                          
                          705.19
      Hedging Contracts.
                          
                          705.20
      Conflicting Agreements.
                          
                          705.21
      Application of Certain Laws and Regulations; Bulk Sales.
                          
                          705.22
      Business and Property.
                          
                          715.23
      Locations.
                          
                          715.24
      [Reserved.]
                          
                          715.25
      Disclosure of Material Business Agreements.
                          
                          715.26
      Anti-Terrorism Laws.
                          
                          71VI.
      AFFIRMATIVE COVENANTS.
                          
                          726.1
      Taxes.
                          
                          726.2
      Conduct of Business and Maintenance of Existence and
    Assets.
                          
                          726.3
      Violations.
                          
                          736.4
      Fixed Charge Coverage Ratio.
                          
                          736.5
      Execution of Supplemental Instruments.
                          
                          736.6
      Standards of Financial Statements.
                          
                          736.7
      Payoff of 2002 Notes.
                          
                          736.8
      Mortgage on Real Property other than the Sarasota
Property.
                          
                          736.9
      Mortgage on Sarasota Property.
                          
                          73
  ii
  VII.
      NEGATIVE COVENANTS.
                          
                          747.1
      Merger, Consolidation, Acquisition and Sale of Assets.
                          
                          747.2
      Creation of Liens.
                          
                          787.3
      Guarantees.
                          
                          787.4
      Investments.
                          
                          797.5
      Extensions of Credit.
                          
                          797.6
      Capital Expenditures.
                          
                          797.7
      Dividends and Distributions; Grants.
                          
                          797.8
      Indebtedness.
                          
                          807.9
      Nature of Business.
                          
                          807.10
      Transactions with Affiliates.
                          
                          807.11
      Leases.
                          
                          817.12
      Subsidiaries.
                          
                          817.13
      Fiscal Year and Accounting Changes.
                          
                          817.14
      Pledge of Credit.
                          
                          817.15
      Amendment of Organizational Documents.
                          
                          817.16
      Compliance with ERISA.
                          
                          817.17
      Repayment or Prepayment of Indebtedness.
                          
                          827.18
      Bailee Documents of Title.
                          
                          827.19
      Modification of Material Business Agreements.
                          
                          827.20
      Modification of 2010 Note Indenture.
                          
                          827.21
      Anti-Terrorism Laws.
                          
                          83VIII.
      CONDITIONS PRECEDENT.
                          
                          838.1
      Conditions to Effectiveness of this Amended and Restated Credit
      Agreement.
                          
                          838.2
      Conditions to Each Advance.
                          
                          87IX.
      NOTICE AND DISCLOSURE REQUIREMENTS.
                          
                          889.1
      Disclosure of Material Matters.
                          
                          889.2
      Schedules; Collateral Reporting Information; Borrowing Base
      Certificate.
                          
                          889.3
      Environmental Reports.
                          
                          899.4
      Litigation.
                          
                          899.5
      Material Occurrences.
                          
                          899.6
      Government Receivables.
                          
                          899.7
      Annual Financial Statements.
                          
                          909.8
      Quarterly Financial Statements.
                          
                          909.9
      Securities Filings.
                          
                          909.10
      Additional Information.
                          
                          919.11
      Projected Operating Budget.
                          
                          919.12
      Notice of Suits, Adverse Events.
                          
                          919.13
      ERISA Notices and Requests.
                          
                          929.14
      Notices Regarding 2002 Note Documents or 2010 Note
    Documents.
                          
                          929.15
      Certified Copies of the New Bolton Loan Documents.
                          
                          929.16
      Additional Documents.
                          
                          92X.
      EVENTS OF DEFAULT.
                          
                          9210.1
      Payment of Obligations.
                          
                          9310.2
      Misrepresentations.
                          
                          9310.3
      Failure to Furnish Information.
                          
                          9310.4
      Liens Against Assets.
                          
                          9310.5
      Breach of Covenants.
                          
                          9310.6
      Judgment.
                          
                          93
  iii
  10.7
      Insolvency and Related Proceedings.
                              
                              9410.8
      Cessation of Operations.
                              
                              9410.9
      Material Adverse Effect.
                              
                              9410.10
      Loss of Priority Lien.
                              
                              9410.11
      Breach of Material Agreements.
                              
                              9410.12
      Cross Default; Cross Acceleration.
                              
                              9410.13
      Default Under 2002 Note Indenture or 2010 Note Indenture.
                              
                              9510.14
      Termination of Guaranty.
                              
                              9510.15
      Change of Control.
                              
                              9510.16
      Invalidity of Credit Agreement.
                              
                              9510.17
      Loss of Material Intellectual Property.
                              
                              9510.18
      Forfeiture of Assets.
                              
                              9510.19
      Business Interruption.
                              
                              9610.20
      ERISA Events.
                              
                              96XI.
      LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT
                              
                              9611.1
      Rights and Remedies.
                              
                              9611.2
      [Reserved]
                              
                              9711.3
      Setoff.
                              
                              9711.4
      Letter of Credit Collateral Account.
                              
                              9711.5
      Appointment of Receiver.
                              
                              9711.6
      Rights and Remedies not Exclusive; Non-Waiver.
                              
                              9811.7
      Allocation of Payments After Event of Default.
                              
                              98XII.
      EFFECTIVE DATE; TERMINATION
                              
                              9912.1
      Effective Date.
                              
                              9912.2
      Termination.
                              
                              99XIII.
      AGENCY PROVISIONS.
                              
                              10013.1
      Appointment.
                              
                              10013.2
      Nature of Duties.
                              
                              10013.3
      Lack of Reliance on Agent and Resignation.
                              
                              10113.4
      Certain Rights of Agent.
                              
                              10113.5
      Reliance.
                              
                              10113.6
      Notice of Default.
                              
                              10213.7
      Posting to an Approved Electronic Platform.
                              
                              10213.8
      Indemnification of Agent and Issuer.
                              
                              10313.9
      Agent in its Individual Capacity.
                              
                              10313.10
      Delivery of Documents.
                              
                              10313.11
      No Reliance on Agent’s Customer Identification Program.
                              
                              10313.12
      Agent May File Proofs of Claim.
                              
                              10313.13
      Collateral and Guaranty Matters.
                              
                              10413.14
      No Independent Action.
                              
                              105XIV.
      BORROWING AGENCY; BORROWERS AND OTHER LOAN PARTIES JOINTLY AND SEVERALLY
      LIABLE.
                              
                              10514.1
      Borrowing Agency Provisions.
                              
                              10514.2
      Cross-Obligations of Loan Parties.
                              
                              10614.3
      Rights of Subrogation.
                              
                              107XV.
      MISCELLANEOUS.
                              
                              10815.1
      Governing Law.
                              
                              10815.2
      Entire Understanding.
                              
                              10815.3
      Amendments.
                              
                              108
  iv
  15.4
      Special and Protective Agent Advances.
                    
                    10915.5
      Transfers and Assignments; Replacement of Certain Lenders.
                    
                    11015.6
      Application of Payments.
                    
                    11315.7
      Indemnity.
                    
                    11315.8
      Notice.
                    
                    11315.9
      Notice by Approved Electronic Communications.
                    
                    11515.10
      Survival.
                    
                    11515.11
      Severability.
                    
                    11515.12
      Expenses.
                    
                    11515.13
      Injunctive Relief.
                    
                    11615.14
      Consequential Damages.
                    
                    11615.15
      Captions.
                    
                    11615.16
      Counterparts; Telecopied Signatures.
                    
                    11615.17
      Construction.
                    
                    11615.18
      Confidentiality.
                    
                    11715.19
      No Sharing of Information Without Consent.
                    
                    11715.20
      USA Patriot Act.
                    
                    11715.21
      Publicity.
                    
                    11715.22
      Judgment Currency.
                    
                    11815.23
      Waiver of Jury Trial and Submission to Non-Exclusive
      Jurisdiction.
                    
                    118
 
 v
  LIST
OF SCHEDULES AND EXHIBITS
  All
Schedules to the Credit and Security Agreement:
  Schedule
      2.9
                    
                    Existing
      Letters of CreditSchedule
      4.1
                    
                    Commercial
      Tort ClaimsSchedule
      4.14(c)
                    
                    Chief
      Executive OfficesSchedule
      4.14(g)
                    
                    Lockboxes;
      Bank AccountsSchedule
      4.14(j)
                    
                    Securities
      AccountsSchedule
      5.2
                    
                    Incorporation/Organization/QualificationSchedule
      5.3
                    
                    Officers,
      Directors, Shareholders, CapitalizationSchedule
      5.5
                    
                    FEINS/Tax
      ReturnsSchedule
      5.7
                    
                    Corporate
      NamesSchedule
      5.8
                    
                    O.S.H.A.
      and Environmental ComplianceSchedule
      5.9(b)
                    
                    LitigationSchedule
      5.10
                    
                    ERISA
      PlansSchedule
      5.11
                    
                    Patents,
      Trademarks, Copyrights and LicensesSchedule
      5.15
                    
                    Labor
      ContractsSchedule
      5.22
                    
                    Business
      ActivitiesSchedule
      5.23
                    
                    LocationsSchedule
      5.25
                    
                    Material
      Business AgreementsSchedule
      7.1
                    
                    Sale
      of AssetsSchedule
      7.2
                    
                    Permitted
      EncumbrancesSchedule
      7.3
                    
                    Permitted
      GuaranteesSchedule
      7.4
                    
                    Permitted
      InvestmentsSchedule
      7.5
                    
                    Extensions
      of CreditSchedule
      7.8
                    
                    Permitted
      Indebtedness
  All
Exhibits to the Credit and Security Agreement:
  Exhibit
      A
                      
                      Closing
      AgendaExhibit
      B
                      
                      Form
      of Revolving NoteExhibit
      C
                      
                      Form
      of Revolving Advance Request for Libor Rate LoansExhibit
      D
                      
                      Form
      of Borrowing Base CertificateExhibit
      E
                      
                      Form
      of Compliance CertificateExhibit
      F
                      
                      Form
      of Financial Condition CertificateExhibit
      G-1
                      
                      Form
      of Landlord WaiverExhibit
      G-2
                      
                      Form
      of Processor/Bailee WaiverExhibit
      G-3
                      
                      Form
      of Mortgagee WaiverExhibit
      G-4
                      
                      Form
      of Consignee WaiverExhibit
      H
                      
                      ProjectionsExhibit
      I
                      
                      Form
      of Assignment and AssumptionExhibit
      J
                      
                      Form
      of Borrower Joinder AgreementExhibit
      K
                      
                      Form
      of Guarantor Joinder
Agreement
 
 vi
  AMENDED
AND RESTATED CREDIT AND SECURITY AGREEMENT
  This AMENDED AND RESTATED CREDIT AND
SECURITY AGREEMENT (this “Agreement”), is dated as of
September 20, 2010, by and among STONERIDGE, INC., an Ohio
corporation (the “Parent”),STONERIDGE ELECTRONICS, INC.,
a Texas corporation (“Electronics”), STONERIDGE CONTROL DEVICES,
INC., a Massachusetts corporation (“Controls”), and such other
Persons as are from time to time parties hereto as Borrowers, other Persons as
are from time to time parties hereto, as Guarantors, the financial institutions
which are now or which hereafter become a party to this Agreement (the “Lenders”), PNCBANK,
NATIONAL ASSOCIATION, a national
banking association (“PNC
Bank”) as successor to both NATIONAL CITY BANK, as Lead
Arranger and the Issuer (as hereinafter defined), and NATIONAL CITY BUSINESS CREDIT,
INC., as administrative agent and collateral agent (the “Agent”).
  IN CONSIDERATION of the mutual
covenants and undertakings herein contained, the receipt and sufficiency of
which are hereby acknowledged, the Loan Parties (as hereinafter defined), the
Lenders, the Issuer and the Agent hereby agree as follows:
  I.
                RESTATEMENT,
      DEFINITIONS AND
CONSTRUCTION.
  1.1
              Restatement of Credit
      Facility.
  This
Agreement amends and restates that certain Credit and Security Agreement, dated
as of November 2, 2007, that certain Amendment No. 1 to Credit and
Security Agreement, that certain Amendment No. 2 to Credit and Security
Agreement, that certain Amendment No. 3 to Credit and Security Agreement,
and that certain Amendment No. 4 to Credit and Security Agreement (the
“Original Credit Agreement”).  This Agreement is an amendment and
restatement, but not a novation or refinancing, of the Original Credit
Agreement.  This Agreement does not evidence or effect a release or
relinquishment of the priority of the Agent, for the benefit of itself, the
Lenders and any Issuer, in any Collateral.  The promissory notes which
presently evidence the Obligations of the Borrowers to the Lenders hereunder are
those certain Revolving Notes in favor of each Lender executed by each of the
Borrowers as of November 2, 2007.  The Other Loan Documents and
other deliverables delivered pursuant to the requirements of Section 8.1 of
the Original Credit Agreement remain effective.
  1.2
              Accounting
      Terms.
  As used
in this Agreement and the Other Loan Documents, accounting terms not defined in
Section 1.4 or elsewhere in this Agreement and accounting terms partly
defined in Section 1.4 to the extent not defined shall have the respective
meanings given to them under GAAP; provided, however, to the
extent accounting terms not defined or only partly defined herein are used for
the purposes of determining compliance with financial covenants in this
Agreement, such accounting terms shall be defined or partly defined in
accordance with GAAP.  All financial computations to be made under
this Agreement shall, unless otherwise specifically provided herein, be made in
accordance with GAAP applied on a basis consistent in all material respects with
the financial statements delivered to the Agent and the Lenders on or prior to
the Closing Date.
  
  1.3
              Uniform Commercial
      Code Terms.
  To the
extent used in this Agreement and the Other Loan Documents, terms defined in the
Uniform Commercial Code shall have the meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined) ascribed
to such terms in the Uniform Commercial Code.  Such terms shall
include: “Account”, “Account Debtor”, “Certificated Security”, “Chattel Paper”,
“Commercial Tort Claim”, “Commodities Account”, “Deposit Account”, “Document”,
“Equipment”, “Farm Products”, “Financial Asset”, “Fixture”, “General
Intangible”, “Instrument”, “Inventory”, “Investment Property”, “Lease”,
“Lessor”, “Letter-of-Credit Rights”, “money”, “Payment Intangibles”, “Proceeds”,
“Product”, “Record”, “Secured Party”, “Securities Account”, “Securities
Intermediary”, “Security”, “Security Entitlement”, “Security Interest” and
“Supporting Obligation”.  To the extent the definition of any category
or type of Collateral is expanded by any amendment, modification or revision to
the Uniform Commercial Code, such expanded definition will apply automatically
as of the date of such amendment, modification or revision.
  1.4
              General
      Terms.
  As used
in this Agreement or any Other Loan Document, the following terms shall have the
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined) set forth below:
  “Acquired Entity” shall mean
any Person acquired pursuant to a Permitted Acquisition or proposed to be
acquired pursuant to a Proposed Acquisition, as applicable.
  “Activation Notice” shall mean
a notice in writing from the Agent to the Borrowing Agent that either (i) an
Event of Default has occurred and is continuing or (ii) the Undrawn Availability
is less than Twenty-Five Million Dollars ($25,000,000).
  “Administrative Questionnaire”
shall mean an Administrative Questionnaire in a form supplied by the Agent to
the Lenders and each assignee thereof.
  “Advances” shall mean the
Revolving Advances.
  “Advance Rates” shall have the
meaning set forth in Section 2.1(a).
  “Affiliate” shall mean, with
respect to a specified Person, any other Person: (a) which directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with such specified Person, (b) which beneficially owns
or holds with power to vote ten percent (10%) or more of any class of the voting
stock of such specified Person, (c) ten percent (10%) or more of the voting
stock of which other Person is beneficially owned or held by such specified
Person, or (d) who is an executive officer or director of such specified
Person.  The term “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
  “Agent” shall have the meaning
set forth in the preamble.
  “Agent’s Fee Letter” shall mean
the Agent’s fee letter dated as of July 13, 2007, between
Parent and the Agent.
  “Agreement” shall have the
meaning set forth in the preamble.
  “Alternate Base Rate” shall
mean, for any period, a fluctuating interest rate per annum equal from time to
time to the higher of: (a) the rate of interest which is established from time
to time by PNC Bank at its principal office in Pittsburgh, Pennsylvania as its
“prime rate” or “base rate” in effect, such rate to be adjusted automatically,
without notice, as of the opening of business on the effective date of any
change in such rate (it being acknowledged that: (i) such rate is not
necessarily the lowest rate of interest then available from PNC Bank on
fluctuating rate loans and (ii) such rate may be established by PNC Bank by
public announcement or otherwise) and (b) the Federal Funds Effective Rate in
effect on such day plus 0.50%.
  2
  “Alternate Base Rate Loan”
shall mean any Advance, in Dollars, during any period in which such Advance
bears interest based upon the Alternate Base Rate.
  “Alternative Currency” shall
mean and include any lawful currency other than Dollars which (i) is readily and
freely transferable and convertible into Dollars and (ii) is acceptable to the
Lenders and the Issuer.
  “Alternative Currency Sublimit”
shall mean Fifty Million Dollars ($50,000,000) (determined at the equivalent
amount in Dollars for each Borrowing denominated in Alternative
Currency).
  “Anti-Terrorism Laws” shall
mean any laws relating to terrorism or money laundering, including Executive
Order No. 13224, the USA Patriot Act, the laws comprising or implementing the
Bank Secrecy Act, and the laws administered by the United States Treasury
Department’s Office of Foreign Asset Control.
  “Applicable Base Rate Margin”
shall be determined pursuant to Section 3.2.
  “Applicable Letter of Credit Fee
Percentage” shall be determined pursuant to Section 3.2.
  “Applicable Libor Rate Margin”
shall be determined pursuant to Section 3.2.
  “Applicable Period” shall have
the meaning set forth in Section 3.2.
  “Applicable Unused Facility Fee
Percentage” shall be determined pursuant to Section 3.2.
  “Approved Electronic
Communication” shall mean each notice, demand, communication,
information, document and other material transmitted, posted or otherwise made
or communicated by e-mail, E-Fax, the StuckyNet System, any Approved Electronic
Platform or any other equivalent electronic service, whether owned, operated or
hosted the Agent, any Lender, any of their Affiliates or any other Person, that
any party is obligated to, or otherwise chooses to, provide to the Agent
pursuant to this Agreement or any Other Loan Document, including any financial
statement, financial and other report, notice, request, certificate and other
information material; provided that
Approved Electronic Communications shall not include any notice, demand,
communication, information, document or other material that the Agent
specifically instructs a Person to deliver in physical form.
  “Approved Electronic Platform”
shall have the meaning specified in Section 13.7.
  “Approved Fund” shall mean any
Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers or manages
a Lender.
  “Approved Securities
Intermediary” shall mean a Securities Intermediary approved by the Agent
in its Permitted Discretion and with respect to which the Borrowing Agent has
delivered to the Agent an executed Securities Account Control
Agreement.
  3
  “Assignment and Assumption”
shall mean an assignment and assumption entered into by a Lender and an Eligible
Assignee (with the consent of any party whose consent is required by
Section 15.5), and accepted by the Agent, in substantially the form of
Exhibit I
or any other form approved by the Agent.
  “Assignment of Claims Act”
shall mean the Assignment of Claims Act of 1940, as amended (31 U.S.C.
Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et
seq.).
  “Augmenting Revolving Lender”
shall have the meaning specified in Section 2.6(a)
  “Bank Services” shall mean each
and any bank service provided to any Loan Party by the Agent, any Lender or any
direct or indirect Subsidiary or Affiliate of the Agent or any Lender, including
the following: (a) commercial credit cards, (b) stored value cards, and (c) cash
management or treasury administration services (including controlled
disbursement, automatic clearinghouse transactions, electronic funds transfers,
returned items, overdrafts and interstate depositary network
services).
  “Blocked Account Agreement”
shall have the meaning set forth in Section 4.14(g).
  “Blocked Person” shall have the
meaning assigned to such term in Section 5.26(b).
  “Borrower” and “Borrowers” shall mean the
Parent, Controls and Electronics, and each other Person added to this Agreement
as a Borrower through a Borrower Joinder Agreement.
  “Borrower Joinder Agreement”
shall mean a Borrower joinder agreement, substantially in the form of Exhibit J.
  “Borrowing” shall mean a
Revolving Borrowing.
  "Borrowing Agent" shall mean
the Parent.
  “Borrowing Base Certificate”
shall mean a certificate duly executed by an officer (or other Person duly
designated by the Board of Directors of the Borrowing Agent) of the Borrowing
Agent appropriately and separately completed by the Borrowers, and in
substantially the form of Exhibit D
hereto.
  “Business Day”shall mean (i)
for all purposes other than as covered by clause (ii) below, any day excluding
Saturday, Sunday and any day which is, in the city in which the Payment Office
is located, a legal holiday or a day on which banking institutions are
authorized by law or other governmental actions to close and (ii) with respect
to all notices and determinations in connection with, and payments of principal
and interest on, Libor Rate Loans, any day which is a Business Day described in
clause (i) and which is also a day for trading by and between banks in Dollar
deposits or Alternative Currency in the interbank Eurocurrency
market.
  “Capital Expenditures” shall
mean any expenditure made or liability incurred which is, determined in
accordance with GAAP, treated as a capital expenditure and not as an expense
item for the year in which it was made or incurred, as the case may be,
excluding (to the extent otherwise included) expenditures made with respect to
repair or replacement of property necessitated by a Material Recovery Event for
which the Borrowing Agent has notified the Agent of the applicable Loan Party’s
intent to invest the proceeds of such Material Recovery Event and is otherwise
in compliance with Section 4.19.
  4
  “Capitalized Leases” means all
leases that have been or should be, in accordance with GAAP, recorded as
capitalized leases.
  “Cash Concentration Account”
shall mean, with respect to the Borrowers, at the discretion of the Agent,
either: (i) any of those certain commercial deposit accounts at PNC Bank in the
name of the Agent, designated as “PNC Bank (for the benefit of itself and the
Issuer) Borrowing Agent Cash Concentration Account” pursuant to a Cash
Concentration Account Agreement (a “Non-Borrower Titled Cash
Concentration Account”); or (ii) such other depository accounts as may be
established and maintained by any of the Borrowers, the Borrowing Agent or any
other applicable Obligor at PNC Bank from time to time, pursuant to a Deposit
Account Agreement and/or a Blocked Account Agreement, each of which, in either
case, shall be: (a) without liability by the Agent or PNC Bank, as
depositary bank, to pay interest thereon, (b) the funds within which shall
immediately become the sole and exclusive property of the Agent for the pro rata
benefit of the Secured Creditors and subject to the sole and exclusive control
off the Agent, and (c) from which account the Agent shall have the
irrevocable and exclusive right to withdraw funds.
  “Cash Concentration Account
Agreement” shall mean an agreement entered into by the Agent and PNC
Bank, as depositary bank, with respect to each Non-Borrower Titled Cash
Concentration Account, in form and substance satisfactory to the Agent and
acknowledged by the Borrowers, the Borrowing Agent or other Obligor, as
applicable, whereby PNC Bank will agree to maintain the Non-Borrower Titled Cash
Concentration Account on behalf of the Agent.
  “Cash Equivalents” shall mean
(a) obligations issued or guaranteed by the United States or any agency thereof,
(b) commercial paper with maturities of not more than one hundred and eighty
(180) days and a published rating of not less than A-1 by Standard & Poor’s
or P-1 by Moody’s Investors Services, Inc. (or the equivalent rating), (c)
Dollar denominated time deposits with, or insured certificates of deposit or
bankers’ acceptances of, any commercial bank that (i) (A) is a Lender or (B) is
organized under the laws of the United States of America, any state thereof or
the District of Columbia or is the principal banking subsidiary of a bank
holding company organized under the laws of the United States of America, any
state thereof or the District of Columbia, and is a member of the Federal
Reserve System, (ii) issues (or the parent of which issues) commercial paper
rated as described in clause (b) above and (iii) has combined capital and
surplus of at least Five Hundred Thousand Dollars ($500,000), in each case with
maturities of not more than one hundred and eighty (180) days from the date of
acquisition thereof, (d) repurchase agreements maturing within one hundred and
eighty (180) days from the date of issuance thereof entered into with a
commercial bank of the type described in clause (c) above, (e) U.S. money market
funds (i) rated AAA by Standard & Poor’s, Inc. or with an equivalent rating
from Moody’s Investors Service, Inc., or (ii) that invest solely in obligations
issued or guaranteed by the United States or an agency thereof, or (f)
short-term marketable securities.
  “CERCLA” shall mean the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. Sections 9601 et seq.
  5
  “Change of Control” shall mean
and include any of the following:
  (a)           during
any period of two consecutive calendar years, individuals who at the beginning
of such period constituted the Parent’s Board of Directors (together with any
new directors whose (x) election by the Parent’s Board of Directors or (y)
nomination for election by the Parent’s shareholders was (prior to the date of
the proxy or consent solicitation relating to such nomination) approved by a
vote of at least two-thirds of the directors then still in office who either
were directors at the beginning of such period or whose election or nomination
for election was previously so approved), cease for any reason to constitute a
majority of the directors then in office;
  (b)           any
person or group (as such term is defined in section 13(d)(3) of the 1934 Act),
other than the Parent, any trustee or other fiduciary holding securities under
an employee benefit plan of the Parent or any members of the Current Holder
Group, acquires, directly or indirectly, beneficial ownership (within the
meaning of Rule 13d-3 and 13d-5 of the 1934 Act) of 50% or more, on a fully
diluted basis, of the economic or voting interest in the Parent’s capital
stock;
  (c)           the
shareholders of the Parent approve a merger or consolidation of the Parent with
any other Person, other than a merger or consolidation which would result in the
voting securities of the Parent outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted or exchanged
for voting securities of the surviving or resulting entity) more than 75% of the
combined voting power of the voting securities of the Parent or such surviving
or resulting entity outstanding after such merger or consolidation;
  (d)           the
shareholders of the Parent approve a plan of complete liquidation of the Parent
or an agreement or agreements for the sale or disposition by the Parent of all
or substantially all of the Parent’s assets;
  (e)           any
“change in control” or any similar term, as defined in (a) the 2002 Note
Documents or the 2010 Note Documents or (b) any of the indentures, credit
agreements or other instruments governing any Indebtedness of the Parent or any
of its Subsidiaries with an outstanding principal amount, or providing for
commitments to lend in an outstanding principal amount, of at least Ten Million
Dollars ($10,000,000) (or the equivalent amount in any other currency); provided, however; with respect
to the 2002 Note Documents, such “change in control” shall have occurred prior
to payment in full of all Indebtedness or other obligations owing pursuant to
any of the 2002 Note Documents;
  (f)           any
merger or consolidation of or with the Parent in which the Parent is not the
surviving party or sale of all or substantially all of the property or assets of
any of the Parent or any first-tier Subsidiary of the Parent.
  As used
in this definition, the term “Current Holder Group” shall mean (i) members
of the Draime family, (ii) those other persons who are officers or
directors of the Parent at the Closing Date, (iii) the spouses, heirs,
legatees, descendants and blood relatives to the third degree of consanguinity
of any such person, (iv) the executors and administrators of the estate of any
such person, and any court appointed guardian of any such person, and (v) any
trust, family partnership or similar investment entity for the benefit of any
such person referred to in the foregoing clauses (i), (ii) or (iii) or any other
persons (including for charitable purposes), so long as one or more members of
the Current Holder Group has the exclusive or a joint right to control the
voting and disposition of securities held by such trust, family partnership or
other investment entity.
  “Charges” shall mean all taxes,
charges, fees, imposts, levies or other assessments, including all net income,
gross income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation
and property taxes, custom duties, fees, assessments, liens, claims and charges,
together with any interest and any penalties, additions to tax or additional
amounts, imposed by any taxing or other similar Governmental Body, domestic or
foreign (including the Pension Benefit Guaranty Corporation or any environmental
agency or superfund), upon the Collateral, any Loan Party or any of its
Subsidiaries.
  6
  “CIP Regulations” shall have
the meaning set forth in Section 13.11.
  “Closing Agenda” shall mean the
closing agenda attached hereto as Exhibit A.
  “Closing Date” shall mean the
date upon which all the conditions set forth in Section 8.1 shall have been
satisfied.
  “Code” shall mean the Internal Revenue Code
of 1986, as amended from time to time, and the regulations promulgated
thereunder.
  “Collateral” shall mean and
include, with respect to a Person, such Person’s:
  (a)           Accounts;
  (b)           Inventory;
  (c)           Equipment
and Fixtures;
  (d)           all
other Goods;
  (e)           General
Intangibles, Payment Intangibles and Intellectual Property;
  (f)           Investment
Property and Security Entitlements;
  (g)           Deposit
Accounts, any and all monies credited by or due from any financial institution
or any other depository;
  (h)           rights
as a consignor, a consignee, an unpaid vendor, mechanic, artisan, or other
lienor, including stoppage in transit, setoff, detinue, replevin, reclamation
and repurchase;
  (i)           Instruments,
Letter of Credit Rights, Supporting Obligations, Documents (including documents
of title), policies and certificates of insurance, choses in action, Chattel
Paper;
  (j)           Commercial
Tort Claims, to the extent described on Schedule 4.1 and all
future Commercial Tort Claims in which a security interest is granted to the
Agent pursuant to Section 4.1;
  (k)           accessions
to, substitutions for, and all replacements, Products and Proceeds of the herein
above-referenced property including proceeds of insurance policies insuring such
property, and proceeds of any insurance, indemnity, warranty or
guaranty;
  (l)           books,
records, and other property (including credit files, programs, printouts,
computer software (owned by such Person or in which it has an interest), and
disks, magnetic tape and other magnetic media, and other materials and records)
pertaining to any such above-referenced property; and
  7
  (m)           to
the extent not otherwise included above, all other tangible and intangible
personal property of such Person;
  in each
case, other than Excluded Property of such Person.
  Collateral
shall also mean the Real Property in which a security interest or Lien is
granted to the Agent pursuant to this Agreement or any Other Loan
Document.
  “Collection Account” shall have
the meaning set forth in Section 4.14(g).
  “Commitment” shall mean, with
respect to any Lender, such Lender’s Revolving Commitment.
  “Compliance Certificate” shall
mean the certificate executed by the any officer of the Borrowing Agent
authorized by the Board of Directors of the Borrowing Agent to so execute on the
basis of and in connection with the financial statements delivered pursuant to
Section 9.7 or 9.8 substantially in the form of Exhibit E and
otherwise satisfactory to the Agent.
  “Consents” shall mean all
filings and all licenses, permits, consents, approvals, authorizations,
qualifications and orders of Governmental Bodies and other third parties,
domestic or foreign, necessary to carry on any Person’s business, including any
Consents required under all applicable federal, state or other applicable
law.
  “Consolidated EBITDA” shall
mean, for any period, Consolidated Net Income for such period plus (a) without
duplication and to the extent deducted in determining such Consolidated Net
Income, the sum of (i) Consolidated Interest Expense for such period, (ii)
consolidated income tax expense for such period, (iii) all amounts attributable
to depreciation and amortization for such period and (iv) any non-cash charges
(other than the write-down of current assets) for such period (provided that to the
extent that all or any portion of the income of any person is excluded from
Consolidated Net Income pursuant to the definition thereof for all or any
portion of such period any amounts set forth in the preceding clauses (i)
through (iv) that are attributable to such person shall not be included for
purposes of this definition for such period or portion thereof), and minus (b)
without duplication (i) all cash payments made during such period on account of
reserves, restructuring charges and other non-recurring non-cash charges added
to Consolidated Net Income pursuant to clause (a)(iv) above in a previous period
and (ii) to the extent included in determining such Consolidated Net Income, any
non-cash extraordinary gains and all non-recurring non-cash items of income for
such period, all determined on a consolidated basis in accordance with GAAP;
provided that
for purposes of calculating Consolidated EBITDA for any period (A) the
Consolidated EBITDA of any Acquired Entity acquired by Parent or any Subsidiary
of Parent pursuant to a Permitted Acquisition during such period shall be
included on a pro forma basis for such
period (assuming the consummation of such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred as of the first
day of such period) and (B) the Consolidated EBITDA of any person or line of
business sold or otherwise disposed of by Parent or any Subsidiary of any Loan
Party during such period shall be excluded for such period (assuming the
consummation of such sale or other disposition and the repayment of any
Indebtedness in connection therewith occurred as of the first day of such
period).
  “Consolidated Equity” shall
mean, with respect to any date, the net equity of the Parent and its
Subsidiaries as of such date determined on a consolidated basis in accordance
with GAAP.
  8
  “Consolidated Fixed Charges”
shall mean, with respect to any fiscal period, the sum of: (a) Consolidated
Interest Expense paid in cash of the Parent and its Subsidiaries determined on a
consolidated basis with respect to such period and (b) scheduled principal
payments on the Advances and other Indebtedness of the Parent and its
Subsidiaries determined on a consolidated basis with respect to such
period.
  “Consolidated Interest Expense”
shall mean, for any period, the sum of (a) the interest expense (including
imputed interest expense in respect of Capital Lease Obligations and Synthetic
Lease Obligations) of the Parent and its Subsidiaries for such period (including
all commissions, discounts and other fees and charges owed by the Borrower and
the Subsidiaries with respect to letters of credit and bankers’ acceptance
financing), net of interest income, in each case determined on a consolidated
basis in accordance with GAAP, plus (b) any interest accrued during such period
in respect of Indebtedness of the Parent or any Subsidiary that is required to
be capitalized rather than included in consolidated interest expense for such
period in accordance with GAAP.  For purposes of the foregoing,
interest expense shall be determined after giving effect to any net payments
made or received by the Parent or any Subsidiary with respect to interest rate
Hedging Contracts.
  “Consolidated Net Income” shall
mean, for any period, the net income or loss of the Parent and its Subsidiaries
for such period determined on a consolidated basis in accordance with
GAAP.
  “Controlled Group” shall mean
all members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with any
Person, are treated as a single employer under Section 414 of the
Code.
  “Copyright Security Agreement”
shall mean a copyright security agreement, executed and delivered by a Loan
Party in connection with this Agreement, in form and substance satisfactory to
the Agent.
  “Customs” shall have the
meaning set forth in Section 2.9(j).
  “Deemed Credit Request” shall
have the meaning set forth in Section 2.2(d).
  “Default” shall mean an event
which, with the giving of notice or passage of time or both, would constitute an
Event of Default.
  “Default Rate” shall have the
meaning set forth in Section 3.3.
  “Defaulting Lender” shall have
the meaning set forth in Section 2.11.
  “Deposit Account Agreement”
shall have the meaning set forth in Section 4.14(g).
  “Dollar” and the sign “$” shall mean lawful money of
the United States of America.
  “Domestic Subsidiary” shall
mean any direct or indirect Subsidiary of a Person that is organized under the
laws of the United States, any state thereof or the District of Columbia (other
than an indirect Subsidiary of a Person which is a direct or indirect Subsidiary
of another Subsidiary which is not organized under such laws).
  “E-Fax” shall mean any system
used to receive or transmit faxes electronically.
  “E-Signature” shall mean the
process of attaching to or logically associating with an Approved Electronic
Communication an electronic symbol, encryption, digital signature or process
(including the name or an abbreviation of the name of the party transmitting the
Approved Electronic Communication) with the intent to sign, authenticate or
accept such Approved Electronic Communication.
  9
  “Eligible Assignee” shall mean
any of the following Persons: (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other Person (other than a natural person) approved
by (i) the Agent, (ii) in the case of any assignment of a commitment to make
Revolving Advances hereunder, the Issuer, and (iii) unless an Event of Default
has occurred and is continuing, the Borrowing Agent (each such approval not to
be unreasonably withheld or delayed); provided, however, that,
notwithstanding the foregoing, “Eligible Assignee” shall not include any Loan
Party or any Loan Party’s Affiliates or Subsidiaries and; provided, further, that,
notwithstanding the foregoing, a Person shall only be an “Eligible Assignee” if
(i) such Person shall have complied with the requirements of Section 3.13
regarding delivery of Withholding Certificates and (ii) the assignment to or
participation of such Person shall not constitute a “prohibited transaction” (as
defined in Section 406 of ERISA or Section 4975 of the
Code).
  “Eligible Inventory” shall
mean, with respect to each Borrower, Inventory of such Borrower which the Agent,
in the exercise of its Permitted Discretion, shall deem to be Eligible
Inventory, based on such considerations as the Agent may from time to time deem
appropriate in its Permitted Discretion.  No Inventory of such
Borrower shall be Eligible Inventory if such Inventory:
  (a)           is
excess, obsolete, unsalable, shopworn, unmerchantable or unfit for sale, or is
slow-moving (other than with respect to replacement parts constituting finished
goods held for sale to customers in the ordinary course of the
business),
  (b)           is
not subject to an enforceable perfected, first priority security interest in
favor of the Agent,
  (c)           is
not owned by such Borrower free and clear of all Liens and rights of any other
Person (including the rights of a purchaser that has made progress payments and
the rights of a surety that has issued a bond to assure such Borrower’s
performance with respect to that Inventory), except the Liens in favor of the
Agent, on behalf of itself and the Lenders, and other Permitted Encumbrances
(subject to reserves for such other Permitted Encumbrances established by the
Agent in accordance with the terms of this Agreement);
  (d)           is
work-in-process or any other Inventory which is not raw material or finished
goods held for resale;
  (e)           except
for Inventory which is described pursuant to subclauses (i) or (ii) of clause
(f) below and which is otherwise Eligible Inventory hereunder, is: (i) not
located in the United States or Mexico, and, if located in Mexico, not located
on premises with respect to which a Person in charge or control of such premises
has taken constructive possession acting as a depository of the Inventory on the
premises for the benefit of the Agent for purposes of perfecting a pledge of
such Inventory satisfactory to the Agent, in its Permitted Discretion, or (ii)
not located on premises owned by such Borrower and disclosed on Schedule 5.23
unless such Inventory is described in subclauses (iii) or (iv) of this
clause (e), or (iii) located on premises leased by such Borrower, unless
such location is disclosed on Schedule 5.23
(or such other location appearing on any subsequent amendments to Schedule 5.23
consented to by the Agent in accordance with Section 15.3) and (A) a
landlord waiver substantially in the form of Exhibit G-1 (or
such other form reasonably satisfactory to the Agent) has been received by the
Agent or (B) reserves reasonably satisfactory to the Agent have been established
by the Agent with respect thereto, or (iv) stored with a warehouseman, processor
or other bailee by such Borrower, unless such location is disclosed on Schedule 5.23
(or such other location appearing on any subsequent amendments to Schedule 5.23
consented to by the Agent in accordance with Section 15.3) and (A) a bailee
waiver substantially in the form of Exhibit G-2 (or
such other form reasonably satisfactory to the Agent) has been received by the
Agent or (B) reserves reasonably satisfactory to the Agent have been
established by the Agent with respect thereto, or (v) located at a location
owned by such Borrower that is subject to a mortgage in favor of a Person other
than the Agent unless such location is disclosed on Schedule 5.23
(or such other location appearing on any subsequent amendments to Schedule 5.23
consented to by the Agent in accordance with Section 15.3) and (A) a
mortgagee waiver substantially in the form of Exhibit G-3 (or
such other form reasonably satisfactory to the Agent) has been received by the
Agent or (B) reserves reasonably satisfactory to the Agent have been established
by the Agent with respect thereto;
  10
  (f)           is
in transit, unless such Inventory is otherwise Eligible Inventory and is: (i) in
transit from a domestic location owned by such Borrower or a domestic location
otherwise identified on Schedule 5.23
(or such other location appearing on any subsequent amendments to Schedule 5.23
consented to by the Agent in accordance with Section 15.3) to another
domestic location identified on Schedule 5.23
(or such other location appearing on any subsequent amendments to Schedule 5.23
consented to by the Agent in accordance with Section 15.3) or
(ii) Inventory for which title has passed to such Borrower, which is
insured to the full value thereof and with respect to which (A) all negotiable
bills of lading shall be properly endorsed and in the Agent’s possession, (B)
all non-negotiable bills of lading shall be issued in the Agent’s name, in each
case, free and clear of all Liens except those in favor of the Agent and (C) the
value of which, to the extent in transit on water, does not exceed Ten Million
Dollars ($10,000,000);
  (g)           is:
(i) evidenced by a negotiable document of title, unless such Document has been
delivered to the Agent with all necessary endorsements, free and clear of all
Liens except those in favor of the Agent or (ii) subject to a non-negotiable
warehouse receipt or other non-negotiable document of title unless such
non-negotiable Document is issued to or for the account of the Agent and such
Document is delivered to the Agent;
  (h)           is
placed on consignment (or is being held pursuant to a consignment
agreement);
  (i)           consists
of goods which have been returned by the customer, excluding goods returned for
reprocessing in the ordinary course of business;
  (j)           consists
of display items or packing or shipping materials, manufacturing supplies or
replacement parts (other than replacement parts constituting finished goods held
for sale to customers in the ordinary course of business);
  (k)           is
not of a type held for sale in the ordinary course of such Borrower’s
business;
  (l)           breaches
any of the representations or warranties pertaining to Inventory of such
Borrower set forth in this Agreement or in any of the Other Loan
Documents;
  (m)           consists
of any costs associated with “freight-in” charges;
  (n)           consists
of any gross profit mark-up in connection with the sale and distribution thereof
to any division of such Borrower or to any Affiliate of such
Borrower;
  (o)           consists
of Hazardous Substances or goods that can be transported or sold only with
licenses that are not readily available;
  11
  (p)           is
not covered by casualty insurance reasonably acceptable to the Agent as required
by the terms of this Agreement;
  (q)           was
produced in violation of the Fair Labor Standards Act and subject to the “hot
goods” provision contained in Title 29 U.S.C.
Section 215(a)(1);
  (r)           failed
to conform in all material respects to all standards imposed by any Governmental
Body, division or department thereof which has regulatory authority over such
Inventory or the use or sale thereof;
  (s)           contains
or bears any Intellectual Property rights licensed to such Borrower by any
Person unless the Agent is reasonably satisfied that it may sell or otherwise
dispose of such Inventory without (i) infringing the rights of such licensor,
(ii) violating any contract with such licensor, or (iii) incurring any liability
with respect to payment of royalties other than royalties incurred pursuant to
sale of such Inventory under the current licensing agreement relating thereto;
or
  (t)           is
not otherwise satisfactory to the Agent as determined in the exercise of its
Permitted Discretion.
  “Eligible Receivables” shall
mean, with respect to each Borrower, each Receivable of such Borrower which the
Agent, in the exercise of its Permitted Discretion, shall deem to be an Eligible
Receivable, based on such considerations as the Agent may from time to time deem
appropriate in its Permitted Discretion.  No Receivable of such
Borrower shall be an Eligible Receivable if:
  (a)           such
Receivable is not subject to the Agent’s enforceable first priority perfected
security interest or is subject to any other Lien except the Liens in favor of
the Agent, on behalf of itself and the Lenders and other Permitted Encumbrances
(subject to reserves for such other Permitted Encumbrances established by the
Agent in accordance with the terms of this Agreement);
  (b)           such
Receivable arises out of a sale made by such Borrower to an Affiliate of such
Borrower or to a Person controlled by an Affiliate of such
Borrower;
  (c)           such
Receivable is due and unpaid more than ninety (90) days after its original due
date or is due more than one hundred fifty (150) days after the original invoice
date;
  (d)           fifty
percent (50%) or more of the aggregate Receivables owing from the applicable
Account Debtor to a Borrower are not deemed Eligible Receivables
hereunder;
  (e)           such
Receivable does not arise in the ordinary course of such Borrower’s
business;
  (f)           any
covenant, representation or warranty contained in this Agreement with respect to
such Receivable has been breached;
  (g)           other
than with respect to (i) Receivables owing from Delphi Corp. in an aggregate
amount not to exceed Three Million Dollars ($3,000,000) at any time with respect
to all of the Borrowers collectively, and (ii) Receivables owing from any other
Account Debtor which is a debtor-in-possession deemed acceptable to the Agent,
in its Permitted Discretion, the Account Debtor with respect to such Receivable
shall: (A) apply for, suffer, or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property or call a meeting of its creditors, (B)
admit in writing its inability, or be generally unable, to pay its debts as they
become due or cease operations of its present business, (C) make a general
assignment for the benefit of creditors, (D) commence a voluntary case under any
state or federal bankruptcy laws (as now or hereafter in effect), (E) be
adjudicated a bankrupt or insolvent, (F) file a petition seeking to take
advantage of any other law providing for the relief of debtors, (G) acquiesce
to, or fail to have dismissed, any petition which is filed against it in any
involuntary case under such bankruptcy laws, or (H) take any action for the
purpose of effecting any of the foregoing;
  12
  (h)           the
sale giving rise to such Receivable is to an Account Debtor domiciled outside
the United States unless (i) such Receivable is owed by an Account Debtor
domiciled in Canada or the United Kingdom and the Agent has an enforceable first
priority perfected Lien in such Receivable satisfactory to the Agent in its
Permitted Discretion or (ii) such Receivable is guaranteed by a letter of
credit, guaranty or acceptance terms, in each case acceptable to the Agent in
its Permitted Discretion;
  (i)           the
sale giving rise to such Receivable is to an Account Debtor on a bill-and-hold,
guaranteed sale, sale-and-return, sale on approval, consignment or any other
repurchase or return basis;
  (j)           the
sale giving rise to such Receivable is to an Account Debtor on a cash on
delivery (i.e. COD) basis or the Account Debtor with respect to such Receivable
is an employee of any Loan Party or any Subsidiary thereof;
  (k)           the
Agent believes, in the exercise of its Permitted Discretion, that collection of
such Receivable is insecure or that such Receivable may not be paid by reason of
the applicable Account Debtor’s financial inability to pay;
  (l)           the
Account Debtor with respect to such Receivable is the United States or any
state, or any department, agency or instrumentality of any of them, unless such
Borrower: (i) has assigned its right to payment of such Receivable to the Agent
pursuant to the Assignment of Claims Act or has otherwise complied with other
applicable state or local statutes or ordinances and (ii) has taken all steps
reasonably necessary to protect the Agent’s interest in such Collateral under
the Assignment of Claims Act or other applicable state or local statutes or
ordinances;
  (m)           the
goods giving rise to such Receivable have not been shipped to or at the
direction of the applicable Account Debtor or the services giving rise to such
Receivable have not been performed by such Borrower or the Receivable otherwise
does not represent a final sale;
  (n)           such
Receivable, together with the aggregate Receivables of (i) the Account Debtor
other than Navistar International Inc. with respect to Receivables owing to the
Borrowers exceeds twenty percent (20%) of the aggregate amount of all
Receivables of the Borrowers, and (ii) Navistar International Inc. with respect
to Receivables owing the Borrowers exceeds thirty-five percent (35%) of the
aggregate amount of all Receivables of the Borrowers; provided however, in each
case, that only that portion of the Receivables of such Account Debtor exceeding
such applicable percentage shall be excluded from Eligible Receivables on
account of this clause (n);
  (o)           such
Receivable is subject to any offset, deduction, defense, dispute, or
counterclaim, or is owed by an Account Debtor that is also a creditor or
supplier of such Borrower (but only to the extent of such Borrower’s obligations
to such Account Debtor from time to time) or such Receivable is contingent in
any respect or for any reason;
  13


(p)           such
Borrower has made any agreement with the applicable Account Debtor with respect
to such Receivable for any discount, allowance or other deduction from the
amount owing on such Receivable, except for discounts or allowances made in the
ordinary course of business for prompt payment, all of which discounts or
allowances are reflected in the calculation of the face value of each respective
invoice related thereto;




(q)           any
return, rejection or repossession of the merchandise sold has occurred or the
rendition of services has been disputed;




(r)           such
Receivable is not evidenced by an invoice or other documentary evidence
satisfactory to the Agent, in its Permitted Discretion;




(s)           such
Receivable is not payable to such Borrower;




(t)           the
applicable Account Debtor with respect to such Receivable is located in New
Jersey, Minnesota, or any other state denying creditors access to its courts in
the absence of a Notice of Business Activities Report or other similar filing,
unless such Borrower is incorporated under the laws of such state or has either
qualified as a foreign corporation authorized to transact business in such state
or has filed a Notice of Business Activities Report or similar filing with the
applicable state agency for the then current year; or




(u)           such
Receivable is not otherwise satisfactory to the Agent as determined in the
exercise of its Permitted Discretion.




“Environmental Laws” shall mean
all federal, state and local environmental, land use, zoning, occupational
health, chemical use, safety and sanitation laws, statutes, ordinances and codes
relating to the protection of the environment or governing the use, storage,
treatment, generation, transportation, processing, handling, production or
disposal of Hazardous Substances and the rules, regulations, policies,
decisions, orders and directives of federal, state and local Governmental
Bodies.




“Environmental Permits” shall
mean all permits, approvals, certificates, notifications, identification
numbers, licenses and other authorizations required under any applicable
Environmental Laws or necessary for the conduct of business.




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




“Eurocurrency Reserve
Percentage” shall mean, for any Interest Period in respect of any Libor
Rate Loan, as of any date of determination, the aggregate of the then stated
maximum reserve percentages (including any marginal, special, emergency or
supplemental reserves), expressed as a decimal, applicable to such Interest
Period (if more than one such percentage is applicable, the daily average of
such percentages for those days in such Interest Period during which any such
percentages shall be so applicable) by the Board of Governors of the Federal
Reserve System, any successor thereto, or any other banking authority, domestic
or foreign, to which any Lender may be subject in respect to euro-currency
funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of
the Federal Reserve Board) or in respect of any other category of liabilities
including deposits by reference to which the interest rate on Libor Rate Loans
is determined or any category of extension of credit or other assets that
include the Libor Rate Loans.  For purposes hereof, such reserve
requirements shall include those imposed under Regulation D of the Federal
Reserve Board and the Libor Rate Loans shall be deemed to constitute
Eurocurrency Liabilities subject to such reserve requirements without benefit of
credits for pro-ration, exceptions or offsets which may be available from time
to time to the Agent under said Regulation D.


14


“Event of Default” shall have
the meaning specified in Article X.




“Excluded Property” shall
mean:




(a)           any
permit, lease or license held by any Person or any Loan Party (in each case as
otherwise permitted by this Agreement) that validly prohibits the creation by
such Person or such Loan Party of a security interest therein;




(b)           any
contract or agreement to which any Person or any Loan Party is a party or any of
such Person’s or Loan Party’s rights or interests thereunder if and only for so
long as the grant by such Person or Loan Party of a security interest pursuant
to this Agreement in its right, title and interest in such contract, agreement,
right or interest thereunder shall result in an effective default thereunder
pursuant to effective and enforceable contractual provisions entered into
by such Person or Loan Party in the ordinary course of business and existing on
the date hereof (other than to the extent that any such term would be rendered
ineffective pursuant to applicable law or Sections 9-406, 9-407, 9-408 or 9-409
of the UCC (or any successor provision or provisions));




but in
the case of clauses (a) and (b) above, only to the extent, and for so long as,
such permit, lease, license, contract or other agreement, validly prohibits the
creation of a Lien in such property in favor of the Agent or for so long as the
consequences specified in clause (b) above shall exist, and all of such property
shall automatically become collateral and become subject to the Liens granted
under this Agreement or the Other Loan Documents at such time as such valid
prohibition or consequences exist.




“Executive Order
No. 13224” shall mean the Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, as the same has been, or
shall hereafter be, renewed, extended, amended or replaced.




“Existing Letters of Credit”
shall mean trade or standby letters of credit issued by National City Bank, PNC
Bank or JPMorgan Chase Bank, N.A. prior to the Closing Date and listed on Schedule 2.9
which will continue in effect after the Closing Date.




“Facility Termination Date”
shall mean November 1, 2012 or earlier if pursuant to the terms of this
Agreement, as applicable, the obligations of the Lenders to make Revolving
Advances are terminated or if the obligation of the Borrowers to repay the
Advances is accelerated.




“Federal Funds Effective Rate”
shall mean, for any day, the rate per annum (rounded upwards, if necessary, to
the nearest one hundredth of one percent (1/100th of 1%) equal to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided, however, that: (a) if
the day for which such rate is to be determined is not a Business Day, the
Federal Funds Effective Rate for such day shall be such a rate on such
transactions on the immediately preceding Business Day as so published on the
next succeeding Business Day and (b) if such rate is not so published for any
Business Day, the Federal Funds Effective Rate for such Business Day shall be
the average of quotations for such day on such transactions received by the
Agent from three federal funds brokers of recognized standing selected by the
Agent.


15


“Fixed Charge Coverage Ratio”
shall mean, with respect to any fiscal period, the ratio of: (a) Consolidated
EBITDA minus
the sum of (i) Capital Expenditures not specifically financed by Indebtedness
(other than Revolving Advances) of the Parent and its Subsidiaries on a
consolidated basis with respect to such period, (ii) cash payments of taxes of
the Parent and its Subsidiaries on a consolidated basis with respect to such
period and (iii) dividends and distributions made in cash of the Parent and its
Subsidiaries on a consolidated basis with respect to such period to (b) Consolidated
Fixed Charges.




“Foreign Lender” shall mean any
Lender that is organized under the laws of a jurisdiction other than that in
which a Borrower is resident for tax purposes.  For purposes of this
definition, the United States, each state thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction.




“Foreign Subsidiary” shall mean
any direct or indirect Subsidiary of the Parent that is organized under the laws
of a jurisdiction other than the United States, any state thereof or the
District of Columbia.




“Formula Amount” shall have the
meaning set forth in Section 2.1(a).




“Fund” shall mean any Person
(other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.




“GAAP” shall mean generally
accepted accounting principles in the United States in effect from time to
time.




“Governmental Body” shall mean
any nation or government, any state or other political subdivision thereof or
any entity exercising the legislative, judicial, regulatory or administrative
functions of or pertaining to a government.




“Guarantor” shall mean, as of
the Closing Date, any Domestic Subsidiary which is not a Borrower as of the
Closing Date, and thereafter any Person who may guarantee payment or performance
of the whole or any part of the Obligations, whether pursuant to this Agreement
through the execution of a Guarantor Joinder Agreement or in a separate
Guaranty.




“Guarantor Joinder Agreement”
shall mean a Guarantor joinder agreement, substantially in the form of Exhibit K.




“Guaranty” shall mean any
guaranty of the Obligations of any Borrower, executed by a
Guarantor.




“Hazardous Substance” shall
mean, without limitation, any flammable explosives, radon, radioactive
materials, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum and petroleum products, methane, hazardous materials,
hazardous wastes, waste materials, hazardous or Toxic Substances or related
materials as defined in CERCLA, the Hazardous Materials Transportation Act, as
amended (49 U.S.C. Sections 1801, et seq.), the Toxic Substances Control Act, as
amended (15 U.S.C. Sections 2601, et seq.), RCRA or any other applicable
Environmental Law and in the regulations adopted pursuant thereto.




“Hedging Contracts” shall mean
any foreign exchange contract, currency swap agreement, futures contract,
commodities hedge agreement, interest rate protection agreement, interest rate
futures agreement, interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, option agreement, or any similar hedging
agreement or arrangement, in each case, to the extent entered into by a Person
in the ordinary course of business and not for speculative
purposes.


16


“Hedging Obligations” shall
mean all net obligations of a Person on a marked-to-market basis under any
Hedging Contracts.




“Incentive Pricing Effective
Date” shall be each December 1, March 1, June 1 and
September 1, commencing with December 1, 2010.




“Increasing Revolving Lender”
shall have the meaning specified in Section 2.6(a)




“Incremental Revolving Advance
Amount” shall mean, at any time, the excess, if any, of (a) Fifty
Million Dollars ($50,000,000) over (b) the aggregate increase in Revolving
Commitments established prior to such time pursuant to
Section 2.6.




“Indebtedness” shall mean, with
respect to a Person at any date of determination, any and all indebtedness,
obligations or liabilities (whether matured or unmatured, liquidated or
unliquidated, direct or indirect, absolute or contingent, or joint or several)
of such Person for or in respect of: (a) borrowed money, (b) amounts raised
under or liabilities in respect of any note purchase or acceptance credit
facility, (c) reimbursement obligations (contingent or otherwise) under any
letter of credit, (d) Hedging Obligations, (e) any other transaction (including
forward sale or purchase agreements, capitalized leases and conditional sales
agreements) having the commercial effect of a borrowing of money entered into by
such Person to finance its operations or capital requirements (but not including
trade payables and accrued expenses incurred in the ordinary course of business
which are not represented by a promissory note or other evidence of indebtedness
and which are not more than ninety (90) days past due), (f) any guaranty of
Indebtedness for borrowed money, and (g) all indebtedness secured by a Lien on
assets owned by such Person, whether or not such indebtedness actually shall
have been created, assumed or incurred by such Person.




“Intellectual Property” shall
mean (a) all utility and design patents of any Person, together with any
extensions, reexaminations and reissues of such patents, patents of addition,
patent applications, divisions, continuations, continuations-in-part, (b) all
trademarks, service marks, trade names, trade dress or other indicia of trade
origin of such Person, whether registered or unregistered, trademark and service
mark registrations and applications for trademark or service mark registrations
and any extension, modification or renewal thereof, whether now existing or
hereinafter acquired, and (c) all original works of authorship fixed in a
tangible medium, published or unpublished, and any copyrights, and registrations
thereof and applications therefor, including all renewals and extensions
thereof, of such Person, in each case, whether now existing or hereafter
acquired.




“Interest Election Request”
shall have the meaning set forth in Section 2.3.




“Interest Period” shall mean,
for each Advance comprising a single Borrowing of Libor Rate Loans, the period
commencing on the date of such Libor Rate Loans or the date of the conversion or
continuation of any Advance into such Libor Rate Loans and ending on the
numerically corresponding day of the period selected by the Borrowing Agent
pursuant to the provisions hereof and each subsequent period commencing on the
last day of the immediately preceding Interest Period in respect of such Libor
Rate Loans and ending on the last day of the period selected by the Borrowing
Agent pursuant to the provisions hereof; provided, however, that the
duration of each such Interest Period shall be one (1), two (2), three (3) or
six (6) months, in each case as the Borrowing Agent may select by delivery to
the Agent of a Revolving Advance Request therefor in accordance with
Section 2.2(a), an Interest Election Request in accordance with Section
2.3(a) or, in each case, any other notice acceptable to the Agent; provided, further,
that:


17


(i)
            the
      Interest Period for each Borrowing of Libor Rate Loans shall be of the
      same duration;




(ii)
            whenever
      the last day of any Interest Period would otherwise occur on a day other
      than a Business Day, the last day of such Interest Period shall be
      extended to occur on the next succeeding Business Day; provided, however, that,
      if such extension would cause the last day of such Interest Period to
      occur in the next following calendar month, the last day of such Interest
      Period shall occur on the immediately preceding Business
    Day;




(iii)
            if
      the Interest Period commences on a Business Day for which there is no
      numerical equivalent in the calendar month in which the Interest Period is
      to end, such Interest Period shall end on the last Business Day of that
      calendar month; and




(iv)          with
respect to Revolving Advances consisting of Libor Rate Loans, no Interest Period
with respect to such Libor Rate Loans may end on a date later than the Facility
Termination Date.




“Inventory Sublimit” shall have
the meaning set forth in Section 2.1(a)(ii).




“IP Rights” shall have the
meaning set forth in Section 5.11.




“IP Security Agreement” shall
mean a Copyright Security Agreement, Patent Security Agreement or Trademark
Security Agreement, as applicable.




“ISP” shall have the meaning
set forth in Section 2.9(d).




“Issuer” shall mean, with
respect to any Letter of Credit, the issuer of such Letter of Credit and shall
be, (i) with respect to Letter of Credit No. CPC5-853803 issued by JPMorgan
Chase Bank, N.A. on July 30, 2010 in the amount of $770,000 for the benefit
of China Merchants Bank-Suzhou Branch, (ii) with respect to any other Letter of
Credit hereunder, PNC Bank, or each other Lender (or Affiliate of a Lender) that
is requested by the Agent to act as an Issuer, and each of their successors and
assigns (and which may be replaced at the sole discretion of the
Agent).




“Joinder Amendment” shall have
the meaning set forth in Section 1.8.




“Lead Arranger” shall mean PNC
Bank.




“Lender” shall have the meaning
ascribed to such term in the preamble.




“Lender Default” shall have
the meaning set forth in Section 2.11(a).




“Lending Installation” shall
mean, with respect to a Lender, the branch, Subsidiary or Affiliate of such
Lender specified under the name of such Lender on the signature pages hereto or
as otherwise selected by such Lender pursuant to Section 2.12, or such
other branch, Subsidiary or Affiliate as such Lender may from time to time
specify in writing to the Borrowing Agent, the Agent and the Lenders as its
Lending Installation.  With respect to Revolving Advances denominated
in any Alternative Currency, any Lender may, by written notice to the Agent,
designate a branch, affiliate or correspondent office as its applicable branch,
Subsidiary or Affiliate with respect to Revolving Advances denominated in that
Alternative Currency.


18




“Letter of Credit” shall mean
(i) the trade or standby letters of credit to be issued pursuant to
Section 2.9 and (ii) the Existing Letters of Credit.




“Letter of Credit Application”
shall have the meaning set forth in Section 2.9(c).




“Letter of Credit Collateral
Account” shall have the meaning specified in Section 11.4.




“Letter of Credit Exposure”
shall mean, at any time of determination, the sum of: (a) the aggregate
undrawn amount of all Letters of Credit outstanding at such time, and
(b) the aggregate amount that has been drawn under such Letters of Credit
for which the Issuer has not at such time been reimbursed by the
Borrowers.




“Letter of Credit Fees” shall
have the meaning set forth in Section 3.4.




“Libor Rate” shall mean, for
any Interest Period with respect to a Libor Rate Loan, the quotient (rounded
upwards, if necessary, to the nearest one sixteenth of one percent (1/16th of
1%) of: (x) the per annum rate of interest, determined by the Agent in
accordance with its usual procedures (which determination shall be conclusive
absent manifest error) as of approximately 12:00 noon (London time) two (2)
Business Days prior to the beginning of such Interest Period pertaining to such
Libor Rate Loan, as provided by Bloomberg’s or Reuters (or any other similar
company or service that provides rate quotations comparable to those currently
provided by such companies as the rate in the London interbank market), as
determined by the Agent from time to time for purposes of providing quotations
of interest rates applicable to deposits in Dollars or in an Alternative
Currency in the London interbank market) as the rate in the London interbank
market for deposits in Dollars or in an Alternative Currency in immediately
available funds with a maturity comparable to such Interest Period divided by
(y) a number equal to 1.00 minus the
Eurocurrency Reserve Percentage.  In the event that such rate
quotation is not available for any reason, then the rate (for purposes of clause
(x) hereof) shall be the rate, determined by the Agent as of approximately 12:00
noon (London time) two (2) Business Days prior to the beginning of such Interest
Period pertaining to such Libor Rate Loan, to be the average (rounded upwards,
if necessary, to the nearest one sixteenth of one percent (1/16th of 1%)) of the
per annum rates at which deposits in Dollars or in an Alternative Currency in
immediately available funds in an amount comparable to such Libor borrowing and
with a maturity comparable to such Interest Period are offered to the prime
banks by leading banks in the London interbank market.  The Libor Rate
shall be adjusted automatically on and as of the effective date of any change in
the Eurocurrency Reserve Percentage.




“Libor Rate Loan” shall mean an
Advance during any period in which such Advance bears interest based on the
Libor Rate.




“Lien” shall mean any mortgage,
deed of trust, pledge, hypothecation, assignment, security interest, lien
(whether statutory or otherwise), Charge, claim or encumbrance, or preference,
priority or other security agreement or preferential arrangement held or
asserted in respect of any asset of any kind or nature whatsoever including any
conditional sale or other title retention agreement, any lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement under the Uniform Commercial
Code or comparable law of any jurisdiction claiming to reflect an interest in
any of the foregoing.




“Loan Account” shall have the
meaning set forth in Section 2.8.


19


“Loan Party” or “Loan Parties” shall mean,
singularly or collectively, as the context may require, each Borrower and each
Guarantor.




“Lockbox” shall mean a post
office box rented by and in the name of the Borrowing Agent (or any other
Borrower acceptable to the Agent) as required by this Agreement and as to which
only the applicable Lockbox Bank and the Agent have access pursuant to the
requirements of this Agreement and which cannot be closed by the applicable
Lockbox Bank without the consent of the Agent pursuant to the applicable Blocked
Account Agreement.




“Lockbox Agreement” shall have
the meaning set forth in Section 4.14(g).




“Lockbox Bank” shall mean PNC
Bank, any other Lender, and any other financial institution acceptable to the
Agent, in its sole discretion.




“Material Adverse Effect” shall
mean a material adverse effect on (a) the financial condition, results of
operations or business of any Loan Party, (b) the financial condition, results
of operations or business of the Loan Parties and their respective Subsidiaries,
taken as a whole, (c) the value of the assets or property of any Loan Party or
the Collateral, or the Agent’s Liens on the Collateral or, subject to Permitted
Encumbrances, the priority of any such Lien or (d) the practical realization of
the benefits of the Agent’s and each Lender’s rights and remedies under this
Agreement and the Other Loan Documents; provided, however, with respect
to clauses (a), (b) and (c), such material adverse effect, calculated as of any
date, must result in or be reasonably expected to result in a reduction in
Consolidated Net Income or Consolidated Net Equity in an amount greater than or
equal to ten percent (10%) of the Formula Amount as of such date.




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


20


“Material IP Rights” shall have
the meaning set forth in Section 5.11.




“Material Recovery Event” shall
mean: (a) any casualty loss in respect of assets of a Loan Party covered by
casualty insurance, (b) any compulsory transfer or taking under threat of
compulsory transfer of any asset of a Loan Party by any agency, department,
authority, commission, board, instrumentality or political subdivision of the
United States, any state or municipal government and (c) any recovery in good
funds by a Loan Party by reason of a nonappealable judgment against any other
Person to the full extent thereof; provided, however that no such
loss, transfer or recovery will constitute a Material Recovery Event unless the
proceeds therefrom exceed One Million Dollars $1,000,000 in the aggregate for
any calendar year.




“Material Recovery Prepayment
Date” shall mean, with respect to any Material Recovery Event that
results in Net Proceeds, the earlier of: (a) the date occurring ninety (90) days
after the occurrence of such Material Recovery Event and (b) the date that is
five Business Days after the date on which the Borrowing Agent shall have
notified the Agent of the applicable  Loan Party’s determination not
to acquire replacement assets useful in such Loan Party’s business (or, in the
case of property loss, not to effect repairs) with all or any portion of such
Net Proceeds.




“Material Subsidiary” shall
mean, at any time, with reference to any Loan Party, any Subsidiary of such Loan
Party (i) that has assets at such time comprising five percent (5%) or more of
the consolidated Assets of the Parent and its Subsidiaries, or (ii) whose
operations in the current fiscal year are expected to, or whose operations in
the most recent fiscal year did (or would have if such person had been a
Subsidiary for such entire fiscal year), represent five percent (5%) or more of
the Consolidated EBITDA of the Parent and its Subsidiaries for such fiscal
year.




“Maximum Revolving Advance
Amount” shall mean One Hundred Million Dollars ($100,000,000) as such
amount may be adjusted from time to time in accordance with this
Agreement.




“Mexican Security Documents”
shall mean the pledges on Inventory located in Mexico to be entered into among
each Borrower, respectively, the Agent and the party acting as the respective
depositary with respect to certain identified inventory, for the benefit of the
Agent.




“Mortgages” shall mean the
respective mortgages among the respective Loan Parties that own any of the Real
Property, and the Agent, in substantially the same form as the corresponding
mortgages used to secure the 2010 Note Collateral Agent for the benefit of the
2010 Noteholders.


21


“Multiemployer Plan” shall mean
a “multiemployer plan” as defined in Sections 3(37) and 4001(a)(3) of
ERISA.




“National City Bank” shall have
the meaning set forth in the preamble.




“Net Orderly Liquidation Value”
shall mean, the orderly liquidation value (net of costs and expenses estimated
to be incurred in connection with such liquidation) of the Borrowers’ Inventory
that is estimated to be recoverable in an orderly liquidation of such Inventory
expressed as a percentage of the net book value thereof, such percentage to be
as determined from time to time by reference to the most recent Inventory
appraisal completed by a qualified third-party appraisal company (approved by
the Agent in its Permitted Discretion) delivered to the Agent.




“Net Proceeds” shall mean: (a)
the cash proceeds (including cash proceeds subsequently received in respect of
non-cash consideration initially received) from any sale, lease, transfer,
dissolution or other disposition of assets of a Loan Party to a Person (other
than collections in respect of Receivables) received by such Loan Party,
including cash payments in respect of Inventory sales or leases (other than
sales or leases of Inventory in the ordinary course of business), payments in
respect of other dispositions of Collateral and any other assets or property of
any Loan Party (net of (x) selling expenses including any reasonable broker’s
fees or commissions, costs of discontinuing operations associated with such
assets and sales, transfer and similar taxes and (y) the repayment of any
Indebtedness secured by a purchase money Lien on such assets that is permitted
under this Agreement), (b) the cash proceeds of any tax refund, (c) the cash
proceeds from the issuance or sale of equity securities or debt securities of a
Loan Party pursuant to any public offering or private placement, net of
transaction costs (in each case, net of customary fees, costs and expenses
including underwriters’ or placement agents’ discounts and commissions and
transfer and similar taxes and legal and accounting fees and expenses) and (d)
the cash proceeds from any Material Recovery Event.




“New Bolton” shall mean Bolton
Conductive Systems, LLC, a Michigan limited liability company.




“New Bolton Acquisition” shall
mean the transaction consummated on the  New Bolton Acquisition Date,
whereby the Parent acquired, pursuant to the terms and conditions of the New
Bolton Acquisition Documents, (i) fifty-one percent (51%) of all of the
outstanding membership interest of New Bolton, and (ii) an option, exercisable
on or after January 1, 2013, but not later than December 31, 2013, to acquire
forty-nine percent (49%) of the outstanding membership interest of New Bolton
from Bolton Conductive Systems, LLC.




“New Bolton Acquisition
Agreement” shall mean the Asset Purchase and Contribution Agreement among
the Parent, Bolton Conductive Systems, LLC, Martin Kochis, Joseph Malecke,
Bolton Investments, LLC, a Michigan limited liability company, William Bolton
and New Bolton, as in existence as of the New Bolton Acquisition
Date.




“New Bolton Acquisition Date”
shall mean October 13, 2009.




“New Bolton Acquisition
Documents” shall mean the New Bolton Acquisition Agreement, and all
agreements, instruments and documents executed pursuant thereto or in connection
therewith, as in existence as of the New Bolton Acquisition
Date.


22


“New Bolton Loan Documents”
shall mean that certain loan agreement, dated on or about the New Bolton
Acquisition Date, between New Bolton and Comerica Bank, pursuant to which New
Bolton may borrow an aggregate principal amount of up to Five Million Dollars
($5,000,000) from Comerica Bank, and any modification or amendment thereto, or
any restatement or refinancing thereof, whether with Comerica Bank or another
lender or lenders, and all agreements, instruments and documents executed
pursuant to or in connection with any such loan agreement (as so modified
amended, restated or refinanced).




“Non-Consenting Lender” shall
have the meaning set forth in Section 15.5(h).




“Non-Excluded Taxes” shall have
the meaning specified in Section 3.13(a).




“Non-Increasing Revolving
Lender” shall have the meaning specified in
Section 2.6(a).




“Note” shall mean each
Revolving Note and “Notes” shall collectively
mean all of the Revolving Notes.




“Obligated Lender” shall have
the meaning set forth in Section 2.12.




“Obligations” shall mean the
present and future loans, advances, debts, liabilities and other obligations of
any Loan Party to the Agent, the Lenders and the Issuer (or any of their
respective Affiliates) under this Agreement and the Other Loan Documents
(whether absolute, contingent, matured or unmatured) including: (a) the
outstanding principal and accrued interest (including interest accruing after a
petition for relief under the federal bankruptcy laws has been filed, whether or
not allowed) in respect of any Revolving Advances to any Borrower by the Lenders
plus the Letter of Credit Exposure and other amounts owing by any Borrower to
the Agent or the Lenders under this Agreement, the Notes or any Other Loan
Document, (b) all fees owing to the Lenders or the Agent under this Agreement
and the Other Loan Documents, (c) any costs and expenses reimbursable to the
Lenders or the Agent pursuant to Section 15.12, (d) Other Taxes, (e)
compensation and indemnification obligations under this Agreement or any Other
Loan Document, (f) reimbursement obligations owing to the Issuer, (g) the Unpaid
Reimbursement Obligation, (h) the Hedging Obligations owing to a Qualified
Counterparty and (i) any fees or charges owing with respect to Bank Services. It
is understood and agreed that any amount owing to a Person which was an
Affiliate of the Agent which was the Agent at the time such hedge exposure of
any Loan Party was incurred, or which was an Affiliate of the Agent which was
the Agent at the time the charge for Bank Services was incurred, or which was
the Issuer at the time the applicable Letter of Credit was issued, shall
continue to be considered as an Obligation for all purposes hereunder and
secured hereby even after such Person is no longer an Affiliate of the Agent or
the Issuer, unless such Obligation has been terminated or such Person otherwise
waives such Obligation.




“Obligor” shall mean,
singularly or collectively, as the context may require, each Borrower and each
Guarantor.




“Other Loan Documents” shall
mean the Notes, the Security Questionnaires, the Letters of Credit, any Blocked
Account Agreement, any Guaranty, any IP Security Agreement, the Mortgages, the
Pledge Agreement, the Pledge Agreement (Brazil), the 2010 Note Intercreditor
Agreement, the Mexican Security Documents, any Waiver, any Compliance
Certificate, the Agent’s Fee Letter, the Post-Closing Waiver Letter, any Hedging
Contract executed by any Qualified Counterparty and any other note, mortgage,
deed of trust, security agreement, pledge, guaranty, insurance assignment or
other lien instrument, fee letter, reimbursement agreement, environmental or
other indemnity agreement, financial statement, audit report, environmental
audit, notice, credit request, cash management agreement, officer’s certificate
or other writing of any kind which is now or hereafter required to be delivered
by or on behalf of any Loan Party to the Agent, the Issuer or any Lender (or any
of their respective Affiliates) in connection with this
Agreement.


23


“Other Taxes” shall have the
meaning set forth in Section 3.13.




“Parent” shall mean Stoneridge,
Inc., an Ohio corporation.




“Parent Guaranty” shall mean
that certain guaranty agreement of the Parent, in form and substance
satisfactory to the Agent, to be dated as of the date of the New Bolton Loan
Documents, in favor of the lender or lenders with respect to the New Bolton Loan
Documents, pursuant to which the Parent guarantees the obligations of New Bolton
owing to such lender or lenders pursuant to the New Bolton Loan
Documents.




“Participant” shall have the
meaning set forth in Section 15.5(d).




“Patent Security Agreement”
shall mean a patent and patent application security agreement, executed and
delivered by a Loan Party in connection with this Agreement, in form and
substance satisfactory to the Agent.




“Payment Office” shall mean
initially 1900 East Ninth Street, 34th Floor, Cleveland, Ohio 44114; thereafter,
such other office of the Agent, if any, which it may designate by notice to the
Borrowing Agent and to each Lender to be the Payment Office.




“PBGC” shall mean the Pension
Benefit Guaranty Corporation.




“Percentage” means, as the
context may require, any Lender’s Revolving Percentage.




“Permitted Acquisition” shall
have the meaning set forth in Section 7.1(b).




“Permitted Acquisition Assumed
Indebtedness” shall have the meaning set forth in
Section 7.1(b).




“Permitted Discretion” shall
mean, as to any Person, a determination made in good faith and in the exercise
of its reasonable (from a perspective of a secured asset-based lender) business
judgment.


24


“Permitted Encumbrances” shall
mean (a) Liens in favor of the Agent for the benefit of the Secured Creditors;
(b) Liens for taxes, assessments or other governmental charges that (i) are not
delinquent or (ii) which are being contested in good faith by appropriate
proceedings which stay the enforcement of any Lien and with respect to which
proper reserves have been taken in accordance with GAAP; provided, however that such
Liens shall have no effect on the priority of the Liens in favor of the
Agent  (and the existence of such Liens shall not violate Section
6.1); (c) deposits or pledges of cash to secure obligations under worker’s
compensation, social security or similar laws, or under unemployment insurance
or general liability or product liability insurance; (d) deposits or pledges of
cash  to secure bids, tenders, contracts (other than contracts for the
payment of money), leases, statutory obligations, performance bonds, surety and
appeal bonds and other obligations of like nature arising in the ordinary course
of business; (e) mechanics’, workers’, materialmens’, warehousemens’, common
carriers’, landlords’ or other like Liens arising in the ordinary course of
business with respect to obligations which are not due or which are being
contested in good faith by a Loan Party or its Subsidiaries; (f) Liens
(including Liens in connection with capital leases) placed upon equipment and
real estate assets acquired to secure a portion of the purchase price thereof;
provided that
(x) any such Lien shall not encumber any other property of a Loan Party or any
Subsidiary thereof (other than insurance and other proceeds of such equipment
and real estate) and (y) the aggregate amount of Indebtedness secured by such
Liens incurred as a result of such purchases during any fiscal year shall not
exceed the amount provided for in Section 7.6; (g) zoning restrictions,
easements, encroachments, rights of way, restrictions, leases, licenses,
restrictive covenants and other similar title exceptions affecting Real
Property, none of which materially impairs the use of such Real Property or the
value thereof, and none of which is violated in any material respect by existing
or supporting structures or land use; (h) attachment and judgment Liens which do
not constitute an Event of Default under Section 10.6; (i) any Lien
existing on any property or asset prior to the acquisition thereof by the Parent
or any Subsidiary of the Parent; provided that (i)
such Lien is not created in contemplation of or in connection with such
acquisition, (ii) such Lien does not apply to Receivables or Inventory, (iii)
such Lien does not apply to any other property or assets of the Borrower or any
Subsidiary and (iv) such Lien does not (A) materially interfere with the use,
occupancy and operation of any Real Property, (B) materially reduce the fair
market value of such Real Property but for such Lien or (C) result in any
material increase in the cost of operating, occupying or owning or leasing such
Real Property; (j) Liens securing the repayment of the 2010 Notes and evidenced
by the 2010 Note Collateral Documents so long as such Liens are subject to the
2010 Note Intercreditor Agreement; and (k) the Liens listed on Schedule 7.2 to
this Agreement so long as the principal amount secured thereby is not hereafter
increased, and no additional assets become subject to such Liens.




“Permitted Period” shall mean,
for purposes of making any guarantee of, investment in, or loan, advance or
other extension of credit to, any Foreign Subsidiary or joint venture pursuant
to Sections 7.3(e), 7.4(e) and 7.5(e), or for purposes of paying any
dividend or distribution pursuant to Section 7.7, or for purposes of
repaying or prepaying certain Indebtedness under Section 7.17, any time at
which:




(a)           after
giving effect to any such guarantee, investment, loan, advance or other
extension of credit, or any dividend or distribution, or any repayment or
prepayment of Indebtedness (any of the foregoing being a “Proposed
Transaction”), the aggregate outstanding Revolving Advances plus the Letter of
Credit Exposure at such time is not greater than or equal to Twenty Million
Dollars ($20,000,000);




(b)           the
Borrowing Agent shall have delivered to the Agent, in form and substance
satisfactory to the Agent:




(i)           within
fifteen days of the consummation of such Proposed Transaction, a pro forma
consolidated balance sheet of the Parent and its consolidated Subsidiaries (the
“Transaction Pro Forma”), based on recent financial data, which shall be
accurate and complete in all material respects and shall fairly present the
assets, liabilities and financial condition of the Parent and its consolidated
Subsidiaries in accordance with GAAP consistently applied, but taking into
account such Proposed Transaction and the funding of all Advances in connection
therewith, and (x) such Transaction Pro Forma shall reflect that average daily
Undrawn Availability for the thirty (30) day period preceding the consummation
of such Proposed Transaction would have exceeded Fifty Million Dollars
($50,000,000) on a pro forma basis (giving effect to such Proposed Transaction
and all Advances made and Letters of Credit issued in connection therewith as if
made or issued on the first day of such period), (y) the Transaction Projections
(as hereinafter defined) shall reflect that such Undrawn Availability of not
less than Fifty Million Dollars ($50,000,000) shall continue for at least thirty
(30) days after the consummation of such Proposed Transaction, and (z) on a pro
forma basis (giving effect to such Proposed Transaction and all Advances made
and Letters of Credit issued in connection therewith as if made on the first day
of such period), the Loan Parties would have been in compliance with the
financial covenant set forth in Section 6.4, for a period of four fiscal
quarters ended with the most recent fiscal quarter for which financial
statements have been provided (or are required to have been provided) pursuant
to Sections 9.7 and 9.8, respectively, as if such financial covenant were
applicable notwithstanding the fact that Undrawn Availability may be in excess
of Twenty Million Dollars ($20,000,000);


25


(ii)          within
fifteen days of the consummation of such Proposed Transaction, updated versions
of the most recently delivered projections under Section 9.11 covering a
period of four fiscal quarters, commencing with the fiscal quarter in which the
Proposed Transaction is to be consummated and otherwise prepared in accordance
with the projections required to be delivered under Section 9.11 (the
“Transaction Projections”) and based upon the financial statements (I) of the
Parent and its consolidated Subsidiaries for Parent’s most recently completed
fiscal year and each fiscal quarter during the current fiscal year for which
financial statements have been provided (or are required to have been provided)
pursuant to Sections 9.7 and9.8, respectively, in relation to the date of
such required delivery of the Proposed Transaction, taking into account such
Proposed Transaction and (II) in the case of an investment, of such Person in
which such investment is being made, for a period similar to the period
described in clause (I) above.




“Person” shall mean any
individual, sole proprietorship, partnership, corporation, business trust, joint
stock company, trust, unincorporated organization, association, limited
liability company, institution, public benefit corporation, joint venture,
entity or government (whether federal, state, county, city, municipal or
otherwise, including any instrumentality, division, agency, body or department
thereof).




“Plan” shall mean any employee
pension benefit plan within the meaning of Section 3(2) of ERISA,
maintained for employees of any Loan Party or any Subsidiary thereof or any
member of the Controlled Group or any such Plan to which any Loan Party or any
Subsidiary thereof or any member of the Controlled Group is required to
contribute on behalf of any of its employees.




“Pledge Agreement” shall mean a
Pledge Agreement, dated as of the Closing Date, among the Loan Parties and the
Agent, in substantially the same form as the Senior Secured Notes Pledge and
Security Agreement used to secure the 2010 Note Collateral Agent for the benefit
of the 2010 Noteholders.




“Pledge Agreement (Brazil)”
shall mean a Pledge Agreement, dated as of the Closing Date, among Parent,
Alphabet do Brazil Ltda and the Agent, in substantially the same form as the
pledge agreement used to secure the 2010 Note Collateral Agent for the benefit
of the 2010 Noteholders.




“PNC Bank” shall have the
meaning set forth in the Preamble.




“Post-Closing Waiver Letter”
shall mean the Post-Closing Waiver Letter, dated as of the Closing Date, among
the Loan Parties and the Agent.




“Projections” shall have the
meaning set forth in Section 5.6(a).




“Proposed Acquisition” shall
have the meaning set forth in Section 7.1(b) hereof.


26


“Qualified Counterparty” shall
mean the Agent, any Affiliate of the Agent and any Lender (or a Person who was a
lender at the time of execution and delivery of a Hedging Contract with a Loan
Party) who has entered into a Hedging Contract with a Loan Party.




“Real Property” shall mean all
real property, both owned and leased, of any Loan Party.




“Receivable” shall mean an
Account.




“Register” shall have the
meaning set forth in Section 15.5(c).




“Reportable Event” shall mean a
reportable event described in Section 4043(b) of ERISA or the regulations
promulgated thereunder.




“Required Lenders” shall mean,
at any time, (x) if there are more than two Lenders, Lenders (excluding, for
purposes of this definition, Lenders then constituting “Defaulting Lenders”
under Section 2.11) holding greater than fifty percent (50%) of the
aggregate amount of the Revolving Commitments of all of the Lenders at such
time; provided,
however, that,
if all of the Revolving Commitments are terminated pursuant to the terms hereof,
then, the term “Required Lenders” means Lenders (excluding, for purposes of this
definition, any Defaulting Lenders) having greater than fifty percent (50%) of
the aggregate principal amount of the Advances of all of the Lenders outstanding
at such time, plus the Letter of
Credit Exposure at such time (excluding, for purposes of this clause (x), the
outstanding Revolving Commitments and the outstanding amount of Advances and
Letter of Credit Exposure of any such Defaulting Lender); and (y) if there are
no more than two (2) Lenders, all Lenders (excluding, for purposes of this
clause (y), any Defaulting Lenders).




“Revolving Advance Request”
shall have the meaning set forth in Section 2.2(a).




“Revolving Advances” shall mean
each of the Advances made pursuant to Section 2.1.




“Revolving Borrowing” shall
mean a Borrowing comprised of Revolving Advances which are made, converted or
continued by the Lenders on a single date, and, in the case of Libor Rate Loans,
which are in a single currency and as to which a single Interest Period is in
effect.




“Revolving Commitment” shall
mean, with respect to any Lender, (a) the commitment of such Lender to make
Revolving Advances in an aggregate amount not to exceed the Dollar amount set
forth below such Lender’s name on such Lender’s signature page hereto as such
Lender’s Revolving Commitment, as same may be adjusted upon any assignment by a
Lender pursuant to Section 15.5(b) or as may be otherwise adjusted from
time to time in accordance with this Agreement or (b) the Dollar amount set
forth in any Assignment and Assumption to which such Lender is a party as such
Lender’s Revolving Commitment.




“Revolving Note” or “Revolving Notes” shall mean,
singularly or collectively, as the context may require, the promissory notes
referred to in Section 2.2(c).




“Revolving Percentage” shall
mean, as to any Lender at any time, the percentage that such Lender’s Revolving
Commitment then constitutes of the total Revolving Commitments (or, at any time
after the Revolving Commitments shall have expired or terminated, the percentage
that the aggregate principal amount of such Lender’s Revolving Advances
outstanding at such time constitutes of the aggregate principal amount of the
Revolving Advances of all of the Lenders outstanding at such
time).


27


“RCRA” shall mean the Resource
Conservation and Recovery Act of 1976, as amended from time to
time.




“Sarasota Property” shall mean
the Real Property owned by one of the Borrowers in fee simple and located in
Sarasota, Florida at 26th Ct. F,
Sarasota, FL 34243.




“Secured Creditor” or “Secured Creditors” shall have
the meanings set forth in Section 4.1.




“Securities Account Control
Agreement” shall mean an agreement in form and substance satisfactory to
the Agent, executed by the Borrowing Agent and the Agent and acknowledged and
agreed to by the relevant Approved Securities Intermediary.




“Security Questionnaire” shall
mean, with respect to each Loan Party, the completed Security Questionnaire
provided by such Loan Party to the Agent.




“Settlement Date” shall mean
the Closing Date and thereafter Wednesday of each week unless such day is not a
Business Day in which case it shall be the next succeeding Business
Day.




“Settlement Week” shall mean
the time period commencing with the opening of business on a Tuesday and ending
on the end of business the following Tuesday.




“Specified Fixed Assets” shall
mean and include with respect to any Person, such Person’s Real Property, all
Investment Property and Security Entitlements consisting of any equity interests
in any Subsidiaries or joint ventures, and all Equipment and
Fixtures.




“Specified Fixed Asset
Collateral” shall mean, with respect to any Loan Party, such Loan
Party’s:




(a)           Specified
Fixed Assets;




(b)           policies
and certificates of insurance covering Specified Fixed Assets;




(c)           accessions
to, substitutions for, and all replacements, Products and Proceeds of the
Specified Fixed Assets including proceeds of insurance policies insuring such
Specified Fixed Assets  and proceeds of any insurance, indemnity,
warranty or guaranty, all to the extent relating to or arising from any of the
Specified Fixed Assets; and




(d)           books,
records, and other property (including credit files, programs, printouts,
computer software (owned by such Person or in which it has an interest), and
disks, magnetic tape and other magnetic media, and other materials and records)
pertaining to any such above-referenced property.




“Stated Amount” shall mean,
with respect to each Letter of Credit, the maximum available to be drawn
thereunder (regardless of whether any conditions or other requirements for
drawing could then be met).




“StuckyNet System”shall mean
the Agent’s StuckyNet-Link internet-based communication system.


28


“Subsidiary” shall mean, in
respect of any Person that is not a natural Person, a corporation or other
business entity the shares constituting a majority of the outstanding capital
stock (or other form of ownership) or constituting a majority of the voting
power in any election of directors (or shares constituting both majorities) of
which are (or upon the exercise of any outstanding warrants, options or other
rights would be) owned directly or indirectly at the time in question by such
Person or another subsidiary of such Person or any combination of the
foregoing.




“Subchapter S” shall mean
subchapter S of the Code.




“Synthetic Lease Obligation”
means the monetary obligation of a Person under (a) a so-called synthetic,
off-balance sheet or tax retention lease or (b) an agreement for the use or
possession of property creating obligations that do not appear on the balance
sheet of such Person but which, upon the insolvency or bankruptcy of such
Person, would be characterized as the indebtedness of such Person (without
regard to accounting treatment).




“Termination Event” shall mean:
(i) a Reportable Event with respect to any Plan or Multiemployer Plan; (ii) the
withdrawal of any Loan Party or any Subsidiary thereof or any member of the
Controlled Group from a Plan during a plan year in which such entity was a
“substantial employer” as defined in Section 4001(a)(2) of ERISA; (iii) the
providing of notice of intent to terminate a Plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the institution by the PBGC of
proceedings to terminate a Plan or Multiemployer Plan; (v) any event or
condition (a) which could reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan or Multiemployer Plan, or (b) that could
reasonably be expected to result in termination of a Multiemployer Plan pursuant
to Section 4041A of ERISA; or (vi) the partial or complete withdrawal
within the meaning of Sections 4203 and 4205 of ERISA, of any Loan Party, any
Subsidiary thereof or any member of the Controlled Group from a Multiemployer
Plan.




“Toxic Substance” shall mean
and include any material present on the Real Property which has been shown to
have significant adverse effect on human health or which is subject to
regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C. Sections
2601 et seq., applicable state law, or any other applicable Federal or state
laws now in force or hereafter enacted relating to toxic
substances.  “Toxic Substance” includes but is not limited to
asbestos, polychlorinated biphenyls (PCBs) and lead-based paints.




“Trademark Security Agreement”
shall mean a trademark security agreement, executed and delivered by a Loan
Party in connection with this Agreement, in form and substance satisfactory to
the Agent.




“Type” shall mean an Advance
consisting of Libor Rate Loans made in Dollars, an Advance consisting of Libor
Rate Loans made in a single Alternative Currency, or an Advance consisting of
Alternate Base Rate Loans, as applicable.




“UCP” shall have the meaning
set forth in Section 2.9(d).




“Undrawn Availability” shall
mean, as of any date of determination, an amount equal to (a) the lesser of (i)
the Formula Amount at such time and (ii) the sum of the Maximum Revolving
Advance Amount less the Letter of Credit Exposure at such time, minus (b) the sum of
(i) the outstanding amount of Revolving Advances at such time, (ii) all amounts
at such time due and owing to any Loan Party’s trade creditors which are
outstanding ninety (90) days or more beyond the due date (without duplication
with respect to any such amount deducted from the Formula Amount), and (iii)
fees and expenses for which any Loan Party is liable at such time but which have
not been paid or charged to the Loan Account.


29


“Uniform Commercial Code”
shall mean the Uniform Commercial Code or other similar law of the State of Ohio
as in effect on the date of this Agreement and as amended from time to
time.




“Unpaid Reimbursement
Obligation” shall have the meaning set forth in
Section 2.9(g).




“USA Patriot Act” shall mean
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.




“Waivers” shall mean,
collectively, any and all landlord’s waivers, warehouseman’s waivers, consignee
waivers, creditor’s waivers, mortgagee waivers and processing facility and
similar bailee’s waivers, executed and delivered in connection with this
Agreement, in form and substance satisfactory to the Agent.




“Wholly-Owned Subsidiary” shall
mean each Subsidiary of the Parent at least ninety-nine percent (99%) of whose
capital stock, equity interests and partnership interests, other than director’s
qualifying shares or similar interests, are owned directly or indirectly by the
Parent.




“Withholding Certificate” shall
mean a Form W-9; a Form W-8BEN; a Form W-8ECI; a Form W-8IMY and the related
statements and certifications as required under Section 1.1441-1(e)(2) or
(3) of the Income Tax Regulations; a statement described in
Section 1.871-14(c)(2)(v) of the Income Tax Regulations; or any other
certificates under the Code or Income Tax Regulations that certify or establish
the status of a payee or beneficial owner as a U.S. or foreign
person.




“2002 Note Documents” shall
mean the 2002 Note Indenture, the 2002 Notes and each other document executed in
connection therewith.




“2002 Note Indenture” shall
mean that certain 2002 Note Indenture, dated as of May 1, 2002, among
Parent, as Issuer, Electronics and Controls, as guarantors thereunder, and Bank
of New York Mellon Trust Company, N.A., as Successor Trustee pursuant to which
the 2002 Notes were issued, as the same may be from time to time amended,
restated or otherwise modified in accordance with the provisions hereof, to be
supplemented on or about the Closing Date by that certain First Supplemental
Indenture, dated as of the Closing Date.




“2002 Noteholder” shall mean
the holder or purchaser of any 2002 Note under the 2002 Note
Indenture.




“2002 Notes” shall mean the
Parent’s 11-1/2% Senior Notes due 2012 issued on May 1, 2002 pursuant to
the 2002 Note Indenture.




“2010 Note Collateral Agent”
shall mean The Bank of New York Mellon Trust Company, N.A., in its capacity as
“Collateral Agent” with respect to the 2010 Noteholders under the 2010 Note
Documents.




“2010 Note Collateral
Documents” shall mean the Senior Secured Notes Pledge and Security
Agreement, certain mortgages or deeds of trust with respect to the Real
Properties, the pledge agreement with respect to the stock issued by PST
Electronica S.A., and any other collateral documents executed in connection with
the 2010 Note Indenture, in each case securing the payment of the 2010
Notes.


30


“2010 Note Documents” shall
mean the 2010 Note Indenture, the 2010 Notes, the 2010 Note Collateral
Documents, and each other document executed in connection with the
foregoing.




“2010 Note Indenture” shall
mean that certain Indenture, dated as of the Closing Date, among Parent, as
“Issuer”, Electronics and Controls, as guarantors thereunder, and The Bank of
New York Mellon Trust Company, N.A., as “Trustee” pursuant to which the 2010
Notes were issued, as the same may be from time to time amended, restated or
otherwise modified in accordance with the provisions hereof.




“2010 Note Intercreditor
Agreement” shall mean that certain Intercreditor Agreement, executed by
each of the Borrowers, any Guarantors, The Bank of New York Mellon Trust
Company, N.A., as “Trustee” for the 2010 Noteholders and as “Collateral Agent”
on behalf of itself and the 2010 Noteholders, and the Agent, on behalf of the
Lenders and the Issuers, as the same may be from time to time amended, restated
or otherwise modified in accordance with the provisions thereof..




“2010 Noteholder” shall mean
the holder or purchaser of any 2010 Note under the 2010 Note
Indenture.




“2010 Notes” shall mean the
Parent’s Senior Secured Notes due 2017 issued on or about the Closing Date
pursuant to the 2010 Note Indenture.




1.5
            Certain Matters of Construction.




For the
purpose of computing periods of time from a specified date to a later specified
date, the word “from” means “from and including” and the words “to” and “until”
each mean “to but excluding”.  Unless the context otherwise requires,
(a) any definition of or reference to any agreement, instrument or Other
Loan Document herein shall be construed as referring to such agreement,
instrument, or Other Loan Document as from time to time amended, supplemented or
otherwise modified, substituted, amended and restated or replaced, (b) any
reference herein to any Person shall be construed to include such Person’s
successors and assigns, (c) the words “herein,” “hereof,” and “hereunder,”
and words of similar import, shall be construed to refer to this Agreement in
its entirety and not any particular provision hereof, (d) any reference to
payment, repayment, or prepayment shall be construed as referring to payment of
immediately available funds in Dollars (or the substantial equivalent thereof in
an Alternative Currency), (e) any pronoun used shall be deemed to cover all
genders, (f) wherever appropriate in the context, terms used herein in the
singular also include the plural and vice versa, (h) all references to statutes
and related regulations shall include any amendments of same and any successor
statutes and regulations, (i) the word “including” may be read to mean
“including, without limitation,” as the context requires and (j) unless
otherwise stated, all section references are to this Agreement.


31


1.6
            Currency Equivalents.




For
purposes of this Agreement, except as otherwise specified herein, (i) the
equivalent in Dollars of any Alternative Currency shall be determined by using
the quoted spot rate at which the Agent offers to exchange Dollars for such
Alternative Currency at its Payment Office at 9:00 A.M. (local time at the
Lending Installation) two Business Days prior to the date on which such
equivalent is to be determined, and (ii) the equivalent in any Alternative
Currency of Dollars shall be determined by using the quoted spot rate at which
the Agent’s Lending Installation offers to exchange such Alternative Currency
for Dollars at the Payment Office at 9:00 A.M. (local time at the Payment
Office) two Business Days prior to the date on which such equivalent is to be
determined; provided, that (A) the equivalent in Dollars of each Libor Rate Loan
made in an Alternative Currency shall be, for the purposes of determining the
unused portion of each Lender’s Commitment, or any or all Advances outstanding
on such date, calculated or recalculated, as the case may be, on the date that
the Libor Rate applicable to such Advance is established, on the last day of the
Interest Period applicable thereto, and on each date that it shall be necessary
(or the Agent shall elect) to determine the unused portion of each Lender’s
Commitment; (B) the equivalent in Dollars of any Letter of Credit Exposure in
respect of any Letter of Credit denominated in an Alternative Currency shall be
determined at the time the drawing under such Letter of Credit was paid or
disbursed by the applicable Issuer; (C) for purposes of determining the Maximum
Revolving Advance amount, the Letter of Credit Exposure or the Undrawn
Availability as contemplated by Sections 2.1(a), 2.5(c), 2.7(b), 2.9(a) and
3.2, the equivalent in Dollars of the face amount of any Letter of Credit
denominated in an Alternative Currency shall be calculated (x) on the date of
the issuance of the respective Letter of Credit, (y) on the first Business Day
of each calendar month thereafter and (z) in any other case where the same is
required or permitted to be calculated, on such other day as the Agent may, in
its Permitted Discretion, consider appropriate; and (D) for purposes of
calculating letter of credit fees as contemplated by Section 3.4, the
equivalent in Dollars of the Stated Amount of any Letter of Credit denominated
in an Alternative Currency shall be calculated on the first day of each calendar
month in the quarterly period in which the respective payment is due pursuant to
said sections.  Notwithstanding the foregoing, for purposes of
determining the amount of the unused facility fees or the Applicable Margin
payable pursuant to Sections 3.5 or 3.2 hereof, the equivalent in Dollars
of any outstanding Revolving Advances which are denominated in Alternative
Currency shall be determined by using the quoted spot rate at which the Agent
offers to exchange Dollars for such Alternative Currency at its Payment Office
at 9:00 A.M. (local time at the Payment Office) two Business Days prior to the
commencement date of the applicable Interest Period for such Revolving Advances,
unless the Agent, in its sole discretion, shall elect to use another day or
basis for determining such equivalent in Dollars.




1.7
            Addition of
      Borrowers.




By
execution of a Borrower Joinder Agreement (including a Borrower Joinder
Agreement executed in connection with a Permitted Acquisition) by a signatory
thereof, and upon acceptance of such Borrower Joinder Agreement by the Agent, in
its sole discretion, and such signatory’s satisfaction of all conditions and
completion of all deliveries specified in the Joinder Amendment (if any) and the
Borrower Joinder Agreement, this Agreement shall be amended so that such
signatory shall become for all purposes a party to this Agreement as if an
original signatory hereto and shall be admitted as a Borrower
hereunder.  This Agreement (as amended by each Joinder Amendment)
shall be binding for all purposes upon such signatory Borrower as if such
signatory was an original signatory hereto, and, if applicable, accommodate the
consummation of the Permitted Acquisition. The Borrower Joinder Agreement shall
require, among other things, (x) a supplement the Schedules provided by the Loan
Parties in connection with this Agreement to reflect the new Borrower, (y) to
the extent acceptable to the Agent in its sole discretion, an update of certain
previously delivered Schedules to the date of the Joinder Amendment to reflect
any change in the disclosures therein made, (z) the delivery of new Notes
reflecting all Borrowers.




1.8
            Joinder Amendments.




In
connection with each Borrower Joinder Agreement, each of the Loan Parties, the
Agent and the Required Lenders may execute an amendment to this Agreement (each
a “Joinder Amendment”), which amendment shall amend such provisions of this
Agreement and the Other Loan Documents as deemed necessary by the Agent to
accommodate the addition of the applicable new Person as a
Borrower.  The consent and execution thereof by all Lenders (and if
applicable, the Issuer) shall be required with respect to any provision of a
Joinder Amendment which would otherwise require pursuant to Section 15.3 hereof
unanimous consent by all Lenders (and if applicable, the
Issuer).


32


1.9
            Classification of New Bolton as a
  Non-Subsidiary.




Notwithstanding
any provision of this Agreement to the contrary, including, without limitation,
the definition of “Subsidiary” hereunder, New Bolton will not be deemed for any
purpose to be, and shall not have any of the rights or obligations of, a
“Subsidiary”, “Borrower”, “Guarantor”, “Loan Party” or “Obligor” hereunder
unless and until the Parent owns, directly or indirectly, one hundred percent
(100%) of the issued and outstanding membership or any other equity interests of
New Bolton.




1.10
            Time
      References.




All time
references in this Agreement are to Cleveland, Ohio time.




II.
            ADVANCES;
      PAYMENTS.




2.1
            Revolving
      Advances to Borrowers.




(a)           Subject
to the terms and conditions set forth in this Agreement, each Lender with a
Revolving Commitment severally and not jointly agrees to make, until and
including the Business Day immediately preceding the Facility Termination Date,
Revolving Advances to the Borrowers; provided, however, that the
aggregate outstanding amount of such Lender’s Revolving Advances shall not at
any time exceed of the lesser of: (x) such Lender’s Revolving Percentage of an
amount equal to the Maximum Revolving Advance Amount less the Letter of Credit
Exposure and (y) such Lender’s Revolving Percentage of an amount equal to the
sum of:




(i)           up
to eighty-five percent (85%) multiplied by the face amount of Eligible
Receivables, plus




(ii)          either
(A) sixty-five percent multiplied by the value of Eligible Inventory valued at
the lower of cost (determined on a first-in-first-out basis) or market value, or
(B) in the event that the Borrowing Agent elects to have its or any other Loan
Party’s Inventory appraised for the purpose of determining the value of the
Inventory portion of the Formula Amount by an appraisal firm acceptable to the
Agent, in its sole discretion, the lesser of either (1) seventy percent (70%)
multiplied by the value of Eligible Inventory valued at the lower of cost
(determined on a first-in-first-out basis) or market value, or (2) eighty-five
percent (85%) of the Net Orderly Liquidation Value of Eligible Inventory;
provided, however, in no event will the aggregate amount of all such Revolving
Advances from all Lenders made with respect to Eligible Inventory exceed
Thirty-Five Million Dollars ($35,000,000) (the “Inventory Sublimit”); provided, further, that in no
event will the aggregate amount of all such Revolving Advances from all Lenders
made with respect to Eligible Inventory located in Mexico exceed Five Million
Dollars ($5,000,000), minus




(iii)         the
aggregate Letter of Credit Exposure, minus




(iv)         such
reserves as the Agent may deem proper and necessary from time to time in the
exercise of its Permitted Discretion.


33


The
percentages set forth in this clause (a) above with respect to Eligible
Inventory and Eligible Receivables shall be collectively referred to as the
“Advance Rates”.  The amount derived at any time and from time to time
from the sum of clauses (i) and (ii) hereinabove minus the sum of
clauses (iii) and (iv) hereinabove shall be referred to as the “Formula
Amount”.  Prior to the Facility Termination Date, the Borrowers may
use the Revolving Advances by borrowing, prepaying and reborrowing, all in
accordance with the terms and conditions hereof.




(b)           Subject
to Section 15.3(viii), the Advance Rates and the Inventory Sublimit may be
increased or decreased by the Agent at any time and from time to time, in its
Permitted Discretion.  Each Borrower consents to any such increases or
decreases (to the extent such increase or decrease was made in the Agent’s
Permitted Discretion) and acknowledges that decreasing the Advance Rates and the
Inventory Sublimit, or increasing the reserves may limit or restrict Advances
requested by the Borrowing Agent.




(c)           Subject
to the terms and conditions of this Agreement, Revolving Advances may be
Alternate Base Rate Loans or Libor Rate Loans, and, in the case of Libor Rate
Loans, denominated in Dollars or an Alternative Currency; provided, however, that (i) all
Revolving Advances made as part of the same Borrowing shall, unless otherwise
specifically provided herein, consist of Revolving Advances of the same Type and
currency, and (ii) the aggregate principal amount of Revolving Advances
denominated in an Alternative Currency shall not exceed at any time outstanding
the Alternative Currency Sublimit.




2.2
            Requests
      For Revolving Advances.




(a)           Requests
for Revolving Borrowings shall be given by the Borrowing Agent to the Agent not
later than 1:00 p.m: (i) on the Business Day which is the requested date of
a proposed Borrowing comprised of Alternate Base Rate Loans, (ii) on the
Business Day which is three (3) Business Days before the requested date of a
proposed Borrowing comprised of Libor Rate Loans denominated in Dollars, and
(iii) on the Business Day which is five (5) Business Days before the
requested date of a proposed Borrowing comprised of Libor Rate Loans denominated
in an Alternative Currency.  Each such request (a “Revolving Advance
Request”) for Alternate Base Rate Loans shall be transmitted to the Agent by an
Approved Electronic Communication (or if requested by the Agent, only by a
request posted to the Agent’s StuckyNet System).  Each Revolving
Advance Request for Libor Rate Loans shall be transmitted to the Agent by the
Borrowing Agent in a written or telephonic notice (in the case of a telephonic
notice, promptly confirmed in writing if requested by the
Agent).  Each written Revolving Advance Request for Libor Rate Loans
or written confirmation shall be substantially in the form of Exhibit C
attached hereto, executed or otherwise acceptably authenticated by the Borrowing
Agent and transmitted to the Agent in accordance with Section
15.8.  Each Revolving Advance Request shall be irrevocable and binding
on the Borrowers and be subject to the indemnification provisions of this
Agreement.  Each Revolving Advance Request shall specify the following
information:




(i)           the
date of the proposed Borrowing, which shall be a Business Day;




(ii)          the
amount of the proposed Borrowing;




(iii)         whether
the resulting Borrowing is to consist of Alternate Base Rate Loans or Libor Rate
Loans;




(iv)         in
the case of a proposed Borrowing of Libor Rate Loans, the duration of the
initial Interest Period; and




(v)          in
the case of a proposed Borrowing of Libor Rate Loans, whether the Libor Rate
Loans are to be denominated in Dollars or an Alternative
Currency.


34


If any
such Revolving Advance Request requests a Borrowing consisting of Libor Rate
Loans but does not specify an Interest Period, then the Borrowing Agent shall be
deemed to have selected an Interest Period of one (1) month’s
duration.  No Libor Rate Loan shall be made available to the Borrowers
during the continuance of a Default or an Event of Default other than Libor Rate
Loans in an Alternative Currency having an Interest Period of one (1)
month.




(b)           Revolving
Advances shall be made as part of a Borrowing consisting of Advances made by the
Lenders ratably in accordance with the Revolving Percentage of each
Lender.  Revolving Advances shall be comprised of one or more
Revolving Borrowings as the Borrowers may elect from time to time by delivery to
the Agent by the Borrowing Agent of a Revolving Advance Request or an Interest
Election Request in accordance with this Agreement.  Each Revolving
Borrowing comprised of Libor Rate Loans shall be in an aggregate amount of not
less than Five Hundred Thousand Dollars ($500,000) (or the substantial
equivalent thereof in an Alternative Currency) or an integral multiple of One
Hundred Thousand Dollars ($100,000) (or the substantial equivalent thereof in an
Alternative Currency) in excess thereof.  No minimum advance amounts
shall apply to Revolving Borrowings comprised of Alternate Base Rate
Loans.




(c)           Each
Lender’s Revolving Advances to the Borrowers shall be evidenced at all times by
a Revolving Note substantially in the form attached hereto as Exhibit B which
shall: (i) be executed and delivered by the Borrowers and payable to the
order of such Lender and (ii) be in a stated principal amount equal to the
Revolving Commitment of such Lender and payable for the unpaid principal amount
of the Revolving Advances evidenced thereby, (iii) mature on the Facility
Termination Date, (iv) bear interest as provided in this Agreement,
(v) be subject to optional and mandatory prepayment as provided in this
Agreement, and (vi) be entitled to the benefits of this Agreement and the
Other Loan Documents.




(d)           The
Borrowers shall be deemed to have made a request for a Revolving Borrowing (a
“Deemed Credit Request”), which Deemed Credit Request shall be irrevocable upon
any interest, principal, fee or other Obligation of the Borrowers (including
Unpaid Reimbursement Obligations) hereunder becoming due, for (i) to the extent
such Revolving Borrowing is made in Dollars, a Revolving Borrowing comprised of
Alternate Base Rate Loans in an amount necessary to pay such interest, principal
fee or Obligation and (ii) to the extent such Revolving Borrowing is made in an
Alternative Currency, a Revolving Borrowing comprised of LIBOR Rate Loans with
an Interest Period of one (1) month in an amount necessary to pay such interest,
principal fee or Obligation.  Each Lender agrees that its obligation
to make or participate in Revolving Advances pursuant to a Deemed Credit Request
is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence of any Default or Event of Default or the
failure of any condition precedent.




(e)           In
the case of a Revolving Advance Request with respect to a proposed Revolving
Borrowing comprised of Libor Rate Loans denominated in an Alternative Currency,
the obligation of each Lender to make its Libor Rate Loan in Alternative
Currency as part of such Revolving Borrowing is subject to the confirmation by
the Agent to the Borrower Agent not later than the fourth Business Day before
the requested date of such Borrowing that the requested Alternative Currency is
readily and freely transferable and convertible into Dollars.




(f)           If
the Agent has not provided the confirmation referred to in clause (e)
above, the Agent shall promptly notify the Borrowing Agent and each Lender,
whereupon the Borrowing Agent shall, by notice to the Agent not later than the
third Business Day before the requested date of such Borrowing, withdraw the
Revolving Advance Request relating to such requested Borrowing.  If
the Borrowing Agent does so withdraw such Revolving Advance Request, the
Borrowing requested in such Revolving Advance Request shall not occur and the
Agent shall promptly so notify each Lender.  If the Borrowing Agent
does not so withdraw such Revolving Advance Request, the Agent shall promptly so
notify each Lender and such Revolving Advance Request shall be deemed to be a
Revolving Advance Request which requests a Revolving Borrowing comprised of
Libor Rate Loans in an aggregate amount in Dollars equivalent, on the date the
Agent so notifies each Lender, to the amount of the originally requested
Revolving Borrowing in the Alternative Currency; and in such notice by the Agent
to each Lender the Agent shall state such aggregate equivalent amount of such
Revolving Borrowing in Dollars and such Lender’s ratable portion of such
Borrowing.


35


2.3
            Interest
      Elections; Conversions of Advances.




(a)          All
Revolving Advances made on the Closing Date shall consist of Alternate Base Rate
Loans.  After the Closing Date, and, with respect to Revolving
Advances, the Borrowing Agent may elect to convert any Revolving Borrowing to a
different Type or to continue any such Borrowing and, in the case of a Borrowing
consisting of Libor Rate Loans, may elect Interest Periods therefor, as provided
in this Section 2.3.  The Borrowing Agent may elect different options
with respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding the Advances
comprising such Borrowing, and the Advances comprising each such portion shall
be considered a separate Borrowing.  The Borrowers shall not be
entitled to have outstanding in the aggregate at one time more than nine (9)
Borrowings of Revolving Advances consisting of Libor Rate Loans.  This
Section 2.3 shall not apply to Revolving Advances made under Section 15.4, which
may not be converted or continued.




(b)         To
make an election pursuant to this Section 2.3, the Borrowing Agent shall notify
the Agent of such election in a written or telephonic notice (in the case of a
telephonic notice, promptly confirmed in writing if requested by the Agent)
(each, an “Interest Election Request”) by the time that a Revolving Advance
Request would be required under Section 2.2(a) if the Borrowing Agent were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election.  Each Interest Election Request
shall be irrevocable and binding on the Borrowing Agent and be subject to the
indemnification provisions of this Agreement.  Each Interest Election
Request shall specify the following information:




(i)           the
Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);




(ii)          the
effective date of the election made pursuant to such Interest Election Request,
which shall be a Business Day;




(iii)         whether
the resulting Borrowing is to consist of Alternate Base Rate Loans or Libor Rate
Loans;




(iv)         if
the resulting Borrowing is to consist of Libor Rate Loans, the Interest Period
to be applicable thereto after giving effect to such election.




If any
such Interest Election Request relates to a Borrowing consisting of Libor Rate
Loans denominated in either Dollars or an Alternative Currency, but does not
specify an Interest Period, then the Borrowing Agent shall be deemed to have
selected an Interest Period of one (1) month’s duration in Dollars or such
Alternative Currency, as applicable.


36


If the
Borrowing Agent fails to deliver a timely Interest Election Request with respect
to a Revolving Borrowing consisting of Libor Rate Loans denominated in Dollars
prior to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to a Revolving Borrowing consisting of Alternate
Base Rate Loans.  If the Borrowing Agent fails to deliver a timely
Interest Election Request with respect to a Borrowing consisting of Libor Rate
Loans denominated in an Alternative Currency prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be continued as
a Borrowing consisting of Libor Rate Loans denominated in such Alternative
Currency for an Interest Period of one (1) month’s duration.




2.4
            Disbursement
      of Proceeds of Advances.




All
amounts shall be made available by each of the Lenders to the Agent in Dollars
or the applicable Alternative Currency and immediately available funds at the
Payment Office.  The Agent shall then make all Advances available to
the Borrowing Agent by disbursing such Advances from whichever office or other
place the Agent may designate from time to time and, such Advances, together
with any and all other Obligations of the Borrowers, shall be charged to the
Loan Account on the Agent’s books.  The proceeds of each Revolving
Advance requested by the Borrowing Agent under Section 2.2 or deemed to have
been requested by the Borrowers under Section 2.2(d) shall, (i) with respect to
requested Revolving Advances, be made available to the Borrower on the day so
requested by way of credit to an operating account of the Borrowing Agent or a
Borrower at PNC Bank as the Borrowing Agent may designate following notification
to the Agent, in immediately available funds, and (ii) with respect to Revolving
Advances deemed to have been requested by the Borrowers, be disbursed to the
Agent to be applied to the outstanding Obligations giving rise to such deemed
request.




2.5
            Repayment
      of Advances.




(a)           The
Revolving Advances shall be due and payable in full on the Facility Termination
Date subject to earlier prepayment as provided in Section 2.7 and the
application of payments from Account Debtors as provided in this
Section. 2.5(a).  Reimbursements of drawings on Letters of Credit
shall be made as provided in Section 2.9(f).  The Borrowers shall
pay principal, interest, and all other amounts payable hereunder, or under any
Other Loan Document, without any deduction whatsoever, including any deduction
for any setoff or counterclaim.




(b)           Each
payment (including each prepayment) by the Borrowers on account of the principal
of and interest on the Advances shall be applied according to the applicable
Percentage of the Lenders.




(c)           Each
Borrower recognizes that the amounts evidenced by checks, notes, drafts or any
other items of payment relating to and/or proceeds of Collateral may not be
collectible by the Agent on the date received.  In consideration of
the Agent’s agreement to conditionally credit the Loan Account as of the next
Business Day following the Agent’s receipt of those items of payment, each
Borrower agrees that, in computing charges under this Agreement, all items of
payment shall be deemed applied by the Agent on account of the Obligations one
(1) Business Day after (i) the Business Day Agent receives such payments via
wire transfer or electronic depository check, or (ii) in the case of payments
received by Agent in any other form, the Business Day such payment constitutes
good funds in the Agent’s account.  The Agent is not, however,
required to credit the Loan Account for the amount of any item of payment which
is unsatisfactory to Agent and Agent may charge the Loan Account for the amount
of any item of payment which is returned to Agent unpaid or otherwise not
collected.


37


(d)           All
credits (other than federal wire transfers) shall be provisional, subject to
verification and final settlement.  Each Borrower agrees that any
information and data reported to the Borrowers pursuant to any service which is
received prior to final posting and confirmation is subject to correction and is
not to be construed as final posting information.  The Agent and the
Lenders shall have no liability for the content of such preliminary service
related information.




(e)           Except
as expressly provided herein, all payments (including prepayments) of principal,
interest, fees and other amounts payable hereunder, or under any of the Other
Loan Documents, shall be made without set-off or counterclaim to the Agent at
the Payment Office not later than 11:00 a.m. on the due date in federal funds or
other funds to the Agentand in lawful money of
the United States of America (in the case of Advances denominated in Dollars) or
in the applicable Alternative Currency (in the case of Advances denominated in
Alternative Currency) ).  The Agent shall have the right to effectuate
payment on any and all Obligations due and owing hereunder by charging such
amounts to the Loan Account as Revolving Advances to the Borrowers.




2.6
            Increase
      in Revolving Commitments.




(a)           The
Borrowing Agent may, by written notice to the Agent from time to time, request
that the Revolving Commitments be increased by an amount not to exceed the
Incremental Revolving Advance Amount at such time.  Upon the approval
of such request by the Agent (which approval shall be in the Agent’s Permitted
Discretion), the Agent shall deliver a copy thereof to each Lender with a
Revolving Commitment.  Such notice shall set forth the amount of the
requested increase in the aggregate Revolving Commitments (which shall be in
minimum aggregate increments of $5,000,000 and a minimum aggregate amount of
$10,000,000 or equal to the remaining Incremental Revolving Advance Amount) and
the date on which such increase is requested to become effective (which shall be
not less than ten (10) Business Days nor more than sixty (60) days after the
date of such notice and which, in any event, must be on or prior to the
termination of the Revolving Commitments in accordance with the terms of this
Agreement), and shall offer each such Lender the opportunity to increase its
Revolving Commitment by its Revolving Percentage of the proposed increased
amount.  Each such Lender shall, by notice to the Borrowing Agent and
the Agent given not more than ten (10) Business Days after the date of the
Agent’s notice, either agree to increase its Revolving Commitment by all or a
portion of the offered amount (each such Lender so agreeing being an “Increasing
Revolving Lender”) or decline to increase its Revolving Commitment (and any such
Lender that does not deliver such a notice within such period of ten (10)
Business Days shall be deemed to have declined to increase its Revolving
Commitment), each Lender so declining or being deemed to have declined being a
“Non-Increasing Revolving Lender”).  In the event that, on the tenth
(10th) Business Day after the day the Agent has delivered a notice pursuant to
the second sentence of this paragraph, the Increasing Revolving Lenders have
agreed pursuant to the preceding sentence to increase their Revolving
Commitments by an aggregate amount less than the increase in the aggregate
Revolving Commitments requested by the Borrowing Agent, the Borrowing Agent may
arrange for one or more banks or other entities (any such bank or other entity
referred to in this clause being an “Augmenting Revolving Lender”), which may
include any Lender, to extend Revolving Commitments or increase their existing
Revolving Commitments in an aggregate amount equal to the unsubscribed amount;
provided that each Augmenting
Revolving Lender, if not already a Lender with a Revolving Commitment hereunder,
shall be subject to the approval of the Agent (which approval shall be in the
Agent’s Permitted Discretion) and the Borrowing Agent, and each Augmenting
Revolving Lender shall execute all such documentation as the Agent shall
reasonably specify to evidence its Revolving Commitment and/or its status as a
Lender with a Revolving Commitment hereunder.  Any increase in the
aggregate Revolving Commitments may be made in an amount which is less than the
increase requested by the Borrowing Agent if the Borrowing Agent is unable to
arrange for, or chooses not to arrange for, Augmenting Revolving
Lenders.


38


(b)           Each
of the parties hereto agrees that the Agent may take any and all actions as may
be reasonably necessary to ensure that, after giving effect to any increase in
the aggregate Revolving Commitments pursuant to this Section 2.6, the
outstanding Revolving Advances (if any) are held by the Lenders with Revolving
Commitments in accordance with their new Revolving Percentages.  This
may be accomplished at the discretion of the Agent (w) by requiring the
outstanding Revolving Advances to be prepaid with the proceeds of new Revolving
Advances, (x) by causing Non-Increasing Revolving Lenders to assign portions of
their outstanding Revolving Advances to Increasing Revolving Lenders and
Augmenting Revolving Lenders, (y) by permitting the Revolving Advances
outstanding at the time of any increase in the aggregate Revolving Commitments
pursuant to this Section 2.6 to remain outstanding until the last days of
the respective Interest Periods therefor, even though the Lenders would hold
such Revolving Advances other than in accordance with their new Revolving
Percentages, or (z) by any combination of the foregoing.  Any
prepayment or assignment described in this Section 2.6(b) shall be subject
to Section 3.10 hereof but otherwise without premium or
penalty.




(c)           Notwithstanding
the foregoing, no increase in the aggregate Revolving Commitments (or in the
Revolving Commitment of any Lender) or addition of a new Lender shall become
effective under this Section 2.6 unless, (i) on the date of such increase,
the conditions set forth in Section 8.2 shall be satisfied and the Agent
shall have received a certificate to that effect dated such date and executed by
a responsible financial officer of the Parent, (ii) the Parent shall have
provided to the Agent and the Lenders an officer’s certificate, signed by an
authorized officer of the Parent, and otherwise in form and substance
satisfactory to the Agent, certifying that all of the Obligations (including any
increase in the aggregate Revolving Commitments) constitute and will continue to
be permitted under any material agreement of the Loan Parties, and (iii) the
Agent shall have received (with sufficient copies for each of the Lenders with
Revolving Commitments) legal opinions, board resolutions and an officer’s
certificate consistent with those delivered on the Closing Date under
Sections 8.1(f), 8.1(g), 8.1(h),8.1(i), 8.1(j), 8.1(l) and
8.1(y).




2.7
            Voluntary and Mandatory Prepayments;
      Reduction of Commitments.




(a)           Subject
to the provisions of Section 3.10, at their option and upon three (3) Business
Days’ prior written notice, the Borrowers may prepay the Advances in whole at
any time or in part from time to time, without premium or penalty, but with
accrued interest on the principal being prepaid to the date of such
prepayment.  The Borrowing Agent shall specify the date of prepayment
of Advances which are Libor Rate Loans and the amount of such
prepayment.  In the event that any prepayment of a Libor Rate Loan is
made on a date other than the last Business Day of the then current Interest
Period with respect thereto, the Borrowers shall indemnify the Agent and the
Lenders therefor in accordance with Section 3.10.




(b)           If,
on any Business Day, the aggregate principal amount of Revolving Advances then
outstanding exceeds the lesser of: (i) the Maximum Revolving Advance Amount
minus the
Letter of Credit Exposure or (ii) the Formula Amount, the Borrowers shall on
such day prepay to the Agent an amount sufficient to eliminate such excess,
which amount shall be used to prepay Revolving Advances ratably in accordance
with each Lender’s Revolving Percentage.  If, on any Business Day, the
aggregate outstanding principal amount of Revolving Advances denominated in
Alternative Currency plus the Letter of Credit Exposure denominated in
Alternative Currency exceeds the Alternative Currency Sublimit, the Borrowers
shall on such day prepay to the Agent an amount sufficient to eliminate such
excess, which amount shall be used to prepay Revolving Advances denominated in
Alternative Currency ratably in accordance with each Lender’s Revolving
Percentage.


39


(c)           So
long as any Revolving Advances are outstanding, the Borrowers shall pay to the
Agent any Net Proceeds received by a Loan Party promptly upon receipt thereof
and the Agent shall apply such Net Proceeds to the Obligations outstanding at
the time of such receipt in such order as the Agent may determine; provided, however, that: (i) no
such payment to the Agent of any Net Proceeds from the disposition of Specified
Fixed Asset Collateral consisting of equity interests in any Subsidiaries or
joint ventures or the assets of any Foreign Subsidiaries pursuant to this
Section 2.7 shall be required, (ii) no such payment to the Agent of any Net
Proceeds from the disposition of, or from a Material Recovery Event with respect
to, Specified Fixed Asset Collateral (other than Specified Fixed Asset
Collateral consisting of equity interests in any Subsidiaries or joint ventures
or the assets of any Foreign Subsidiaries pursuant to this Section 2.7
shall be required so long as no Event of Default has occurred and is continuing,
(iii) no such payment to the Agent of any Net Proceeds from the disposition of,
or from a Material Recovery Event with respect to, Collateral pursuant to this
Section 2.7 shall be required so long as no Activation Notice has been
delivered to the Borrowing Agent, (v) nothing in this Section 2.7 or in the
definition of “Net Proceeds” shall constitute authorization not otherwise
permitted by this Agreement for any Loan Party to enter into any transaction
that would generate Net Proceeds, and (iv) no prepayment pursuant to this
Section 2.7 shall be required with respect to any Net Proceeds of
Collateral from a Material Recovery Event while such Net Proceeds are available
for reinvestment as permitted by Section 4.19.  For the avoidance
of doubt, any cash proceeds from a casualty loss, compulsory transfer or
non-appealable judgment not constituting Net Proceeds of Collateral from a
Material Recovery Event by reason of being in an amount less than One Million
Dollars ($1,000,000) from any individual event giving rise thereto, shall be
applied by the Agent to principal Revolving Advances then outstanding in
accordance with Section 4.14(h) only in the event that an Activation Notice has
been delivered to the Borrowing Agent.  In addition, to the extent any
portion of the Net Proceeds remains after the application of Net Proceeds to
outstanding Revolving Advances as required under this Section 2.7(c), such
remaining Net Proceeds shall be released to the Borrowing Agent.




(d)           Each
prepayment applied to Revolving Advances pursuant to this Section 2.7 shall
not constitute a permanent reduction of the Maximum Revolving Advance Amount and
the amount of outstanding Revolving Advances so prepaid may be
reborrowed.  Any prepayment under this Section 2.7 shall be subject to
Section 3.10; provided, however, the Agent
will use reasonable efforts to avoid an application of Net Proceeds which causes
early prepayment of a Borrowing of Libor Rate Loans prior to the expiration of
the Interest Period applicable to such Libor Rate Loans.




(e)           Upon
three (3) Business Days’ prior written notice from the Borrowing Agent to the
Agent, the Borrowers may request that the Lenders permanently reduce, in whole
or in part, the aggregate Revolving Commitments, whereupon the aggregate
Revolving Commitments shall be so reduced.  Each reduction in the
aggregate Revolving Commitments hereunder shall be made among the Lenders
ratably in accordance with their Revolving Commitments.  Each
reduction shall be subject to the following:  (i) each such reduction
shall be in an aggregate principal amount of not less than Five Million Dollars
($5,000,000) or a multiple of One Million Dollars ($1,000,000) in excess thereof
and (ii) the Borrowers shall not be permitted to reduce the aggregate Revolving
Commitments unless, concurrently with any reduction, one or more of the
Borrowers shall make principal payments, ratable among the Lenders, on each
Lender’s then outstanding Revolving Advances to the Borrowers in an amount
which, when aggregated with such ratable payment to the Lenders by the other
Borrowers, will result in the aggregate Revolving Credit Advances of the Lenders
to the Borrowers outstanding after such payments, when taken together with the
aggregate Letter of Credit Exposure then outstanding, not exceeding the
aggregate Revolving Commitments.  On the date of each such reduction,
the Borrowers shall pay to the Agent for the account of the Lenders (A) the
unused facility fees referenced in Section 3.5 and interest referenced in
Section 3.1, in each case accrued through the date of such reduction in
respect of the aggregate Revolving Commitment of the Lenders so reduced and (B)
any amounts required pursuant to the provisions of
Section 3.10.  Each reduction in the Revolving Commitments
hereunder, if any, shall be a permanent reduction and no amount in excess of
such reduced commitment may be borrowed or reborrowed.


40


2.8
            Statement
      of Account.




The Agent shall maintain, in accordance
with its customary procedures, a loan account (“Loan Account”) in the name of
the Borrowers in which shall be recorded, among other things, the date and
amount of each Advance made by the Lenders, each Letter of Credit issued by the
Issuer and the date and amount of each payment in respect thereof; provided, however, the failure
by the Agent to record the date and amount of any Advance or Letter of Credit
shall not adversely affect the Agent or any Lender.  Each calendar
month, the Agent shall send to the Borrowing Agent a statement showing the
accounting for the Advances made and Letters of Credit issued, payments made or
credited in respect thereof, and other transactions between the Agent and the
Borrowers, during such month, and the Agent shall provide the Borrowing Agent
with access to Agent’s global GIR and StuckyNet System as relating to the
Borrowers.  The monthly statements shall be deemed correct and binding
upon the Borrowers in the absence of manifest error and shall constitute an
account stated between the Lenders and the Borrowers unless the Agent receives a
written statement from the Borrowing Agent of the Borrowers’ specific exceptions
thereto within thirty (30) days after such statement is received by the
Borrowing Agent.  The records of the Agent with respect to the Loan
Account shall be presumed correct evidence absent manifest error of the amounts
of Advances, Letters of Credit and other charges thereto and of payments
applicable thereto.




Any sums expended by the Agent or any
Lender due to the Borrowers’ failure to perform or comply with its obligations
under this Agreement or any Other Loan Document including payments made in
connection with the Borrowers’ obligations under Sections 2.5, 3.13, 4.2, 4.4,
4.12, 4.13, 6.1 and 15.12 may be charged to the Loan Account as a Revolving
Advance to the Borrowers and shall thereafter be Obligations
hereunder.




2.9
            Letters
      of Credit.




(a)           Subject
to the terms and conditions hereof, the Issuer shall issue or cause the issuance
of certain Letters of Credit on behalf of any Borrower denominated and payable
in Dollars or an Alternative Currency in such form as may be approved by the
Issuer and the Agent; provided, however, that the
Issuer will not be required to issue or cause to be issued any Letters of Credit
to the extent that the face amount of such Letters of Credit would cause the
then outstanding Revolving Advances to exceed the lesser of (A) the Maximum
Revolving Advance Amount minus the sum of the
Letter of Credit Exposure or (B) the Formula Amount.  The Letter of
Credit Exposure shall not exceed Ten Million Dollars ($10,000,000)) at any
time.  All disbursements or payments related to Letters of Credit
shall be deemed to be Alternate Base Rate Loans consisting of Revolving Advances
and shall bear interest at the Alternate Base Rate, unless and until converted
to Libor Rate Loans hereunder in accordance with Section 2.3. Letters of Credit
that have not been drawn upon shall not bear interest.




(b)           Schedule 2.9
contains a description of all Existing Letters of Credit.  All such
Existing Letters of Credit shall constitute a “Letter of Credit” hereunder for
all purposes hereof and shall be deemed to have been issued, for purposes of
Section 3.4 hereof, as of the Closing Date.  From and after the
Closing Date, the terms of this Agreement shall apply to such Existing Letters
of Credit, superseding any other agreement otherwise applicable to them to the
extent inconsistent with the terms hereof.


41


(c)           The
Borrowing Agent, on behalf of any Borrower, may request the Issuer to issue or
cause the issuance of a Letter of Credit by delivering to the Issuer at the
Payment Office, the Issuer’s form of letter of credit application (a “Letter of
Credit Application”) completed to the satisfaction of the Issuer, and such other
certificates, documents and other papers and information as the Issuer may
reasonably request no later than 12:00 noon at least two (2) Business Days’
prior to the date of such proposed issuance.  The Agent shall notify
the Lenders of the request by the Borrowing Agent for a Letter of Credit
hereunder within a reasonable time after receiving such request.




(d)           Each
Letter of Credit shall, among other things, (i) provide for the payment of sight
drafts or other forms of written demand for payment, or acceptances of, issued
drafts when presented for honor thereunder in accordance with the terms thereof
and when accompanied by the documents described therein and (ii) have an expiry
date not later than the earlier of one (1) year from the date of issuance or the
Facility Termination Date.  Each trade Letter of Credit shall be
subject to the Uniform Customs and Practice for Documentary Credits (2007
Revision), International Chamber of Commerce Publication No. 600, and any
amendments or revisions thereof adhered to by the Issuer (the
“UCP”).  Each standby Letter of Credit shall be subject to the
International Standby Practices (1998), International Chamber of Commerce
Publication 590 and any amendments or revisions thereof adhered to by the Issuer
(the “ISP”) or the UCP, as determined by the Issuer.  Each Letter of
Credit shall be governed, to the extent not inconsistent with the UCP or the
ISP, as applicable, by the laws of the State of Ohio.




(e)           Effective
as of the date of its issuance of a Letter of Credit, the Issuer grants to each
Lender, and each Lender acquires, an undivided participation in such Letter of
Credit equal to such Lender’s Revolving Percentage of such Letter of Credit’s
face amount.  Each Lender acknowledges and agrees that its obligation
to pay for such acquisition pursuant to this Section 2.9(e) is absolute and
unconditional and shall not be affected by any event or circumstance whatsoever,
including the occurrence of any Default or Event of Default hereunder or the
failure of any condition precedent in this Agreement to be satisfied and each
payment in satisfaction thereof shall be made without any offset, abatement,
withholding or reduction whatsoever; provided, however, that the
Issuer shall not be excused from liability to any Lender for any direct damages
caused by the Issuer’s gross negligence or willful misconduct.




(f)           Whenever
there is a drawing on a Letter of Credit, the Borrowers agree to pay the Agent
on the date of such drawing for the account of the Issuer an amount equal to the
amount of such drawing, with such payment to be made in Dollars (and in the
amount which is the Dollar equivalent of any such payment or disbursement made
or denominated in an Alternative Currency).  Should the Borrowers fail
to reimburse the Issuer for the amount of such drawing, the Borrowers shall be
deemed to have requested a Revolving Borrowing consisting of Alternate Base Rate
Loans to be made by the Lenders to the Borrowers pursuant to Section 2.2 in
an aggregate amount equal to the amount of such drawing (with the Agent’s having
determined in the case of any payment by the Issuer made in an Alternative
Currency the equivalent thereof in Dollars), without regard to any minimums and
multiples for lending amounts specified hereunder.  Each Lender agrees
that its obligation to make any such Revolving Advance is absolute and
unconditional and shall not be affected by any circumstances whatsoever,
including the occurrence and continuance of a Default or Event of Default
hereunder (except for an Event of Default arising under Section 10.7 or Section
10.8), and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.  The Agent shall disburse the
proceeds of such disbursement directly to the Issuer and such disbursement shall
satisfy the Borrowers’ reimbursement obligation.


42


(g)           In
the event that the Revolving Advances requested pursuant to Section 2.2(a)
cannot be made because of the occurrence and continuance of an Event of Default
under Section 10.7 or Section 10.8, each Lender shall be obligated to consummate
the purchase, on the date its Revolving Advance would have been made pursuant to
this Section 2.9(g), of its undivided participating interest in each outstanding
unpaid reimbursement obligation (the “Unpaid Reimbursement Obligation”) owing to
the Issuer.  On the purchase date, each such Lender shall pay to the
Agent, for the benefit of the Issuer, the purchase price for its participating
interest in an amount equal to its Revolving Percentage of such Unpaid
Reimbursement Obligation.  Each Lender shall comply with its
obligation under this Section 2.9(g) by wire transfer of immediately available
funds, in the same manner as provided in Section 2.10 with respect to Revolving
Advances made by such Lender (and Section 2.10 shall apply, mutatis mutandis, to
the payment obligations of the Lenders), and the Agent shall promptly pay to the
Issuer the amounts so received by it from the Lenders.  After the date
of such purchase, the outstanding Unpaid Reimbursement Obligation shall bear
interest for the account of the Lenders for each day from and including the date
of the drawing giving rise to the Unpaid Reimbursement Obligation until the
earlier of: (i) the date of reimbursement by the Borrowers and (ii) the date on
which such drawing is reimbursed by Revolving Advances as provided in this
Section 2.9(g), in each case, at the rate per annum that would apply to
Alternate Base Rate Loans.  After the date of such purchase, any
payment by the Borrowers to the Agent with respect to the Unpaid Reimbursement
Obligation, together with interest thereon, shall be promptly distributed by the
Agent to each Lender based on its Revolving Percentage.  Any Unpaid
Reimbursement Obligation shall be deemed to be a Revolving Advance for all
purposes of this Agreement and the Other Loan Documents until such Unpaid
Reimbursement Obligation is repaid by the Borrowers in full, together with
interest thereon as herein specified.




(h)           In
connection with the issuance of any Letter of Credit, the Borrowers shall
indemnify, save and hold the Agent, each Lender and each Issuer harmless from
any loss, cost, expense or liability, including payments made by the Agent, any
Lender or any Issuer and expenses and reasonable attorneys’ fees incurred by the
Agent, any Lender or Issuer arising out of, or in connection with, any Letter of
Credit to be issued or created for any Borrower, except for any loss, cost,
expense or liability resulting from gross negligence or willful misconduct of
the Agent, the Issuer or any correspondent of the Issuer.  The
Borrowers shall be bound by the Agent’s or any Issuer’s regulations and good
faith interpretations of any Letter of Credit issued or created for the Loan
Account, although this interpretation may be different from its own; and,
neither the Agent, nor any Lender, nor any Issuer nor any of their
correspondents shall be liable for any error, negligence, or mistakes, whether
of omission or commission, in following the Borrowing Agent’s or any Borrower’s
instructions or those contained in any Letter of Credit or of any modifications,
amendments or supplements thereto or in issuing or paying any Letter of Credit,
except for the Agent’s, any Lender’s, any Issuer’s or such correspondents’ gross
negligence or willful misconduct.




(i)           The
Borrowing Agent shall authorize and direct the Issuer to name the applicable
Borrower as the “Applicant” or “Account Party” of each Letter of Credit whether
the issuance is for the benefit of such Borrower or any Subsidiary of such
Borrower.  The Borrowing Agent shall authorize and direct the Issuer
to deliver to the Agent all instruments, documents, and other writings and
property received by the Issuer pursuant to the Letter of Credit and to accept
and rely upon the Agent’s instructions and agreements with respect to all
matters arising in connection with the Letter of Credit and the Letter of Credit
Application.


43


(j)           In
connection with all Letters of Credit issued by the Issuer under this Agreement,
each Borrower hereby appoints the Issuer, or its designee, as its attorney, with
full power and authority upon the occurrence and during the continuance of an
Event of Default: (i) to sign or endorse such Borrower’s name upon any warehouse
or other receipts, letter of credit applications and acceptances; (ii) to sign
such Borrower’s name on bills of lading; (iii) to clear Inventory through the
United States Customs Department (“Customs”) in the name of such Borrower or
Issuer or Issuer’s designee, and to sign and deliver to Customs officials powers
of attorney in the name of such Borrower for such purpose; and (iv) to complete
in the name of such Borrower or Issuer or Issuer’s designee, any order, sale or
transaction, obtain the necessary documents in connection therewith, and collect
the proceeds thereof.  Neither Issuer nor its attorneys will be liable
for any acts or omissions or for any errors of judgment or mistakes of fact or
law, except for Issuer’s or its attorney’s willful misconduct or gross
negligence.  This power, being coupled with an interest, is
irrevocable as long as any Letters of Credit remain outstanding.




2.10
            Funding
      of Advances by Lenders; Sharing of Payments;
  Settlement.




(a)           Each
Revolving Borrowing shall be advanced according to the applicable Revolving
Percentage of the Lenders.




(b)           Notwithstanding
anything to the contrary contained in Section 2.5(b) hereof, commencing with the
first Business Day following the Closing Date, Revolving Advances shall be
advanced by the Agent and each payment by the Borrowers on account of Revolving
Advances shall be applied first to those Revolving Advances advanced by the
Agent.  On or before 1:00 p.m. on each Settlement Date commencing with
the first Settlement Date following the Closing Date, the Agent and the Lenders
shall make certain payments as follows: (i) if the aggregate amount of new
Revolving Advances made by the Agent during the preceding Settlement Week (if
any) exceeds the aggregate amount of repayments applied to outstanding Revolving
Advances during such preceding Settlement Week, then each Lender shall provide
the Agent with funds in an amount equal to its applicable Revolving Percentage
of the difference between (x) such Revolving Advances and (y) such repayments
and (ii) if the aggregate amount of repayments applied to outstanding Revolving
Advances during such Settlement Week exceeds the aggregate amount of new
Revolving Advances made during such Settlement Week, then the Agent shall
provide each Lender with funds in an amount equal to its applicable Revolving
Percentage of the difference between (x) such repayments and (y) such Revolving
Advances.  Each Lender shall be entitled to earn interest applicable
under this Agreement on outstanding Advances which it has funded.  On
each Settlement Date, the Agent shall submit to each Lender a settlement
statement of the amount of outstanding Revolving Advances at the end of the
Settlement Week immediately preceding such Settlement Date which shall disclose
the net amount due to or due from such Lender on such Settlement
Date.   Such settlement statement of the Agent shall be presumed
correct in the absence of manifest error.




(c)           If
any Lender shall at any time receive any payment of all or part of its Advances,
or interest thereon, or receive any Collateral in respect thereof (whether
voluntarily or involuntarily or by set-off) in a greater proportion than any
such payment to and Collateral received by any other Lender, if any, in respect
of such other Lender’s Advances, or interest thereon (a “benefited Lender”), and
such greater proportionate payment or receipt of Collateral is not expressly
permitted hereunder, such benefited Lender shall purchase for cash from the
other Lenders a participation in such portion of each such other Lender’s
Advances, or shall provide such other Lender with the benefits of any such
Collateral, or the proceeds thereof, as shall be necessary to cause such
benefited Lender to share the excess payment or benefits of such Collateral or
proceeds ratably with each of the other Lenders; provided, however, that if all
or any portion of such excess payment or benefits is thereafter recovered from
such benefited Lender, such purchase shall be rescinded, and the purchase price
and benefits returned, to the extent of such recovery, but without
interest.  Each benefited Lender so purchasing a portion of another
Lender’s Advances may exercise all rights of payment (including rights of
set-off) with respect to such portion as fully as if such Lender were the direct
holder of such portion.


44


(d)           Unless
the Agent shall have been notified by telephone, confirmed in writing, by any
Lender that such Lender will not make the amount which would constitute its
applicable Percentage of the Advances available to the Agent, the Agent may (but
shall not be obligated to) assume that such Lender shall make such amount
available to the Agent on the next Settlement Date and, in reliance upon such
assumption, make available to the Borrowers a corresponding
amount.  If such amount is not made available to the Agent by such
Lender by the next Settlement Date, such Lender shall pay to the Agent on demand
(i) such unpaid amount plus (ii) interest calculated at the daily average
Federal Funds Effective Rate (computed on the basis of a year of three hundred
and sixty (360) days) during the period from such Settlement Date to the date on
which such amount does become available to the Agent from the Lender in
immediately available funds.  If such amount is not made available to
the Agent by such Lender within three (3) Business Days after such Settlement
Date, the Agent shall also be entitled on demand to repayment of such an amount
from the Borrowers with interest thereon at the rate per annum equal to the rate
then applicable to Revolving Advances hereunder; provided, however, that the
Agent’s right to such recovery shall not prejudice or otherwise adversely affect
any rights the Borrowers’ may have against such Lender.




2.11
            Defaulting
      Lender.




(a)           Notwithstanding
anything to the contrary contained herein, in the event any Lender (x) has
failed (which failure constitutes a breach by such Lender of its obligations
under this Agreement) to make available its portion of any Advance or
participation purchase price obligation as required under this Agreement or (y)
has notified either the Agent or the Borrowing Agent that it does not intend to
make available its portion of any Advance or participation purchase price
obligation as required under this Agreement (if the actual failure would
constitute a breach by such Lender of its obligations under this Agreement)
(each, a “Lender Default”), all rights and obligations hereunder of such Lender
(a “Defaulting Lender”) shall be modified to the extent provided by this
Section 2.11 while such Lender Default remains in effect.  In
addition, in the case of any failure described in clause (x) or any such
notice to the Agent from a Lender described in clause (y), the Agent will
promptly notify the Borrowing Agent of any such failure or of its receipt of any
such notice from a Lender.




(b)           The
Agent shall not be obligated to transfer to such Defaulting Lender any payments
made by the Borrowers for the benefit of such Defaulting Lender until such
Defaulting Lender has cured its failure.  Until the earlier of such
Defaulting Lender’s cure of its failure to fund or the termination of all of the
Commitments, all amounts repaid to the Agent by the Borrowers which would
otherwise be required to be applied to such Defaulting Lender’s Advances or
participation purchase price obligation, as the case may be, shall be advanced
to the Borrowers by the Agent on behalf of such Defaulting Lender to cure, in
full or in part, the failure by such Defaulting Lender to fund, but shall
nevertheless be deemed to have been paid to such Defaulting Lender in
satisfaction of, the Obligations to which such payment would otherwise have been
applied.




(c)           A
Defaulting Lender shall not be entitled to give instructions to the Agent or to
approve, disapprove, consent to or vote on any matters relating to this
Agreement and the Other Loan Documents.  All amendments, waivers and
other modifications of this Agreement and the Other Loan Documents may be made
without regard to a Defaulting Lender and, for purposes of the definition of
“Required Lenders”, a Defaulting Lender shall be deemed not to be a Lender and
not to have Advances (or participation purchase price obligations)
outstanding.




(d)           Other
than as expressly set forth in this Section 2.11, the rights and
obligations of a Defaulting Lender (including the obligation to indemnify the
Agent) and the other parties hereto shall remain unchanged.  Nothing
in this Section 2.11 shall be deemed to release any Defaulting Lender from
its obligations under this Agreement and the Other Loan Documents, shall alter
such obligations, shall operate as a waiver of any default by such Defaulting
Lender hereunder, or shall prejudice any rights which any Borrower, the Agent or
any Lender may have against any Defaulting Lender as a result of any default by
such Defaulting Lender hereunder.  In the event a Defaulting Lender
retroactively cures to the satisfaction of the Agent the breach which caused a
Lender to become a Defaulting Lender, such Defaulting Lender shall no longer be
a Defaulting Lender and shall be treated as a Lender under this
Agreement.


45


2.12
            Funding
      by Lending Installations.




All or any part of the Advances or
Letters of Credit that any Lender or the Issuer (the “Obligated Lender”) may be
obligated to fund pursuant to this Agreement: (i) may be funded by such
Obligated Lender on behalf of such Obligated Lender’s Lending Installation or
(ii) may be funded on such Obligated Lender’s behalf by such Lender by and
through any such Lending Installation; provided, however, that,
(a) if any Lending Installation fails to fund all or any part of any such
Advance  or Letter of Credit, the Obligated Lender shall be obligated
to fund such Advance or Letter of Credit pursuant to the terms hereof,
(b) in no event shall any such funding by or through any Lending
Installation increase the costs or expenses for which the Borrowers are liable
under this Agreement and (c) in no event shall any such funding on behalf
of or through any such Lending Installation subject any Borrower to any taxes,
assessments and governmental charges without such Obligated Lender’s being
subject to the exercise by such Borrower of its rights under
Section 3.13.  The funding of an Advance or Letter of Credit by a
Lending Installation hereunder shall utilize the applicable commitment of the
Obligated Lender to the same extent, and as if, such Advance or Letter of Credit
were funded by such Obligated Lender, and for purposes of this Agreement, such
Advance or Letter of Credit shall be deemed to have been made directly by such
Obligated Lender.




2.13
            Use
      of Proceeds.




The Borrowers shall apply the proceeds
of the Revolving Advances (i) to pay fees and expenses relating to the
transaction contemplated by this Agreement, (ii) to pay all amounts owing under
or with respect to the Original Credit Agreement, (iii) to fund any Permitted
Acquisitions and (iv) for general corporate purposes.




III.
            INTEREST;
      FEES; YIELD PROTECTION.




3.1
            Interest.




The
Borrowers shall pay interest on the unpaid principal amount of each Advance from
the date such Advance is made until the principal amount thereof shall have been
paid in full as follows.  Interest charges shall be computed on the
actual principal amount of Advances outstanding during the calendar
month.




(a)           Alternate Base Rate
Loans.  So long as no Event of Default has occurred which is
continuing, Alternate Base Rate Loans shall bear interest for each day at a rate
per annum equal to the Alternate Base Rate plus the Applicable Base Rate Margin
which is then in effect for Revolving Borrowings comprised of Alternate Base
Rate Loans.  Interest on Alternate Base Rate Loans shall be payable in
arrears on the first (1st) day of each calendar month, on the date such
Revolving Advances comprising any such Revolving Borrowing shall be paid in full
(whether at maturity, by reason of acceleration or otherwise) and, after
maturity, on demand.




(b)           Libor Rate
Loans.  So long as no Event of Default has occurred which is
continuing, Libor Rate Loans shall bear interest during each applicable Interest
Period at a rate per annum equal to the Libor Rate plus the Applicable Libor
Rate Margin which is then in effect and applicable to the Borrowings comprised
of such Libor Rate Loans.  Interest on Libor Rate Loans shall be
payable at the last day of each Interest Period (but for Libor Rate Loans with
an Interest Period in excess of three (3) months, on the ninetieth (90th) day
after the commencement of such Libor Rate Loan, and after each ninety (90) day
interval thereafter), on the date such Revolving Advances comprising any such
Revolving Borrowing shall be paid in full (whether at maturity, by reason of
acceleration or otherwise) and, after maturity, on demand.


46


3.2
            Applicable
      Margins.




At the
end of each fiscal quarter, the Agent shall determine the Undrawn Availability
for such fiscal quarter based upon the average daily Undrawn Availability for
each day of such fiscal quarter.  From each Incentive Pricing
Effective Date until the next Incentive Pricing Effective Date, the Applicable
Base Rate Margin, the Applicable Libor Rate Margin, the Applicable Unused
Facility Fee Percentage and the Applicable Letter of Credit Fee Percentage shall
be determined by reference to the applicable Undrawn Availability on the grid
below; provided, however, that
TierIII pricing
shall apply through and including November 30, 2010.




Tier
                                
                                Undrawn
                                  Availability
                                
                                Applicable Libor
                                  Rate Margin
                                
                                
                                Applicable
                                  Base Rate
                                  Margin
                                
                                
                                Applicable
                                  Letter of
                                  Credit Fee
                                  Percentage
                                
                                
                                Applicable
                                  Unused
                                  Facility Fee
                                  PercentageI
                                
                                <
      $25,000,000
                                
                                
                                1.75
                                %
                                
                                
                                0.25
                                %
                                
                                
                                1.75
                                %
                                
                                
                                0.375
                                %II
                                
                                >
      $25,000,000 but
                                  <
      $50,000,000
                                
                                
                                1.50
                                %
                                
                                
                                0
                                %
                                
                                
                                1.50
                                %
                                
                                
                                0.375
                                %III
                                
                                >
      $50,000,000 but
                                  <
      $70,000,000
                                
                                
                                1.25
                                %
                                
                                
                                0
                                %
                                
                                
                                1.25
                                %
                                
                                
                                0.375
                                %IV
                                
                                >
      $70,000,000
                                
                                
                                1.00
                                %
                                
                                
                                0
                                %
                                
                                
                                1.00
                                %
                                
                                
                                0.375
                                %




If any
financial statement or certificate delivered pursuant to Article IX is
shown to be inaccurate (regardless of whether this Agreement is in effect when
such inaccuracy is discovered), and such inaccuracy, if corrected, would have
led to the application of a higher Applicable Base Rate Margin, Applicable Libor
Rate Margin, Applicable Unused Facility Fee Percentageor
Applicable Letter of Credit Fee Percentage for any period (such period, the
“Applicable Period”), than the Applicable Base Rate Margin, Applicable Libor
Rate Margin, Applicable Unused Facility Fee Percentageor
Applicable Letter of Credit Fee Percentage, as applicable, actually applied to
such Applicable Period, then, upon the written request of the Agent, such margin
or percentage shall be determined in accordance with the correct financial
information for such Applicable Period and the Borrowers shall immediately pay
to the Agent any accrued additional interest and fees owing as a result of such
increased margin or percentage for such Applicable Period, which payment shall
be applied promptly by the Agent to the Lenders in accordance with the terms of
this Agreement.  This paragraph shall not limit the rights of the
Agent or the Lenders with respect to Article XI or to charge the Default Rate
pursuant to Section 3.3.




3.3
            Default
      Rate.




Upon the
occurrence of an Event of Default which is continuing, upon the election of the
Agent, or upon the request of the Required Lenders, the Obligations (including
with respect to all Letter of Credit Fees) shall bear interest at a rate per
annum equal at all times to two percent (2%) in excess of the otherwise
applicable interest rate payable pursuant to the terms of this Agreement (the
“Default Rate”).


47


3.4
            Letter
      of Credit Fees.




The
Borrowers shall pay (x) to the Agent, for the ratable benefit of the Lenders,
fees for each Letter of Credit for the period commencing with the date of
issuance of such Letter of Credit and ending on the date of expiration or
termination thereof, equal to the average daily face amount of each outstanding
Letter of Credit multiplied by the Applicable Letter of Credit Fee Percentage,
such fees to be calculated on the basis of a 360-day year for the actual number
of days elapsed and to be payable monthly in arrears on the first day of each
calendar month and on the Facility Termination Date, and (y) to the Issuer, for
its own account, any and all fees and expenses as agreed upon by the Issuer and
the Borrowing Agent in connection with any Letter of Credit, including in
connection with the opening, amendment or renewal of any such Letter of Credit
and any acceptances created thereunder (all of the foregoing fees, the “Letter
of Credit Fees”).  All such charges shall be deemed earned in full on
the date when the same are due and payable hereunder and shall not be subject to
rebate or proration upon the termination of this Agreement for any
reason.  Any such charge in effect at the time of a particular
transaction shall be the charge for that transaction, notwithstanding any
subsequent change in the Issuer’s prevailing charges for that type of
transaction.




3.5
            Unused
      Facility Fees.




If,
during any calendar month, the sum of (i) the average daily unpaid balance of
the Revolving Advances for each day of such calendar month, plus (ii) the
average daily outstanding face amount of Letters of Credit for each day of such
calendar month, does not equal the Maximum Revolving Advance Amount, then the
Borrowers shall pay to the Agent for the ratable benefit of the Lenders a fee at
a rate per annum equal to (x) the Applicable Unused Facility Fee Percentage
multiplied by
(y) the amount by which the Maximum Revolving Advance Amount exceeds such
aggregate average daily sum.  Such fee shall be payable to the Agent
in arrears on the first (1st) day of each calendar month after the date hereof
until the Facility Termination Date and on the Facility Termination
Date.




3.6
            Computation of Interest and
      Fees.




Interest
and fees hereunder shall be computed on the basis of a year of three hundred and
sixty-five (365) days and for the actual number of days elapsed.  If
any payment to be made hereunder becomes due and payable on a day other than a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and interest thereon shall be payable at the rate otherwise
applicable under this Agreement during such extension.




3.7
            Maximum
      Charges.




In no event whatsoever shall interest
and other charges charged hereunder exceed the highest rate permissible under
law.  In the event interest and other charges as computed hereunder
would otherwise exceed the highest rate permitted under law, such excess amount
shall be first applied to any unpaid principal balance owed by the Borrowers,
and if the then remaining excess amount is greater than the previously unpaid
principal balance, the Lenders shall promptly refund such excess amount to the
Borrowers and the provisions hereof shall be deemed amended to provide for such
permissible rate.


48


3.8
            Increased
      Costs.




In the event that the Agent or any
Lender shall determine that (a) the introduction after the effective date of
this Agreement of any law, treaty, rule or regulation or any change therein
after the effective date of this Agreement, (b) any change after the effective
date of this Agreement in the interpretation or administration of any law,
treaty, rule or regulation by any central bank or other Governmental Body or (c)
the compliance by the Agent or such Lender with any guideline, request or
directive from any central bank or other Governmental Body (whether or not
having the force of law) promulgated or issued after the effective date of this
Agreement (for purposes of this Section 3.8, the terms “Agent” and “Lender”
shall include any corporation or bank controlling the Agent or such Lender and
the office or branch where the Agent or such Lender makes or maintains any Libor
Rate Loans), shall:




(a)           subject
the Agent or such Lender to any tax of any kind whatsoever with respect to this
Agreement or any Other Loan Document or change the basis of taxation of payments
to the Agent or such Lender of principal, fees, interest or any other amount
payable hereunder or under any Other Loan Documents (except for changes in the
rate of tax on the overall net income of the Agent or such Lender by the
jurisdiction in which it maintains its principal office);




(b)           impose,
modify or hold applicable any reserve, special deposit, assessment or similar
requirement against assets held by, or deposits in or for the account of,
advances or loans by, or other credit extended by any office of the Agent or
such Lender, including pursuant to Regulation D of the Board of Governors of the
Federal Reserve System; or




(c)           impose
on the Agent or such Lender or the London interbank offered rate market any
other condition with respect to this Agreement or any Other Loan
Document;




and the
result of any of the foregoing is to increase the cost to the Agent or such
Lender of making, renewing or maintaining its Revolving Advances hereunder by an
amount that the Agent or such Lender deems to be material or to reduce the
amount of any payment (whether of principal, interest or otherwise) in respect
of any of the Revolving Advances by an amount that the Agent or such Lender
deems to be material, then, in any case, the Borrowers shall promptly pay the
Agent or such Lender, upon its demand, such additional amount as will compensate
the Agent or such Lender for such additional cost or such reduction, as the case
may be; provided, however, the
foregoing shall not apply to increased costs which are reflected in the
Eurocurrency Reserve Percentage.  The Agent or such Lender, upon
determining in good faith that any such additional amounts will be payable
pursuant to this Section 3.8, will give prompt written notice thereof to
the Borrowing Agent, which notice shall set forth, in reasonable detail, the
basis of the calculation of such additional amounts, which basis must be
reasonable and which calculation shall be presumed correct absent manifest
error, although the failure to give any such notice shall not release or
diminish any of the Borrowers’ obligations to pay additional amounts pursuant to
this Section 3.8 upon the subsequent receipt of such
notice.




3.9
            Non-Ascertainable
      Libor Rate; Unavailable Deposits.




In the event that the Agent shall have
determined that:




(a)           reasonable
means do not exist for ascertaining the Libor Rate applicable for any Interest
Period; or




(b)           Dollar
deposits in the relevant amount and for the relevant maturity are not available
in the London interbank offered rate market, with respect to an outstanding
Libor Rate Loan, a proposed Libor Rate Loan, or a proposed conversion of an
Alternate Base Rate Loan into a Libor Rate Loan,


49


then the
Agent shall give the Borrowing Agent prompt written, telephonic or telegraphic
notice of such determination.  If such notice is given, (i) any such
requested Libor Rate Loan shall be made as an Alternate Base Rate Loan, unless
the Borrowing Agent shall notify the Agent, no later than 10:00 a.m. two (2)
Business Days prior to the date of such proposed Borrowing, that its request for
such Borrowing shall be cancelled or made as an unaffected type of Libor Rate
Loan, (ii) any Alternate Base Rate Loan or Libor Rate Loan which was to have
been converted to an affected type of Libor Rate Loan shall be continued as or
converted into an Alternate Base Rate Loan, or, if the Borrowing Agent shall
notify the Agent, no later than 10:00 a.m. two (2) Business Days prior to the
proposed conversion, shall be maintained as an unaffected type of Libor Rate
Loan, and (iii) any outstanding affected Libor Rate Loans shall be converted
into an Alternate Base Rate Loan, or, if the Borrowing Agent shall notify the
Agent, no later than 10:00 a.m. two (2) Business Days prior to the last
Business Day of the then current Interest Period applicable to such affected
Libor Rate Loan, shall be converted into an unaffected type of Libor Rate Loan,
on the last Business Day of the then current Interest Period for such affected
Libor Rate Loans.  Until such notice has been withdrawn, the Lenders
shall have no obligation to make an affected type of Libor Rate Loan or maintain
outstanding affected Libor Rate Loans and the Borrowers shall not have the right
to convert an Alternate Base Rate Loan or an unaffected type of Libor Rate Loan
into an affected type of Libor Rate Loan.




3.10
            Libor
      Rate Loan Losses.




The Borrowers shall indemnify the Agent
and the Lenders and hold the Agent and the Lenders harmless from and against any
and all losses or expenses that the Agent and the Lenders may sustain or incur
as a consequence of any prepayment, conversion of, or any default by the
Borrowers in the payment of the principal of or interest on any Libor Rate Loan
or failure by the Borrowers to complete a Borrowing of, a prepayment of or
conversion of or to a Libor Rate Loan after notice thereof has been given,
including any interest payable by the Agent or the Lenders to lenders of funds
obtained by it in order to make or maintain its Libor Rate Loans
hereunder.  The Agent or such Lender, upon determining in good faith
that any such additional amounts will be payable pursuant to this
Section 3.10, will give prompt written notice thereof to the Borrowing
Agent, which notice shall set forth, in reasonable detail, the basis of the
calculation of such additional amounts, which basis must be reasonable and which
calculation shall be presumed correct absent manifest error, although the
failure to give any such notice shall not release or diminish any of the
Borrowers’ obligations to pay additional amounts pursuant to this
Section 3.10 upon the subsequent receipt of such notice.




3.11
            Capital
      Adequacy.




In the event that the Agent or any
Lender shall have determined that (a) the introduction after the effective date
of this Agreement of any law, treaty, rule or regulation or any change therein
after the effective date of this Agreement, (b) any change after the effective
date of this Agreement in the interpretation or administration of any law,
treaty, rule or regulation by any central bank or other Governmental Body or (c)
the compliance by any Lender or the Issuer with any guideline, request or
directive from any central bank or other Governmental Body (whether or not
having the force of law) promulgated or issued after the effective date of this
Agreement (for purposes of this Section 3.11, the terms “Agent” and
“Lender” shall include any corporation or bank controlling the Agent or any
Lender and the office or branch where any such Lender makes or maintains any
Libor Rate Loans), has or would have the effect of reducing the rate of return
on the Agent or any Lender’s capital as a consequence of its obligations
hereunder to a level below that which the Agent or such Lender could have
achieved but for such adoption, change or compliance (taking into consideration
the Agent’s and each Lender’s policies with respect to capital adequacy) by an
amount deemed by the Agent or any Lender to be material, then, from time to
time, the Borrowers shall pay upon demand to the Agent or such Lender such
additional amount or amounts as will compensate the Agent or such Lender for
such reduction.  In determining such amount or amounts, the Agent or
such Lender may use any reasonable averaging or attribution
methods.  The protection of this Section 3.11 shall be available
to the Agent and each Lender regardless of any possible contention of invalidity
or inapplicability with respect to the applicable law, regulation or
condition.  The Agent or such Lender, upon determining in good faith
that any such additional amounts will be payable pursuant to this
Section 3.11, will give prompt written notice thereof to the Borrowing
Agent, which notice shall set forth, in reasonable detail, the basis of the
calculation of such additional amounts, which basis must be reasonable and which
calculation shall be presumed correct absent manifest error, although the
failure to give any such notice shall not release or diminish any of the
Borrowers’ obligations to pay additional amounts pursuant to this
Section 3.11 upon the subsequent receipt of such notice.


50


3.12
            Illegality.




Notwithstanding any other provision
hereof, if any applicable law, treaty, regulation or directive adopted after the
effective date of this Agreement, or any change therein or in the interpretation
or application thereof after the effective date of this Agreement, shall make it
unlawful for the Agent or any Lender (for purposes of this Section 3.12,
the terms “Agent” and “Lender” shall include any corporation or bank controlling
the Agent or such Lender or the office or branch where any such Lender or makes
or maintains any Libor Rate Loans) to make or maintain its Libor Rate Loans, the
obligation of the Lenders to make Libor Rate Loans hereunder shall forthwith be
cancelled and the Borrowers shall, if any affected Libor Rate Loans are then
outstanding, promptly upon request from the Agent, either pay all such affected
Libor Rate Loans or convert such affected Libor Rate Loans into loans of another
Type.  If any such payment or conversion of any Libor Rate Loan is
made on a day that is not the last day of the Interest Period applicable to such
Libor Rate Loan, the Borrowers shall pay the Agent, upon the Agent’s request,
such amount or amounts as may be necessary to compensate the Lenders for any
loss or expense sustained or incurred by the Lenders in respect of such Libor
Rate Loan as a result of such payment or conversion, including any interest or
other amounts payable by the Lenders to lenders of funds obtained by the Lenders
in order to make or maintain such Libor Rate Loan.  The Agent or such
Lender, upon determining in good faith that any such additional amounts will be
payable pursuant to this Section 3.12, will give prompt written notice
thereof to the Borrowing Agent, which notice shall set forth, in reasonable
detail, the basis of the calculation of such additional amounts, which basis
must be reasonable and which calculation shall be presumed correct absent
manifest error, although the failure to give any such notice shall not release
or diminish any of the Borrowers’ obligations to pay additional amounts pursuant
to this Section 3.12 upon the subsequent receipt of such
notice.




3.13
            Taxes; Withholding; Tax Indemnification.




(a)           All
payments made by the Loan Parties under this Agreement and the Notes shall be
made free and clear of, and without deduction or withholding for or on account
of, any present or future taxes, levies, imposts, charges, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Body, excluding (i)
taxes imposed on or measured by the overall net income (however denominated) of,
and franchise taxes imposed on (in lieu of net income taxes) any of the Agent,
Issuer or the Lenders by the jurisdiction (or any political subdivision thereof)
under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable Lending
Installation is located, (ii) any branch profits taxes imposed by the United
States or any similar tax imposed by any other jurisdiction in which any Loan
Party is located and (iii) in the case of a Foreign Lender (other than an
assignee pursuant to a request by any Borrower under Section 15.5(g)), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party hereto (or designates a new lending
office) or is attributable to such Foreign Lender’s failure or inability (other
than as a result of a change in law) to comply with Section 3.13(c), except to
the extent that such Foreign Lender (or its assignor, if any) was entitled, at
the time of designation of a new lending office (or assignment), to receive
additional amounts from such Loan Party with respect to such withholding tax
pursuant to this Section 3.13(a) (all such non-excluded taxes, levies, imposts,
charges, deductions and withholdings, the “Non-Excluded Taxes”).  In
addition, the Loan Parties agree to pay to the relevant Governmental Body in
accordance with applicable law any current or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies that arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any Other Loan Document (“Other
Taxes”).


51


(b)           If
any Non-Excluded Taxes or Other Taxes are required by law to be withheld from
any amounts payable to the Lenders or the Issuer hereunder or under the Notes,
the amounts so payable to such Person shall be increased to the extent necessary
to yield to such Person a net amount equal to interest or any such other amounts
that would have been paid without such withholdings, at the rates or in the
amounts specified in this Agreement and the Notes.  Whenever any
Non-Excluded Taxes or Other Taxes are payable by the Loan Parties, the Borrowing
Agent shall send to the Agent a certified copy of any original official receipt
received by any Loan Party showing payment thereof or, if such receipts are not
obtainable, other evidence of such payments by such Loan Party reasonably
satisfactory to the Lenders, the Issuer or the Agent, as
applicable.  The Loan Parties shall indemnify the Agent, the Lenders
and the Issuer for the full amount of Non-Excluded Taxes and Other Taxes that
are paid by such indemnified Person (including penalties, interest and expenses
arising with respect thereto) whether or not such Non-Excluded Taxes or Other
Taxes were correctly or legally imposed or asserted by any Governmental
Body.




(c)           Each
Lender, the Issuer or assignee or participant of a Lender or the Issuer that is
a Foreign Lender (and, upon the written request of the Agent, each other Lender,
the Issuer or assignee or participant of a Lender or the Issuer) agrees that it
will deliver to each of the Borrowing Agent and the Agent two (2) duly completed
appropriate valid Withholding Certificates certifying its status as a U.S. or
foreign person and, if appropriate, making a claim of complete exemption from
U.S. withholding tax on the basis of an income tax treaty or an exemption
provided by the Code.  Each Lender or the Issuer, assignee or
participant required to deliver to the Borrowing Agent and the Agent Withholding
Certificates shall deliver such valid Withholding Certificates as follows:
(A) each Lender or the Issuer which is a party hereto on the Closing Date
shall deliver such valid Withholding Certificate not more than five (5) Business
Days after it enters into this Agreement; (B) each assignee or participant
shall deliver such valid Withholding Certificates at least five (5) Business
Days before the effective date of such assignment or participation (unless the
Agent in its sole discretion shall permit such assignee or participant to
deliver such valid Withholding Certificates less than five (5) Business Days
before such date in which case it shall be due on the date specified by the
Agent).  Each Lender, the Issuer, assignee or participant which so
delivers Withholding Certificates further undertakes to deliver to each of the
Borrowing Agent and the Agent two (2) additional copies of such Withholding
Certificate (or a successor form) on or before the date that such Withholding
Certificate expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent Withholding Certificate so delivered by
it, and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Borrowing Agent or the Agent.




(d)           Without
prejudice to the survival of any other agreement of the Borrowers hereunder, the
agreement and liabilities of the Borrowers contained in this Section 3.13
shall survive the payment in full of the Obligations.


52


IV.
            COLLATERAL: GENERAL
      TERMS.




4.1
            Security Interest in the
      Collateral.




To secure
the prompt payment and performance of the Obligations, each Obligor hereby
grants to the Agent, for its benefit and the ratable benefit of each Lender and
the Issuer (and, in each case, their Subsidiaries and Affiliates to which
Obligations are owed) (the “Secured Creditors”, and each individually, a
“Secured Creditor”), a continuing security interest in and a pledge of all of
the Collateral.  In addition, each Obligor shall promptly provide the
Agent with written notice of all Commercial Tort Claims, such notice to contain
the case title together with the applicable court and a brief description of the
claim(s).  Upon delivery of each such notice, such Obligor shall be
deemed to hereby grant to the Agent a security interest and lien in and to such
Commercial Tort Claims and all proceeds thereof.




To
further secure such prompt payment and performance of the Obligations, each Loan
Party shall also assign, pledge and grant to the Agent, for the ratable benefit
of the Secured Creditors, a mortgage on each parcel of owned Real Property in
substantially the same form as the corresponding mortgages used to secure the
2010 Note Collateral Agent for the benefit of the 2010 Noteholders; provided, however, no Borrower
shall be required to deliver a mortgage with respect to the Sarasota Property
unless such Sarasota Property is not sold to a third party prior to
April 1, 2011.




4.2
            Perfection of Security
      Interest.




Each
Obligor shall take all action that may be necessary or desirable, or that the
Agent may request, so as at all times to maintain the validity, perfection,
enforceability and priority of the Agent’s security interest in the Collateral
or to enable the Agent to protect, exercise or enforce its rights hereunder and
in the Collateral, including (i) immediately discharging all Liens other than
Permitted Encumbrances, (ii) using commercially reasonable efforts to obtain
applicable Waivers, as the Agent may request, (iii) delivering to the Agent,
endorsed or accompanied by such instruments of assignment as the Agent may
specify, and stamping or marking, in such manner as the Agent may specify, any
and all Chattel Paper, Instruments, Letters of Credit and advices thereof and
Documents evidencing or forming a part of the Collateral, (iv) entering into
lockbox, warehousing and other custodial arrangements satisfactory to the Agent
as and to the extent required hereunder, and (v) executing and delivering
control agreements, instruments of pledge, mortgages, notices, assignments and
lockbox arrangements, in each case in form and substance satisfactory to the
Agent, relating to the creation, validity, perfection, maintenance or
continuation of the Agent’s security interest in Collateral under the Uniform
Commercial Code or other applicable law.  By its signature hereto,
each Obligor hereby authorizes the Agent to file against such Obligor one or
more financing, continuation, or amendment statements pursuant to the Uniform
Commercial Code to perfect Liens in the Collateral securing Obligations arising
hereunder in form and substance satisfactory to the Agent (which may describe
the Collateral with such words as “all assets” or other words of similar effect
so long as the Specified Fixed Asset Collateral is stated to be specifically
excluded).  All charges, expenses and fees the Agent may incur in
doing any of the foregoing, and any local taxes relating thereto, shall be
charged to the Loan Account as a Revolving Advance of an Alternate Base Rate
Loan and added to the Obligations, or, at the Agent’s option, shall be paid to
the Agent for the ratable benefit of the Secured Creditors immediately upon
demand.  Each Obligor shall mark its respective books and records as
may be necessary or appropriate to evidence, protect and perfect the Agent’s
security interest and shall cause its financial statements to reflect such
security interest.


53




4.3
            Disposition of
      Collateral.




Each Obligor will safeguard and protect
all Collateral and shall make no disposition thereof whether by sale, lease or
except as may be otherwise permitted under this Agreement.




4.4
            Preservation of
      Collateral.




Following the occurrence and during the
continuation of an Event of Default, in addition to the rights and remedies set
forth in Section 11.1, the Agent may at any time take such steps as the
Agent deems necessary to protect the Agent’s interest in and to preserve the
Collateral, including: (a) the hiring of such security guards or the placing of
other security protection measures as the Agent may deem appropriate and the
employing and maintaining at any Obligor’s premises a custodian who shall have
full authority to do all acts necessary to protect the Agent’s interests in the
Collateral, (b) leasing warehouse facilities to which the Agent may move all or
part of the Collateral, and (c) using any of each Obligor’s owned or leased
lifts, hoists, trucks and other facilities or equipment for handling or removing
the Collateral.  The Agent shall have, and is hereby granted, a right
of ingress and egress to the places where the Collateral is located, and may
proceed over and through any of each Obligor’s owned or leased
property.  Each Obligor shall cooperate fully with all of the Agent’s
efforts to preserve the Collateral as permitted in the foregoing sentence and
will take such actions to preserve the Collateral as the Agent may
direct.  All of the Agent’s expenses of preserving the Collateral in
accordance with the foregoing, including any expenses relating to the bonding of
a custodian, shall be charged to the Loan Account as a Revolving Advance of an
Alternate Base Rate Loan and added to the Obligations.




4.5
            Ownership of
      Collateral.




With respect to the Collateral, at the
time the Collateral becomes subject to the Agent’s security interest: (a) each
Obligor shall be the sole owner of and fully authorized and able to sell,
transfer, pledge or grant a perfected security interest in each and every item
of its respective Collateral to the Agent; and, except for Permitted
Encumbrances, the Collateral shall be free and clear of all Liens and
encumbrances whatsoever; (b) each document and agreement executed by each
Obligor or delivered to the Agent or any Lender in connection with this
Agreement shall be true and correct in all material respects; (c) all signatures
and endorsements of each Obligor that appear on such documents and agreements
shall be genuine and such Obligor shall have full capacity to execute same; and
(d) each Obligor’s Inventory shall be located as set forth on Schedule 5.23 and
shall not be removed from such location(s) without the prior written consent of
the Agent, except (i) with
respect to the sale of Inventory in the ordinary course of business, (ii) with
respect to Inventory in transit from one location identified on Schedule 5.23 to
another location identified on Schedule 5.23 and
(iii) such other location appearing on any subsequent amendments to Schedule 5.23 as
consented to by the Agent pursuant to Section 15.3.




4.6
            Defense of Agent’s and
      Lenders’ Interests.




Each Obligor shall defend the Agent’s
interests in the Collateral against any and all Persons
whatsoever.  At any time during the continuance of an Event of
Default, the Agent shall have the right to take possession of the indicia of the
Collateral and the Collateral in whatever physical form contained, including:
labels, stationery, documents, instruments and advertising
materials.  If the Agent exercises such right to take possession of
the Collateral, the Obligors shall, upon demand, assemble it in the best manner
possible and make it available to the Agent at a place reasonably convenient to
the Agent.  In addition, with respect to all Collateral, the Agent,
the Issuer and the Lenders shall be entitled to all of the rights and remedies
set forth herein and further provided by the Uniform Commercial Code or other
applicable law.  At any time during the continuance of an Event of
Default, each Obligor shall and the Agent may, at its option, instruct all
suppliers, carriers, forwarders, warehousers or others receiving or holding
cash, checks, Inventory, Documents or Instruments in which the Agent holds a
security interest to deliver same to the Agent or subject to the Agent’s order
and if they shall come into any Obligor’s possession, they, and each of them,
shall be held by such Obligor in trust as the Agent’s trustee, and such Obligor
will immediately deliver them to the Agent in their original form together with
any necessary endorsement.




54




4.7
            Books and
      Records.




Each  Obligor shall (a) keep
proper books of record and account in which true and correct entries will be
made of all dealings or transactions of or in relation to its business and
affairs, (b) set up on its books accruals with respect to all taxes, assessments
and other Charges, levies and claims, and (c) on a reasonably current basis set
up on its books, from its earnings, allowances against doubtful Receivables,
advances and investments and all other proper accruals (including accruals for
premiums, if any, due on required payments and accruals for depreciation,
obsolescence, or amortization of properties) which should be set aside from such
earnings in connection with its business.  All determinations pursuant
to this Section 4.7 shall be made in all material respects in accordance
with, or as required by, GAAP consistently applied in the opinion of such
independent public accountant as shall then be regularly engaged by the
Obligors.




4.8
            Financial
      Disclosure.




Each Obligor irrevocably authorizes and
directs: (i) all accountants and auditors employed by such Obligor at any time
and promptly after the request of the Agent to exhibit and deliver to the Agent
copies of such Obligor’s or any Subsidiary’s financial statements (if any exist
at or prior to the date of such request), trial balances or other accounting
records of any sort in the accountant’s or auditor’s possession, and to disclose
to the Agent any information such accountants may have concerning such Obligor’s
or such Subsidiary’s financial status and business operations and (ii) to the
extent permitted by applicable law, all federal, state and municipal authorities
to furnish to the Agent copies of reports or examinations relating to such
Obligor or such Subsidiary, whether made by such Obligor or such Subsidiary or
otherwise; provided, however, prior to the
occurrence of an Event of Default which is continuing, the Agent may only obtain
such information or materials from such accountants or such authorities if such
Obligor or such Subsidiary, as applicable, fails to furnish such information or
materials to the Agent within fifteen (15) Business Days after the Agent has
requested such information and material from such Obligor.




4.9
            Compliance with
      Laws.




Each Obligor shall be in compliance
with all laws, acts, rules, regulations and orders of any Governmental Body with
jurisdiction over it or the Collateral or any part thereof or the operation of
such Obligor’s business, except to the extent any noncompliance, when taken
singly or in the aggregate with all other similar instances of noncompliance,
has not resulted or could not reasonably be expected to result in a Material
Adverse Effect.  Each Obligor may, however, contest or dispute any
acts, rules, regulations, orders and directions of those Governmental Bodies or
officials in any reasonable manner; provided, however, that any
related Lien is otherwise a Permitted Encumbrance.  The Collateral at
all times shall be maintained in accordance with the material requirements of
all insurance carriers which provide insurance with respect to the Collateral so
that such insurance shall remain in full force and effect.


55




4.10
            Inspection of
      Premises.




At all reasonable times as the Agent
deems necessary, the Agent shall have full access to and the right to audit,
check, inspect and make abstracts and copies from each Obligor’s books, records,
audits, correspondence and all other papers relating to the Collateral and the
operation of such Obligor’s business.  The Agent and its agents may
enter upon any Obligor’s premises at any time during business hours and at any
other reasonable time, and from time to time as the Agent deems necessary or
desirable, for the purpose of auditing, inspecting and appraising the Collateral
and any and all records pertaining thereto and the operation of such Obligor’s
business.  Each Lender shall have the right to request that such
Lender be permitted to accompany the Agent with respect to any such visit or
inspection, and shall have the option to so accompany the Agent, all at such
Lender’s expense.  The Agent shall have the right to conduct such
audits, appraisals and field examinations at such times as the Agent deems
necessary and such audits, appraisals and field examinations shall be at the
Borrowers’ expense; provided, however, such audits,
appraisals and field examinations shall be at the Borrowers’ expense only to the
extent that (i) such audit, appraisal and field examination of the Collateral is
the first conducted by Agent during the then current fiscal year, (ii) such
audit, appraisal and field examination of the Collateral is the second conducted
by Agent during the then current fiscal year and the average daily amount of the
aggregate outstanding Revolving Credit Advances and Letter of Credit Exposure
exceeds Fifty Million Dollars ($50,000,000) for any sixty (60) consecutive day
period during such then current fiscal year, or (iii) such audit, appraisal and
field examination of the Collateral is conducted by Agent at any time an Event
of Default has occurred and is continuing.




4.11
            Insurance.




(a)           Each
Obligor shall bear the full risk of any loss of any nature whatsoever with
respect to the Collateral and the other assets of such Obligor.  At
each Obligor’s own cost and expense, such Obligor shall, with financially sound
and reputable insurance carriers having a “Financial Strength Rating” of at
least A- as provided by A.M. Best Company, Inc., (i) keep all its properties and
assets insured against the hazards of fire, business interruption, those hazards
covered by extended coverage insurance and such other hazards as is customary in
the case of companies engaged in businesses similar to such Obligor’s, (ii)
maintain public and product liability insurance, as is customary in the case of
companies engaged in businesses similar to such Obligor’s against claims for
personal injury, death or property damage suffered by others and employee theft,
embezzlement and other criminal activities, and (iii) maintain all such worker’s
compensation or similar insurance as may be required under the laws of any state
or jurisdiction in which such Obligor is engaged in business.  All
such insurance shall be in amounts, cover such assets and be under policies
acceptable to the Agent in its Permitted Discretion, but, in any case, no less
than is customary for companies engaged in businesses similar to such
Obligor’s.  In the event any Collateral or other properties or assets
of any Obligor is located in any area that has been designated by the Federal
Emergency Management Agency as a “Special Flood Hazard Area”, the applicable
Obligor shall purchase and maintain flood insurance on such Collateral,
properties or assets (including any personal property which is located on any
Real Property leased by an Obligor within a “Special Flood Hazard
Area”).  The amount of all insurance required by this Section 4.11
shall at a minimum comply with applicable law, including the Flood Disaster
Protection Act of 1973.


56


(b)           The
Obligors shall furnish the Agent with (i) a status report with respect to the
renewal of all such insurance no later than ten (10) days before the expiration
date thereof, (ii) evidence of the maintenance of all such insurance by the
renewal thereof no later than the expiration date thereof, and (iii) with
respect to the Collateral, appropriate loss payable endorsements in form and
substance satisfactory to the Agent, naming the Agent as a additional insured
and lender loss payee, as its interests may appear and providing (A) that all
proceeds thereunder covering a loss of or damage to Collateral shall be payable
to the Agent, (B) no such insurance shall be affected by any act or neglect of
the insured or owner of the property described in such policy, and (C) that such
policy and loss payable clauses may not be cancelled, amended or terminated
unless at least thirty (30) days’ prior written notice is given to the
Agent.  The Obligors shall provide copies of all such insurance
policies (including the appropriate lender loss payee and additional insured
endorsements) within thirty (30) days after the Agent’s request, however, only
certificates of such insurance shall be required on the Closing
Date.




(c)           The
carriers named in any insurance policies covering Collateral shall be directed
in such policies that in the event of any loss to make payment for such loss to
the Agent and not to the applicable Obligors and the Agent
jointly.  The Agent may endorse any Obligor’s name on any insurance
losses with respect to Collateral paid by check, draft or other instrument
payable to any Obligor and the Agent jointly and do such other things as the
Agent may deem advisable to reduce the same to cash.  At any time
during the continuance of an Event of Default, the Agent is hereby authorized to
adjust and compromise claims under insurance coverage with respect to
Collateral, and, so long as any Revolving Advances are outstanding, with respect
to any other assets or properties.  All loss recoveries upon any
insurance with respect to a Material Recovery Event received by the Agent or the
applicable Obligor shall be applied in accordance with Section 4.19 and
Section 2.7(c).  In the event that an Event of Default has
occurred and is continuing and any Revolving Advances are outstanding, any loss
recoveries attributable to Specified Fixed Asset Collateral (other than
Specified Fixed Asset Collateral consisting of equity interests in any
Subsidiaries or joint ventures) not relating to a Material Recovery Event shall
be payable directly to the Agent to be applied to the Obligations as required by
the terms of Section 4.14(h) and Section 2.7(c).  In the
event that an Activation Notice has been delivered to the Borrowing Agent, any
loss recoveries attributable to assets other than Specified Fixed Asset
Collateral and not relating to a Material Recovery Event shall be payable
directly to the Agent to be applied to the Obligations as required by the terms
of Section 4.14(h) and Section 2.7(c).




(d)           Each
Obligor shall give the Agent prior written notice of any change in insurance
carriers and any new insurance policy shall comply with the provisions of this
Section 4.11 and otherwise be acceptable to the Agent in its Permitted
Discretion.  Without in any way limiting the foregoing, in no event
shall any Obligor change any insurance carrier with respect to the Collateral
without first obtaining a loss payable endorsement in form and substance
satisfactory to the Agent.




4.12
            Failure to Pay
      Insurance.




If any Obligor fails to obtain
insurance as hereinabove provided, or to keep the same in force, the Agent, if
the Agent so elects, may obtain such insurance and pay the premium therefor on
behalf of such Obligor, and charge the Loan Account therefor as a Revolving
Advance of an Alternate Base Rate Loan to the Borrowers and such expenses so
paid shall be part of the Obligations.




4.13
            Payment of
      Leasehold Obligations.




Each Obligor shall at all times pay,
when and as due (in accordance with all applicable grace periods, if any), its
rental obligations under all leases under which it is a tenant, and shall
otherwise comply, in all material respects, with all other terms of such leases
and keep them in full force and effect, and, at the Agent’s reasonable request,
will provide evidence of having done so.


57




4.14
            Receivables;
      Investments, Cash
Management.




(a)           Nature of
Receivables.  Each of the Receivables shall be a bona fide and
valid Receivable representing a bona fide obligation incurred by the Account
Debtor therein named, for a fixed sum as set forth in the invoice relating
thereto (provided immaterial or unintentional invoice errors shall not be deemed
to be a breach hereof) with respect to an absolute sale or lease and delivery of
goods upon stated terms of an Obligor, or work, labor or services theretofore
rendered by an Obligor as of the date each Receivable is
created.  Each Receivable shall be due and owing without dispute,
setoff or counterclaim at the time of its inclusion as an Eligible Receivable on
the Borrowing Base Certificate and shall be excluded from being an Eligible
Receivable on each Borrowing Base Certificate delivered by the Borrowing Agent
to the Agent after assertion of any such dispute, setoff or counterclaim against
such Receivable that would cause such Receivable not to be an Eligible
Receivable.




(b)           Solvency of Account
Debtors.  Each Account Debtor with respect to Receivables, to
the applicable Obligor’s knowledge, as of the date each Receivable is created,
is and will be solvent and able to pay all Receivables on which the Account
Debtor is obligated in full when due (other than with respect to Delphi Corp.
and any other debtor-in-possession Account Debtor whose insolvency is disclosed
to the Agent in writing and whose insolvency is deemed acceptable to the Agent,
in its Permitted Discretion,) or with respect to such Account Debtors of any
Obligor who are not solvent such Borrower has or will promptly set up on its
books and in its financial records bad debt reserves in accordance with
GAAP.




(c)           Chief Executive
Offices.  Each Obligor’s chief executive office is located at
the addresses set forth on Schedule 4.14(c)
hereto.  Until written notice is given to the Agent by the Borrowing
Agent of any other office at which any Obligor keeps its records pertaining to
Receivables, all such records shall be kept at such disclosed chief executive
office.




(d)           Notification of Assignment of
Receivables.  At any time an Event of Default has occurred and
is continuing, the Agent shall have the right to send notice of the assignment
of, and the Agent’s security interest in, the Receivables to any and all Account
Debtors or any third party holding or otherwise concerned with any of the
Collateral.  During the continuance of any Event of Default, the Agent
shall have the sole right to collect the Receivables, take possession of the
Collateral, or both.  The Agent’s actual reasonable collection
expenses, including stationery and postage, telephone and telecopier,
secretarial and clerical expenses and the salaries of any collection personnel
used for collection (including reasonable attorneys’ fees), may be charged to
the Loan Account as a Revolving Advance of an Alternate Base Rate Loan to the
Borrowers and such expenses so paid shall be part of the
Obligations.




(e)           Power of Attorney to Act for
Obligors.  The Agent shall have the right, upon the occurrence
of an Event of Default which is continuing, to receive, endorse, assign and
deliver in the name of the Agent or any Obligor any and all checks, drafts and
other instruments for the payment of money relating to the Receivables, and each
Obligor hereby waives notice of presentment, protest and non-payment of any
instrument so endorsed.  Each Obligor hereby constitutes the Agent or
the Agent’s designee as such Obligor’s attorney with power at any time upon the
occurrence of an Event of Default which is continuing: (i) to endorse such
Obligor’s name upon any notes, acceptances, checks, drafts, money orders or
other evidences of payment of Collateral, (ii) to sign such Obligor’s name on
any invoice or bill of lading relating to any of the Receivables, drafts against
Account Debtors, assignments and verifications of Receivables, (iii) to send
verifications of Receivables to any Account Debtor, (iv) to demand payment of
the Receivables, (v) to enforce payment of the Receivables by legal proceedings
or otherwise, (vi) to exercise all of such Obligor’s rights and remedies with
respect to the collection of the Receivables and any other Collateral, (vii) to
settle, adjust, compromise, extend or renew the Receivables, (viii) to settle,
adjust or compromise any legal proceedings brought to collect Receivables, (ix)
to prepare, file and sign such Obligor’s name on a proof of claim in bankruptcy
or similar document against any Account Debtor, (x) to prepare, file and sign
such Obligor’s name on any notice of Lien, assignment or satisfaction of Lien or
similar document in connection with the Receivables, and (xi) to do all other
lawful acts and things necessary to collect the Receivables.  All acts
of said attorney or designee are hereby ratified and approved, and said attorney
or designee shall not be liable for any acts of omission or commission nor for
any error of judgment or mistake of fact or of law, unless done with gross
negligence or willful misconduct; this power being coupled with an interest is
irrevocable while any of the Obligations remain unpaid.  The Agent
shall have the right at any time an Event of Default has occurred and is
continuing, to change the address for delivery of mail addressed to any Obligor
to such address as the Agent may designate and to receive and open all mail
addressed to any Obligor.


58




(f)           No Liability.  None
of the Agent, the Issuer or any Lender shall, under any circumstances or in any
event whatsoever, have any liability for any error or omission or delay of any
kind occurring in the settlement, collection or payment of any of the
Receivables or any instrument received in payment thereof, or for any resulting
damage unless such liability arises from the Agent’s, the Issuer’s or any
Lender’s willful misconduct or gross negligence as finally determined by a court
of competent jurisdiction.  Upon the occurrence of an Event of Default
which is continuing, the Agent may, without notice or consent from any Obligor,
sue upon or otherwise collect, extend the time of payment of, compromise or
settle for cash, credit or upon any terms any of the Receivables or any other
securities, instruments or insurance applicable thereto or release any obligor
thereof.  The Agent is authorized and empowered to accept, upon the
occurrence of an Event of Default which is continuing, the return of the goods
represented by any of the Receivables, without notice to or consent by any
Obligor, all without discharging or in any way affecting any Obligor’s liability
hereunder.




(g)           Establishment of Lockboxes and
Collection Accounts.  The Obligors have established and shall
maintain one or more Lockboxes with PNC Bank and with each other Lockbox
Bank.  The Obligors have established and will maintain a deposit
account (each a “Collection Account”) with each Lockbox Bank in the name of the
Borrowing Agent or such other Obligors as are acceptable to the Agent, in its
sole discretion.  In the case of PNC Bank, after the Borrowing Agent
has received an Activation Notice, each Cash Concentration Account maintained at
PNC Bank shall function as a Collection Account maintained at PNC Bank for all
purposes of this Section 4.14(g) and 4.14(h).  Each Lockbox Bank
and the Borrowing Agent (or other applicable Obligor) have entered into
agreements establishing the Lockboxes maintained by such Lockbox Bank (each a
“Lockbox Agreement”) and agreements with respect to the Collection Account
maintained at such Lockbox Bank (each a “Deposit Account Agreement”), each such
Lockbox Agreement and Deposit Account Agreement to be in form and substance
satisfactory to the Agent.  The Borrowing Agent (or other applicable
Obligor), the Agent and the applicable Lockbox Bank at which the each Collection
Account is located shall have entered into a blocked account agreement (each a
“Blocked Account Agreement”) relating to rights of the Agent with respect to the
Lockboxes and the Collection Accounts maintained at such Lockbox
Bank.  The Collection Accounts shall not be subject to any deduction,
set-off, banker’s lien or any other right in favor of any Person, except for the fees
of the related Lockbox Bank and with respect to returned items.  All
funds deposited into the Collection Accounts shall be subject to the sole and
exclusive control of the Agent on behalf of the Lenders and shall be subject
only to such signing authority designated from time to time by the Agent, in
accordance with the terms of the applicable Blocked Account Agreement; provided, however, that, prior
to the delivery to the Borrowing Agent of an Activation Notice, the Obligors
shall have the authority to direct the withdrawal, application, investment or
handling of the funds in the Collection Accounts.  No Obligor shall
have control over such funds except as described in the immediately preceding
sentence.  Agent shall only be permitted to deliver an Activation
Notice to the Borrowing Agent in the event that either (i) an Event of Default
has occurred and is continuing or (ii) the Undrawn Availability is less than
Twenty-Five Million Dollars ($25,000,000).


59




Schedule 4.14(g)
hereto lists the following information with respect to each Obligor:
(i) all present Lockboxes, all Collection Accounts and all Cash
Concentration Accounts, (ii) the name and address of each Lockbox,
(iii) the account number of each Collection Account and each Cash
Concentration Account, (iv) a contact Person at each Lockbox Bank, and
(v) a list describing all Blocked Account Agreements.  Other
than: (a) such Lockboxes, Collection Accounts and Cash Concentration
Accounts, (b) Securities Accounts, and (c) those other operating
accounts (whether checking or Deposit Accounts) disclosed on the Schedule 4.14(g)
(which such Obligor shall use solely for the purpose of disbursing monies of
such Obligor (or as otherwise described on Schedule 4.14(g)) and not for
collecting or depositing collections or remittances of proceeds of other
Collateral) which have been consented to by the Agent from time to time in the
Agent’s sole discretion, no Obligor shall maintain nor permit any other Person
to maintain a post office box, Deposit Account or checking account receiving any
such Collections or remittances of Proceeds of other Collateral or otherwise
holding monies of such Obligor.




(h)           Processing Collections and Proceeds;
Cash Concentration Accounts. Each Obligor shall notify all of its Account
Debtors and any other remitter of the proceeds of other Collateral to forward
all collections and remittances of every kind due such Obligor to either a
Lockbox or to a Collection Account (such notices to be in such form and
substance as the Agent may reasonably require from time to time).  In
accordance with the terms of the applicable Blocked Account Agreement, each
Lockbox Bank shall be instructed to deposit on a daily basis all collections
from customers or other remittances of Proceeds of any Obligor sent to the
Lockbox maintained by such Lockbox Bank directly into the applicable Collection
Account in the identical form in which such collections were made (except for
any necessary endorsements) whether by cash or check.  In accordance
with the terms of the applicable Blocked Account Agreement, such Lockbox Bank
shall be instructed that, upon its receipt of any Activation Notice, it shall
deposit on a daily basis all funds from collections deposited into such
Collection Account to one of the Cash Concentration Accounts.  None of
the Cash Concentration Accounts shall be subject to any deduction, set off,
banker’s lien or any other right in favor of any Person.  Subject to
this paragraph, all funds deposited into any of the Cash Concentration Accounts
shall be the exclusive property of the Agent on behalf of the Lenders, shall be
subject to the sole and exclusive control of the Agent and only to such signing
authority designated from time to time by the Agent, and the Agent shall apply
such funds deposited in any of the Cash Concentration Accounts to the repayment
of the Obligations in accordance with Section 2.7(c), if no Event of
Default has occurred and is continuing, in accordance with Section 11.7, if
an Event of Default has occurred and is continuing, or as otherwise agreed by
the Agent and the Borrowing Agent; provided however, after
payment in full has been made of the amounts described in Section 2.7(c) or
Section 11.7, as applicable, unless the Borrowing Agent’s has provided
other instructions with respect thereto, any additional funds then held in any
of the Cash Concentration Accounts shall be released to the Borrowing
Agent.  Prior to the delivery of an Activation Notice by the Agent,
all funds received into a Collection Account and not applied to the Obligations
shall be released to the Borrowing Agent.




Each
Obligor hereby agrees to deposit immediately collections of Accounts and all
other Proceeds of Collateral in the identical form in which such collections or
Proceeds were received (except for any necessary endorsements), whether by cash
or check, into a Collection Account.  Any collections or Proceeds
received by the Obligors shall be deemed held by the Obligors in trust and as
fiduciary for the Lenders until deposit is made into the applicable Collection
Account or, after an Activation Notice has been received by the Borrowing Agent,
into the applicable Cash Concentration Account.  Each Obligor hereby
agrees to deposit immediately such directly received collections and all other
Proceeds of Collateral into any Collection Account maintained by or on behalf of
such Obligor, or, after an Activation Notice has been received by the Borrowing
Agent, into any Cash Concentration Account.  In the event that any
terms or provisions of any Cash Concentration Accounts Agreement and this
Agreement conflict, the terms and provisions of this Agreement shall
govern.


60




Each Obligor agrees not to commingle
any such collections or Proceeds with any of such Obligor’s other funds or
property, but to hold such funds separate and apart in trust and as fiduciary
for the Lenders until deposit is made into the applicable Collection Account in
the identical form in which such collections were made (except for any necessary
endorsements) whether by cash or check.  In accordance with the terms
of the applicable Blocked Account Agreement, each Lockbox Bank shall be
instructed, prior to the delivery of an Activation Notice to the Borrowing
Agent, to deposit on a daily basis all funds from collections and Proceeds
deposited into a Lockbox into the Collection Account, and, after an Activation
Notice has been delivered to the Borrowing Agent, each Lockbox Bank shall be
instructed to deposit on a daily basis all funds received into the Collection
Account into the applicable Cash Concentration Account.




(i)           Adjustments.  No
Obligor shall, nor shall such Obligor permit any other Person to, without the
Agent’s consent, compromise or adjust any Receivables (or extend the time for
payment thereof) or accept any returns of merchandise or grant any additional
discounts, allowances or credits thereon, except for those compromises,
adjustments, returns, discounts, credits and allowances as have been heretofore
(A) customary in the business or industry of such Obligor or (B) done in the
ordinary course of such Obligor’s business




(j)           Securities
Accounts.  Within sixty (60) days after the Closing Date, all
Investment Property of the Obligors constituting Collateral which is held by a
Securities Intermediary shall be held in a Securities Account which is subject
to a Securities Account Control Agreement.  The Securities Accounts
shall not be subject to any deduction, set-off, broker’s lien or any other right
in favor of any Person, except for the fees
of the Securities Intermediary.  All funds deposited into the
Securities Accounts shall be subject to the sole and exclusive control of the
Agent on behalf of the Lenders and shall be subject only to such signing
authority designated from time to time by the Agent, in accordance with the
terms of the applicable Securities Account Control Account Agreement; provided, however, that, prior
to the delivery to the Borrowing Agent of an Activation Notice, the Obligors
shall have the authority to direct the withdrawal, application, investment or
handling of the funds in the Securities Accounts.  No Obligor shall
have control over such funds except as described in the immediately preceding
sentence.  Agent shall only be permitted to deliver an Activation
Notice to the Borrowing Agent in the event that either (i) an Event of Default
has occurred and is continuing or (ii) the Undrawn Availability is less than
Twenty-Five Million Dollars ($25,000,000).




Schedule 4.14(j)
hereto lists the following information with respect to each Obligor:
(i) all present Securities Accounts (ii) the account number of each
Securities Account and (iii) within sixty (60) days after the Closing Date,
a list describing all Securities Account Control Agreements.




4.15
            Maintenance of
      Equipment.




Each Obligor shall maintain, and shall
cause each Subsidiary thereof to maintain, its Equipment in good operating
condition and repair in accordance in all material respects with industry
standards (reasonable wear and tear excepted) and shall make or cause to be made
all necessary replacements of and repairs thereto as are deemed necessary by the
Obligor, in its good-faith reasonable business judgment,.  No Obligor
shall, nor shall such Obligor permit any Subsidiary or other Person to, use or
operate the Equipment in violation of any law, statute, ordinance, code, rule or
regulation except to the extent that any violation, when taken singly or in the
aggregate with all other noncompliance has not resulted or could not reasonably
be expected to result in a Material Adverse Effect.


61




4.16
            Exculpation of
      Liability.




Nothing herein contained shall be
construed to constitute the Agent, the Issuer or any Lender as any Obligor’s
agent for any purpose whatsoever, nor shall the Agent, the Issuer or any Lender
be responsible or liable for any shortage, discrepancy, damage, loss or
destruction of any part of the Collateral wherever the same may be located and
regardless of the cause thereof, except for the
Agent’s or any Lender’s gross negligence or willful misconduct.  None
of the Agent, the Issuer or any Lender, whether by anything herein or in any
assignment or otherwise, shall assume any of each Obligor’s obligations under
any contract or agreement assigned to the Agent, the Issuer or such Lender, and
neither the Agent, the Issuer nor any Lender shall be responsible in any way for
the performance by any Obligor of any of the terms and conditions
thereof.




4.17
            Environmental
      Matters.




(a)           Obligor
Compliance.  Each Obligor: (i) shall use and operate its
business, facilities, leaseholds, assets and properties, and cause each of its
Subsidiaries to use and operate its respective facilities and properties, in
compliance with Environmental Laws, (ii) shall remain in compliance with, and
shall cause each of its Subsidiaries to remain in compliance with, all necessary
Environmental Permits, and (iii) shall handle all Hazardous Substances in
compliance with all applicable Environmental Laws except to the extent, as to
all of the foregoing, that any noncompliance, when taken singly or in the
aggregate with all other such noncompliance, has not resulted or could not
reasonably be expected to result in a Material Adverse Effect or in aggregate
liabilities in excess of Five Million Dollars ($5,000,000).  No
Obligor shall suffer to exist, nor permit any of its Subsidiaries to suffer to
exist, a environmental condition with respect to any of the Real Property or
leasehold which, when taken singly or in the aggregate with all other
environmental conditions, has resulted or could reasonably be expected to result
in a Material Adverse Effect or in aggregate liabilities in excess of Five
Million Dollars ($5,000,000).




(b)           Notification.  Each
Obligor shall furnish to the Agent promptly after receipt a copy of any notice
such Obligor or any Subsidiary thereof may receive from any Governmental Body or
any other Person that any litigation, investigation or proceeding pertaining to
any environmental matter had been instituted or is threatened against such
Obligor or such Subsidiary, any of the Real Property or any past or present
operation of such Obligor or such Subsidiary.




(c)           Remedial
Actions.  If any Obligor shall fail to comply with the
requirements of Section 4.17(a), the Agent may, but shall not be obligated to,
to the extent the Agent, in the exercise of its Permitted Discretion, determines
such action is necessary to protect the Agent’s interest in the Collateral: (A)
give such notices or (B) enter onto the Real Property (or authorize third
parties to enter onto the Real Property) and take such actions as the Agent (or
such third parties as directed by the Agent) reasonably deems necessary or
advisable, to clean up, remove, mitigate or otherwise deal with any resulting
environmental condition or non-compliance.  All reasonable costs and
expenses incurred by the Agent (or such third parties) in the exercise of any
such rights, including any sums paid in connection with any judicial or
administrative investigation or proceedings, fines and penalties, together with
interest thereon from the date expended at the Default Rate for Alternate Base
Rate Loans constituting Revolving Advances shall be paid upon demand by the
Obligors, and until paid shall be deemed to be Obligations.


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(d)           Environmental
Assessments.  If any Obligor shall fail to comply with the
requirements of Section 4.17(a), the Agent may, but shall not be obligated to,
to the extent the Agent, in the exercise of its Permitted Discretion, determines
such action is necessary to protect the Agent’s interest in the Collateral,
require the Obligors to promptly provide the Agent, at the Obligors’ expense,
with an environmental assessment or environmental audit report prepared by an
environmental engineering firm acceptable in the reasonable opinion of the
Agent, to assess the existence of any discharge of Hazardous Substance or the
potential costs in connection with abatement, cleanup and removal of any
Hazardous Substances on or at the Real Property.  At such times as no
Event of Default has occurred and is continuing, if the Agent determines, in the
exercise of its Permitted Discretion, that any discharge of Hazardous Substances
has occurred on or at the Real Property, and that such event or condition has
resulted or could reasonably be expected to result in a Material Adverse Effect
or in aggregate liabilities in excess of Five Million Dollars ($5,000,000),
then, upon the
written request of the Agent, the Obligors shall promptly provide the Agent, at
the Obligors’ expense, with an environmental assessment or environmental audit
report prepared by an environmental engineering firm acceptable in the
reasonable opinion of the Agent, to assess the existence of any such event or
condition or the potential costs in connection with abatement, cleanup and
removal of any Hazardous Substances on or at the Real Property. Any report or
investigation of such discharge of Hazardous Substances proposed or acceptable
to the Governmental Body charged to oversee the cleanup of such discharges shall
be acceptable to the Agent.




(e)           Environmental
Indemnities.  The Obligors shall defend and indemnify the
Agent, the Issuer and their respective employees, agents, directors and
officers, and hold each such Person harmless from and against all losses,
liabilities, damages, expenses, claims, costs, fines and penalties, including
attorney’s fees, suffered or incurred by any such Person in connection with the
transactions contemplated by this Agreement, the execution, delivery or
recording of any Other Loan Document, the administration of the facilities
pursuant to this Agreement or enforcement of the rights and remedies of the
Agent and Lenders and Issuer under this Agreement or any Other Loan Document
under or on account of any Environmental Law, the discharge of any Hazardous
Substances from the Real Property, or the presence of any Hazardous Substances
affecting the Real Property, whether or not the same originates or emerges from
the Real Property as a result of the foregoing, unless, in each case, such
losses, liabilities, damages, expenses, claims fines or penalties are the result
of the gross negligence or willful misconduct of such Person.




4.18
            Financing
      Statements.




Except for the financing statements
filed by the Agent and those financing statements filed in connection with Liens
permitted by Section 7.2, no financing statement (or analogous filing or
registration under the laws of any other jurisdiction) covering any of the
Collateral or any Proceeds thereof is on file in any public office or
registry.




4.19
            Material Recovery
      Event.




Within 10 days after the occurrence of
any Material Recovery Event, the Borrowing Agent shall furnish to the Agent
written notice thereof.  If any Material Recovery Event results in Net
Proceeds, a portion or all of which is required to be applied as a mandatory
prepayment of the Advances pursuant to Section 2.7(c), the applicable
Obligor will pay over such Net Proceeds to the Agent; provided, however, if: (i) no
Default or Event of Default has occurred which is continuing and (ii) the
Borrowing Agent notifies the Agent in writing prior to the Material Recovery
Prepayment Date that the applicable Obligor intends to rebuild or restore the
affected property, that such rebuilding or restoration can be accomplished
within twelve (12) months out of such Net Proceeds and any other cash (other
than cash obtained from Advances hereunder) and such written notice includes an
estimate of the amount of Net Proceeds required for such investment, then no such
Section 2.7(c) prepayment of the Advances shall be required, and (Z) until
the Material Recovery Prepayment Date, the Agent may in its Permitted Discretion
reserve against the Revolving Advances an amount equal to such Net
Proceeds.  Any Net Proceeds of a Material Recovery Event not so
applied by the Material Recovery Prepayment Date to the costs of rebuilding or
restoration shall be applied to the prepayment of the Obligations in accordance
with and to the extent required by Section 2.7(c).  Application
of any Net Proceeds to the Revolving Advances pursuant to Section 2.7(c)
pending reinvestment thereof by such Obligor, or otherwise, shall not result in
a permanent reduction of the Maximum Revolving Advance Amount.


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4.20
            Partial Release of
      Liens.




Each
Lender hereby irrevocably authorizes the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral which: (i) constitutes property being sold or disposed of and the
applicable Obligor certifies to the Agent that the sale or disposition is made
in compliance with the provisions of this Agreement (and the Agent may rely in
good faith conclusively on any such certificate, without further inquiry),
(ii) constitutes property covered by Permitted Encumbrances with lien
priority superior to those Liens in favor of the Agent hereunder, (iii)
constitutes property in addition to that addressed by clauses (i) and (ii)
above, with an aggregate fair market value of less than One Million Dollars
($1,000,000), or (iv) to the extent not restricted by Section 15.3(v),
constitutes property in addition to that addressed by clauses (i) through (iii)
above, as to which the Required Lenders have otherwise consented in writing to
the sale or other disposition thereof.




V.
            REPRESENTATIONS AND
      WARRANTIES.




Each Loan Party represents and warrants
as follows:




5.1
            Authority.




Each Loan Party has the full power,
authority and legal right to enter into this Agreement and the Other Loan
Documents to which it is a party and to perform all of its respective
obligations thereunder.  This Agreement and the Other Loan Documents
to which each Loan Party is a party constitute the legal, valid and binding
obligations of such Loan Party, enforceable against it in accordance with their
terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and by general principles of equity.  The
execution, delivery and performance of this Agreement and of the Other Loan
Documents by each Loan Party, as applicable, (a) are within such Loan Party’s
corporate, limited partnership or limited liability company powers, as the case
may be, have been duly authorized, are not in contravention of any applicable
law or the terms of such Loan Party’s charter document, by-laws, operating
agreement, articles of incorporation, articles of organization or other
applicable documents relating to such Loan Party’s formation or organization, as
the case may be, or to the conduct of such Loan Party’s business or of any
material agreement, instrument or undertaking to which such Loan Party is a
party or by which such Loan Party is bound(including the Material
Business Agreements) and (b) will not conflict with nor result in any breach in
any of the provisions of or constitute a default under or will not result in the
creation of any Lien (other than in favor of the Agent) upon any asset of such
Loan Party under the provisions of any applicable law, any such charter
document, by-laws, operating agreement, articles of incorporation, articles of
organization or other applicable documents, or any such material agreement,
instrument or undertaking, to which such Loan Party is a party or by which it or
its property may be bound, including the Material
Business Agreements.




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5.2
            Formation and
      Qualification/Subsidiaries.


Each Loan Party and each Subsidiary
thereof is duly incorporated or organized, as the case may be, and in existence
or good standing under the laws of the jurisdictions listed on Schedule 5.2 and is
qualified to do business and is in good standing in the jurisdictions listed on
Schedule 5.2
which constitute all jurisdictions in which qualification and good standing are
necessary for such Loan Party or such Subsidiary to conduct its business and own
its property and where the failure to so qualify or be in good standing could
reasonably be expected to have a Material Adverse Effect.  Each Loan
Party has delivered to the Agent true and complete copies of its articles of
incorporation and by-laws, articles of organization and operating agreement or
other organizational documents, as the case may be, and will notify the Agent of
any amendment or changes thereto promptly, or in any event, within three
Business Days of such amendment or changes.  The only Subsidiaries of
each Loan Party are listed on Schedule
5.2.  Schedule 5.2 contains
for each Loan Party, such Loan Party’s corporation identification number or
other applicable organizational identification number issued by such Loan
Party’s jurisdiction of organization.




5.3
            Officers, Directors, Shareholders,
  Capitalization.




The names and titles of all executive
officers and directors, managers or general partners, as applicable, of each
Loan Party, as of the Closing Date, are set forth on Schedule
5.3.  Schedule 5.3 also
sets forth for each Loan Party other than the Parent, as of the Closing Date,
the names of such Loan Party’s shareholders, members, or partners, as
applicable, and a description of such Person’s equity interest in such Loan
Party (including, if applicable, a listing of the share certificates and the
number of shares of capital stock held by such Person). There are no outstanding
subscriptions, options, warrants, calls, rights or other agreements or
commitments of any nature relating to any equity interests in any Loan Party
(other than the Parent) or any Subsidiary thereof.




5.4
            Survival of
      Representations and
Warranties.




All representations and warranties of
each Loan Party contained in this Agreement and the Other Loan Documents, as the
case may be, shall be true at the time of such Loan Party’s execution of this
Agreement and the Other Loan Documents, as the case may be. All such
representations and warranties of each such Loan Party shall survive the
execution, delivery and acceptance thereof by the parties thereto and the
closing of the transactions described therein or related thereto.




5.5
            FEINs/Tax
      Returns.




The federal tax identification number
of each Loan Party and each Subsidiary thereof is set forth on Schedule
5.5.  Each Loan Party and each Subsidiary thereof has filed all
federal, state and local tax returns and other reports such Loan Party or such
Subsidiary is required by law to file.  Except as set forth on Schedule 5.5, each
Loan Party and each Subsidiary thereof has paid all taxes, assessments, fees and
other governmental charges that are due and payable.  Except as set
forth on Schedule
5.5, all applicable income tax returns of each Loan Party and each
Subsidiary thereof have been examined and reported upon by the appropriate
taxing authority or closed by applicable statute and satisfied for all fiscal
years prior to and including the fiscal year ending December 31,
2005.  The provision for taxes on the books of each Loan Party and
each Subsidiary thereof is adequate for all years not closed by applicable
statutes, and for its current fiscal year, and none of such Loan Parties or such
Subsidiaries has any knowledge of any deficiency or additional assessment in
connection therewith not provided for on its books.  Except as set
forth on Schedule
5.5., there is no action, suit, investigation, audit, claim, assessment
or, to the best of each Loan Party’s knowledge, asserted deficiency pending or
proposed or threatened with respect to taxes of any Loan Party or any
Subsidiary, and to the knowledge of such Loan Parties or such Subsidiaries, no
basis exists therefor.


65




5.6
            Financial Statements.




(a)           The
four-quarter cash flow projections of Parent and its consolidated Subsidiaries
for the fiscal year ending on December 31, 2010 and for the two fiscal
years ending on December 31, 2012, and their projected balance sheets as of
September 30, 2010, copies of which are annexed hereto as Exhibit H (the
“Projections”) were prepared by or under the supervision of the chief financial
officer of Parent, are based on underlying assumptions and estimates which
Parent reasonably believes in good faith provide a reasonable basis for the
projections contained therein and, with respect to the four-quarter cash flow
projections for the fiscal year ending on December 31, 2007, reflect such
Loan Party’s judgment based on present circumstances of the most likely set of
conditions and course of action for the projected period.




(b)           The
consolidated balance sheets of Parent and its consolidated Subsidiaries as of
December 31, 2009, and the related consolidated statements of income,
changes in stockholder’s equity, and changes in cash flow for the period ended
on such date, all accompanied by reports thereon containing opinions without
qualification by independent certified public accountants, copies of which have
been delivered to the Agent, have been prepared in accordance with GAAP,
consistently applied, and present fairly in all material respects the financial
condition of Parent and its consolidated Subsidiaries at such date and the
results of their operations for such period. Since December 31, 2009, there
has been no change in the financial condition of Parent and its consolidated
Subsidiaries taken as a whole as shown on the consolidated balance sheet as of
such dateand no change in the
aggregate value of machinery, Equipment and Real Property owned by the Loan
Parties and their Subsidiaries, except changes in the ordinary course of
business, which individually or in the aggregate has had, or reasonably
could be expected to cause in the future, a Material Adverse
Effect.




5.7
            Corporate
      Names.




Except as set forth on Schedule 5.7, during
the previous five (5) years, no Loan Party nor any Domestic Subsidiary thereof:
(i) has been known by any other legal name, (ii) has done business or sold
Inventory under or been known by any other name, (iii) has been the surviving
entity of a merger or consolidation or (iv) has acquired all or substantially
all of the assets of any Person.




5.8
            O.S.H.A. and
      Environmental Compliance.




(a)           Except
as set forth on Schedule 5.8, and
subject to the next sentence, each Loan Party and each Subsidiary thereof has
duly complied with, and each Loan Party and each such Subsidiary’s facilities,
business, assets and property, and to such Loan Party’s knowledge, each Loan
Party’s and each such Subsidiary’s leaseholds, are in compliance with the
provisions of the Federal Occupational Safety and Health Act, the Environmental
Protection Act, RCRA (or the equivalent laws and/or statutes of any other
jurisdiction, to the extent applicable) and all other Environmental
Laws.  To the extent any Loan Party or Subsidiary thereof has not
complied or is not in compliance with the provisions of the Federal Occupational
Safety and Health Act, the Environmental Protection Act, RCRA (or the equivalent
laws and/or statutes of any other jurisdiction, to the extent applicable) and
all other Environmental Laws, such noncompliance, whether taken singly or in the
aggregate with all other noncompliance and with all liabilities resulting from
subsection (d) below and all failures under subsection (b) below, has
not resulted and can not reasonably be expected to result in a Material Adverse
Effect or in aggregate liabilities in excess of Five Million Dollars
($5,000,000).  Except as set forth on Schedule 5.8, there
are no outstanding citations, notices or orders of non-compliance issued to any
Loan Party or any Subsidiary thereof or relating to its business, assets,
property, or leaseholds under any such laws, rules or
regulations.


66




(b)           Each
Loan Party and each Subsidiary thereof has been issued all required federal,
state and local licenses, certificates or permits relating to all applicable
Environmental Laws and the Federal Occupational Safety and Health Act (or the
equivalent laws and/or statutes of any other jurisdiction, to the extent
applicable), except to the extent that failure .to have such licenses,
certificates or permits, whether taken singly or in the aggregate with all other
such failures, has not resulted in and is not reasonably expected to result in
(i) any Loan Party’s being unable to conduct its business in the manner
otherwise currently conducted and (ii) aggregate liabilities in excess of Five
Million Dollars ($5,000,000), whether taken singly or in the aggregate with all
other such failures, and when combined with all liabilities resulting from
subsection (d) below and all noncompliance under subsection (a) above,
in excess of Five Million Dollars ($5,000,000).




(c)           To
the best of each Loan Party’s knowledge, after due inquiry, there are no
underground storage tanks or polychlorinated biphenyls on the Real
Property.




(d)           There
have been no releases, spills, discharges, leaks or disposals of Hazardous
Substances at, upon, under or within any Real Property; the Real Property has
not ever been used as a treatment, storage or disposal facility of Hazardous
Substances; and no Hazardous Substances are present on the Real Property, in
each case, to the extent such releases, spills, discharges, leaks or disposals,
use or presence has resulted or could reasonably be expected to result in a
Material Adverse Effect or in aggregate liabilities, when combined with all
liabilities resulting from all noncompliance under subsection (a) above or
all failures under subsection (b) above, in excess of Five Million Dollars
($5,000,000).




5.9
            Solvency; No Litigation,
      Violation of Laws.




(a)           After
giving effect to the transactions contemplated by this Agreement, each Loan
Party and each Material Subsidiary will be solvent, will be able to pay its
respective debts as they mature, will have capital sufficient to carry on its
respective business and all businesses in which it is about to engage, and (i)
as of the Closing Date, the fair present saleable value of its respective
assets, calculated on a going concern basis, is in excess of the amount of its
respective liabilities and (ii) at all times subsequent to the Closing Date, the
fair saleable value of its respective assets (calculated on a going concern
basis) will be in excess of the amount of its respective
liabilities.




(b)           Except
as set forth in Schedule 5.9(b), no
Loan Party nor any Subsidiary thereof has any pending or, to the best of its
knowledge, threatened litigation, arbitration, actions or proceedings, that
could reasonably be expected to result in a Material Adverse
Effect.




(c)           No
Loan Party or any Subsidiary thereof is in violation of any applicable statute,
regulation or ordinance, or any order of any court, Governmental Body or
arbitration board or tribunal, in any respect which could reasonably be expected
to result in a Material Adverse Effect.




67




5.10
            ERISA Compliance.


No Loan Party, nor any Subsidiary
thereof or any member of the Controlled Group maintains or contributes to any
Plan other than those listed on Schedule 5.10
hereto.  Except as set forth in Schedule 5.10, (i) no
Plan has incurred any “accumulated funding deficiency,” as defined in
Section 302(a) (2) of ERISA and Section 412(a) of the Code, whether or
not waived, and each Loan Party, each such Subsidiary and each member of the
Controlled Group has met all applicable minimum funding requirements under
Section 302 of ERISA in respect of each Plan, (ii) each Plan which is
intended to be a qualified plan under Section 401(a) of the Code as
currently in effect has been determined by the Internal Revenue Service to be
qualified under Section 401(a) of the Code and the trust related thereto is
exempt from federal income tax under Section 501(a) of the Code, or the
prototype plan that has been adopted, as appropriate, has a favorable
determination letter from the Internal Revenue Service, (iii) no Loan Party, nor
any Subsidiary thereof or any member of the Controlled Group has incurred any
liability to the PBGC other than for the payment of premiums, and there are no
premium payments which have become due which are unpaid, (iv) no Plan has been
terminated by the plan administrator thereof nor by the PBGC, and there is no
occurrence which would cause the PBGC to institute proceedings under Title IV of
ERISA to terminate any Plan, (v) at this time, the current value of the assets
of each Plan exceeds the present value of the accrued benefits and other
liabilities of such Plan and no Loan Party, nor any such Subsidiary or any
member of the Controlled Group knows of any facts or circumstances which would
materially change the value of such assets and accrued benefits and other
liabilities, (vi) no Loan Party, nor any such Subsidiary or any member of the
Controlled Group has breached any of the responsibilities, obligations or duties
imposed on it by ERISA with respect to any Plan, (vii) no Loan Party, nor any
such Subsidiary or any member of the Controlled Group has incurred any liability
for any excise tax arising under Section 4972 or 4980B of the Code, and no
fact exists which could give rise to any such liability, (viii) no Loan Party,
nor any such Subsidiary or any member of the Controlled Group nor any fiduciary
of, nor any trustee to, any Plan, has engaged in a “prohibited transaction”
described in Section 406 of ERISA or Section 4975 of the Code nor
taken any action which would constitute or result in a Termination Event with
respect to any such Plan which is subject to ERISA, (ix) each Loan Party, each
of its Subsidiaries and each member of the Controlled Group has made all
contributions due and payable with respect to each Plan, (x) there exists no
event described in Section 4043(b) of ERISA, for which the thirty (30) day
notice period contained in 29 CFR Section 2615.3 has not been waived, (xi)
no Loan Party, nor any such Subsidiary or any member of the Controlled Group has
any fiduciary responsibility for investments with respect to any plan existing
for the benefit of persons other than employees or former employees of any Loan
Party, any such Subsidiary or any member of the Controlled Group, and (xii) no
Loan Party, nor any such Subsidiary or any member of the Controlled Group has
withdrawn, completely or partially, from any Multiemployer Plan so as to incur
liability under the Multiemployer Pension Plan Amendments Act of
1980.  Except as disclosed on Schedule 5.10, no Loan Party, nor
any Subsidiary thereof or any member of the Controlled Group, maintains an
employee welfare benefit plan (within the meaning of Section 3(1) of ERISA) that
provides postretirement medical or life insurance benefits to former employees,
other than as required under Part 6 of Title I of ERISA.




5.11
            Patents,
      Trademarks, Copyrights and
Licenses.




All patents, patent applications,
trademarks, trademark applications, service marks, service mark applications,
copyrights, copyright applications, design rights, tradenames, assumed names and
licenses of any of the foregoing owned or utilized by any Loan Party (“IP
Rights”) are set forth on Schedule 5.11.  Any
such IP Rights material to and necessary for the operation of the Loan Parties’
businesses (“Material IP Rights”) are valid and have been duly registered or
filed (if applicable) with all appropriate Governmental Bodies and constitute
all of the IP Rights which are material to and necessary for the operation of
the Loan Parties’ businesses.  To the best knowledge of each of the
Loan Parties, there is no objection to or pending challenge to the validity of
any Material IP Rights and no Loan Party is aware of any grounds for any
challenge, except as set forth in Schedule 5.11
hereto.  Each of the Material IP Rights was lawfully created, acquired
or licensed by such Loan Party from the proper and lawful owner
thereof.  Each of the Material IP Rights has been maintained so as to
preserve the utility thereof in the Loan Parties’ businesses.  There
is no customized software licensed by any Loan Party which is necessary for the
continued operation in any material respect of such Loan Party.


68




5.12
            Licenses and
      Permits.




Each Loan Party and each Subsidiary
thereof is in compliance with and has procured and is now in possession of, all
material licenses or permits required by any applicable federal, state or local
law or regulation for the operation of its business in each jurisdiction wherein
it is now conducting or proposes to conduct business and where the failure to
comply with or procure such licenses or permits could reasonably be expected to
have a Material Adverse Effect.




5.13
            No Burdensome
      Restrictions.




No Loan Party or any Subsidiary thereof
is party to any contract or agreement, the performance of which could reasonably
be expected to have a Material Adverse Effect.  No Loan Party nor any
Subsidiary thereof has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien which is not a
Permitted Encumbrance.




5.14
            No
      Default Under 2002 Note Indenture or 2010 Note
  Indenture.




No “event
of default” or similar term (as defined in the 2002 Note Indenture, any other
2002 Note Document, the 2010 Note Indenture or any other 2010 Note Document) or
“default” (as defined in the 2002 Note Indenture, any other 2002 Note Document,
the 2010 Note Indenture or any other 2010 Note Document) exists, nor will any
such event of default or default exist under the 2002 Note Indenture, any other
2002 Note Document, the 2010 Note Indenture or any other 2010 Note Document
immediately after the making of any Advance or other extension of credit
hereunder; provided, however; with respect
to the 2002 Note Documents, such “event of default or default shall have
occurred prior to payment in full of all Indebtedness or other obligations owing
pursuant to any of the 2002 Note Documents.




5.15
            No Labor
      Disputes.




No Loan Party nor any Subsidiary
thereof is involved in any material labor dispute or any labor dispute involving
any bargaining unit or other group of employees generally; there are no strikes
or walkouts or, to the best of each Loan Party’s knowledge, after due inquiry,
union organization activity of any of such Loan Party’s or such Subsidiary’s
employees in existence or threatened, which, in the case of any of the
foregoing, has had, or is reasonably expected to have a Material Adverse
Effect.  Except as set forth on Schedule 5.15
hereof, no Loan Party has any labor contract that is scheduled to expire prior
to the Facility Termination Date.




5.16
            Margin
      Regulations.




No Loan Party nor any Subsidiary
thereof is engaged, nor will it engage, principally or as one of its important
activities, in the business of extending credit for the purpose of “purchasing”
or “carrying” any “margin stock” within the respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect.  No part of
the proceeds of any Advance will be used for “purchasing” or “carrying” “margin
stock” as defined in Regulation U of such Board of Governors.


69




5.17
            Investment Company
      Act.




No Loan Party or any Subsidiary thereof
is an “investment company” registered or required to be registered under the
Investment Company Act of 1940, as amended, nor is it controlled by such a
company.




5.18
            Disclosure.




No representation or warranty made by
any Loan Party in this Agreement or in any financial statement, report,
certificate or any other document furnished in connection herewith contains any
untrue statement of material fact or omits to state any material fact necessary
to make the statements herein or therein made not misleading in light of the
circumstances in which such representation or warranty was
made.  There is no fact known to any Loan Party (other than facts
regarding general economic, political or demographic matters and facts regarding
the automotive or automotive parts industries generally, to the extent addressed
and disclosed in the firm’s annual report for the fiscal year ending
December 31, 2006 filed with the Securities and Exchange Commission or in
any periodic report filed by the Borrowing Agent with the Securities and
Exchange Commission after the Closing Date) which could reasonably be expected
to have a Material Adverse Effect, which such Loan Party has not disclosed to
the Agent herein or otherwise in writing in Other Loan Documents, certificates
and statements furnished to the Agent for use in connection with the transaction
contemplated by this Agreement.




5.19
            Hedging
      Contracts.




No Loan Party nor any Subsidiary
thereof is a party to, nor will it be a party to, any Hedging Contract unless
same provides that the settlement amounts upon termination are payable without
regard to default on the part of either party (i.e. on a “Second Method” basis
if the Hedging Contract is under the 1992 ISDA Master Agreement or an equivalent
basis if otherwise documented).




5.20
            Conflicting
      Agreements.




No provision of any mortgage,
indenture, contract or agreement, judgment, decree or order binding on any Loan
Party or any Subsidiary thereof or affecting the Collateral or any other
property of any Loan Party conflicts with, or requires any Consent which has not
already been obtained by such Loan Party or such Subsidiary where such conflict
or a failure to obtain such Consent would in any way prevent the execution,
delivery or performance by the Loan Parties of the terms of this Agreement or
the Other Loan Documents or the rights of any of the Agent, Lenders or Issuer
thereunder.




5.21
            Application of Certain Laws and Regulations; Bulk
  Sales.




No Loan Party, nor any Subsidiary
thereof or any Affiliate of such Loan Party or such Subsidiary is subject to any
statute, rule or regulation which regulates the incurrence of any Indebtedness,
including statutes or regulations relative to common or interstate carriers or
to the sale of electricity, gas, steam, water, telephone, telegraph or other
public utility services.  All of the Loan Parties’ Inventory has been
acquired or manufactured by the Loan Parties in the ordinary course of the Loan
Parties’ business and such acquired Inventory has been acquired by the Loan
Parties from Persons in the business of selling Inventory of that kind and do
not require compliance by the Loan Parties or any other Person with any bulk
transfer laws or regulations of any Governmental Body.


70




5.22
            Business and
      Property.




No Loan Party nor any Subsidiary
thereof is engaged in any business other than as set forth on Schedule 5.22 hereto
and activities necessary to conduct such business or incidental
thereto.  On the Closing Date, each Loan Party and each Subsidiary
thereof will own, lease or license all the property and possess all of the
rights and Consents necessary for the conduct of its business.




5.23
            Locations.




Schedule 5.23 lists
each Real Property and whether such Real Property is owned or
leased.  Schedule 5.23 further
indicates each location where any Loan Party or any Domestic Subsidiary thereof
has any assets whether or not such location is a Real Property.  To
the extent that any such location is leased, the name and address of the
applicable landlord, a good faith estimate of the market value of the Collateral
held at such location and a summary of the primary lease terms are also
contained on Schedule
5.23.  Other than as disclosed on Schedule 5.23, no
Loan Party nor any direct Subsidiary of any Loan Party owns real property which
is subject to a mortgage.  Except as disclosed on Schedule 5.23, none
of the Collateral is in the possession of any bailee, warehouseman, processor or
consignee.  To the extent that any of the Collateral is in the
possession of any bailee, warehouseman, processor or consignee, Schedule 5.23 also
contains a good faith estimate of the market value of the Collateral held by
each such Person at each location.




5.24
            [Reserved.]




5.25
            Disclosure of Material
      Business Agreements.




Schedule 5.25
lists each Material Business Agreement to which any Loan Party or any Subsidiary
thereof is a party.




5.26
            Anti-Terrorism
      Laws.




(a)           No
Loan Party, any Subsidiary of any Loan Party, any Affiliate of any Loan Party or
any of their agents acting or benefiting in any capacity in connection with the
Advances, the Letters of Credit, or other transactions hereunder is in violation
in any material respect of any Anti-Terrorism Law or engages in or conspires to
engage in any transaction that evades or avoids, or has the purpose of evading
or avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law.




(b)           No
Loan Party, any Subsidiary of any Loan Party, any Affiliate of any Loan Party or
any of their agents acting or benefiting in any capacity in connection with the
Advances, the Letters of Credit, or other transactions hereunder, is any of the
following (each a “Blocked Person”):




(i)           a
Person that is listed in the annex to, or is otherwise subject to the provisions
of, the Executive Order No. 13224;




(ii)          a
Person owned or controlled by, or acting for or on behalf of, any Person that is
listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order No. 13224;




(iii)         a
Person with which any Lender or the Issuer is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism
Law;


71




(iv)         a
Person that commits, threatens or conspires to commit or supports “terrorism” as
defined in the Executive Order No. 13224;




(v)          a
Person that is named as a “specially designated national” on the most current
list published by the U.S. Treasury Department Office of Foreign Asset Control
at its official website or any replacement website or other replacement official
publication of such list, or




(vi)         a
Person who is affiliated or associated with a Person listed above.




No Loan
Party, any Subsidiary of any Loan Party, any Affiliate of any Loan Party or any
of their agents acting or benefiting in any capacity in connection with the
Advances, the Letters of Credit, or other transactions hereunder: (i) conducts
any business or engages in making or receiving any contribution of funds, goods
or services to or for the benefit of any Blocked Person or (ii) deals in, or
otherwise engages in any transaction relating to, any property or interests in
property blocked pursuant to the Executive Order No. 13224.




VI.
            AFFIRMATIVE COVENANTS.




Each Loan Party shall until payment in
full of the Obligations and termination of this Agreement:




6.1
            Taxes.




Pay, and
cause each Subsidiary thereof to pay, when due, all taxes, assessments and other
Charges lawfully levied or assessed upon such Loan Party or any of the assets or
property of any Loan Party including real and personal property taxes,
assessments and other Charges and all franchise, income, employment, social
security, withholding, and sales taxes; provided, however, that no such
tax, assessment, Charge or levy need be paid so long as and to the extent that:
(i) it is contested in good faith and by timely and appropriate proceedings
effective, during the pendency of such proceedings, to stay the enforcement of
such taxes, assessments, Charges and levies, (ii)(x) such stay prevents the
creation of any Lien (other than inchoate Liens for property taxes) or (y) a
bond has been provided which prevents the creation of any Lien (other than
inchoate Liens for property taxes) and (iii) appropriate reserves, as required
by GAAP, are established on the books of such Loan Party or its Subsidiaries, as
applicable, which are sufficient reserves to the reasonable satisfaction of the
Agent to protect the Agent’s security interest in or Lien on the
Collateral.  Each Loan Party hereby indemnifies and holds the Agent,
the Issuer and each Lender harmless in respect of any and all such
Charges.  If any tax, assessment or other Charge by any Governmental
Body creates a Lien on the Collateral which the Agent, in the exercise of its
Permitted Discretion, determines is currently enforceable and neither inchoate
nor stayed, the Agent may without notice to the Loan Parties pay such tax,
assessments or other Charge.  Agent shall promptly provide the
Borrowing Agent with written notice of any such tax payment subsequent to the
payment thereof.




6.2
            Conduct of Business and
      Maintenance of Existence and
Assets.




(a)
Maintain all of its properties necessary in its business in good working order
and condition (reasonable wear and tear excepted and except as may be disposed
of in accordance with the terms of this Agreement), including all Material IP
Rights; (b) take all actions necessary to enforce and protect the validity of
its Material IP Rights, unless the relevant Loan Party or Subsidiary determines
in its reasonable business judgment that taking any such actions is not in its
best interest; (c) keep in full force and effect its existence and comply in all
respects with the laws and regulations governing the conduct of its business
where the failure to do so could reasonably be expected to have a Material
Adverse Effect; and (d) make all such reports and pay all such franchise and
other taxes and license fees and do all such other acts and things as may be
lawfully required to maintain the rights, licenses, leases, powers and
franchises necessary to its business under the laws of any jurisdiction to which
it or its assets are subject.


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6.3
            Violations.




Notify the Agent in writing promptly,
and in any event within three Business Days of obtaining knowledge of any
violation of any law, statute, regulation or ordinance of any Governmental Body,
or of any agency thereof, applicable to any Loan Party or any Subsidiary thereof
or the assets or property of any Loan Party which could reasonably be expected
to have a Material Adverse Effect.




6.4
            Fixed Charge
      Coverage Ratio.




At any time at which the Undrawn
Availability is less than Twenty Million Dollars ($20,000,000), maintain a Fixed
Charge Coverage Ratio of not less than 1.10 to 1.00.  The Fixed Charge
Coverage Ratio shall be calculated as of the last day of each fiscal quarter for
the period equal to the four consecutive fiscal quarters then
ending.




6.5
            Execution of
      Supplemental Instruments.




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




6.6
            Standards of Financial
      Statements.




Cause all financial statements referred
to in Sections 9.7, 9.8, 9.10 or 9.11, in each case, as to which GAAP is
applicable, to be complete and correct in all material respects (subject, in the
case of interim financial statements, to notes and normal year-end audit
adjustments) and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein (except as
concurred in by such reporting accountants or officer, as the case may be, and
disclosed therein).




6.7
            Payoff of 2002
      Notes.




Pay in full all of the outstanding
Indebtedness and any other amounts owing with respect to the 2002 Notes, the
2002 Indenture or the 2002 Note Documents, and terminate each of the 2002 Note
Documents, within 45 days after the Closing Date.




6.8
            Mortgage on Real
      Property other than the Sarasota
  Property.




Within 60 days after the Closing Date,
execute and deliver to the Agent a Mortgage with respect to each parcel of Real
Property owned by any of the Loan Parties other than the Sarasota Property,
together with ALTA surveys and legal opinions with respect thereto, all in form
and substance substantially similar to those delivered to the 2010 Note
Collateral Agent.




6.9
            Mortgage on Sarasota
      Property.




In the event that the any of the
Borrowers owns the Sarasota Property as of April 1, 2011, execute and
deliver to the Agent a Mortgage with respect to the Sarasota Property, together
with title searches, ALTA surveys and legal opinions with respect thereto, all
in form and substance substantially similar to those delivered to the 2010 Note
Collateral Agent.


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VII.
              NEGATIVE
      COVENANTS.




Until satisfaction in full of the
Obligations and termination of this Agreement, no Loan Party shall, nor shall it
permit any of its Subsidiaries to:




7.1
            Merger,
      Consolidation, Acquisition and Sale of
  Assets.




Wind up, liquidate or dissolve its
affairs; enter into any transaction of merger, consolidation or other
reorganization with or into any other Person or permit any other Person to
consolidate with or merge with it; acquire all or a substantial portion of the
assets or stock of any Person; sell, pledge, lease transfer or otherwise dispose
of any of its property or assets other than Inventory in the ordinary course of
business; except that the following shall be permitted:




(a)           If
no Default or Event of Default has occurred and is continuing or would result
therefrom,




(i)           the
merger, consolidation or amalgamation of any Domestic Subsidiary with or into
the Parent or into another Domestic Subsidiary which is both a Borrower and a
Wholly-Owned Subsidiary, so long as in any merger, consolidation or amalgamation
involving the Parent, the Parent is the surviving or continuing or resulting
corporation;




(ii)          the
merger, consolidation or amalgamation of any Foreign Subsidiary with or into
another Subsidiary which is both a Foreign Subsidiary and a Wholly-Owned
Subsidiary;




(iii)         (A)
the liquidation, winding up or dissolution of any Foreign Subsidiary of the
Parent and (B) the liquidation, winding up or dissolution of Stone Ridge Far
East LLC, a Delaware limited liability company, so long as any proceeds of any
such liquidation, winding up or dissolution are treated as “Net Proceeds” for
purposes of Section 2.7(c) hereof;




(iv)         other
than as permitted under Section 7.1(c) hereof, the sale, pledge, lease,
transfer or disposition of Equipment, Fixtures or any Real Property of any Loan
Party or any Subsidiary of any Loan Party; provided that:




(A)         the
aggregate consideration for such transaction represents fair value (as
determined in good faith by management of the Parent),




(B)         the
aggregate consideration for all such transactions effected on a cumulative basis
on or after the Closing Date does not exceed Fifty Million Dollars
($50,000,000), and




(C)         any
assets or proceeds thereof in excess of the aggregate amount of Capital
Expenditures of all of the Loan Parties and all of their Subsidiaries in such
fiscal year on a cumulative basis shall be treated as “Net Proceeds” for
purposes of Section 2.7(c) hereof;




74




(v)          the
transfer or other disposition of any property by the Parent to any Domestic
Subsidiary which is both an Obligor and a Wholly-Owned Subsidiary, or by any
Domestic Subsidiary to the Parent or to any other Domestic Subsidiary which is
both an Obligor and a Wholly-Owned Subsidiary of the Parent;




(vi)       
 the transfer or other disposition of part or all of any Loan Party’s or
any Subsidiary’s interest in any joint venture and




(vii)       the
transfer, lease, sale or other disposition of any property by a Foreign
Subsidiary to the Parent, to any Loan Party, or to any Foreign Subsidiary which
is a Wholly-Owned Subsidiary for cash or an intercompany note, including,
without limitation, any transfer, lease, sale or other disposition for cash or
an intercompany note of (A) any equity interest in a Foreign Subsidiary,
or(B) any rights in respect of intercompany indebtedness of a Foreign
Subsidiary (whether evidenced by a promissory note or otherwise).




(b)           If
no Default or Event of Default has occurred and is continuing or would result
therefrom, any Obligor may acquire all or substantially all of the assets or
capital stock of any Person (in each case, a “Proposed Acquisition”), subject to
the satisfaction of each of the following conditions (in each case, a “Permitted
Acquisition”):




(i)           the
Agent shall receive at least ten (10) Business Days’ prior written notice of
such Proposed Acquisition, which notice shall include a detailed description of
such Proposed Acquisition;




(ii)          such
Proposed Acquisition shall only involve assets comprising a business, or those
assets of a business, of the type engaged in by the Loan Parties as of the
Closing Date, and which business would not subject the Agent or any Lender to
regulatory or third party approvals in connection with the exercise of its
rights and remedies under this Agreement or any Other Loan
Document;




(iii)         such
Proposed Acquisition shall be consensual and shall have been approved by the
board of directors of such Person (and if such Proposed Acquisition is a sale of
stock, the board of directors of the seller) and, if required by applicable law,
the shareholders of such Person;




(iv)        no
Indebtedness, contingent obligations or other liabilities shall be incurred or
assumed in connection with such Proposed Acquisition, except (A) Advances made
hereunder, (B) ordinary course trade payables, accrued expenses and unsecured
Indebtedness of such Person assumed in connection therewith, and (C)
Indebtedness incurred to finance such Proposed Acquisition so long as such
Indebtedness (1) is fully subordinated to the Obligations on terms acceptable to
the Agent in its sole discretion, (2) does not allow for any amortization of
principal prior to six months following payment in full of the Obligations, (3)
is not secured by any Lien on assets of a Loan Party or any Subsidiary thereof,
(4) does not exceed more than twenty-five percent (25%) of the aggregate
purchase price of the Proposed Acquisition, and (5) is subject to such other
terms acceptable to the Agent in its sole discretion (together, “Permitted
Acquisition Assumed Indebtedness”);




75




(v)         the
sum of all amounts payable in connection with all Permitted Acquisitions
(including all transaction costs and, without duplication, all Indebtedness,
liabilities and contingent obligations incurred or assumed in connection
therewith, including therein the maximum amount of any earn-out or deferred
purchase price payable) during any fiscal year of the Loan Parties, shall not
exceed (A) so long as the Undrawn Availability is equal to or less than Thirty
Million Dollars ($30,000,000) on a pro forma basis (as further described in
subsection 7.1(b)(ix)(A) below) immediately prior to and immediately
following the consummation of such Permitted Acquisition, Zero Dollars, (B) so
long as the Undrawn Availability is in excess of Thirty Million Dollars
($30,000,000) on a pro forma basis (as further described in
subsection 7.1(b)(ix)(A) below) immediately prior to and immediately
following the consummation of such Permitted Acquisition, Forty Million Dollars
($40,000,000) and (C) so long as the Undrawn Availability is in excess of
Sixty-Five Million Dollars ($65,000,000) on a pro forma basis (as further
described in subsection 7.1(b)(ix)(A) below) immediately prior to and
immediately following the consummation of such Permitted Acquisition, an
unlimited amount;




(vi)        if
the Proposed Acquisition is a stock purchase or merger, such Person shall have
positive earnings before interest, income taxes, depreciation and amortization
for the trailing four-quarter period preceding the anticipated closing date of
the Proposed Acquisition, as determined based upon the financial statements of
such Person for its most recently completed fiscal year and its most recent
interim financial period completed within sixty (60) days prior to the date of
consummation of such Proposed Acquisition;




(vii)       at
or prior to the closing of any Permitted Acquisition with respect to a Person or
the assets of a Person organized under the laws of or located in the United
States, any state thereof or the District of Columbia, the Agent shall have a
first priority perfected Lien (subject to Permitted Encumbrances) in all
Receivables, Inventory and other assets acquired pursuant thereto, or in the
assets of such Person, as applicable, other than Excluded Property and Specified
Fixed Asset Collateral, and the Agent shall have received such documents as may
be required in connection therewith;




(viii)      with
respect to the closing of any Permitted Acquisition described in
subsection 7.1(b)(vii) above, the Agent shall have conducted a field
examination of and a collateral audit of all assets acquired pursuant thereto,
or in the assets of such Person, as applicable, prior to any such acquired
assets being included in the calculation of the Formula Amount;




(ix)         the
Borrowing Agent shall have delivered to the Agent, in form and substance
satisfactory to the Agent:




76




(A)        within
fifteen days of the consummation of such Proposed Acquisition, a pro forma
consolidated balance sheet of the Parent and its consolidated Subsidiaries (the
“Acquisition Pro Forma”), based on recent financial data, which shall be
accurate and complete in all material respects and shall fairly present the
assets, liabilities and financial condition of the Parent and its consolidated
Subsidiaries in accordance with GAAP consistently applied, but taking into
account such Proposed Acquisition and the funding of all Advances in connection
therewith, and (x) such Acquisition Pro Forma shall reflect that average daily
Undrawn Availability for the thirty (30) day period preceding the consummation
of such Proposed Acquisition would have exceeded Thirty Million Dollars
($30,000,000) or Sixty-Five Million Dollars ($65,000,000), as applicable
pursuant to subsection (v) above on a pro forma basis (giving effect to such
Proposed Acquisition and all Advances made and Letters of Credit issued in
connection therewith as if made or issued on the first day of such period), (y)
the Acquisition Projections (as hereinafter defined) shall reflect that such
Undrawn Availability of Thirty Million Dollars ($30,000,000)
or  Sixty-Five Million Dollars ($65,000,000), as applicable pursuant
to subsection (v) above, shall continue for at least thirty (30) days after the
consummation of such Proposed Acquisition, and (z) on a pro forma basis (giving
effect to such Proposed Acquisition and all Advances made and Letters of Credit
issued in connection therewith as if made on the first day of such period), the
Loan Parties would have been in compliance with the financial covenant set forth
in Section 6.4, for a period of four fiscal quarters ended with the most
recent fiscal quarter for which financial statements have been provided (or are
required to have been provided) pursuant to Sections 9.7 and9.8,
respectively, as if such financial covenant were applicable notwithstanding the
fact that Undrawn Availability may be in excess of Twenty Million Dollars
($20,000,000);




(B)         within
fifteen days of the consummation of such Proposed Acquisition, updated versions
of the most recently delivered projections under Section 9.11 covering a
period of four fiscal quarters, commencing with the fiscal quarter in which the
Proposed Acquisition is to be consummated and otherwise prepared in accordance
with the projections required to be delivered under Section 9.11 (the
“Acquisition Projections”) and based upon the financial statements (I) of the
Parent and its consolidated Subsidiaries for Parent’s most recently completed
fiscal year and each fiscal quarter during the current fiscal year for which
financial statements have been provided (or are required to have been provided)
pursuant to Sections 9.7 and9.8, respectively, in relation to the date of
such required delivery of the Proposed Acquisition, taking into account such
Proposed Acquisition and (II) of such Person being acquired for a period similar
to the period described in clause (I) above; and




(x)          a
certificate of the chief financial officer of the Borrowing Agent to the effect
that:  (w) the Loan Parties will be solvent upon the consummation of
the Proposed Acquisition, (x) the Acquisition Pro Forma fairly presents the
financial condition of the Parent and its consolidated Subsidiaries as of the
date thereof after giving effect to the Proposed Acquisition, (y) the
Acquisition Projections are reasonable estimates of the future financial
performance of the Loan Parties subsequent to the date thereof based upon the
historical performance of the Loan Parties, and (z) the Borrowing Agent has
completed its due diligence investigation with respect to the Proposed
Acquisition, which investigation was conducted in a manner similar to that which
would have been conducted by a prudent purchaser of a comparable business or
assets, as applicable, and the results of which investigation were delivered to
the Agent and Lenders;




(xi)         the
form and substance of the Proposed Acquisition shall be reasonably acceptable to
the Agent; and




(xii)        any
necessary Joinder Amendment and Borrower Joinder Agreements shall have been
fully executed and delivered and all conditions precedent to the effectiveness
thereto shall have been fully completed or satisfied or shall be so satisfied
upon the consummation of the Proposed Acquisition.




77




(c)           Parent
or any of its Subsidiaries may sell, pledge, lease, transfer or otherwise
dispose of any Equipment that, in the reasonable business judgment of the
management of Parent or any such Subsidiary, is obsolete, worn out, unnecessary
or no longer useful in Parent’s or such Subsidiary’s business, including the
aircraft described on Schedule 7.1.




(d)           Parent
and its Subsidiaries shall be permitted to make any Capital Expenditures
permitted pursuant to Section 7.6.




(e)           The
Parent and its Subsidiaries shall be permitted to make the investments permitted
pursuant to Section 7.4.




(f)           The
Parent and its Subsidiaries shall be permitted to make the distributions and pay
the dividends permitted pursuant to Section 7.7.




7.2
            Creation of
      Liens.




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




7.3
            Guarantees.




Become liable upon the obligations of
any Person by assumption, endorsement or guaranty thereof or otherwise (other
than to the Lenders or the Issuer) except (a) guarantees existing on the Closing
Date and set forth on Schedule 7.3, (b) the
endorsement of checks in the ordinary course of business, (c) guarantees made by
a Loan Party or any Subsidiary thereof with respect to the Indebtedness of any
Obligor that is otherwise permitted pursuant to Section 7.8, (d) guarantees
made by an Obligor with respect to the Indebtedness of any Foreign Subsidiary so
long as the aggregate amount of all such Indebtedness guaranteed under this
clause (d), together with any extensions of credit from any Loan Party to a
Foreign Subsidiary permitted under Section 7.5(d) and investments of any
Loan Party in a Foreign Subsidiary, joint venture or partnership permitted under
Section 7.4(d), does not exceed Fifteen Million Dollars ($15,000,000) in
the aggregate, (e) at any time during a Permitted Period, additional guarantees
made by an Obligor with respect to the Indebtedness of any Foreign Subsidiary,
and (f) the Parent Guaranty so long as the maximum amount of all obligations
guaranteed thereby does not exceed Six Million Dollars ($6,000,000) in the
aggregate, whether such obligations constitute principal, interest, fees or
other Indebtedness.




78




7.4
            Investments.




Purchase or acquire obligations or
stock of, or any other interest in, any Person, except (a) investments
existing on the Closing Date and set forth on Schedule 7.4,
(b) investments made in New Bolton to consummate the New Bolton Acquisition
in accordance with the New Bolton Acquisition Documents, (c) Permitted
Acquisitions and any related Permitted Acquisition Assumed Indebtedness in
connection therewith, (d) investments in any Foreign Subsidiary or in any
joint venture or partnership so long as the aggregate amount of all such
investments under this clause (d), together with any guarantees by a Loan
Party of any Foreign Subsidiary permitted under Section 7.3(d) and any
extensions of credit from any Loan Party to a Foreign
Subsidiary  permitted under Section 7.5(d), does not exceed
Fifteen Million Dollars ($15,000,000) in the aggregate, (e) at any time
during a Permitted Period, additional investments in any Foreign Subsidiary or
in any joint venture or partnership, (f) investments in any Loan Party,
(g) purchases by any Foreign Subsidiary of, or acquisitions by any Foreign
Subsidiary of obligations or stock of, or any other interest in, any other
Foreign Subsidiary which is a Wholly-Owned Subsidiary, including any purchases,
acquisitions or investments contemplated pursuant to Section 7.1(a)(vii),
(h) cash and Cash Equivalents; provided, however,the Borrowers and any of
their Subsidiaries may invest in cash and Cash Equivalents as
follows:  (A) during any time that Revolving Advances are outstanding
to the Borrowers and an Activation Notice has not been delivered by the Agent
pursuant to Section 4.14(g), the aggregate amount of all cash and Cash
Equivalents held by the Borrowers or any of their Domestic Subsidiaries
permitted by this subsection (h) shall not exceed Forty-Six Million Dollars
($46,000,000) for any period of three consecutive Business Days; (B) the
aggregate amount of all cash and Cash Equivalents held by Foreign Subsidiaries
of the Loan Parties shall not be restricted, and (C) during any time that
Revolving Advances are outstanding to any Borrowers and an Activation Notice has
been delivered by the Agent pursuant to Section  4.14(g), the
aggregate amount of all such investments held by the Borrowers or any of their
Domestic Subsidiaries permitted by subsection (h) of this Section 7.4
shall not exceed One Million Dollars ($1,000,000) for any period of three
consecutive Business Days.




7.5
            Extensions of
      Credit.




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




7.6
            Capital
      Expenditures.




Make or incur any Capital Expenditure
or commitments for Capital Expenditures (including capitalized leases) unless
such Capital Expenditures do not exceed Thirty-seven Million Dollars
($37,000,000) in the aggregate on a consolidated basis for the Loan Parties and
their Subsidiaries in any calendar year.




7.7
            Dividends and
      Distributions; Grants.




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




79




7.8
            Indebtedness.




Create, incur, assume or suffer to
exist any Indebtedness except in respect of:




(a)           Indebtedness
existing on the Closing Date and set forth on Schedule 7.8
(including any extensions, renewals or refinancings thereof); provided that the
principal amount of such Indebtedness shall not be increased without the prior
written consent of the Required Lenders;




(b)           Indebtedness
to the Lenders and the Issuer under or pursuant to this Agreement or the Other
Loan Documents;




(c)           (i)
prior to a date not later than 45 days following the Closing Date, Indebtedness
in respect of the 2002 Notes in an amount less than 50% of the aggregate amount
of the outstanding Indebtedness owing with respect to the 2002 Notes immediately
prior to the Closing Date, and (ii) Indebtedness in respect of the 2010 Notes,
in an aggregate principal amount not to exceed One Hundred Seventy-Five Million
Dollars ($175,000,000);




(d)           Indebtedness
incurred for Capital Expenditures permitted under Section 7.6;




(e)           Indebtedness
as permitted under Section 7.5;




(f)           Indebtedness
consisting of the guarantees permitted under Section 7.3;




(g)           Permitted
Acquisition Assumed Indebtedness in an aggregate amount not to exceed Fifteen
Million Dollars ($15,000,000);




(h)           Hedging
Obligations arising under Hedging Contracts complying with the requirements set
forth in Section 5.19 and entered into in the ordinary course of business
and not with a speculative purpose;




(i)           Indebtedness
owing from a Foreign Subsidiary to any party other than a Loan Party which does
not exceed Fifty Million Dollars ($50,000,000) in the aggregate;
and




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




7.9
            Nature of
      Business.




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




7.10
            Transactions with
      Affiliates.




Directly
or indirectly, purchase, acquire or lease any property from, or sell, transfer
or lease any property to, or otherwise deal with, any Affiliate, except
(a) transactions in the ordinary course of business, on an arm’s length
basis on terms no less favorable than terms which would have been obtainable
from a Person other than an Affiliate, and (b) transactions otherwise
permitted pursuant to Sections 7.1(a)(vii), 7.3, 7.4 and
7.5.




80




7.11
            Leases.




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




7.12
            Subsidiaries.




Form any
Domestic Subsidiary unless, at the sole discretion of the Agent, (i) (A) such
Subsidiary expressly becomes a Borrower and becomes jointly and severally liable
for the obligations of the Borrowers hereunder, under the Notes and under any
other agreement between the Borrowers and the Lenders in accordance with the
provisions of Sections 1.7 and 1.8; provided, however, none of such
Subsidiary’s assets shall be included in the Formula Amount in accordance with
the terms of this Agreement until such time as the Agent makes such
determination in its Permitted Discretion, or (B) such Subsidiary expressly
becomes a Guarantor for the Obligations by delivering an executed Guarantor
Joinder Agreement to the Agent, (ii) the Agent shall have received all
documents, including appropriate security agreements, pledge agreements,
mortgages, Waivers, Consents, organizational documents, corporate resolutions
and legal opinions it may reasonably require in connection therewith, and (iii)
the Agent shall have obtained, for the benefit of the Secured Creditors, a first
priority perfected Lien in all assets (other than Excluded Property and
Specified Fixed Asset Collateral) of such Subsidiary.




7.13
            Fiscal Year and
      Accounting Changes.




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




7.14
            Pledge of Credit.




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




7.15
            Amendment of Organizational
Documents.




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




7.16
            Compliance with
      ERISA.




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




81




7.17
            Repayment or Prepayment of
      Indebtedness.




At any time, directly or indirectly,
prepay any Indebtedness (other than the Obligations to the extent permitted
under the terms of this Agreement) or repurchase, redeem, retire or otherwise
acquire any Indebtedness of any Loan Party or any Subsidiary thereof; provided, however, (i) the
Parent may repay, prepay, redeem or acquire for value any of its 2002 Notes (a)
from available cash and cash equivalents existing as of the Closing Date so long
as such cash and cash equivalents do not arise from the proceeds of Revolving
Advances, or (b) from the proceeds of the issuance of the 2010 Notes; (ii) the
Parent may repay, prepay, redeem or acquire for value any of its 2010 Notes (a)
from available cash and cash equivalents existing as of the Closing Date or
arising after the Closing Date so long as such cash and cash equivalents do not
arise from the proceeds of Revolving Advances, or (b) from the proceeds of
Revolving Advances; (iii) any Subsidiary may repay or prepay any Obligor with
respect to any Indebtedness; and (iv) at any time during a Permitted Period, any
Obligor or other Subsidiary may repay or prepay any other Subsidiary with
respect to any Indebtedness; provided, further, in the case
of each of subclauses (a) and (b) of clause (ii) above, (x) no Event of Default
then exists or would exist by reason of such repayment or repurchase and (y) the
Undrawn Availability after such repayment or repurchase exceeds Thirty Million
Dollars ($30,000,000).




7.18
            Bailee Documents of Title.




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




7.19
            Modification of Material Business
Agreements.




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




7.20
            Modification of 2010 Note
Indenture.




Enter
into or permit any amendment to, or modification or change of, any 2010 Note
Document as in effect on the Closing Date, unless, prior to the effectiveness
thereof, such amendment, modification or change has been approved in writing by
the Agent, acting on instructions from the Required Lenders; provided, however, that no such
approval shall be required for an amendment, modification or change that does
not adversely affect the Lenders.




82




7.21
            Anti-Terrorism
      Laws.




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




VIII.
            CONDITIONS
      PRECEDENT.




8.1
            Conditions to Effectiveness of this Amended and Restated Credit
      Agreement.




This Agreement shall become effective
upon satisfaction of the following conditions precedent unless waived by the
Agent pursuant to the Post-Closing Waiver Letter:




(a)
            Loan
      Documents.  The Agent shall have received an executed
      version of this Agreement, the Notes, the 2010 Note Intercreditor
      Agreement, and, to the extent not otherwise specifically described below,
      any Other Loan Documents to be delivered on the Closing Date, including
      (i) the Post-Closing Waiver Letter and (ii) the other documents required
      to be delivered pursuant to the Closing Agenda, in each case, in form,
      substance and number satisfactory to the
Agent;




(b)
            Collateral and
      Security.  The Agent shall have received an executed
      version of each IP Security Agreement, the Pledge Agreement, the Pledge
      Agreement (Brazil), and any Other Loan Document necessary to grant to the
      Agent, for the benefit of the Lenders, a lien on, security interest in,
      and pledge of, all personal property in which the 2010 Note Collateral
      Agent is being granted a lien, security interest or pledge, each in form,
      substance and number satisfactory to the Agent, and all Collateral items
      required to be physically delivered to the Agent under this Agreement or
      any Other Loan Document shall have been so delivered, accompanied by any
      appropriate instruments of transfer (or arrangements satisfactory to the
      Agent for such delivery shall be in place), and all taxes, fees and other
      charges then due and payable in connection with the execution, delivery,
      recording, publishing and filing of such instruments and incurrence of the
      Obligations and the delivery of this Agreement and the Other Loan
      Documents shall have been paid in
full.




(c)
            Lien
      Searches.  The Agent shall have received accurate and
      complete copies of all of the Lien, pending suit and other public records
      searches required by the Agent (as more fully described on the Closing
      Agenda);




(d)
            Tax
      Returns.  The Agent shall have received the first page of
      each Loan Party’s federal tax returns for the most recent two (2) tax
      years;




(e)
            Filings, Registrations
      and Recordings.  Other than the Mortgages, each document
      (including any Uniform Commercial Code financing statement) required by
      this Agreement, any related agreement or under law or reasonably requested
      by the Agent to be filed, registered or recorded in order to create, in
      favor of the Agent, a perfected security interest in or Lien upon the
      Collateral shall have been properly filed, registered or recorded in each
      jurisdiction in which the filing, registration or recordation thereof is
      so required or requested and all actions necessary or, in the opinion of
      the Agent, desirable to perfect and protect the Lien of the Agent granted
      hereunder shall have been taken;




83




(f)
            Corporate
      Proceedings.  The Agent shall have received a copy of the
      resolutions in form and substance reasonably satisfactory to the Agent, of
      the Board of Directors (or if applicable, the general partner or board of
      managers) of each Loan Party (i) authorizing the execution, delivery and
      performance of this Agreement, the Notes, and the Other Loan Documents to
      which such Loan Party is a party, and (ii) the granting by such Loan Party
      of the security interests in and Liens upon the Collateral, in each case
      certified by the Secretary or Assistant Secretary of such Loan Party as of
      the Closing Date and such certificate shall state that the resolutions
      thereby certified are true, accurate and complete and have note been
      amended, modified, revoked or rescinded as of the date of such
      certificate;




(g)
            Authorization
      Certificates.  The Agent shall have received a
      certificate of the Secretary or an Assistant Secretary of the Borrowing
      Agent, dated the Closing Date, as to the authority and incumbency of
      various specified employees of the Borrowing Agent to utilize the
      StuckyNet System, deliver Borrowing Base Certificates, Compliance
      Certificates, any other Collateral Reports and otherwise communicate with
      the Agent.




(h)
            Incumbency
      Certificates.  The Agent shall have received a
      certificate of the Secretary or an Assistant Secretary of each Loan Party,
      dated the Closing Date, as to the incumbency and signature of the officers
      of such Loan Party executing this Agreement and the Other Loan Documents
      to which such Loan Party is a party together with evidence of the
      incumbency of such Secretary or such Assistant
  Secretary;




(i)
            Charter
      Documents.  The Agent shall have received a copy of the
      Articles of Incorporation or Certificate of Incorporation, as the case may
      be, of each Loan Party, together with all amendments thereto, certified by
      the Secretary of State or other appropriate official of such Loan Party’s
      jurisdiction of incorporation, together with copies of the by-laws or code
      of regulations, as the case may be, of such Loan Party, in each case,
      together with all amendments and supplements thereto, and all agreements
      of such Loan Party shareholders, certified as accurate and complete by the
      Secretary or Assistant Secretary of such Loan
  Party;




(j)
            Good
      Standing.  The Agent shall have received copies of good
      standing certificates, or similar certifications, as applicable, for each
      Loan Party dated not more than thirty (30) days prior to the Closing Date,
      issued by the Secretary of State or other appropriate official of such
      Loan Party’s jurisdiction of incorporation, and each jurisdiction where
      the conduct of such Loan Party’s business activities or the ownership of
      its properties necessitates qualification, except where the failure to be
      so qualified could not reasonably be expected to cause a Material Adverse
      Effect;




(k)
            Compliance with
      Law.  The Agent shall have received evidence that each
      Loan Party and each Subsidiary thereof is in compliance in all material
      respects with all pertinent federal, state and local regulations including
      those with respect to the Environmental Laws, the Federal Occupational
      Safety and Health Act and ERISA (or the equivalent laws and/or statutes of
      any other jurisdiction, to the extent
  applicable);




84




(l)
            Legal
      Opinion.  The Agent shall have received the executed
      legal opinion of Baker & Hostetler LLP, Burns & Levinson LLP, and
      such other law firms reasonably satisfactory to Agent, in form and
      substance satisfactory to the Agent, which shall cover such matters
      incident to the transactions contemplated by this Agreement and the Other
      Loan Documents, as the Agent may reasonably require, and each Loan Party
      hereby authorizes and directs such counsel to address such opinion to the
      Agent, the Lenders and the Issuer, and in each case, their respective
      successors and assigns;




(m)
            No
      Litigation.  (i) No litigation, investigation or
      proceeding before or by any arbitrator or Governmental Body shall be
      continuing or threatened against any Loan Party or any Subsidiary thereof
      or against the officers, directors or managers of such Loan Party or such
      Subsidiary (A) in connection with this Agreement or the Other Loan
      Documents or any of the transactions contemplated thereby and which, in
      the reasonable opinion of the Agent, is deemed material or (B) which
      could, in the reasonable opinion of the Agent, have a Material Adverse
      Effect; and (ii) no injunction, writ, restraining order or other order of
      any nature materially adverse to such Loan Party or such Subsidiary or the
      conduct of its business or inconsistent with the due consummation of the
      transactions contemplated by this Agreement shall have been issued by any
      Governmental Body;




(n)
            Financial Condition
      Certificate.  The Agent shall have received an executed
      Financial Condition Certificate in the form of Exhibit F;




(o)
            Fees.  The
      Agent shall have received, or will receive as part of the funding on the
      Closing Date, all fees payable to the Agent, the Lead Arranger, the Issuer
      and the Lenders on or prior to the Closing Date pursuant to Article III
      hereto or the Agent’s Fee Letter;




(p)
            Insurance.  The
      Agent shall have received evidence satisfactory to the Agent that each
      Loan Party has the personal and real property, liability, business
      interruption and other insurance required by Section 4.11, with Agent’s
      loss payable endorsements, in form and substance satisfactory to Agent,
      listing the Agent as loss payee with respect to the Collateral and as
      additional insured, as its interests may appear, and consistent with the
      terms and provisions of the 2010 Note Intercreditor
    Agreement;




(q)
            Letters of Credit and
      Letter of Credit Application.  The Agent shall have
      received from the Borrowing Agent (i) a completed Letter of Credit
      Application for the Letters of Credit to be issued on the Closing Date and
      (ii) an accurate and complete copy of each Letter of Credit set forth in
      Schedule 2.9
      attached hereto;




(r)
            Payment of
      Expenses.  The Agent shall have received any and all
      costs and expenses owing to the Agent in accordance with
      Section 15.12 required to be paid by the Loan
  Parties;




(s)
            Consents.  The
      Agent shall have received any and all Consents necessary to permit the
      effectuation of the transactions contemplated by this Agreement and the
      Other Loan Documents and, in each case, the Consents of such third parties
      as might assert claims with respect to the Collateral, as the Agent and
      its counsel shall deem necessary;




85




(t)
            No Material Adverse
      Change.  (i) Since December 31, 2009, there shall
      not have occurred any event, condition or state of facts which could
      reasonably be expected to have a Material Adverse Effect and (ii) no
      representations made or information supplied to the Agent shall have been
      proven to be inaccurate or misleading in any material
    respect;




(u)
            Waivers.  The
      Agent shall have received an executed copy of each Waiver required by the
      Closing Agenda to be delivered on the Closing
  Date;




(v)
            Leasehold and Similar
      Agreements.  The Agent shall have received copies of all
      leases, mortgages, warehouseman agreements, consignment agreements,
      processing agreements or similar agreements in effect with respect to (i)
      all premises leased by any Loan Party and (ii) all locations at which
      Inventory or Equipment of any Loan Party is
  located;




(w)
            Contract
      Review.  The Agent shall have received Schedule 5.25
      listing all of the Material Business Agreements of each Loan
      Party;




(x)
            Termination of
      Existing Indebtedness.  The Agent shall have received
      evidence, in form and substance satisfactory to the Agent, that a portion
      of Net Proceeds of the issuance of the 2010 Notes shall have been applied,
      or will be applied on the Closing Date, to pay off those 2002 Notes
      tendered to the Parent for payment in full, in an amount greater than 50%
      of the aggregate amount of the outstanding Indebtedness owing with respect
      to the 2002 Notes immediately prior to the Closing
  Date;




(y)
            Bring-Down
      Certificate.  The Agent shall have received a certificate
      signed by the chief financial officer of each Loan Party, dated as of the
      Closing Date, stating that (i) all representations and warranties set
      forth in this Agreement and the Other Loan Documents to which such Loan
      Party is a party are true and correct in all material respects on and as
      of such date, (ii) such Loan Party, as applicable, is on such date in
      compliance with all the terms and provisions set forth in this Agreement
      and the Other Loan Documents, as the case may be, (iii) on such date no
      Default or Event of Default has occurred or is continuing and (iv) all of
      the deliveries to be made by or on behalf of such Loan Party as specified
      in the Closing Agenda shall have been furnished to the Agent; provided, however, the
      Loan Parties shall be permitted to update and revise the Schedules to this
      Agreement in connection with the delivery of such certificate, but only to
      the extent that such revised Schedules are in form and substance
      satisfactory to the Agent, in the exercise of its Permitted
      Discretion.




(z)
            Title
      Searches.  The Agent shall have received title searches
      with respect to the Real Property, other than the Sarasota Property, the
      results of which shall be in form and substance satisfactory to the Agent
      and conducted by a title insurance company satisfactory to the
      Agent;




86




(aa)
            2010 Note
      Documents.  The Borrowers shall have provided to the
      Agent and the Lenders (i) a copy of the 2010 Note Documents, together with
      any amendments or supplements thereto, all in form and substance
      satisfactory to the Agent, certified by an officer of the Parent as being
      true and complete and (ii) an officer’s certificate, signed by an
      authorized officer of the Parent, and otherwise in form and substance
      satisfactory to the Agent and the Lenders, certifying (A) that no
      “default” or “event of default” or any similar term (as defined in the
      2010 Note Indenture) exists under the 2010 Note Indenture or under any of
      the 2010 Note Documents, nor will exist as of the Closing Date, (B) that
      all of the Obligations constitute “permitted indebtedness” or any similar
      term (as defined in the 2010 Note Indenture), and (C) such other matters
      with respect to the 2010 Note Documents as the Agent shall deem necessary
      or appropriate;




(bb)
            Closing Agenda
      Conditions.  Each other condition precedent described on
      the Closing Agenda shall have been fulfilled to the satisfaction of the
      Agent; and




(cc)
            Other.  All
      corporate and other proceedings, and all documents, instruments and other
      legal matters in connection with the transactions contemplated by this
      Agreement shall be satisfactory in form and substance to the Agent and its
      counsel.




8.2
            Conditions to Each
      Advance.




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




(a)
            Representations and
      Warranties.  Each of the representations and warranties
      made by any Loan Party in or pursuant to this Agreement and any Other Loan
      Documents to which it is a party, as the case may be, and each of the
      representations and warranties contained in any certificate, document or
      financial or other statement furnished at any time under or in connection
      with this Agreement or any Other Loan Document shall be true and correct
      in all material respects on and as of such date as if made on and as of
      such date except for representations and warranties made as of or
      regarding a specified date.




(b)
            No
      Default.  No Event of Default or Default shall have
      occurred and be continuing on such date, or would exist after giving
      effect to the Advances requested to be made or Letters of Credit requested
      to be issued, on such date; provided, however that,
      the Agent, in its sole discretion, may, pursuant to Section 15.4
      continue to make Advances and the Issuer, in its sole discretion, may
      continue to issue Letters of Credit, in each case, notwithstanding the
      existence of an Event of Default or Default and any Advances so made or
      Letters of Credit so issued shall not be deemed a waiver of any such Event
      of Default or Default.




(c)
            Maximum
      Advances.  Subject to Section 15.4, in the case of
      any Advances requested to be made or Letters of Credit requested to be
      issued, after giving effect thereto, the aggregate Advances or Letters of
      Credit shall not exceed the maximum amount of the applicable Advances
      permitted under Section 2.1 or the maximum amount of Letters of
      Credit under Section 2.9.




(d)
            Request for
      Advances.  Each request for an Advance or a Letter of
      Credit by the Borrowing Agent hereunder shall constitute a representation
      and warranty by each Loan Party as of the date of such Advance or Letter
      of Credit that the conditions contained in this Section shall have
      been satisfied.




87




IX.
            NOTICE AND DISCLOSURE
      REQUIREMENTS.




Each Loan Party shall, on behalf of
itself and its Subsidiaries, until satisfaction in full of the Obligations and
the termination of this Agreement:




9.1
            Disclosure of
      Material Matters.




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




9.2
            Schedules;
      Collateral Reporting Information; Borrowing Base
      Certificate.




Deliver
to the Agent on or before the twentieth (20th) day of each calendar month as and
for the prior calendar month (a) accounts payable agings and accounts receivable
agings of the Borrowers (reconciled to the general ledger and the Borrowing Base
Certificate), (b) Inventory reports of the Borrowers (which shall include a
lower of cost or market calculation) and (c) a Borrowing Base Certificate (which
shall be calculated as of the last day of the prior calendar month and which
shall not be binding upon the Agent or restrictive of the Agent’s rights under
this Agreement).  Such inventory reports shall include, with respect
to any inventory owned by the Borrowers and located in Mexico, a perpetual
inventory report listing the types of inventory per location (including product
number or SKU description), and the quantity on hand, per unit cost and extended
value of each such type of inventory per location.  In addition, for
any period during which Undrawn Availability does not exceed Twenty Million
Dollars ($20,000,000), unless otherwise agreed by the Agent, the Borrowing Agent
shall deliver to the Agent on a calendar weekly basis an interim Borrowing Base
Certificate and inventory report (i) reflecting all activity of the Borrowers
(sales, collections, credits, etc.) impacting the Receivables of the Borrowers
for all Business Days since the preparation of the immediately prior week
interim Borrowing Base Certificate, and (ii) reflecting all changes in the types
of inventory and quantity on hand, per unit cost and extended value of such
types of inventory per location in Mexico since the preparation of the
immediately prior week interim inventory report.  The amount excluded
from Eligible Receivables on such interim Borrowing Base Certificate shall be
the amount that is calculated and updated monthly pursuant to this Section 9.2
and which is satisfactory to the Agent.  The amount of Eligible
Inventory to be included on such interim Borrowing Base Certificate shall be
calculated and updated monthly pursuant to this Section 9.2 and which is
satisfactory to the Agent.  Such interim Borrowing Base Certificate
shall also include a reconciliation of the Inventory reported thereon with the
Inventory of the Borrowers reported on the general ledger of the
Borrowers.  In addition, with respect to any period during which
Undrawn Availability does not exceed Twenty Million Dollars ($20,000,000), the
Borrowing Agent will deliver to the Agent at such intervals as the Agent may
reasonably require: (i) confirmatory assignment schedules, (ii) copies of
Account Debtor’s invoices, (iii) evidence of shipment or delivery, (iv) accounts
payable schedules of the Borrowers (reconciled to the general ledger) and (v)
such further schedules, documents or information regarding the Collateral as the
Agent may require including trial balances and test
verifications.  The Agent shall have the right to confirm and verify
all Receivables by any manner and through any medium it considers advisable and
do whatever it may deem reasonably necessary to protect its interests
hereunder.  The items to be provided under this Section are to be
in form satisfactory to the Agent and executed by the applicable Loan Parties
and delivered to the Agent from time to time solely for the Agent’s convenience
in maintaining records of the Collateral, and any Person’s failure to deliver
any of such items to the Agent shall not affect, terminate, modify or otherwise
limit the Agent’s Lien with respect to the Collateral.  The items to
be provided under this Section 9.2 shall be delivered to the Agent by Approved
Electronic Communication (or, if requested by the Agent, only by posting to the
Agent’s StuckyNet system).




88




9.3
            Environmental
      Reports.




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




9.4
            Litigation.




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




9.5
            Material
      Occurrences.




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




9.6
            Government
      Receivables.




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




89




9.7
            Annual Financial
      Statements.




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




9.8
            Quarterly Financial
      Statements.




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




9.9
            Securities
      Filings.




Furnish
the Agent as soon as available, but in any event within ten (10) days after the
filing thereof, with copies of such financial statements, proxy statements,
registration statements, reports and returns as any Loan Party or any Subsidiary
thereof is required to file with the United States Securities and Exchange
Commission or any state securities commission.




90




9.10
            Additional
      Information.




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




9.11
            Projected
      Operating Budget.




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




9.12
            Notice of Suits, Adverse
      Events.




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




91




9.13
            ERISA Notices and
      Requests.




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




9.14
            Notices
      Regarding 2002 Note Documents or 2010 Note
  Documents.




Furnish
the Agent with written notice promptly, and in any event with three Business
Days, of any notice provided (i) to the 2010 Noteholders or the trustee therefor
under the 2010 Note Indenture, the 2010 Notes or any of the other 2010 Note
Documents, or (ii) to the 2002 Noteholders or the trustee therefor under the
2002 Note Indenture, the 2002 Notes or any of the other 2002 Note
Documents.




9.15
            Certified
      Copies of the New Bolton Loan
Documents.




Promptly,
and in any event within Five Business Days of the execution and delivery
thereof, copies of all of the executed and delivered New Bolton Loan Documents
and the Parent Guaranty, each in form and substance satisfactory to the Agent,
certified as being true, correct and complete by an officer of the
Parent.




9.16
            Additional
      Documents.




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




X.
            EVENTS OF
      DEFAULT.




The occurrence of any one or more of
the following events shall constitute an “Event of Default”:




92




10.1
            Payment of
      Obligations.




(a)           Failure
by any Borrower to pay any principal with respect to the Obligations when due,
whether at maturity, by reason of acceleration pursuant to the terms of this
Agreement, or by required prepayment;




(b)           Failure
by any Borrower to pay any interest with respect to the Obligations when due, or
failure by any Loan Party to pay any other liabilities or make any other
payment, fee or charge provided for under this Agreement or any Other Loan
Document herein when due, if any such failure shall continue for five or more
days;




10.2
            Misrepresentations.




Any representation or warranty made or
deemed made by any Loan Party thereof in this Agreement, any Other Loan Document
or in any certificate, document or financial or other statement furnished at any
time in connection herewith or therewith, as the case may be, shall prove to
have been misleading in any material respect on the date when made or deemed to
have been made;




10.3
            Failure to Furnish
      Information.




Failure by any Loan Party to (a)
furnish financial information required to be provided hereunder when due, (b)
furnish any additional financial information reasonably requested by the Agent
within fifteen (15) Business Days after such information is requested, or (c)
permit the inspection of its or any of its Subsidiaries’ books or records to the
extent such inspection is provided for hereunder;




10.4
            Liens Against
      Assets.




Issuance of a notice of Lien, levy,
assessment, injunction or attachment against a material portion of any Loan
Party’s or any Subsidiary’s property (other than property of a Foreign
Subsidiary) which is not stayed or lifted within thirty (30) days except for
Liens described in clause (h) or clause (j) of the definition of
Permitted Encumbrances;




10.5
            Breach of
      Covenants.




Except as otherwise provided for in
Sections 10.1, 10.3 and 10.4, (i) failure or neglect of any Loan Party to
perform, keep or observe any term, provision, condition, covenant herein
contained (other than any term, provision, condition, covenant referenced in
clause (ii) hereof), or the failure or neglect by any Loan Party or any
Subsidiary thereof to perform, keep or observe any term, provision, condition,
covenant contained in any Other Loan Document, or (ii) failure or neglect
of any Loan Party or any Subsidiary thereof to perform, keep or observe any
term, provision, condition, covenant herein contained in Sections 4.6, 4.7,
4.9,4.13, 4.15 or 6.2(a) or 6.2(c) and such failure shall continue for thirty
(30) days from the date upon which any Loan Party has knowledge of the
occurrence of such failure or neglect;




10.6
            Judgment.




Any money judgment, writ or warrant of
attachment or similar process (including but not limited to distraint or
execution) involving an amount, when aggregated with all such money judgment,
writ or warrant of attachment or similar process outstanding at such time, in
excess of Five Million Dollars ($5,000,000) is entered or filed against any Loan
Party or any Subsidiary thereof or, in each case, against any of its respective
assets and is not released, discharged, vacated, fully bonded or stayed within
thirty (30) days after such judgment, writ or warrant of attachment or similar
proceeding is entered, unless such judgment is covered by insurance from an
insurance carrier which has acknowledged coverage in the amount of the claim
without any reservation of rights or which has been ordered by a court of
competent jurisdiction to pay such claim;




93


10.7
                Insolvency and Related
      Proceedings.
  (a)           Any
Loan Party or any other Subsidiary which is a Material Subsidiary shall (i)
apply for, consent to or suffer the appointment of, or the taking of possession
by, a receiver, custodian, trustee, liquidator or similar fiduciary of itself or
of all or a substantial part of its property, (ii) make a general assignment for
the benefit of creditors, (iii) commence a voluntary case under any state or
federal bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a
bankrupt or insolvent, (v) file a petition seeking to take advantage of any
other law providing for the relief of debtors, (vi) acquiesce to, or fail to
have dismissed, within sixty (60) days, any petition filed against it in any
involuntary case under such bankruptcy laws, (vii) take any action for the
purpose of effecting any of the foregoing or (viii) admit in writing its
inability, or be generally unable, to pay its debts as they become
due;
  (b)           Any
occurrence analogous to any of the matters described in clause (a) above
occurs in relation to a Loan Party or any Material Subsidiary under the laws of
any other jurisdiction.
  10.8
                Cessation of
      Operations.
  Any Loan Party or any Domestic
Subsidiary thereof shall cease operation of its present business for more than
five consecutive Business Days;
  10.9
                Material Adverse
      Effect.
  Any change in any Loan Party’s or any
Subsidiary’s condition or affairs (financial or otherwise) which in the Agent’s
reasonable opinion has or could reasonably be expected to have a Material
Adverse Effect;
  10.10
              Loss of Priority
      Lien.
  The Agent’s Liens in the Collateral
created hereunder or provided for hereby or under any Other Loan Document for
any reason ceases to be in full force and effect and a perfected Lien having a
first priority interest, except for Liens described in clause (f) of the
definition of Permitted Encumbrances;
  10.11
              Breach of Material
      Agreements.
  A
material default of the obligations of any Loan Party or any Subsidiary thereof
under any Material Business Agreement to which it is a party shall occur which
default is not cured within any applicable cure period;
  10.12
              Cross Default; Cross
      Acceleration.
  Any Loan Party or any Subsidiary
thereof shall (a) default in any payment of principal of or interest on any
Indebtedness beyond any period of grace with respect to such payment if the
outstanding principal amount of all such defaulted Indebtedness exceeds Ten
Million Dollars ($10,000,000) in the aggregate, or (b) default in the observance
of any other covenant, term or condition contained in any agreement or
instrument pursuant to which such Indebtedness is created, secured or evidenced,
if the outstanding principal amount of all such defaulted Indebtedness exceeds
Ten Million Dollars ($10,000,000) in the aggregate and the effect of such
default is to permit the acceleration of such Indebtedness;
  94
  10.13
              Default
      Under 2002 Note Indenture or 2010 Note
  Indenture.
  If (a)
any “Event of Default” (as defined in the 2002 Note Indenture) or similar term
(as defined in the 2010 Note Indenture) shall occur under either the 2002 Note
Indenture or the 2010 Note Indenture; or (b) the Obligations, or any part
thereof, shall cease to be “Permitted Indebtedness” (as defined in the 2002 Note
Indenture) or similar term (as defined in the 2010 Note Indenture) ; provided, however; with respect
to the 2002 Note Documents, such “Event of Default” or failure to constitute
“Permitted Indebtedness shall have occurred prior to payment in full of all
Indebtedness or other obligations owing pursuant to any of the 2002 Note
Documents;
  10.14
              Termination
      of Guaranty.
  Termination
or breach of any Guaranty or similar agreement executed and delivered to the
Agent in connection with the Obligations of any Loan Party, or if any Guarantor
attempts to terminate, challenges the validity of, or its liability under, any
such Guaranty, any similar agreement or its obligations under Section
14.2;
  10.15
              Change of
      Control.
  Any Change of Control shall
occur;
  10.16
              Invalidity of Credit
      Agreement.
  Any material provision of this
Agreement shall, for any reason, cease to be valid and binding on any Loan
Party, or any Loan Party shall so claim in writing to the Agent;
  10.17
              Loss of Material Intellectual
      Property.
  (a) Any Governmental Body shall (A)
revoke, terminate, suspend or adversely modify any Material IP Rights or any
material license or permit necessary for the continued operation of the Loan
Parties’ businesses, or (B) commence proceedings to suspend, revoke, terminate
or adversely modify any Material IP Rights or any material license or permit
necessary for the continued operation of the Loan Parties’ businesses and such
proceedings shall not be dismissed or discharged within sixty (60) days, or (C)
schedule or conduct a hearing on the renewal of any Material IP Rights or any
material license or permit necessary for the continued operation of the Loan
Parties’ businesses and the staff of such Governmental Body issues a report
recommending the termination, revocation, suspension or material, adverse
modification of such Material IP Rights or material license or permit necessary
for the continued operation of the Loan Parties’ businesses,; (b) any agreement
which is necessary and material to the operation of such Loan Party’s business
shall be revoked or terminated and not replaced by a substitute reasonably
acceptable to the Agent within thirty (30) days after the date of such
revocation or termination, and, in the case of clause (a) or (b) above, such
revocation or termination and non-replacement could reasonably be expected to
have a Material Adverse Effect;
  10.18
              Forfeiture of
      Assets.
  Any adjudication against any Loan Party
or any Subsidiary thereof in criminal proceedings requiring such Loan Party’s or
such Subsidiary’s forfeiture of any assets having, either individually or in the
aggregate, a value in excess of Two Million Five Hundred Thousand Dollars
($2,500,000), or any portion of the Collateral having, either individually or in
the aggregate, a value in excess of One Million Dollars ($1,000,000) shall be
seized or taken by a Governmental Body, or any Loan Party or any Subsidiary
thereof or the title and rights of such Loan Party or such Subsidiary shall have
become the subject matter of litigation which could, in the reasonable opinion
of the Agent, upon final determination, result in material impairment or loss of
the security provided by this Agreement or the Other Loan
Documents;
  95
  10.19
              Business
      Interruption.
  The operations of any Loan Party or any
Subsidiary thereof are interrupted at any time for more than two (2) consecutive
Business Days, which interruption could reasonably be expected to have a
Material Adverse Effect; or
  10.20
              ERISA
      Events.
  An event
or condition specified in Sections 7.16 or 9.13 shall occur or exist with
respect to any Plan and, as a result of such event or condition, together with
all other such events or conditions, any Loan Party, any Subsidiary thereof or
any member of the Controlled Group shall incur, or is reasonably likely to
incur, a liability to a Plan or the PBGC (or both) which could reasonably be
expected to have a Material Adverse Effect or results or could reasonably be
expected to result in aggregate liabilities in excess of One Million Dollars
($1,000,000).
  XI.
              LENDERS’
      RIGHTS AND REMEDIES AFTER DEFAULT
  11.1
                Rights and
      Remedies.
  Upon the occurrence of (i) an Event of
Default pursuant to Section 10.7, all Obligations (other than Hedging
Obligations) shall be immediately due and payable and this Agreement and the
obligation of the Lenders and to make Advances and the Issuer to issue Letters
of Credit shall be deemed terminated all without presentment, demand or notice
of any kind (all of which are hereby expressly waived by each Loan Party), and
(ii) any Event of Default (other than pursuant to Section 10.7), the Agent
may, and upon the written request of the Required Lenders shall, declare all
Obligations to be immediately due and payable and terminate the obligation of
the Lenders to make Advances and the Issuer to issue Letters of Credit, all
without presentment, demand or notice of any kind (all of which are hereby
expressly waived by each Loan Party).  Upon the occurrence of any
Event of Default, the Agent shall have the right to exercise any and all other
rights and remedies provided for herein, under the Uniform Commercial Code and
at law or equity generally, including the right to foreclose the security
interests granted herein and to realize upon any Collateral by any available
judicial procedure or to take, to the extent permitted by applicable law,
possession of and sell any or all of the Collateral with or without judicial
process.  The Agent may enter any Obligor’s premises or other premises
without legal process and without incurring liability to such Obligor therefor,
and the Agent may thereupon, or at any time thereafter, in its discretion
without notice or demand, take the Collateral and remove the same to such place
as the Agent may deem advisable and the Agent may require such Obligor to make
the Collateral available to the Agent at a convenient place or
places.  With or without having the Collateral at the time or place of
sale, and subject to the applicable provisions of the Uniform Commercial Code,
the Agent may sell the Collateral, or any part thereof, at public or private
sale, at any time or place, in one or more sales, at such price or prices, and
upon such terms, either for cash, credit or future delivery, as the Agent may
elect.  Except as to that part of the Collateral which is perishable
or threatens to decline speedily in value or is of a type customarily sold on a
recognized market, the Agent shall give such Obligor reasonable notification of
such sale or sales, it being agreed that in all events written notice mailed to
such Obligor at least ten (10) days prior to such sale or sales is reasonable
notification.  At any public sale the Agent, any Lender or the Issuer
may bid for and become the purchaser, and the Agent, any Lender, the Issuer or
any other purchaser at any such sale thereafter shall hold the Collateral sold
absolutely free from any claim or right of whatsoever kind, including any equity
of redemption, and such right and equity are hereby expressly waived and
released by each Obligor.  In connection with the exercise of the
foregoing remedies, the Agent is granted permission to use all of each Obligor’s
trademarks, trade styles, trade names, patents, patent applications, licenses,
franchises and other proprietary rights which are used in connection with (a)
Inventory for the purpose of disposing of such Inventory and (b) Equipment for
the purpose of completing the manufacture of unfinished goods.  The
proceeds realized from the sale of any Collateral shall be applied in accordance
with Section 11.7.  If any deficiency shall arise, the Borrowers shall
remain liable to the Agent, the Lenders and the Issuer therefor.
  96
  11.2
                [Reserved]
  11.3
                Setoff.
  In addition to any other rights which
the Agent, any Lender or the Issuer may have under applicable law, upon the
occurrence of an Event of Default hereunder, the Agent, such Lender and the
Issuer, including any branch, Subsidiary or Affiliate of the Agent, such Lender
or the Issuer, shall have a right to apply any Obligor’s property held by the
Agent, such Lender, the Issuer, such branch, Subsidiary or Affiliate to reduce
the Obligations.  However, each Lender agrees that it shall not,
without the express written consent of the Agent, and that it shall, to the
extent it is lawfully entitled to do so, upon the written request of the Agent,
setoff against the Obligations any amounts owing by such Lender to any Obligor
or in any Deposit Account of any Obligor now or hereafter maintained with such
Lender.
  11.4
                Letter
      of Credit Collateral Account.
  Immediately upon the request of the
Agent, after the occurrence and during the continuance of an Event of Default,
the Borrowers will deposit and maintain cash in an account with the Agent (the
“Letter of Credit Collateral Account”), as cash collateral, in an amount equal
to one hundred five percent (105%) of the Letter of Credit
Exposure.  Upon such occurrence and request, the Borrowers hereby
irrevocably authorize the Agent, on the Borrowers’ behalf and in the Borrower’s
name, to open such Letter of Credit Collateral Account and to make and maintain
deposits in the Letter of Credit Collateral Account, in such required amounts,
out of the proceeds of Receivables or other Collateral or out of any other funds
of the Borrowers in the Agent’s possession at any time.  The Agent
will invest such cash collateral (less applicable reserves) in such short-term
money-market items and the net return on such investments shall be credited to
such account and constitute additional cash collateral.  The Letter of
Credit Collateral Accountshall be under the sole
dominion and control of the Agent subject to the terms of this Agreement and the
Borrowers shall not be entitled to withdraw any funds from the Letter of Credit
Collateral Account.  The Agent may apply funds held in the Letter of
Credit Collateral Account to the payment of any amounts as shall have become or
shall become due and payable by the Borrowers to the Issuer and, after the
occurrence which is continuing, to the payment of Obligations then
outstanding.
  11.5
                Appointment of
      Receiver.
  Upon the
occurrence of an Event of Default which is continuing, the Agent shall be
entitled, upon application to the United States District Court for the Northern
District of Ohio, to the immediate appointment of a receiver for all or part of
the Collateral, whether such receivership is incidental to a proposed sale of
the Collateral, pursuant to the Uniform Commercial Code or
otherwise.  Each Obligor hereby consents to the appointment of such a
receiver without bond, to the full extent permitted by applicable statute or
law.
  97
  11.6
                Rights and Remedies not
      Exclusive; Non-Waiver.
  The enumeration of the foregoing rights
and remedies is not intended to be exhaustive and the exercise of any right or
remedy shall not preclude the exercise of any other rights or remedies provided
for herein or otherwise provided by law, all of which shall be cumulative and
not alternative. No delay or omission on the Agent’s, any Lender’s or the
Issuer’s part in exercising any right, remedy or option shall operate as a
waiver of such or any other right, remedy or option or of any Default or Event
of Default.
  11.7
                Allocation of Payments After
      Event of Default.
  Notwithstanding any other provisions of
this Agreement to the contrary other than Section 14.2, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent on account of the Obligations or any other
amounts outstanding under any of the Other Loan Documents or in respect of the
Collateral shall be paid over or delivered as follows:
  First, to the payment of all
reasonable out-of-pocket costs and expenses (including reasonable attorneys’
fees) of the Agent in connection with enforcing the rights of the Lenders and
the Issuer under this Agreement and the Other Loan Documents and any protective
advances made by the Agent with respect to the Collateral under or pursuant to
the term of this Agreement;
  Second, to payment of any fees
owed to the Agent by any Borrower under this Agreement or the Other Loan
Documents;
  Third, to the payment of all
reasonable out-of-pocket costs and expenses (including reasonable attorneys’
fees) of each of the Lenders and the Issuer in connection with enforcing its
rights under this Agreement and the Other Loan Documents or otherwise with
respect to the Obligations owing to such Lender or the Issuer (other than
Hedging Contracts with a Qualified Counterparty and other than Obligations
relating to Banking Services);
  Fourth, to the payment of all
of the Obligations consisting of accrued fees and interest arising under or
pursuant to this Agreement or the Other Loan Documents (other than Hedging
Contracts with a Qualified Counterparty and other than Obligations relating to
Banking Services);
  Fifth, to the ratable payment
of the outstanding principal amount of the Revolving Advances (including the
payment or cash collateralization of the Letter of Credit
Exposure);
  Sixth, to the ratable payment
of all reasonable out-of-pocket costs and expenses (including reasonable
attorneys’ fees), accrued fees and interest, and any other amounts owing with
respect to the Obligations relating to Banking Services;
  Seventh, to all other
Obligations and other obligations which shall have become due and payable under
this Agreement and the Other Loan Documents and not repaid pursuant to clauses
“First” through “Sixth” above; and
  Eighth, to the payment of the
surplus, if any, to the Loan Parties or whoever may be lawfully entitled to
receive such surplus.
  98
  In
carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders and the Issuer shall receive (so
long as it is not a Defaulting Lender) an amount equal to its pro rata share
(based on the proportion that then outstanding Advances held by such Lender or
the Issuer bears to the aggregate then outstanding Advances) of amounts
available to be applied pursuant to clauses “Third”, “Fourth”, “Fifth”, “Sixth”
and “Seventh” above; and (iii) to the extent that any amounts available for
distribution pursuant to clause “Fifth” above are attributable to the Letter of
Credit Exposure, such amounts shall be held by the Agent in a cash collateral
account and applied (A) first, to reimburse the Issuer from time to time for any
drawings under such Letters of Credit and (B) then, following the expiration of
all Letters of Credit, to all other obligations of the types described in
clauses “Fifth”, “Sixth” and “Seventh” above in the manner provided in this
Section 11.7.
  XII.
              EFFECTIVE
      DATE; TERMINATION
  12.1
                Effective
      Date.
  This Agreement shall become effective
on the date and as of the time on and as of which the Loan Parties, the Agent,
each Lender and the Issuer shall have signed a copy hereof (whether the same or
different copies) and shall have delivered the executed original to the Agent at
the address specified in Section 15.8.  As of such time, this
Agreement shall be binding upon and inure to the benefit of the Loan Parties,
the Agent, each Lender and the Issuer, and their respective successors and
assigns, except that no Loan Party shall have any right to assign its rights
hereunder or any interest herein except as set forth in
Section 15.5(a).
  12.2
                Termination.
  The Loan Parties may terminate this
Agreement at any time upon sixty (60) days’ prior written notice to the Agent
and upon payment in full of the Obligations (including all amounts due pursuant
to Article III).  The termination of this Agreement shall not affect
any Loan Party’s, the Agent’s, any Lender’s or the Issuer’s rights, or any of
the Obligations having their inception prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into, rights or interests created or Obligations
have been fully disposed of, concluded or liquidated.  The security
interests, Liens and rights granted to the Agent, the Lenders and the Issuer
hereunder and the financing statements filed hereunder shall continue in full
force and effect, notwithstanding the termination of this Agreement or the fact
that the Loan Account may from time to time have a zero or negative balance,
until all of the Obligations (other than Obligations with respect to
Section 15.7) have been paid or performed in full after the termination of
this Agreement or any Loan Party or any Subsidiary thereof has furnished the
Agent, the Lenders and the Issuer with an indemnification satisfactory to the
Agent, the Lenders and the Issuer with respect thereto.  Accordingly,
each Loan Party waives any rights which it may have under the Uniform Commercial
Code to demand the filing of termination statements with respect to the
Collateral, and the Agent shall not be required to send such termination
statements to the Loan Parties, or to file them with any filing office, unless
and until this Agreement shall have been terminated in accordance with its terms
and all Obligations (other than Obligations with respect to Section 15.7)
paid in full in immediately available funds.  All representations,
warranties, covenants, waivers and agreements contained herein shall survive
termination hereof until all Obligations are paid or performed in
full.  All indemnification obligations contained herein shall survive
the termination hereof and payment in full of the Obligations.
  99
  XIII.
              AGENCY
      PROVISIONS.
  13.1
                Appointment.
  Each Lender and the Issuer hereby
designates PNC to act as the Agent for such Lender and the Issuer under this
Agreement and the Other Loan Documents, including, without limitation, the 2010
Note Intercreditor Agreement. Each Lender and the Issuer hereby irrevocably
authorizes the Agent to take such action on its behalf under the provisions of
this Agreement and the Other Loan Documents and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of the Agent by the terms hereof and thereof and such other powers as
are reasonably incidental thereto and the Agent shall hold all Collateral,
payments of principal and interest, fees, charges and collections (without
giving effect to any collection days) received pursuant to this Agreement, for
the ratable benefit of the Secured Creditors.  The Agent may perform
any of its duties hereunder by or through its agents or employees.  As
to any matters not expressly provided for by this Agreement (including
collection of the Notes) the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding; provided, however, that the
Agent shall not be required to take any action which exposes the Agent to
liability or which is contrary to this Agreement or the Other Loan Documents or
applicable law unless the Agent is furnished with an indemnification reasonably
satisfactory to the Agent with respect thereto.
  The Agent
shall also act as the “collateral agent” under this Agreement and the Other Loan
Documents, including, without limitation, the 2010 Note Intercreditor Agreement,
and each of the Lenders and the Issuer hereby irrevocably appoints and
authorizes the Agent to act as the agent of such Lender and Issuer for purposes
of entering into the 2010 Note Intercreditor Agreement and for purposes of
acquiring, holding and enforcing any and all Liens on Collateral granted by any
of the Loan Parties to secure any of the Obligations, together with such powers
and discretion as are reasonably incidental thereto.  In this
connection, the Agent, as “collateral agent” and any agents or employees
appointed by such Agent pursuant to this Section for purposes of holding or
enforcing any Lien on the Collateral (or any portion thereof) granted under this
Agreement or the Other Loan Documents, or for exercising any rights and remedies
thereunder at the direction of such Agent), shall be entitled to the benefits of
all provisions of this Article XIII and Article XV as if set forth in full
herein with respect thereto.
  13.2
                Nature of
      Duties.
  The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
Other Loan Documents.  Neither the Agent nor any of its officers,
directors, employees or agents shall be (i) liable for any action taken or
omitted by them as such hereunder or in connection herewith, unless caused by
their gross negligence or willful misconduct or (ii) responsible in any manner
for any recitals, statements, representations or warranties made by any Loan
Party or any Subsidiary thereof or, in each case, any officer thereof, contained
in this Agreement, or in any of the Other Loan Documents or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agent under or in connection with, this Agreement or any of the Other
Loan Documents, as the case may be, or for the value, validity, effectiveness,
genuineness, due execution, enforceability or sufficiency of this Agreement, or
any of the Other Loan Documents or for any failure of any Loan Party to perform
its obligations hereunder.  The Agent shall not be under any
obligation to any Lender or the Issuer to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any of the Other Loan Documents, or to inspect the
properties, books or records of any Loan Party or any Subsidiary
thereof.  The Agent shall not be responsible to any Lender or the
Issuer for the financial condition of any Loan Party or any Subsidiary thereof,
or be required to make any inquiry concerning the financial condition of any
Loan Party or any Subsidiary thereof, or the existence of any Event of Default
or any Default.  The duties of the Agent as respects the Advances to
the Borrowers shall be mechanical and administrative in nature; the Agent shall
not have by reason of this Agreement a fiduciary relationship in respect of any
Lender or the Issuer, and nothing in this Agreement, expressed or implied, is
intended to or shall be so construed as to impose upon the Agent any obligations
in respect of this Agreement except as expressly set forth herein.
  100
  13.3
                Lack of Reliance on Agent and
      Resignation.
  Independently and without reliance upon
the Agent, any other Lender or the Issuer, each Lender and the Issuer has made
and shall continue to make (i) its own independent investigation of the
financial condition and affairs of the Loan Parties in connection with the
making and the continuance of the Advances hereunder and the taking or not
taking of any action in connection herewith and (ii) its own appraisal of the
creditworthiness of the Loan Parties.  The Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
or the Issuer with any credit or other information with respect thereto, whether
coming into its possession before making of the Advances or at any time or times
thereafter except as shall be provided by any Loan Party pursuant to the terms
hereof.
  The Agent may resign on thirty (30)
days’ written notice to each of the Lenders, the Issuer and the Borrowing Agent
and upon such resignation, the Required Lenders will promptly designate a
successor Agent reasonably satisfactory to the Loan Parties.  Any such
successor of the Agent shall succeed to the rights, powers and duties of the
Agent, and the term “Agent” shall mean such successor agent effective upon its
appointment, and the former the Agent’s rights, powers and duties as the Agent
shall be terminated, without any other or further act or deed on the part of
such former Agent.  After the Agent’s resignation as the Agent, the
provisions of this Article XIV shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Agent under this
Agreement.
  13.4
                Certain Rights of
      Agent.
  If the Agent shall request instructions
from the Lenders and the Issuer with respect to any act or action (including
failure to act) in connection with this Agreement or any Other Loan Document,
the Agent shall be entitled to refrain from such act or taking such action
unless and until the Agent shall have received instructions from the Required
Lenders; and the Agent shall not incur liability to any Person by reason of so
refraining.  Without limiting the foregoing, the Lenders and the
Issuer shall not have any right of action whatsoever against the Agent as a
result of its acting or refraining from acting hereunder in accordance with the
instructions of the Required Lenders.
  13.5
                Reliance.
  The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, order or Other Loan Document or telephone message believed by it to
be genuine and correct and to have been signed, sent or made by the proper
person or entity, and, with respect to all legal matters pertaining to this
Agreement and the Other Loan Documents and its duties hereunder, upon advice of
counsel selected by it.  The Agent may employ agents and
attorneys-in-fact and shall not be liable for the default or misconduct of any
such agents or attorneys-in-fact selected by the Agent with reasonable
care.
  101
  13.6
                Notice of
      Default.
  The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder or under the Other Loan Documents, unless the Agent has received
notice from a Lender, the Issuer or a Loan Party referring to this Agreement or
the Other Loan Documents, describing such Default or Event of Default and
stating that such notice is a “notice of default”.  In the event that
the Agent receives such a notice, the Agent shall give notice thereof to the
Lenders and the Issuer.  The Agent shall take such action with respect
to such Default or Event of Default as shall be reasonably directed by the
Required Lenders; provided, however, that, unless
and until the Agent shall have received such directions, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as is permitted hereunder or
under applicable law and as it shall deem advisable in the best interests of the
Lenders and the Issuer.
  13.7
                Posting
      to an Approved Electronic
Platform.
  Each of the Lenders, the Issuer and the
Loan Parties agree that the Agent may, but shall not be obligated to, make the
Approved Electronic Communications available to the Lenders and Issuer by
posting such Approved Electronic Communications on IntraLinks TM , SyndtrackTM or
a substantially similar electronic platform chosen by the Agent to be its
electronic transmission system (the “Approved Electronic
Platform”).
  Although the Approved Electronic
Platform and its primary web portal are secured with generally-applicable
security procedures and policies implemented or modified by the Agent from time
to time and the Approved Electronic Platform is secured through a
single-user-per-deal authorization method whereby each user may access the
Approved Electronic Platform only on a deal-by-deal basis, each of the Lenders,
the Issuer and the Loan Parties acknowledges and agrees that the distribution of
material through an electronic medium is not necessarily secure and that there
are confidentiality and other risks associated with such
distribution.  In consideration for the convenience and other benefits
afforded by such distribution and for the other consideration provided
hereunder, the receipt and sufficiency of which are hereby acknowledged, each of
the Lenders, the Issuer and the Loan Parties hereby approves distribution of the
Approved Electronic Communications through the Approved Electronic Platform and
understands and assumes the risks of such distribution.  Each of the
Lenders, the Issuer, and the Loan Parties agrees that the Agent may, but (except
as may be required by applicable law) shall not be obligated to, store the
Approved Electronic Communications on the Approved Electronic Platform in
accordance with the Agent’s generally-applicable document retention procedures
and policies.
  THE
APPROVED ELECTRONIC PLATFORM AND THE APPROVED ELECTRONIC COMMUNICATIONS ARE
PROVIDED “AS IS” AND “AS AVAILABLE”.  The Agent and any of its
Affiliates or any of their respective officers, directors, employees, agents,
advisors or representatives do not warrant the accuracy, adequacy or
completeness of the Approved Electronic Communications or the Approved
Electronic Platform and expressly disclaim liability for errors or omissions in
the Approved Electronic Platform.  No warranty of any kind, express,
implied or statutory, including any warranty of merchantability, fitness for a
particular purpose, non-infringement of third party rights or freedom from
viruses or other code defects, is made by the Agent or such Affiliates or such
respective officers, directors, employees, agents, advisors or representatives
in connection with the Approved Electronic Platform or the Approved Electronic
Communications.
  102
  13.8
                Indemnification of Agent and
      Issuer.
  To the extent the Agent or the Issuer
is not reimbursed and indemnified by the Loan Parties (or any other Person on
any Loan Party’s behalf), each Lender will reimburse and indemnify the Agent or
the Issuer, as applicable, in accordance with their Percentages, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent or the Issuer in performing its duties hereunder, or in any way relating
to or arising out of this Agreement or any Other Loan Document; provided, however, that, the
Lenders shall not be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or willful misconduct of the
Agent or the Issuer, as applicable.
  13.9
                Agent
      in its Individual Capacity.
  With respect to the obligation of the
Agent to lend under this Agreement, the Advances made by it shall have the same
rights and powers hereunder as any other Lender and as if it were not performing
the duties as the Agent specified herein; and the term “Lender” or any similar
term shall, unless the context clearly otherwise indicates, include the Agent in
its individual capacity as a Lender.  The Agent may engage in business
with any Loan Party or any Subsidiary thereof as if it were not performing the
duties specified herein, and may accept fees and other consideration from any
Loan Party or any Subsidiary thereof for services in connection with this
Agreement or otherwise without having to account for the same to the
Lenders.
  13.10
              Delivery of
      Documents.
  Whenever
the Agent receives financial statements required under Section 9.7 and
Section 9.8 and\or a Borrowing Base Certificate pursuant to the terms of this
Agreement, the Agent will promptly furnish such documents and information to the
Lenders and the Issuer.
  13.11
              No Reliance on Agent’s Customer
      Identification Program.
  Each of
the Lenders and the Issuer acknowledges and agrees that neither such Lender nor
the Issuer, nor any of their Affiliates, participants or assignees, may rely on
the Agent to carry out such Lender’s, Issuer’s, Affiliate’s, participant’s or
assignee’s customer identification program, or other obligations required or
imposed under or pursuant to the USA Patriot Act or the regulations thereunder,
including the regulations contained in 31 CFR 103.121 (as hereafter amended or
replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including any
programs involving any of the following items relating to or in connection with
any of the Loan Parties, their Affiliates or their agents, this Agreement, the
Other Loan Documents or the transactions hereunder or contemplated hereby: (i)
any identity verification procedures, (ii) any record keeping, (iii) comparisons
with government lists, (iv) customer notices or (v) other procedures required
under the CIP Regulations or such other laws.
  13.12
              Agent May File Proofs of
      Claim.
  In case
of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Agent (irrespective of whether the
principal of any Advance or any Obligation with respect to a Letter of Credit
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether the Agent shall have made any demand on any
Borrower) shall be entitled and empowered, by intervention in such proceeding or
otherwise:
  103
  (a)           to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Advances, Obligations owing with respect to a
Letter of Credit and all other Obligations that are owing and unpaid and to file
such Other Loan Documents as may be necessary or advisable in order to have the
claims of the Lenders, the Issuer, the Agent and the other Secured Creditors
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Lenders, the Issuer, the Agent and the other Secured
Creditors and their respective agents and counsel and all other amounts due the
Lenders, the Issuer and the Agent under Sections 3.4, 3.5 and 15.12)
allowed in such judicial proceeding; and
  (b)           to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;
  and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender and the Issuer to make such payments to the Agent and, in the event that
the Agent shall consent to the making of such payments directly to the Lenders
and the Issuer, to pay to the Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Agent and its agents
and counsel, and any other amounts due the Agent under Sections 3.5 and
15.12.
  Nothing
contained herein shall be deemed to authorize the Agent to authorize or consent
to or accept or adopt on behalf of any Lender, any Issuer or any other Secured
Creditor any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender, any Issuer or any other
Secured Creditor to authorize the Agent to vote in respect of the claim of any
Lender, any Issuer or any other Secured Creditor in any such
proceeding.
  13.13
              Collateral and Guaranty
      Matters.
  The
Lenders and the Issuer irrevocably authorize the Agent, at its option and in its
Permitted Discretion:
  (a)           to
release any Lien on any property granted to or held by the Agent under this
Agreement or any Other Loan Document (i) upon termination of the aggregate
Revolving Commitments and payment in full of all Obligations (other than
contingent indemnification obligations not yet accrued and payable), and the
expiration or termination of all Letters of Credit, (ii) that is sold or to be
sold as part of or in connection with any sale permitted hereunder or under any
Other Loan Document, or (iii) subject to Section 15.3(v), if approved,
authorized or ratified in writing by the Required Lenders;
  (b)          to
release any Guarantor from its obligations under the applicable Guaranty if such
Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder;
  (c)        
  to subordinate any Lien on any property granted to or held by the
Agent hereunder or under any Other Loan Document to the holder of any Lien on
such property that is permitted by Section 7.8(d) and Section 7.2 pursuant
to clause (f) of the definition of Permitted Encumbrances; and
  (d)          upon
request by the Agent at any time, the Required Lenders (or, if necessary, all
Lenders) will confirm in writing the authority of the Agent to release its
interest in particular types or items of property, or to release any Guarantor
from its obligations under the applicable Guaranty pursuant to this
Section 13.13.  In each case as specified in this
Section 13.13, the Agent will, at the Parent’s expense, execute and deliver
to the applicable Loan Party such documents as such Loan Party may reasonably
request to evidence the release of such item of Collateral from the assignment
and security interest granted hereunder and under the Other Loan Documents, or
to release such Guarantor from its obligations under the applicable Guaranty, in
each case in accordance with the terms of the Other Loan Documents and this
Section 13.13.
  104
  13.14
              No Independent
      Action.
  Notwithstanding
any other provision of this Agreement, each Lender agrees that it shall not,
unless specifically requested to do so by the Agent, take any action to protect
or enforce its rights arising out of this Agreement or the Other Loan Documents,
it being the intent of the Lenders that any such action to protect or enforce
rights under this Agreement and the Other Loan Documents shall be taken in
concert and at the direction or with the consent of the Agent or the Required
Lenders.
  XIV.
              BORROWING
      AGENCY; BORROWERS AND OTHER LOAN PARTIES JOINTLY AND SEVERALLY
      LIABLE.
  14.1
                Borrowing
      Agency Provisions.
  (a)      
    Each Borrower hereby irrevocably designates the
Borrowing Agent to be its attorney and agent and in such capacity to borrow,
sign and endorse notes, and execute and deliver all notices, instruments,
documents, writings and further assurances now or hereafter required hereunder,
on behalf of such Borrower or the Borrowers, and hereby authorizes the Agent to
pay over or credit all proceeds of Advances hereunder in accordance with the
requests of the Borrowing Agent.
  (b)          The
handling of this credit facility as a co-borrowing facility with a borrowing
agent in the manner set forth in this Agreement is solely as an accommodation to
the Borrowers and at their request.  Neither the Agent, any Lender nor
the Issuer shall incur liability to the Loan Parties as a result
thereof.  To induce the Agent, the Lenders and the Issuer to do so,
and in consideration thereof, each Loan Party hereby indemnifies the Agent, each
Lender and the Issuer and holds the Agent, each Lender and the Issuer harmless
from and against any and all liabilities, expenses, losses, damages and claims
of damage or injury asserted against the Agent, any Lender or the Issuer by any
Person arising from or incurred by reason of the handling of the financing
arrangements of the Loan Parties as provided herein, reliance by the Agent, any
Lender or the Issuer on any request or instruction from the Borrowing Agent or
any other action taken by the Agent, any Lender or the Issuer with respect to
this Section 14.1 except due to willful misconduct or gross negligence by
the indemnified party. This Section 14.1 shall survive the termination of
this Agreement.
  105
  14.2
                Cross-Obligations
      of Loan Parties.
  (a)           To
induce the Lenders to make the Advances to the Borrowers and the Issuer to issue
Letters of Credit, and in consideration thereof, each of the Borrowers hereby
unconditionally and irrevocably: (a) agrees to be jointly and severally
liable for the due and punctual payment in immediately available funds of all
Obligations (whether by acceleration or otherwise) of the Borrowers, (b) agrees
to be jointly and severally liable to the Issuer for the due and punctual
payment in immediately available funds of all reimbursement obligations and
(c) agrees jointly and severally to pay any and all reasonable expenses
which may be incurred by the Agent in enforcing its rights with respect to such
Obligations of the Borrowers.  To induce the Lenders to make the
Advances to the Borrowers and the Issuer to issue Letters of Credit, and in
consideration thereof, each Guarantor hereby (i) unconditionally and irrevocably
guarantees, the punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all Obligations of the other Loan Parties, of
every type and description and (ii) agrees jointly and severally to pay any
and all reasonable expenses which may be incurred by the Agent in enforcing its
rights with respect to such guaranty.  The maximum liability of an
Obligor for its guaranty under this Section (including, to the extent that the
agreement by each Borrower to be jointly and severally liable for the
Obligations of the Borrowers is construed to be a guaranty of the Obligations of
any other Borrower) shall be the greatest amount which after taking into
consideration all other valid and enforceable debts and liabilities of such
Obligor, an applicable court has determined (after any appeals) would not render
such Obligor insolvent, unable to pay its debts as they become due, inadequately
capitalized for the business which it intends to conduct (in all such cases,
within the meaning of Section 548 of the Bankruptcy Code, 11 U.S.C. §§101, et. seq., or any other
similar state law), or unable to pay a judgment rendered upon a claim that is
the subject of an action or proceeding pending at the time when such guaranty
(or the agreement to be so jointly and severally liable) is incurred or
increased.           Such
guaranty (or, if applicable, the agreement to be so jointly and severally
liable) shall be irrevocable, unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected, except for payment of such Obligations and to the extent permitted by
applicable law, by: (i) any extension, renewal, settlement, compromise,
waiver or release in respect of any Obligation under this Agreement or any Other
Loan Document by operation of law or otherwise; (ii) any modification or
amendment of or supplement to this Agreement or any Other Loan Document;
(iii) any modification, amendment, waiver, release, non-perfection or
invalidity of any direct or indirect security, or of any guarantee or other
liability of any third party, of the Obligations with respect to which the such
guaranty (or, if applicable, agreement to be jointly and severally liable)
relates; (iv) any change in the corporate existence, structure, or
ownership of, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting such Obligor or its assets or any resulting release or
discharge of any of the Obligations; (v) the existence of any claim,
set-off or other rights which any Loan Party may have at any time against any
Lender, the Issuer or any other Person, whether or not arising in connection
with this Agreement or any Other Loan Document; (vi) any invalidity or
unenforceability relating to or against any Loan Party thereof for any reason of
this Agreement or any Other Loan Document or any provision of applicable law or
regulation purporting to prohibit the payment by any Loan Party of any
Obligation under this Agreement or any Other Loan Document; or (vii) to the
extent permitted by applicable law, any other act or omission to act or delay of
any kind by any Loan Party, the Agent, the Lenders, the Issuer or any other
Person or any other circumstance whatsoever that might, but for the provisions
of this paragraph, constitute a legal or equitable discharge of such Obligor’s
guaranty (or, if applicable, agreement to be jointly and severally liable)
hereunder.
  (c)           The
agreement of each Obligor under this Section 14.2 (including the agreement of
each Borrower to be jointly and severally liable for the Obligations of the
other Borrowers) shall remain in full force and effect until all Commitments of
the Lenders and the obligations of the Issuer are terminated and the Obligations
under this Agreement or any Other Loan Document have been paid in
full.  If at any time any payment of any amount payable by any other
Loan Party under this Agreement and the Other Loan Documents is rescinded or
must be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of such Loan Party or otherwise, the agreement of each Obligor
under this Section (including the agreement of each Borrower to be so jointly
and severally liable for the Obligations of the other Borrowers) shall be
reinstated at such time as though such payment had become due but had not been
made at such time.  This Section 14.2 shall survive the termination of
this Agreement until the payment in full of all amounts payable under this
Agreement and any Other Loan Documents.
  106
  (d)           No
Obligor shall be entitled to enforce any remedy which the Agent, any Lender or
the Issuer now has or may hereafter have against any of the other Loan Party, in
respect of all or any part of the Obligations paid by such Obligor pursuant to
its guaranty hereunder (or its agreement to be jointly and severally liable)
until all of the Obligations shall have been fully and finally paid to the Agent
for the benefit of the Secured Creditors and all Commitments of the Lenders and
the Issuer to the Borrowers have terminated.  Each such Obligor hereby
waives any benefit of, and any right to participate in, any security or
collateral given to the Agent to secure payment of the
Obligations.  Each such Obligor also waives all setoffs and
counterclaims and all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, and notices
of acceptance of this agreement to guaranty the Obligations (and to be jointly
and severally liable, if applicable).  Each such Obligor waives all
notices of the existence, creation or incurring of additional Obligations by any
other Loan Party, and also waives all notices that the principal amount, or any
portion thereof, and/or any interest on any instrument or document evidencing
all or any part of the Obligations is due, notices of any and all proceedings to
collect all or any part of such Obligations, and, to the extent permitted by
law, notices of exchange, sale, surrender or other handling of any Collateral
given to the Agent to secure payment of the Obligations. If acceleration of the
time for payment of any amount payable by any Loan Party under this Agreement or
any Other Loan Document in respect of Obligations is stayed upon the insolvency,
bankruptcy or reorganization of any Loan Party, all such amounts otherwise
subject to acceleration under the terms of this Agreement shall nonetheless be
payable by each of the other Loan Parties who are an Obligor under their
agreement to guaranty the Obligations (and, if applicable, to be jointly and
severally liable), to the extent permitted by applicable law.
  14.3
                Rights
      of Subrogation.
  (a)           If
any Obligor makes a payment in respect of Section 14.2, it shall be subrogated
to the rights, if any, of the Lenders and Issuer and other payees against the
other Loan Parties with respect to such payment and shall have the rights of
contribution set forth below against the other Loan Parties; provided, however, that such
Obligor shall not enforce its rights to any payment by way of subrogation or by
exercising its right of contribution until all the Obligations owing hereunder
shall have been finally paid in full and may not under applicable insolvency
laws be required to be repaid, and all Commitments of the Lenders and all
obligations of the Issuer to issue Letters of Credit hereunder have been
terminated.  Subject to all of the Obligations hereunder having been
finally paid in full and not subject to required repayment under applicable
insolvency laws and all Commitments of the Lenders hereunder and all obligations
of the Issuer to issue Letters of Credit hereunder having terminated, each
Obligor shall make, and agrees with each of the other Obligors (and the
successors and assigns of such Obligors) to make, payments in respect of the
Obligations of such Loan Parties to which such other Obligors are subrogated by
reason of making payment pursuant to Section 14.2, or contribution payments to
which such other Obligors are entitled, such that, taking into account all such
payments on account of subrogation or contribution rights:
  (i)           Each
Obligor shall have paid to the other Obligors on account of such subrogation and
contribution rights (A) all Obligations the benefit of which has been received
by such Obligor or which relate to Obligations the benefit of which has been
received by such Obligor or (B) if the aggregate of all such payments by all
Obligors to all other Obligors would exceed the outstanding Obligations, such
Obligor’s pro rata share of the outstanding Obligations , in accordance with the
amount of the benefit received by such Obligor as described under subsection (A)
hereinabove; and
  (ii)           If
there remain Obligations unpaid after application of the payments referred to
above, the deficiency shall be shared among the Obligors pro rata in proportion
to their respective net worth on the Closing Date of this
Agreement.
  107
  XV.
              MISCELLANEOUS.
  15.1
                Governing
      Law.
  This Agreement and the Other Loan
Documents and the respective rights and obligations of the parties thereunder
shall be governed by and construed in accordance with the internal laws of the
State of Ohio (without regard to any conflict of law principles thereof and
except to the extent that perfection of the Agent’s security interests and Liens
and the effect thereof are otherwise governed by the Uniform Commercial Code of
any other jurisdiction).
  15.2
                Entire
      Understanding.
  This Agreement and the documents
executed concurrently herewith contain the entire understanding among the Loan
Parties, the Agent, each Lender and the Issuer and supersede all prior
agreements and understandings, if any, relating to the subject matter
hereof.  Any promises, representations, warranties or guarantees not
herein contained and hereinafter made shall have no force and effect unless in
writing, signed by each Loan Party’s, the Agent’s, each Lender’s and the
Issuer’s respective officers.  Each Loan Party acknowledges that it
has been advised by counsel in connection with the execution of this Agreement
and the Other Loan Documents and is not relying upon oral representations or
statements inconsistent with the terms and provisions of this
Agreement.
  15.3
                Amendments.
  None of
this Agreement, any Other Loan Document, or, in each case, any portion or
provisions thereof, may be changed, modified, amended, waived, supplemented,
discharged, cancelled or terminated orally or by any course of dealing, or in
any manner other than by an agreement in writing, signed by the party to be
charged.  The Required Lenders, the Agent with the consent in writing
of the Required Lenders, and the Loan Parties and their Subsidiaries (as
applicable), may, subject to the provisions of this Section 15.3, from time
to time enter into written supplemental agreements to this Agreement or the
Other Loan Documents executed by such parties for the purpose of adding or
deleting any provisions or otherwise changing, varying, waiving or otherwise
amending in any manner the rights of the Lenders, the Issuer, the Agent, the
Loan Parties or their Subsidiaries thereunder or the conditions, provisions or
terms thereof, or consenting to any deviation therefrom, or waiving any Event of
Default thereunder, but only to the extent specified in such written agreements;
provided, however that, the
consent of the Issuer must be obtained with respect to any amendment, waiver of
or consent with respect to Section 2.9 or any other provisions the
amendment or waiver of which would adversely affect the Issuer and, provided, further, that no such
supplemental agreement shall, without the consent of all Lenders:
  (i)        
   increase any Commitment of any Lender or increase the Maximum
Revolving Advance Amount.
  (ii)          alter
the definition of the term Revolving Percentage.
  (iii)         extend
the maturity of any Note or, without the consent of the affected Person, the due
date for any amount payable hereunder, or decrease the rate of interest or
reduce any fee payable by any Loan Party to the Lenders or the Issuer pursuant
to this Agreement.
  (iv)         alter
the definition of the term Required Lenders or alter, amend or modify this
Section 15.3.
  108
  (v)          release
all or substantially all of the Collateral.
  (vi)         change
the rights and duties of the Agent.
  (vii)        permit
any Revolving Advance to be made if, after giving effect thereto, (x) the sum of
the Revolving Advances outstanding plus the Letter of Credit Exposure would
exceed (y) (A) the Maximum Revolving Advance Amount on any Business Day or (B)
the Formula Amount for more than thirty (30) consecutive Business Days or one
hundred five percent (105%) of the Formula Amount on any Business
Day.
  (viii)       increase
the Advance Rates above the Advance Rates in effect on the Closing Date or
increase the limit on advances with respect to Eligible Inventory or Eligible
Inventory located in Mexico.
  (ix)          release
any Person from the Obligations under this Agreement, any applicable Guaranty,
if any, or any Other Loan Document.
  (x)           alter,
amend or modify Section 11.7.
  Any such
supplemental agreement shall apply equally to each Lender and the Issuer and
shall be binding upon the Lenders, the Issuer, the Agent and all future holders
of the Obligations.  In the case of any waiver, the Loan Parties,
their Subsidiaries, the Agent, the Lenders and the Issuer shall be restored to
their former positions and rights, and any Event of Default waived shall be
deemed to be cured and not continuing, but no waiver of a specific Event of
Default shall extend to any subsequent Event of Default (whether or not the
subsequent Event of Default is the same as the Event of Default which was
waived), or impair any right consequent thereon.
  (b)Notwithstanding
the foregoing, the Loan Parties may, with the written consent of the Agent, from
time to time amend or supplement the Schedules to this Agreement (other than
Schedules 7.2, 7.3, 7.4, 7.5 and 7.8).
  15.4
                Special
      and Protective Agent
Advances.
  (a)           Notwithstanding
(a) the existence of a Default or an Event of Default, (b) that any of the other
applicable conditions precedent set forth in Section 8.2 have not been
satisfied or (c) any other provision of this Agreement, the Agent may at its
discretion and without the consent of the Required Lenders, voluntarily permit
the outstanding Revolving Advances, plus the Letter of Credit Exposure at any
time to exceed one hundred five percent (105%) of the Formula Amount for up to
thirty (30) consecutive Business Days provided that such outstanding Advances do
not exceed the Maximum Revolving Advance Amount.  For purposes of the
preceding sentence, the discretion granted to the Agent hereunder shall not
preclude involuntary overadvances that may result from time to time due to the
fact that the Formula Amount was unintentionally exceeded for any reason,
including Collateral previously deemed to be either “Eligible Receivables” or
“Eligible Inventory”, as applicable, becomes ineligible or collections of
Receivables applied to reduce outstanding Revolving Advances are thereafter
returned for insufficient funds or overadvances are made to protect or preserve
the Collateral.  In the event the Agent involuntarily permits either
the outstanding Revolving Advances to exceed the Formula Amount by more than
five percent (5%), the Agent shall use its efforts to have the Borrowers
decrease any such excess in as expeditious a manner as is practicable under the
circumstances and not inconsistent with the reason for such
excess.  Revolving Advances made after the Agent has determined the
existence of involuntary overadvances shall be deemed to be involuntary
overadvances and shall be decreased in accordance with the preceding
sentence.
  109
  (b)           In
addition to the discretionary voluntary Revolving Advances permitted above in
Section 15.4(a), the Agent is hereby authorized by each Loan Party, the
Lenders and the Issuer, from time to time in the Agent’s sole discretion (a)
after the occurrence and during the continuation of an Event of Default or (b)
at any time that any of the other applicable conditions precedent set forth in
Section 8.2 have not been satisfied, to make protective Revolving Advances
to the Borrowers on behalf of the Lenders which the Agent, in its Permitted
Discretion, deems necessary or desirable (i) to preserve or protect the
Collateral, or any portion thereof, (ii) to enhance the likelihood of, or
maximize the amount of, repayment of the Advances and other Obligations, or
(iii) to pay any other amount chargeable to the Loan Parties pursuant to the
terms of this Agreement; provided, that at any
time after giving effect to any such Revolving Advances, the outstanding
Revolving Advances do not exceed the lesser of (X) one hundred five percent
(105%) of the Formula Amount or (Y) the Maximum Revolving Advance Amount less
the Letter of Credit Exposure.
  15.5
                Transfers and Assignments;
      Replacement of Certain
Lenders.
  (a)           Successors and
Assigns.  The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender.  No Lender may assign or otherwise
transfer any of its rights or obligations hereunder except: (i) to an Eligible
Assignee in accordance with the provisions of Section 15.5(b), (ii) by way
of participation in accordance with the provisions of Section 15.5(d) or
(iii) by way of pledge or assignment of a security interest subject to the
restrictions of Section 15.5(e) (and any other attempted assignment or
transfer by any party hereto shall be null and void).  Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in Section 15.5(d) and, to
the extent expressly contemplated hereby, the Affiliates of each of the Agent,
the Lenders and the respective directors, officers, employees, agents and
advisors of such Affiliates of each of the Agent, the Lenders) any legal or
equitable right, remedy or claim under or by reason of this
Agreement.
  (b)           Transfer of Commitments.   Any Lender
may at any time assign to one or more Eligible Assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of any
Commitment hereunder and the Advances at the time owing to such Lender); provided, however that: (i)
except in the case of an assignment of the entire remaining amount of the
assigning Lender’s Revolving Commitment hereunder and the Advances at the time
owing to such Lender or in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund with respect to a Lender, the aggregate amount
of the Revolving Commitment (which for this purpose includes Revolving Advances
outstanding thereunder) or, if the Revolving Commitment is not then in effect,
the principal outstanding balance of the Advances of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date) shall not be less than Five Million Dollars ($5,000,000), in the case of
any assignment in respect of Revolving Advances unless each of the Agent and, so
long as no Default or Event of Default has occurred and is continuing, the
Borrowing Agent otherwise consents (each such consent not to be unreasonably
withheld or delayed); (ii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Advances or the Commitment
hereunder assigned, except that this clause (ii) shall not prohibit any Lender
from assigning all or a portion of its rights and obligations in or among
separate Advances on a non-pro rata basis; (iii) any assignment of a Commitment
or Advance hereunder must be approved by the Agent and the Issuer unless the
Person that is the proposed assignee is itself a Lender with an existing
Commitment or Advance, as applicable (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee); and (iv) the parties to each
assignment shall execute and deliver to the Agent an Assignment and Assumption,
together with a processing and recordation fee of Three Thousand Five Hundred
Dollars ($3,500), and the Eligible Assignee, if it shall not be a Lender, shall
deliver to the Agent an Administrative Questionnaire.  Subject to
acceptance and recording thereof by the Agent pursuant to Section 15.5(c),
from and after the effective date specified in each Assignment and Assumption,
the Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of
Section 15.5 with respect to facts and circumstances occurring prior to the
effective date of such assignment.  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 15.5(b) shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with Section 15.5(d).
  110
  (c)           Maintenance of
Register.  The Agent, acting solely for this purpose as an
agent of the Borrowers, shall maintain at its office in Cleveland, Ohio, a copy
of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, the Commitments of, and
principal amounts of the Advances owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”).  The entries in the
Register shall be conclusive, and the Borrowers, the Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary.  The Register shall be available for
inspection by the Borrowers and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
  (d)           Participations.  Any
Lender may at any time, without the consent of, or notice to, any Loan Party or
the Agent, sell participations to any Person (other than a natural person or any
Loan Party, its Subsidiaries or any of their Affiliates) (each, a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Commitments and/or the Advances
owing to it); provided, however,
that (i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations and (iii) the Loan Parties, the Agent and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this
Agreement.  Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any  provision of this Agreement; provided, further,
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in Section 15.3 that affects such Participant.  Each Loan
Party agrees that each Participant shall be entitled to the benefits of Article
III, and Article XV to the same extent as if it were a Lender and had acquired
its interest by assignment pursuant to Section 15.5.  To the
extent permitted by law, each Participant also shall be entitled to the benefits
of Section 11.3 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.10(c) as though it were a
Lender.
  A
Participant shall not be entitled to receive any greater payment under this
Section 15.5(d) than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant unless the
sale of the participation to such Participant is made with the Borrowers’ prior
written consent.  A Participant that is not incorporated under the
laws of the United States or a state thereof shall not be entitled to the
benefits of Section 2.5 unless the Borrowers are notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrowers, to comply with Section 3.13 as though it were a
Lender.
  111
  (e)           Pledge of Interests. Any Lender may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement to secure obligations of such Lender, including any pledge
or assignment to secure obligations to a Federal Reserve Bank; provided, however,
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
  (f)           Replacement of
Notes.  Each Borrower shall execute and deliver: (i) to the
Agent, the transferor and the transferee, any consent or release (of all or a
portion of the obligations of the transferor) to be delivered in connection with
each Assignment and Assumption, (ii) if a Lender’s entire Revolving Commitment
and all of its Revolving Advances, have been transferred to the transferee,
appropriate replacement notes against return of the Notes (each marked
“replaced”) held by the transferor and (iii) if only a portion of a Lender’s
interest in its Revolving Commitment and Revolving Advances has been
transferred, replacement notes to each of the transferor and the transferee
against return of the original such Notes of the transferor (each marked
“replaced”) held by the transferor; provided, however, that,
simultaneously with the Borrowers’ delivery of new Notes pursuant to this
Section 15.5(f), the transferor Lender will deliver to the Borrowers any
Note being replaced in whole or in part, and each such Note delivered by the
transferor Lender shall be conspicuously marked “replaced” when so
delivered.
  (g)           Replacement of Certain
Lenders.   If any Lender is a Defaulting Lender hereunder
or if any Borrower is required to pay any additional amount to any Lender or any
Governmental Body for the account of any Lender pursuant to Section 3.13, then,
the Borrowers may, at the such Lender’s sole expense and effort, upon notice to
such Lender and the Agent, require such Lender to assign and delegate, without
recourse (in accordance with the restrictions contained in
Section 15.5(b)), all of its interests, rights and obligations under this
Agreement to an Eligible Assignee that shall assume such obligations; provided, however, that (i) the
Borrowers shall have received the prior written consent of the Agent, which
consent shall not be unreasonably withheld and (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its
Advances, accrued interest thereon, accrued fees and all other amounts payable
to it hereunder, from the assignee (to the extent of such outstanding principal
and accrued interest and fees) or the Borrowers (in the case of all other
amounts).  None of the Lenders shall be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrowers to require such
assignment and delegation cease to apply.
  (h)           Replacement of Non-Consenting
Lenders.   If, in connection with any proposed amendment,
waiver or consent hereunder pursuant to Section 15.2 (i) requiring the
consent of all Lenders, the consent of Required Lenders is obtained but the
consent of all Lenders whose consent is required is not obtained or (ii)
requiring the consent of Required Lenders, the consent of Lenders holding
fifty-one percent (51%) or more of the applicable threshold, is obtained but the
consent of Required Lenders is not obtained (any Lender withholding consent as
described in clause (i) and (ii) hereof being referred to as a “Non-Consenting
Lender”), then,
so long as the Agent is not a Non-Consenting Lender, the Agent may, at the sole
expense of the Borrowers, upon notice to such Non-Consenting Lender and the
Borrowers, require such Non-Consenting Lender to assign and delegate, without
recourse (in accordance with the restrictions contained in
Section 15.5(b)), all of its interests, rights and obligations under this
Agreement to an Eligible Assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided, however,
that such Lender shall have received payment of an amount equal to the
outstanding principal of its Advances, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder, from the assignee (to the extent
of such outstanding principal and accrued interest and fees) or the Borrowers
(in the case of all other amounts).
  112
  15.6
                Application of
      Payments.
  Except to
the extent expressly otherwise provided in Sections  11.7 and 14.2, the
Agent shall have the continuing and exclusive right to apply or reverse and
re-apply any payment and any and all proceeds of Collateral to any portion of
the Obligations.  To the extent that any Loan Party or any Subsidiary
thereof makes a payment or the Agent, any Lender or the Issuer receives any
payment or proceeds of the Collateral for any Loan Party’s or any Subsidiary’s
benefit, which are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver, custodian or any other party under any bankruptcy law,
common law or equitable cause, then, to such extent, the Obligations or part
thereof intended to be satisfied shall be revived and continue as if such
payment or proceeds had not been received by the Agent, such Lender or the
Issuer.
  15.7
                Indemnity.
  Each Loan Party shall indemnify the
Agent, each Lender, the Issuer and each of their respective officers, directors,
Affiliates, employees and agents from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever (including
reasonable fees and disbursements of counsel) which may be imposed on, incurred
by, or asserted against the Agent, any Lender or the Issuer in any litigation,
proceeding or investigation instituted or conducted by any Governmental Body or
any other Person with respect to any aspect of, or any transaction contemplated
by, or referred to in, or any matter related to, this Agreement or the Other
Loan Documents, whether or not the Agent, any Lender or the Issuer is a party
thereto, except to the extent that any of the foregoing arises out of the gross
negligence or willful misconduct of the party being indemnified.
  15.8
                Notice.
  (a)           Notice Addresses. Except for
notices required to be delivered by Approved Electronic Communication, any
notice or request hereunder may be given to any Loan Party or to the Agent, any
Lender or the Issuer at the following respective addresses (or at such other
address as may hereafter be specified in a notice designated as a notice of
change of address under this Section):
  (A)           If
to Agent:           
          PNC
Bank
 1900 East Ninth Street
 34th
Floor
 Locator B7-YB13-34-3
 Cleveland, Ohio, 44114
 Attention:  Joseph G. Moran
or Stoneridge
 Account Manager
 Telephone:  (216)222-5636
 Telecopier:  (216)222-9396
 Email:  joseph.moran@pnc.com
 
 (B)           If
to the Issuer:        
        PNC Bank
 1900 East Ninth Street
 34th
Floor
 Locator B7-YB13-34-3
 Cleveland, Ohio, 44114
 Attention:  Joseph G. Moran
or Operations Manager
 Telephone:  216-222-5636
 Telecopier:  216-222-9396
 Email:  joseph.moran@pnc.com
  113




(C)          If
to a
Lender:               
   As specified on the signature pages hereof.
 
 (D)          If
to the Borrowing
 Agent or a Loan
Party:       Stoneridge, Inc., as Borrowing
Agent
 9400 East Market Street
 Warren, Ohio 44484
 Attention:    
George E. Strickler, Executive Vice  President, Chief Financial
Officer and Treasurer
 Telephone: (330)856-2443
 Telecopier: (330)856-3618
 Email:  gstrickler@stoneridge.com




Unless
otherwise required or limited by the terms of this Agreement, any notice,
request, demand, direction or other communication (for purposes of this
Section 15.8 only, a “Notice”) to be given to or made upon any party hereto
under any provision of this Agreement shall be given or made by telephone or in
writing or facsimile transmission or similar telecommunications
device).  Unless the context of this Agreement would indicate
otherwise, an Approved Electronic Communication shall satisfy any requirement
for a writing.  Any such Notice must be delivered to the applicable
parties hereto at the addresses and numbers set forth in this Agreement or in
accordance with any subsequent unrevoked Notice from any such party that is
given in accordance with this Section 15.8.




(b)           Effectiveness of
Notices.  All Notices shall be effective (i) if delivered by
hand, including any overnight courier service, upon personal delivery, (ii) if
delivered by mail, four (4) days after being deposited with the United States
Postal Service, with first-class postage prepaid, return receipt requested,
(iii) if delivered by posting to an Approved Electronic Platform, an internet
website or a similar telecommunication device requiring that a user have prior
access to such Approved Electronic Platform, website or other device (to the
extent permitted by Section 13.7 to be delivered thereunder), when such Notice
shall have been made generally available on such Approved Electronic Platform,
internet website or similar device to the party being notified (regardless of
whether such party must accomplish, and whether or not such party shall have
accomplished, any action prior to obtaining access to such items, including
registration, disclosure of contact information, compliance with a standard user
agreement or undertaking a duty of confidentiality) and such party has been
notified that such communication has been posted to the Approved Electronic
Platform, (iv) if delivered by other Approved Electronic Communication, when
actually received by the target electronic system, (v) if by a facsimile
transmission, when sent to the applicable party’s facsimile machine’s telephone
number, if the party sending such Notice receives confirmation of the delivery
thereof from its own facsimile machine; and (vi) if by telephonic Notice, when a
party is contacted by telephone, if delivery of such telephonic Notice is
confirmed no later than the next Business Day by hand delivery, a facsimile or
electronic transmission, an Approved Electronic Communication or an overnight
courier delivery of a confirmatory Notice (received at or before noon on such
next Business Day); provided, however, that Notices
to the Agent shall not be effective until actually received by the
Agent.




(c)           Concurrent
Notice.  Any Lender or the Issuer giving a Notice to the
Borrowing Agent or a Loan Party shall concurrently send a copy thereof to the
Agent, and the Agent shall promptly notify the other Lenders and the Issuer of
its receipt of such Notice.


114


15.9
              Notice by Approved Electronic
      Communications.




The Agent, the Issuer, each Lender and
each of their Affiliates is authorized to transmit, post or otherwise make or
communicate, in its sole discretion (but shall not be required to do so), by
Approved Electronic Communications in connection with this Agreement or any
Other Loan Document and the transactions contemplated therein.  Each
of the Loan Parties, the Agent, the Lenders and the Issuer hereby acknowledges
and agrees that the use of Approved Electronic Communications is not necessarily
secure and that there are risks associated with such use, including risks of
interception, disclosure and abuse and each indicates it assumes and accepts
such risks by hereby authorizing each of the Agent, the Issuer, each Lender and
each of their Affiliates to transmit Approved Electronic
Communications.




No
Approved Electronic Communications shall be denied legal effect merely because
it is made electronically.  Approved Electronic Communications that
are not readily capable of bearing either a signature or a reproduction of a
signature may be signed, and shall be deemed signed, by attaching to, or
logically associating with such Approved Electronic Communication, an
E-Signature, upon which the Agent, the Issuer, each Lender and the Loan Parties
may rely and assume the authenticity thereof.  Each Approved
Electronic Communication containing a signature, a reproduction of a signature
or an E-Signature shall, for all intents and purposes, have the same effect and
weight as a signed paper original.  Each E-Signature shall be deemed
sufficient to satisfy any requirement for a “signature” and each Approved
Electronic Communication shall be deemed sufficient to satisfy any requirement
for a “writing”, in each case including pursuant to this Agreement, any Other
Loan Document, the Uniform Commercial Code, the Federal Uniform Electronic
Transactions Act, the Electronic Signatures in Global and National Commerce Act
and any substantive or procedural law governing such subject
matter.  Each party or beneficiary hereto agrees not to contest the
validity or enforceability of an Approved Electronic Communication or
E-Signature under the provisions of any applicable law requiring certain
documents to be in writing or signed; provided, that
nothing herein shall limit such party’s or beneficiary’s right to contest
whether an Approved Electronic Communication or E-Signature has been altered
after transmission.




15.10
            Survival.




The obligations of the Loan Parties under Sections 3.8,
3.9, 3.10, 3.11, 4.17(e), 13.8, and 15.12 and Article XIV shall survive
termination of this Agreement and the Other Loan Documents and payment in full
of the Obligations.




15.11
            Severability.




If any part of this Agreement is contrary to, prohibited
by, or deemed invalid under applicable laws or regulations, such provision shall
be inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given effect so far as possible.




15.12
            Expenses.




Each Loan Party agrees to pay on demand
all reasonable costs and expenses of (a) the Agent (including the reasonable
fees and out-of-pocket expenses of counsel or other advisors for the Agent and
including internal counsel) in connection with the negotiation, preparation,
execution, delivery, administration, modification, amendment, forbearance and
waiver of this Agreement and the Other Loan Documents, and (b) the Agent, the
Lenders and the Issuer (including the reasonable fees and out-of-pocket expenses
of counsel or other advisors) in connection with (i) any workout or
restructuring of the Obligations or (ii) the enforcement of, the exercise of
remedies under, or the preservation of rights and remedies under this Agreement
or any of the Other Loan Documents (including any collection, bankruptcy or
other enforcement proceedings arising with respect to any Loan Party, this
Agreement, or any Event of Default under this Agreement). Each Loan Party
further agrees to pay to the Agent on demand all usual and customary fees and
expenses which the Agent incurs in connection with (a) the forwarding of Advance
proceeds and (b) the establishment and maintenance of any Collection Accounts as
provided for in Section 4.14(g).


115


15.13
            Injunctive
      Relief.




Each Loan
Party recognizes that, in the event any Loan Party fails to perform, observe or
discharge any of its obligations or liabilities under this Agreement, any remedy
at law may prove to be inadequate relief to the Lenders and/or the
Issuer.  Therefore, the Agent, if the Agent so requests, shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving that actual damages are not an adequate
remedy.




15.14
            Consequential
      Damages.




None
of  the Agent, any Lender or the Issuer, nor any agent or attorney for
any of them, shall be liable to the Loan Parties, for any special, incidental,
consequential or punitive damages arising from any breach of contract, tort or
other wrong relating to the establishment, administration or collection of the
Obligations.




15.15
            Captions.




The captions at various places in this Agreement are
intended for convenience only and do not constitute and shall not be interpreted
as part of this Agreement.




15.16
            Counterparts;
      Telecopied
Signatures.




This Agreement may be executed in any number of and by
different parties hereto on separate counterparts, all of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute one and the same agreement.  Any signature delivered by a
party by facsimile transmission shall be deemed to be an original signature
hereto.




15.17
            Construction.




The parties acknowledge that each party
and its counsel have reviewed this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments, schedules or exhibits thereto.


116


15.18
            Confidentiality.




The Agent, each Lender, the Issuer, each Eligible
Assignee party to an Assignment and Assumption and each Participant shall hold
all non-public information obtained by the Agent, such Lender, the Issuer, such
Eligible Assignee party to an Assignment and Assumption or such Participant
pursuant to the requirements of this Agreement in accordance with the Agent’s,
such Lender’s, the Issuer’s, such Eligible Assignee’s and such Participant’s
customary procedures for handling confidential information of this nature; provided,
however,
the Agent, each Lender, the Issuer, each Eligible Assignee party to an
Assignment and Assumption and each Participant may disclose such confidential
information (in all cases on a confidential basis) (a) to its examiners,
affiliates, outside auditors, counsel and other professional advisors, (b) to
the Agent, any Lender, the Issuer, any prospective assignee, any Eligible
Assignee which is a party to an Assignment and Assumption and any Participants,
and (c) as required or requested by any Governmental Body or representative
thereof or pursuant to legal process; provided,
further
that (i) unless specifically prohibited by applicable law or court order, the
Agent, each Lender, the Issuer and each Eligible Assignee a party to an
Assignment and Assumption and each Participant shall use its best efforts prior
to disclosure thereof, to notify the Loan Parties of the applicable request for
disclosure of such non-public information (A) by a Governmental Body or
representative thereof (other than any such request in connection with an
examination of the financial condition of a Lender, the Issuer, a each Eligible
Assignee a party to an Assignment and Assumption or a Participant by such
Governmental Body) or (B) pursuant to legal process and (ii) in no event shall
the Agent, any Lender, the Issuer, any Eligible Assignee a party to an
Assignment and Assumption or any Participant be obligated to return any
materials furnished by the Loan Parties other than those documents and
instruments in possession of the Agent, any Lender or the Issuer in order to
perfect its Lien on the Collateral once the Obligations have been paid in full
and this Agreement has been terminated.




15.19
            No Sharing of
      InformationWithout
      Consent.




Each Loan Party acknowledges that from time to time
financial advisory, investment banking and other services may be offered or
provided to any Loan Party or one or more of its Affiliates (in connection with
this Agreement or otherwise) by any Lender, the Issuer or by one or more
Subsidiaries or Affiliates of such Lender or the Issuer.  None of the
Agent, any Lender or the Issuer is authorized to share any information delivered
to such Lender or the Issuer or the Agent by or on behalf of any Loan Party or
any Subsidiary thereof pursuant to or in connection with this Agreement, or in
connection with the decision of such Lender or the Issuer or the Agent to enter
into this Agreement, to any such Subsidiary or Affiliate of such Lender or the
Issuer or the Agent, without the prior written consent of the Borrower
Agent..




15.20
            USA Patriot
      Act.




Each Lender, the Issuer or assignee or participant of a
Lender or the Issuer that is not incorporated under the laws of the United
States or a state thereof (and is not excepted from the certification
requirement contained in Section 313 of the USA Patriot Act and the
applicable regulations because it is both (i) an affiliate of a depository
institution or foreign bank that maintains a physical presence in the United
states or foreign country and (ii) subject to supervision by a banking authority
regulating such affiliated depository institution or foreign bank) shall deliver
to the Agent the certification, or, if applicable, recertification, certifying
that such Lender or the Issuer is not a “shell” and certifying to other matters
as required by Section 313 of the USA Patriot Act and the applicable
regulations (1) within ten (10) days after the Closing Date, and (2) as such
other times as are required under the USA Patriot
Act.




15.21
            Publicity.




Each Loan Party, each Lender and the
Issuer hereby authorizes the Agent to make appropriate announcements of the
financial arrangement entered into among the Loan Parties, the Agent, the
Lenders and the Issuer, including announcements which are commonly known as
tombstones, in such publications and to such selected parties as the Agent shall
in its sole and absolute discretion deem appropriate.  Each Loan
Party, each Lender and the Issuer hereby further authorizes the Agent to
disclose information relating to this Agreement to Gold Sheets, and other
similar bank trade publications, with such information to consist of deal terms
and other information customarily found in such publications.


117


15.22
            Judgment
      Currency.




(a)           If
for the purposes of obtaining judgment in any court it is necessary to convert a
sum due hereunder or under any of the Notes in any currency (the “Original
Currency”) into another currency (the “Other Currency”) the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Agent could purchase the Original Currency with the Other
Currency at the Payment Office on the second Business Day preceding that on
which final judgment is given.




(b)           The
obligation of any Borrower or any Loan Party in respect of any sum due in the
Original Currency from it to any Lender, the Issuer or the Agent hereunder
shall, notwithstanding any judgment in any Other Currency, be discharged only to
the extent that on the Business Day following receipt by such Lender, the Issuer
or the Agent (as the case may be) of any sum adjudged to be so due in such Other
Currency such Lender, the Issuer or the Agent (as the case may be) may in
accordance with normal banking procedures purchase Dollars with such Other
Currency; if the amount of the Original Currency so purchased is less than the
sum originally due to such Lender, the Issuer or the Agent (as the case may be)
in the Original Currency, such Borrower and/or any other applicable Loan Party
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify such Lender, the Issuer or the Agent (as the case may be) against such
loss, and if the amount of the Original Currency so purchased exceeds the sum
originally due to any Lender, the Issuer or the Agent (as the case may be) in
the Original Currency, such Lender, the Issuer or the Administrative Agent (as
the case may be) agrees to remit to the applicable Borrower or other Loan Party
such excess.




15.23
            Waiver
      of Jury Trial and Submission to Non-Exclusive
  Jurisdiction.




EACH OF THE PARTIES HERETO WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG THE PARTIES OR ANY THEREOF, ARISING OUT OF,
IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
AMONG THEM IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN
DOCUMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED THERETO.




Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any Ohio state court or federal court of the United
States sitting in Cuyahoga County, Ohio, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement, the Notes or any Other Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such Ohio state or, to the extent
permitted by law, in such federal court.  Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.  Nothing in this agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement, the Notes or any Other Loan Document in
the courts of any jurisdiction.




Each Loan Party hereby waives personal
service of any and all process upon it and consents that all such service of
process may be made by registered mail (return receipt requested) directed to
such Loan Party at its address set forth in Section 15.8 and service so
made shall be deemed completed five (5) days after the same shall have been so
deposited in the mails of the United States, or, at the Agent’s option, by
service upon such Loan Party.  Nothing herein shall affect the right
to serve process in any manner permitted by law or shall limit the right of the
Agent, any Lender or the Issuer to bring proceedings against any Loan Party in
the courts of any other jurisdiction.


118


Each of the parties hereto hereby
irrevocably and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this
Agreement, the Notes or any Other Loan Document in any Ohio state or federal
court sitting in Ohio.  Each of the parties hereto hereby waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.  The
parties confirm that the foregoing waivers are informed and freely
made.




[SIGNATURES
FOLLOW]




119


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




BORROWERS:STONERIDGE,
      INC.By:
              /s/ George E. StricklerName:
      George E. StricklerTitle:
      Executive Vice President, Chief FinancialOfficer
      and TreasurerSTONERIDGE
      CONTROL DEVICES, INC.By:
              /s/ George E. StricklerName:
      George E. StricklerTitle:
      Vice President and TreasurerSTONERIDGE
      ELECTRONICS, INC.By:
              /s/ George E. StricklerName:
      George E. StricklerTitle:
      Vice President and
Treasurer


S-1


AGENT:PNC BANK, NATIONAL
      ASSOCIATION, as
                          AgentBy:
                        /s/ Joseph G. MoranName:  Joseph
      G. MoranTitle:  Senior
      Vice PresidentISSUERS:PNC BANK, NATIONAL ASSOCIATION,as
                          IssuerBy:
                        /s/ Joseph G. MoranName:  Joseph
      G. MoranTitle:  Senior
      Vice PresidentJPMORGAN CHASE BANK,
      N.A.,as an
      IssuerBy:
                        /s/ Katherine C. CliffelName:  Katherine
      C. CliffelTitle:  Vice
      President


S-2




LENDERS:PNC BANK, NATIONAL
      ASSOCIATION, as a
                      LenderBy:
                    /s/ Joseph G. MoranName:  Joseph
      G. MoranTitle:  Senior
      Vice PresidentRevolving
      Commitment:  $48,000,000Notice Information:PNC
      Bank, National Association1900
      East Ninth Street34th
      FloorLocator
      B7-YB13-34-3Cleveland,
      OH 44114Attention:  Joseph
      G. Moranor
      Stoneridge Account ManagerTelephone:  (216)222-5636Telecopier:  (216)222-9396Email:  joseph.moran@pnc.com


S-3




COMERICA BANK., as a
      LenderBy:
                            /s/ Brandon WellingName:  Brandon
      WellingTitle:  Assistant
      Vice PresidentRevolving
      Commitment:  $20,000,000Notice Information:Comerica
      Bank500
      Woodward9th
      FloorDetroit,
      MIAttention:  Brandon
      WellingAssistant
      Vice PresidentTelephone:  (313)
      222-5066Telecopier:  (313)
      222-9516Email:  bdwelling@comerica.com




S-4




JPMORGAN CHASE BANK,
      N.A., as a LenderBy:
                      /s/ Katherine C. CliffelName:  Katherine
      C. CliffelTitle:  Vice
      PresidentRevolving
      Commitment:  $20,000,000Notice Information:JPMorgan
      Chase Bank, N.A.1300
      E. Ninth Street13th
      FloorCleveland,
      Ohio. 44114Katherine
      C. Cliffel, Vice PresidentTel:
      216-781-4471Fax:
      216-781-2071Email:
      Katherine.C.Cliffel@chase.com




S-5




FIFTH THIRD BANK., as a
      LenderBy:
                      /s/ Marty McGintyName:  Marty
      McGintyTitle:  Vice
      PresidentRevolving
      Commitment:  $12,000,000Notice Information:Fifth
      Third Bank600
      Superior Ave EastCleveland,
      Ohio. 44114Marty
      McGinty, Vice PresidentTel:
      216-274-5098Fax:
      216-274-5617Email:
      marty.mcginty
@53.com




S-6


SCHEDULES




TO




AMENDED
AND RESTATED CREDIT AND SECURITY AGREEMENT (the “Agreement”)




BY
AND AMONG




PNC
BANK, NATIONAL ASSOCIATION




(AS
LENDER, ISSUER AND AGENT)




and





SUCH
OTHER LENDERS WHICH ARE NOW OR HEREAFTER A PARTY THERETO





and





STONERIDGE,
INC.,




(AS
BORROWER),





SUCH
OTHER BORROWERS WHICH ARE NOW OR HEREAFTER A PARTY THERETO


and


SUCH
GUARANTORS WHICH ARE NOW OR HEREAFTER A PARTY THERETO


and


PNC
BANK, NATIONAL ASSOCIATION




(AS
LEAD ARRANGER AND BOOK RUNNER)











Dated
as of October 4, 2010








These
Schedules are qualified in their entirety by reference to specific provisions of
the Agreement, and are not intended to constitute, and shall not be construed as
constituting, any representations or warranties of any Loan Party except as and
to the extent provided in the Agreement, subject to the limitations
therein.  Certain information contained in the Schedules may not be
required to be disclosed pursuant to the Agreement.  Such information
is included solely for informational purposes, and disclosure of such
information shall not be deemed to enlarge or enhance any of the representations
or warranties in the Agreement.  Inclusion of information herein shall
not be construed as an admission that such information is material to any Loan
Party.





Disclosures
in one part of a particular Schedule for any purpose will be deemed disclosed
for all purposes of such particular Schedule where such disclosure is reasonably
apparent. Disclosures by attachments and documents referenced by these Schedules
(other than with respect to schedules and exhibits to the Contracts set forth in
Schedule 5.25) are deemed made herein.  Headings have been inserted in
the Schedules for convenience of reference only and shall not have the effect of
amending or changing the information presented or creating a standard for
disclosure different than that set forth in the
Agreement.  Capitalized terms used in these Schedules and not
otherwise defined herein shall have the respective meanings assigned to such
terms in the Agreement.







Schedule
2.9





Existing
Letters of Credit




1.
              
              Irrevocable
      letter of credit dated as of June 18, 2002, by Stoneridge, Inc. in favor
      of National Union Fire Insurance Co. (AIG) and with a balance as of
      September 22, 2010 of $1,080,000; expires June 18,
2011.2.
              
              Irrevocable
      letter of credit dated as of May 18, 2001, by Stoneridge, Inc. in favor of
      The Travelers Indemnity Company and with a balance as of September 22,
      2010 of $235,000; expires May 31, 2011.3.
              
              Irrevocable
      letter of credit dated as of February 27, 2008, by Stoneridge, Inc. in
      favor of Ace American Insurance Company and with a balance as of September
      22, 2010 of $371,281; expires December 31, 2011.4.
              
              Irrevocable
      letter of credit dated as of January 26, 2009, by Stoneridge, Inc. in
      favor of Ace American Insurance Company and with a balance as of September
      22, 2010 of $325,000; expires December 31, 2011.5.
              
              Irrevocable
      letter of credit dated as of January 23, 2007, by Stoneridge, Inc. in
      favor of Ace American Insurance Company and with a balance as of September
      22, 2010 of $484,684; expires December 31, 2011.6.
              
              Irrevocable
      letter of credit dated as of March 8, 2010, by Stoneridge, Inc. in favor
      of Ace American Insurance Company and with a balance as of September 22,
      2010 of $43,782; expires December 31, 2011.7.
              
              Irrevocable
      letter of credit dated as of July 30, 2010, by Stoneridge, Inc. in favor
      of China Merchants Bank and with a balance as of September 22, 2010 of
      $770,000; expires September 1,
2011.







Schedule
4.1





Commercial
Tort Claims




None.











Schedule
4.14(c)





Chief
Executive Offices




Chief Executive
Offices





1.
              
              Stoneridge,
      Inc., 9400 East Market Street, Warren, OH 444842.
              
              Stoneridge
      Electronics, Inc., #7A Zane Grey, Unit #203, El Paso, TX
    799063.
              
              Stoneridge
      Control Devices, Inc., 300 Dan Road, Canton, MA
  02021





Additional Locations at
which Records are Kept





Stoneridge,
Inc.





·
            7292
      26th
      Court East, Sarasota, FL 34243


·
            345
      South Mill Street, Lexington, OH
44904


·
            8640
      East Market Street, Warren, OH
44484


·
            700
      Industrial Drive, Portland, IN
47371





Stoneridge
Control Devices, Inc.





·
            28000
      Cabot Drive, Suite 100, Novi, MI
48377





Stoneridge
Electronics, Inc.





·
            #7A
      Zane Grey, Unit #203, El Paso, TX
79906











Schedule
4.14(g)





Lockboxes;
Bank Accounts


Region
                    
                    Country
                    
                    Division
                    
                    Bank
                    
                    AccountNorth
      America
                    
                    USA
                    
                    Stoneridge
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    Stoneridge
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    Stoneridge
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    Alphabet
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    Alphabet
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    Alphabet
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    Alphabet
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    Alphabet
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    Alphabet
                    
                    First
      National BankNorth
      America
                    
                    USA
                    
                    Hi-Stat
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    Hi-Stat
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    Hi-Stat
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    Hi-Stat
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    Pollak
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    Pollak
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    Pollak
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    Pollak
                    
                    Bank
      of AmericaNorth
      America
                    
                    USA
                    
                    TED
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    TED
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    TED
                    
                    PNC
      / NCBNorth
      America
                    
                    USA
                    
                    TED
                    
                    Wells
      Fargo Bank - El PasoNorth
      America
                    
                    Mexico
                    
                    Alphabet
      Mon
                    
                    Scotiabank
      InverlatNorth
      America
                    
                    Mexico
                    
                    Alphabet
      Mon
                    
                    Scotiabank
      InverlatNorth
      America
                    
                    Mexico
                    
                    Alphabet
      Mon
                    
                    Banco
      Mercantil del Norte, S.A. (MXN)North
      America
                    
                    Mexico
                    
                    Alphabet
      Mon
                    
                    Banco
      Mercantil del Norte, S.A. (USD)North
      America
                    
                    Mexico
                    
                    Alphabet
      Chi
                    
                    BaNorte
      (USD)North
      America
                    
                    Mexico
                    
                    Alphabet
      Chi
                    
                    BaNorte
      (MXN)North
      America
                    
                    Mexico
                    
                    TED
                    
                    BaNorteNorth
      America
                    
                    Mexico
                    
                    TED
                    
                    Banco
      Mercantil del Norte, S.A.North
      America
                    
                    Mexico
                    
                    TED
                    
                    Banco
      Mercantil del Norte, S.A.




Master Account (Allegiant
Fund linked to this account)





Region
              
              Country
              
              Division
              
              Bank
              
              AccountNorth
      America
              
              USA
              
              Stoneridge
              
              PNC
      / NCB










Multicurrency Account
(MXN)





Region
              
              Country
              
              Division
              
              Bank
              
              AccountNorth
      America
              
              USA
              
              Stoneridge
              
              PNC
      / NCB




Investment
Accounts




Region
              
              Country
              
              Division
              
              Bank
              
              AccountNorth
      America
              
              USA
              
              Stoneridge
              
              Comerica
      BankNorth
      America
              
              USA
              
              Stoneridge
              
              PNC





ABL
Accounts




Region
              
              Country
              
              Division
              
              Bank
              
              AccountNorth
      America
              
              USA
              
              Alphabet
              
              PNC
      / NCBNorth
      America
              
              USA
              
              Hi-Stat
              
              PNC
      / NCBNorth
      America
              
              USA
              
              Pollak
              
              PNC
      / NCBNorth
      America
              
              USA
              
              TED
              
              PNC
      / NCB







Schedule
4.14(j)


Securities
Accounts




See
Schedule 4.14(g).







Schedule
5.2





Incorporation/Organization/Qualification





Company
                                
                                Place of Incorporation
                                
                                Jurisdictions in Which
                                  Qualified to do Business
                                
                                Organizational
                                  Identification
                                  NumberStoneridge, Inc.
                                
                                OH,
      USA
                                
                                Michigan,
      Indiana,
                                  Massachusetts,
      Florida,
                                  Texas,
      Ohio
                                
                                732877Stoneridge
      Control Devices, Inc.
                                
                                MA,
      USA
                                
                                Massachusetts,
      Michigan
                                
                                043493548Stoneridge
      Electronics, Inc.
                                
                                TX,
      USA
                                
                                Texas
                                
                                156117100Stoneridge
      International Financial Services Company
                                
                                IRE
                                
                                Ireland
                                
                                N/AStoneridge
      Holdings CV
                                
                                NL
                                
                                Netherlands
                                
                                N/AStoneridge
      European Holdings B.V.
                                
                                NL
                                
                                Netherlands
                                
                                N/AStoneridge
      AB
                                
                                Sweden
                                
                                Sweden
                                
                                N/AStoneridge
      Electronics AB
                                
                                Sweden
                                
                                Sweden
                                
                                N/AStoneridge
      Nordic AB
                                
                                Sweden
                                
                                Sweden
                                
                                N/AStoneridge
      GmbH
                                
                                Germany
                                
                                Germany
                                
                                N/AStoneridge
      Electronics Limited
                                
                                Scotland
                                
                                United
      Kingdom, France and Spain
                                
                                N/AStoneridge
      Electronics SrL
                                
                                Italy
                                
                                Italy
                                
                                N/AStoneridge
      Holdings OU
                                
                                Estonia
                                
                                Estonia
                                
                                N/AStoneridge
      Electronics AS
                                
                                Estonia
                                
                                Estonia
                                
                                N/AStoneridge
      Pollak (Holdings) Limited
                                
                                UK
                                
                                United
      Kingdom
                                
                                N/AStoneridge-Pollak
      Limited
                                
                                UK
                                
                                United
      Kingdom
                                
                                N/AAlphabet
      do Brazil Ltda
                                
                                Brazil
                                
                                Brazil
                                
                                N/ATED
      de Mexico SA de CV
                                
                                Mexico
                                
                                Mexico
                                
                                N/AAlphabet
      de Mexico SA de CV
                                
                                Mexico
                                
                                Mexico
                                
                                N/AAlphabet
      de Mexico de Monclova SA de CV
                                
                                Mexico
                                
                                Mexico
                                
                                N/AStoneridge
      Asia Holdings Ltd.
                                
                                Mauritius
                                
                                Mauritius
                                
                                N/AStoneridge
      Asia Pacific Electronics (Suzhou) Co. Ltd.
                                
                                China
                                
                                China
                                
                                N/A







Schedule
5.3


Officers,
Directors, Shareholders, Capitalization





Loan
      Party
                            
                            Officers
                            
                            Directors
                            
                            Shareholders/MembersJohn
      Corey – President and
                              CEOGeorge
      Strickler –
                              Executive
      Vice President,
                              CFO
      and Treasurer
                            
                            William
      Lasky (Chairman)John
      CoreyStoneridge,
      Inc.
                            
                            Thomas
      Beaver – Vice
                              President
      of the Company
                              and
      Vice President of
                              Global
      Sales and Systems
                              Engineering
                            
                            Paul
      Schlather
                              
                              Jeffrey
      Draime
                            
                            PublicIra
      KaplanMark
      Tervalon – Vice
                              President
      and President of
                              the
      Electronics Division
                            
                            Douglas
      JacobsKim
      KorthMike
      Sloan –Vice
                              President
      and President of
                              the
      Control Devices
                              DivisionRobert
      Loesch – SecretaryJohn
      Corey – PresidentGeorge
      StricklerStoneridge
      Electronics,
                              Inc.
                            
                            George
      Strickler – Vice
                              President
      and Treasurer
                            
                            John
      Corey
                            
                            Stoneridge,
      Inc., 100%
                              (100
      shares, certificates
                              numbered
      3 and 4)Michael
      CarnahanRobert
      Loesch – SecretaryJohn
      Corey – PresidentGeorge
      StricklerStoneridge
      Control
                              Devices,
      Inc.
                            
                            George
      Strickler – Vice
                              President
      and Treasurer
                            
                            John
      Corey
                            
                            Stoneridge,
      Inc., 100%
                              (100
      shares, certificates
                              numbered
      3 and 4)Michael
      SloanRobert
      Loesch – Secretary











Schedule
5.5


FEINS/Tax
Returns




Loan Party or Loan Party
      Subsidiary
              
              FEINStoneridge,
      Inc.
              
              34-1598949Stoneridge
      Electronics, Inc.
              
              52-2206181Stoneridge
      Control Devices, Inc.
              
              04-3493548Stoneridge
      International Financial Services Company
              
              N/AStoneridge
      Holdings CV
              
              N/AStoneridge
      European Holdings B.V.
              
              N/AStoneridge
      AB
              
              N/AStoneridge
      Electronics AB
              
              N/AStoneridge
      Nordic AB
              
              N/AStoneridge
      GmbH
              
              N/AStoneridge
      Electronics Limited
              
              N/AStoneridge
      Electronics SrL
              
              N/AStoneridge
      Holdings OU
              
              N/AStoneridge
      Electronics AS
              
              N/AStoneridge
      Pollak (Holdings) Limited
              
              N/AStoneridge-Pollak
      Limited
              
              N/AAlphabet
      do Brazil Ltda
              
              N/ATED
      de Mexico SA de CV
              
              N/AAlphabet
      de Mexico SA de CV
              
              N/AAlphabet
      de Mexico de Monclova SA de CV
              
              N/AStoneridge
      Asia Holdings Ltd.
              
              N/AStoneridge
      Asia Pacific Electronics (Suzho) Co. Ltd.
              
              N/A




Entity
                            
                            Jurisdiction
                            
                            Income Tax Returns Not
                              Examined and Reported
                              Upon or Closed by
                              Applicable Statute
                            
                            Current
                              Federal
                              Audit
                            
                            Current
                              State
                              Audit
                            
                            Current
                              Foreign
                              AuditStoneridge,
      Inc.
                            
                            US
                            
                            2007-2009
                            
                            N/A
                            
                            MI
      2005-2008
                            
                            N/AStoneridge
      Electronics, Inc.
                            
                            US
                            
                            2007-2009
                            
                            N/A
                            
                            N/A
                            
                            N/AStoneridge
      Control Devices, Inc.
                            
                            US
                            
                            2007-2009
                            
                            N/A
                            
                            N/A
                            
                            N/AStoneridge
      International Financial Services Company
                            
                            IRE
                            
                            2005-2009
                            
                            N/A
                            
                            N/A
                            
                            N/AStoneridge
      Holdings CV
                            
                            NL
                            
                            N/A
                            
                            N/A
                            
                            N/A
                            
                            N/AStoneridge
      European Holdings B.V.
                            
                            NL
                            
                            2005-2009
                            
                            N/A
                            
                            N/A
                            
                            N/AStoneridge
      AB
                            
                            SWEDEN
                            
                            2004-2009
                            
                            N/A
                            
                            N/A
                            
                            N/AStoneridge
      Electronics AB
                            
                            SWEDEN
                            
                            2004-2009
                            
                            N/A
                            
                            N/A
                            
                            N/AStoneridge
      Nordic AB
                            
                            SWEDEN
                            
                            2004-2009
                            
                            N/A
                            
                            N/A
                            
                            N/AStoneridge
      GmbH
                            
                            GER
                            
                            2007-2009
                            
                            N/A
                            
                            N/A
                            
                            N/AStoneridge
      Electronics Limited
                            
                            UK
                            
                            2005-2009
                            
                            N/A
                            
                            N/A
                            
                            N/AStoneridge
      Electronics SrL
                            
                            IT
                            
                            2005-2009
                            
                            N/A
                            
                            N/A
                            
                            N/AStoneridge
      Holdings OU
                            
                            ESTONIA
                            
                            N/A
                            
                            N/A
                            
                            N/A
                            
                            N/AStoneridge
      Electronics AS
                            
                            ESTONIA
                            
                            N/A
                            
                            N/A
                            
                            N/A
                            
                            N/AStoneridge
      Pollak (Holdings) Limited
                            
                            UK
                            
                            2005-2009
                            
                            N/A
                            
                            N/A
                            
                            N/AStoneridge-Pollak
      Limited
                            
                            UK
                            
                            2005-2009
                            
                            N/A
                            
                            N/A
                            
                            N/AAlphabet
      do Brazil Ltda
                            
                            BRAZIL
                            
                            2005-2009
                            
                            N/A
                            
                            N/A
                            
                            N/ATED
      de Mexico SA de CV
                            
                            MEX
                            
                            2005-2009
                            
                            N/A
                            
                            N/A
                            
                            N/AAlphabet
      de Mexico SA de CV
                            
                            MEX
                            
                            2005-2009
                            
                            N/A
                            
                            N/A
                            
                            N/AAlphabet
      de Mexico de Monclova SA de CV
                            
                            MEX
                            
                            2005-2009
                            
                            N/A
                            
                            N/A
                            
                            2006-2007Stoneridge
      Asia Holdings Ltd.
                            
                            MAURITIUS
                            
                            2005-2009
                            
                            N/A
                            
                            N/A
                            
                            N/AStoneridge
      Asia Pacific Electronics (Suzhou) Co. Ltd.
                            
                            CHINA
                            
                            2005-2009
                            
                            N/A
                            
                            N/A
                            
                            N/A







Schedule
5.7





Corporate
Names





1.
              
              Stoneridge,
      Inc.: Hi-Stat, Hi-Stat Manufacturing Company, Alphabet, Ohio Stoneridge,
      Inc., Stoneridge Electronics North America2.
              
              Stoneridge
      Electronics, Inc.: Transportation Electronics Division (TED), Electronic
      Products Division (EPD), Pollak TED, Pollak EPD, Stoneridge TED,
      Stoneridge Electronics North America3.
              
              Stoneridge
      Control Devices, Inc.:  Switch Products Division (SPD), Actuator
      Products Division (APD), Pollak North America, Joseph Pollak
      Company/Corporation, Pollak Engineered
Products







Schedule
5.8





O.S.H.A
and Environmental Compliance





None.







Schedule
5.9(b)





Litigation





None.





Schedule
5.10





ERISA
Compliance





List of Plans Maintained or
to Which Contributions are Made





Stoneridge,
Inc. & Subsidiaries Health & Welfare Plans





1.
            Medical
      Plans –


·
            Anthem
      BC/BS


·
            Premium
      Plan


·
            Core
      Plan


·
            HSA
      Plan (HDHP)


·
            Tufts


·
            HMO
      Plan


2.
            Dental
      Plan – MetLife – Option 1, Option 2,
DHMO


3.
            Vision
      Care - EyeMed


4.
            Basic
      Life, AD&D, Optional Life, Optional AD&D, Dependent life –
      Prudential


5.
            Short
      Term Disability, Long-term disability -
  Prudential


6.
            Flexible
      Spending Accounts – Flexible Benefits
  Administrators


·
            Medical


·
            Dependent
      Care





Stoneridge,
Inc. & Subsidiaries maintains a 401(k) Retirement Plan





Other
Plans





Stoneridge-Pollak
Limited Pension Plan – placed in administration in the UK February 23,
2010































































































































Country
              
              Application
                No.
              
              Patent
                No.
              
              Status
              
              TitleGermany
              
              60325772.0
              
              
              
              Published
              
              Electro-Mechanical
      Actuator for an Electrically Actuated Parking BrakeUnited
      States
              
              12/409,114
              
              
              
              Allowed
              
              Trailer
      Tow Connector AssemblyUnited
      States
              
              12/397,605
              
              
              
              Published
              
              Touch
      Sensor SystemBrazil
              
              0619291-2
              
              
              
              Pending
              
              Sensor
      System Including a Magnetized ShaftCanada
              
              2,626,583
              
              
              
              Pending
              
              Sensor
      System Including a Magnetized ShaftChina
      (People’sRepublic)
              
              200680047749.5
              
              
              
              Published
              
              Sensor
      System Including a Magnetized ShaftEuropean
      PatentConvention
              
              06846138.3
              
              
              
              Published
              
              Sensor
      System Including a Magnetized ShaftJapan
              
              2008-536661
              
              
              
              Published
              
              Sensor
      System Including a Magnetized ShaftUnited
      States
              
              12/345,148
              
              
              
              Published
              
              Sensor
      System Including a Magnetized  ShaftUnited
      States
              
              12/547,077
              
              
              
              Pending
              
              Sensor
      System Including a Magnetized ShaftGermany
              
              112007001032.0
              
              
              
              Published
              
              Steering
      Shaft Lock ActuatorJapan
              
              2009-507999
              
              
              
              Published
              
              Steering
      Shaft Lock ActuatorUnited
      Kingdom
              
              0819615.6
              
              
              
              Published
              
              Steering
      Shaft Lock ActuatorUnited
      States
              
              11/873,901
              
              
              
              Published
              
              Non-Contact
      Engine Parameter SensorBrazil
              
              0718735-1
              
              
              
              Pending
              
              Cylinder
      Position Sensor and Cylinder Incorporating the SameCanada
              
              2,672,588
              
              
              
              Pending
              
              Cylinder
      Position Sensor and Cylinder Incorporating the SameChina
      (People’s Republic)
              
              200780050586.0
              
              
              
              Published
              
              Cylinder
      Position Sensor and Cylinder Incorporating the SameEuropean
      Patent Convention
              
              07869246.4
              
              
              
              Published
              
              Cylinder
      Position Sensor and Cylinder Incorporating the SameJapan
              
              2009-541603
              
              
              
              Pending
              
              Cylinder
      Position Sensor and Cylinder Incorporating the SamePatent
      Cooperation Treaty
              
              PCT/US07/87495
              
              
              
              Published
              
              Cylinder
      Position Sensor and Cylinder Incorporating the SameUnited
      States
              
              11/956,302
              
              
              
              Published
              
              Cylinder
      Position Sensor and Cylinder Incorporating the SameUnited
      States
              
              12/564,394
              
              
              
              Pending
              
              Trailer
      Two Connector AssemblyGermany
              
              11
      2008 002 382.4
              
              
              
              Pending
              
              Interchangeable
      Lever AssembliesUnited
      Kingdom
              
              1004038.4
              
              
              
              Pending
              
              Interchangeable
      Lever AssembliesUnited
      States
              
              12/206,661
              
              
              
              Published
              
              Interchangeable
      Lever Assemblies









Country
              
              Application
                No.
              
              Patent
                No.
              
              Status
              
              TitlePatent
      CooperationTreaty
              
              PCT/US08/83403
              
              
              
              Published
              
              Device
      for Illuminating Target Surface Including an Integrated
    SwitchUnited
      States
              
              12/270,598
              
              
              
              Published
              
              Device
      for Illuminating Target Surface Including an Integrated
    SwitchPatent
      Cooperation Treaty
              
              PCT/US08/85145
              
              
              
              Published
              
              Crank-Type
      Linear ActuatorUnited
      States
              
              12/325,635
              
              
              
              Published
              
              Crank-Type
      Linear ActuatorPatent
      Cooperation Treaty
              
              PCT/US09/44573
              
              
              
              Published
              
              Cylinder
      Position Sensor and Cylinder Incorporating the SameUnited
      States
              
              12/468,860
              
              
              
              Published
              
              Cylinder
      Position Sensor and  Cylinder Incorporating the
    SameUnited
      States
              
              12/567,587
              
              
              
              Pending
              
              Touch
      Sensor System and MethodGermany
              
              10
      2010 009 607.5
              
              
              
              Pending
              
              Touch
      Sensor System with MemoryUnited
      States
              
              61/156,202
              
              
              
              Pending
              
              Touch
      Sensor System with MemoryUnited
      States
              
              12/713,441
              
              
              
              Pending
              
              Touch  Sensor
      System with MemoryGermany
              
              10
      2010 009 535.4
              
              
              
              Pending
              
              Actuator
      with Linearly Movable Drive ScrewUnited
      Kingdom
              
              1003341.3
              
              
              
              Pending
              
              Actuator
      with Linearly Movable Drive ScrewUnited
      States
              
              12/714,040
              
              
              
              Pending
              
              Actuator
      with Linearly Movable Drive ScrewUnited
      States
              
              61/264,755
              
              
              
              Pending
              
              Shift-By-Wire
      Transmission Range Selector System and Actuator for the
    SameUnited
      States
              
              61/314,785
              
              
              
              Pending
              
              Target
      Activated SensorUnited
      States
              
              09/765,899
              
              
              
              Granted
              
              Electro-Mechanical
      ActuatorGermany
              
              60134227.5-08
              
              1296844
              
              Allowed
              
              Fuel
      Door Lock ActuatorUnited
      States
              
              09/898,579
              
              6,739,633
              
              Granted
              
              Fuel
      Door Lock ActuatorEuropean
      Patent Convention
              
              98302017.3
              
              0867904
              
              Granted
              
              AUTOMOTIVE
      INERTIA SWITCHCanada
              
              2,580,523
              
              
              
              Pending
              
              Solenoid
      Having Reduced Operating NoiseEuropean
      PatentConvention
              
              05797907.2
              
              
              
              Published
              
              Solenoid
      Having Reduced Operating NoiseKorea,
      Republic of
              
              2007-7008439
              
              
              
              Pending
              
              Solenoid
      Having Reduced Operating NoiseUnited
      States
              
              11/041,081
              
              7,159,840
              
              Granted
              
              Solenoid
      Having Reduced Operating NoiseBrazil
              
              0709424-8
              
              
              
              Pending
              
              Temperature
      SensorCanada
              
              2,647,537
              
              
              
              Pending
              
              Temperature
      SensorChina
      (People’s Republic)
              
              200780018270.3
              
              
              
              Published
              
              Temperature
      SensorEuropean
      PatentConvention
              
              07759554.4
              
              
              
              Pending
              
              Temperature
      Sensor










Country
              
              Application
                No.
              
              Patent
                No.
              
              Status
              
              TitleIndia
              
              8371/DELNP/2008
              
              
              
              Published
              
              Temperature
      SensorJapan
              
              2009-503237
              
              
              
              Published
              
              Temperature
      SensorKorea,
      Republic of
              
              2008-7026267
              
              
              
              Pending
              
              Temperature
      SensorUnited
      States
              
              11/692,679
              
              7,682,076
              
              Granted
              
              Temperature
      SensorUnited
      States
              
              12/389,739
              
              
              
              Published
              
              Temperature
      SensorChina
      (People’s Republic)
              
              200680052373.7
              
              
              
              Published
              
              Filtration
      Device for Use with a Fuel Vapor Recovery SystemKorea,
      Republic of
              
              2008-7016861
              
              
              
              Pending
              
              Filtration
      Device for Use with a Fuel Vapor Recovery SystemUnited
      States
              
              11/624,174
              
              7,594,500
              
              Granted
              
              Air
      Control ModuleUnited
      States
              
              11/844,659
              
              
              
              Published
              
              Valve
      Seat and Valve Ball for Vacuum Solenoid ValvesUnited
      States
              
              12/039,095
              
              
              
              Allowed
              
              Filtration
      Device for use with a Fuel Vapor Recovery SystemUnited
      States
              
              61/159,955
              
              
              
              Pending
              
              Exhaust
      Gas Temperature Sensor Lead Sealing and Strain ReliefUnited
      States
              
              61/300,391
              
              
              
              Pending
              
              Exhaust
      Gas Temperature Sensor Including an Epoxy for Strain Relief and Heat
      Transfer and Also an Exhaust Gas Temperature Sensor Including an
      Anti-Vibration SleeveUnited
      States
              
              61/308,267
              
              
              
              Pending
              
              Soot
      Sensor




Trademarks




OWNER
            
            TRADEMARK
            
            REGISTRATION/APPLICATION NO.Stoneridge, Inc.
            
            STONERIDGE
            
            2,331,113ALPHABET
            
            2,198,412S LOGO
            
            2,328,114S LOGO
            
            2,324,833Stoneridge Control Devices, Inc.
            
            POLLACK
            
            2,308,719Design
            
            77/220,584









Schedule
5.15





Labor
Contracts





None.





Schedule
5.22





Business
Activities





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





Schedule
5.23





Locations





Location
                    
                    Leased
                      Owned
                    
                    Primary Lease Terms (if
                      Applicable)
                    
                    Value of Collateral
                    
                    Landlord Contact
                      Information9400
      E. Market St., Warren, OH 44484
                    
                    Owned
                    
                    N/A
                    
                    
                    N/A
                    
                    N/A7292
      26th
      Ct. E., Sarasota, FL 34243
                    
                    Owned
                    
                    N/A
                    
                    
                    N/A
                    
                    N/A345
      S. Mill St., Lexington, OH 44904
                    
                    Owned
                    
                    N/A
                    
                    
                    N/A
                    
                    N/A320
      S. Mill St., Lexington, OH 44904
                    
                    Owned
                    
                    N/A
                    
                    
                    N/A
                    
                    N/A700
      Industrial Dr., Portland, IN 47371
                    
                    Owned
                    
                    N/A
                    
                    
                    N/A
                    
                    N/A300
      Dan Rd., Canton, MA 02021
                    
                    Owned
                    
                    N/A
                    
                    
                    N/A
                    
                    N/A415
      W. Water Street, Portland, Indiana 47371
                    
                    Leased
                    
                    Month-to-month
      lease for approximately 25,000 sq. ft.
                    
                    $
                    265,000
                    
                    DS
      Snyder Storage 415 W. Water Street, Portland, Indiana
  47371340
      South Mill St., Lexington, OH 44904
                    
                    Leased
                    
                    Month-to-month
      lease for approximately 15,000 sq. ft.
                    
                    $
                    150,000
                    
                    Phyllis
      F. Hire, Trustee Under Agreement Dated March 3, 1988, as amended, 26 East
      Main St., Suite 2, Lexington, OH 44904632
      E. Church Street, Galion, OH 44833
                    
                    Leased
                    
                    Month-to-month
      lease for approximately 7,788 sq. ft.
                    
                    $
                    250,000
                    
                    Taj
      Ma Hall Ltd., Cecil E. Landin, Partner, 632 E. Church Street, Galion, OH
      4483325
      Walnut Street Rear, Lexington, OH 44904
                    
                    Leased
                    
                    Month-to-month
      lease for approximately 2,700 sq. ft.
                    
                    $
                    100,000
                    
                    Walker
      Bros Lexington LLC, 95 Benjamin Street, Lexington, OH
  44904#7A
      Zane Grey, Unit #230, , El Paso, TX 79906
                    
                    Leased
                    
                    Lease
      for approximately 50,000 sq. ft.; 3year term to expire May 2012. No option
      to renew.
                    
                    $
                    730,300
                    
                    KASCO
      Industrial Capital Inc., P.O. Box 64, El Paso, TX 799418640
      E. Market St., Warren, OH 44484
                    
                    Leased
                    
                    Lease
      for approximately 24,570 sq. ft.; original lease amended to expire
      December 31, 2014. Option to renew for 5 years
                    
                    $
                    5,968,142
                    
                    Hunters
      Square Inc., P.O. Box 8827, Warren, OH 44484Haggerty
      Corporate Center II, 28000 Cabot Dr. Suite 100, Novi, MI
    48331
                    
                    Leased
                    
                    Lease
      for approximately 8300 sq. ft.; originally with 7-year term but extended
      an additional five years and five months to expire
10/31/13
                    
                    $
                    206,000
                    
                    Haggerty
      Corporate Office Centre II, LLC, 39000 Country Club Dr., Farmington Hills,
      MI 48331





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


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







Schedule
5.25





Material
Business Agreements





1.
            Indenture
      dated as of May 1, 2002 among Stoneridge, Inc. as Issuer, Stoneridge
      Control Devices, Inc. and Stoneridge Electronics, Inc., as Guarantors, and
      Fifth Third Bank, as trustee


2.
            Purchase
      Agreement dated as of May 1, 2002 among Stoneridge Inc., Stoneridge
      Control Devices Inc., Stoneridge Electronics Inc. and Deutsche Bank
      Securities Inc., J.P. Morgan Securities Inc., Morgan Stanley & Co.
      Incorporated and NatCity Investments
Inc.


3.
            Registration
      Rights Agreement dated as of May 1, 2002 among Stoneridge Inc.,
      Stoneridge Control Devices Inc., Stoneridge Electronics Inc. and Deutsche
      Bank Securities Inc., J.P. Morgan Securities Inc., Morgan Stanley &
      Co. Incorporated and NatCity Investments
Inc.


4.
            Indenture
      dated as of October 4, 2010 among Stoneridge, Inc. as Issuer, Stoneridge
      Control Devices, Inc. and Stoneridge Electronics, Inc., as Guarantors, and
      The Bank of New York Mellon Trust Company, N.A., as trustee and collateral
      agent


5.
            Purchase
      Agreement dated as of September 24, 2010 among Stoneridge Inc., Stoneridge
      Control Devices Inc., Stoneridge Electronics Inc. and Inc., J.P. Morgan
      Securities Inc. and Deutsche Bank Securities
  Inc.


6.
            Credit
      Agreement dated as of November 2, 2007 among Stoneridge, Inc., as
      Borrower, the Lending Institutions Named Therein, as Lenders, National
      City Business Credit, Inc., as Administrative Agent and Collateral Agent,
      and National City Bank, as Lead Arranger and Issuer (incorporated by
      reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed on November 8, 2007).


7.
            Amendment
      No. 1 dated April 24, 2009 to Credit and Security Agreement dated as of
      November 2, 2007 by and among the Company as Borrower, the Lending
      Institutions Named Therein, as Lenders, National City Business Credit,
      Inc., Comerica Bank, JP Morgan Chase, PNC Bank, National Association and
      Fifth Third Bank, as lenders (incorporated by reference to Exhibit 99.1 to
      the Company’s Current Report on Form 8-K filed on April 30,
      2009).


8.
            Amendment
      No. 2 dated April 24, 2009 to Credit and Security Agreement dated as of
      November 2, 2007 by and among the Company as Borrower, the Lending
      Institutions Named Therein, as Lenders, National City Business Credit,
      Inc., Comerica Bank, JP Morgan Chase, PNC Bank, National Association and
      Fifth Third Bank, as lenders (incorporated by reference to Exhibit 99.2 to
      the Company’s Current Report on Form 8-K filed on April 30,
      2009).


9.
            Amendment
      No. 3 dated October 9, 2009 to Credit and Security Agreement dated as of
      November 2, 2007 by and among the Company as Borrower, the Lending
      Institutions Named Therein, as Lenders, National City Business Credit,
      Inc., Comerica Bank, JP Morgan Chase, PNC Bank, National Association and
      Fifth Third Bank, as lenders, filed
herewith.


10.
            Long-Term
      Incentive Plan Share Option
Agreement


11.
            Directors’
      Share Option Plan Share Option
Agreement


12.
            Long-Term
      Incentive Plan Restricted Shares Grant
Agreement


13.
            Director’s
      Restricted Shares Plan Agreement


14.
            Long-Term
      Incentive Plan Restricted Shares Grant Agreement including Performance and
      Time-Based Restricted Shares


15.
            Amendment
      to Restricted Shares Grant
Agreement


16.
            Amended
      and Restated Long-Term Incentive
Plan.


17.
            Employment
      Agreement between the Company and John C.
Corey.


18.
            Amended
      Employment Agreement between Stoneridge, Inc. and John C.
      Corey


19.
            Amended
      and Restated Change in Control
Agreement


20.
            Long-Term
      Cash Incentive Plan


21.
            Long-Term
      Incentive Plan – 2007 form of amendment to the restricted shares grant
      agreement


22.
            Long-Term
      Incentive Plan – 2008 form of amendment to the restricted shares grant
      agreement


23.
            Long-Term
      Cash Incentive Plan


24.
            Officers’
      and Key Employees’ Severance Plan


25.
            Retention
      Award between the Company and John C.
Corey


26.
            Retention
      Awards between the Company and George E. Strickler, Mark J. Tervalon,
      Thomas A. Beaver and Michael D.
Sloan


27.
            Indemnification
      agreement between the Company and John C. Corey, George E. Strickler,
      Kenneth A. Kure and James E.
Malcolm


28.
            Purchase
      and Sale of Quotas of P.S.T. Industria Eletornica da Amazonia LTDA, among,
      Ricardo Ribero Maciel, Ichiro Aoki, Sergio de Cerqueira Leite, Marcos
      Ferretti, P.S.T. Industria Eletronica Da Amazonia LTDA, and Stoneridge,
      Inc., dated 10-29-97.









29.
            Quotaholders’
      Agreement, among Marcos Ferretti, Sergio de Cerqueira Leite, Stoneridge,
      Inc. and PST Industria Electronica Da Amazonia Ltda., dated October 29,
      1997.


30.
            Quotaholders’
      Agreement, among Marcos Ferretti, Sergio de Cerqueira Leite, PST Industria
      Eletronica da Amazonia, and Stoneridge, Inc., dated 10-29-97, as
      amended.


31.
            Share
      Subscription, Share Purchase and Shareholders Agreement, among Minda
      Group, Minda Instruments Limited, and Stoneridge, Inc., dated 8-11-04 (and
      related agreements).


32.
            First
      Amendment to Share Subscription, Share Purchase and Shareholders
      Agreement, among Minda Group, Minda Instruments Limited, and Stoneridge,
      Inc., dated 4-21-05.


33.
            Asset
      Purchase and Contribution Agreement, among Bolton Conductive Systems, LLC,
      Martin Kochis, Joseph Malecke, Bolton Investments, LLC, New Bolton
      Conductive Systems, LLC, and Stoneridge, Inc., dated 10-9-09 (and related
      agreements).


34.
            Operating
      Agreement of New Bolton Conductive Systems LLC, between Bolton Conductive
      Systems, LLC and Stoneridge, Inc., dated
  10-13-09.


35.
            Lease
      Agreement between Stoneridge-Pollak Limited, Stoneridge Inc. and Vantage
      Point Business Village Limited, with respect to Stoneridge-Pollak
      Limited’s facility.


36.
            Agreement
      Relating to Delta Schoeller, between Stoneridge-Pollak Limited and Freedom
      Sailboards Limited, dated 11-23-09 (and related
    agreements).


37.
            Lease
      Agreement between Hunters Square Inc., Landlord, and Stoneridge, Inc.,
      Tenant, dated 3-19-1999, as amended by First Amendment to Lease, between
      Hunters Square LLC, successor to Hunters Square Inc., Landlord, and
      Stoneridge, Inc., Tenant, dated
2-13-2009.


38.
            Lease
      between Stoneridge Electronics Limited, Tenant, and Dundee City Council,
      Landlord, dated 2008


39.
            Lease
      between Stoneridge Electronics AB, Tenant, and W-Invest AB, Landlord,
      dated 10-1-2009


40.
            Lease
      between Stoneridge Electronics AB, Tenant, and AB Brostaden Landlord,
      dated 1-1-2008


41.
            Lease,
      as amended and extended between Alphabet de Mexico, Tenant, and Ecom de
      Mexico SA de CV, Landlord, dated
12-1-1998


42.
            Lease,
      as amended and extended between Alphabet de Mexico, Tenant, and Parque
      Industrias de Americas SA de CV, Landlord, dated
  10-7-2005


43.
            Lease,
      as amended and extended between Alphabet de Mexico de Monclova, Tenant,
      and Parque Industrias de Americas SA de CV, Landlord, dated
      4-4-2003


44.
            Lease
      between Stoneridge Electronics AS, Tenant, and OU Prategli Invest,
      Landlord, dated 8-17-2007


45.
            Lease
      between Stoneridge Asia Pacific Electronics (Suzhou) Co. Ltd, Tenant, and
      Landlord, dated 3-19-1999


46.
            Supply
      Agreement, between International Truck and Engine Corporation and Alphabet
      Division of Stoneridge, Inc., dated July 27,
  2010.


47.
            License
      between Continental AG and Stoneridge August
  2009


48.
            Letter
      of Intent, between Daimler Trucks North America LLC and Stoneridge
      Electronics North America, dated
12-15-09.


49.
            General
      Supply Contract, between Scania CV AB and Stoneridge Electronics AB, dated
      4-7-06.


50.
            Purchase
      Orders with American Axel and Manufacturing,
  Inc.


51.
            GM
      Purchase Orders and accompanying Terms and
  Conditions.


52.
            Price
      Agreement, between AB Volvo and Stoneridge Electronics AB, dated
      12-10-08.


53.
            Development
      Agreement, between Volvo Truck Corporation and Stoneridge Electronics AB,
      dated 2-5-08.


54.
            Purchase
      Order between Volvo Construction Equipment AB and Stoneridge Electronics
      AB


55.
            Long
      Term Agreement, between Deere & Company and Stoneridge, dated
      5-1-08.


56.
            First
      Amendment to Stoneridge Agreement, between Deere & Company and
      Stoneridge, dated 8-1-08.


57.
            Purchase
      Orders with Ford Motor Company.


58.
            Chrysler
      [Pollack, Hi-Stat] Production Purchasing General Terms and Conditions
      (undated) & various purchase
orders.


59.
            Development
      and Supply Contract with Daimler AG,
undated.


60.
            Agreement,
      between MAN Nutzfahrzeuge AG and Stoneridge Electronics AB, dated
      10-6-09.


61.
            Requirements
      Contracts with Delphi.


62.
            Purchase
      Orders with Lear Corporation.


63.
            Master
      Agreement No. MA-15309 with Reserved Inventory Addendum, between
      Pollak-EPD Corp. and Arrow Electronics Components Group of Arrow
      Electronics, Inc., both dated 6-15-04. As
  amended


64.
            Purchase
      and Supply Agreement, between Stoneridge Control Device Systems, Hi-Stat
      Lexington Division and Arrow Manufacturing, LTD, dated
      12-4-09.


65.
            Volume
      Purchase Agreement, between Power and Signal Group and Stoneridge
      Electronics NA, dated 1-1-10.










Schedule
7.1





Sale
of Assets





None.





Schedule
7.2





Permitted
Encumbrances





Tax
Judgment Lien by the State of Ohio Department of Taxation filed 11/7/2008 in the
amount of $518.95 as of such date.





See
following page for recorded financing statements that cover specific items of
leased or financed collateral (other than the filings in favor of National City
Business Credit, Inc./PNC Bank, National Association).







Updated
as of 09/16/10 and does not include TERMINATED liens





Name of Entity
                            
                            State
                            
                            Type of Lien
                            
                            Secured Party (if applicable)
                            
                            Filing #
                            
                            Latest Date
                              of Filing
                            
                            Date of
                              SearchStoneridge
      Far East LLC
                            
                            DE
                            
                            UCC
                            
                            National
      City Business Credit, Inc.
                            
                            20074233028
                            
                            11/6/2007
                            
                            8/25/2010Stoneridge
      Far East LLC
                            
                            DE
                            
                            Federal
      Tax
                            
                            Clean
                            
                            
                            
                            
                            
                            8/25/2010Stoneridge
      Control Devices, Inc.
                            
                            MA
                            
                            State
      Tax
                            
                            Clean
                            
                            
                            
                            
                            
                            9/8/2010Stoneridge
      Control Devices, Inc.
                            
                            MA
                            
                            UCC
                            
                            National
      City Business Credit, Inc.
                            
                            200760988910
                            
                            11/6/2007
                            
                            9/8/2010Stoneridge
      Electronics, Inc.
                            
                            TX
                            
                            Federal
      Tax
                            
                            Clean
                            
                            
                            
                            
                            
                            9/6/2010Stoneridge
      Electronics, Inc.
                            
                            TX
                            
                            UCC
                            
                            National
      City Business Credit, Inc.
                            
                            070037945914
                            
                            11/6/2007
                            
                            9/6/2010Stoneridge
      Electronics North America
                            
                            TX
                            
                            UCC
                            
                            De
      Lage Landen
                            
                            090007383848
                            
                            3/16/2009
                            
                            9/6/2010Stoneridge
      Electronics North America
                            
                            TX
                            
                            UCC
                            
                            De
      Lage Landen
                            
                            090007386023
                            
                            3/16/2009
                            
                            9/6/2010Stoneridge
      Electronics North America
                            
                            TX
                            
                            UCC
                            
                            De
      Lage Landen
                            
                            090009234360
                            
                            4/2/2009
                            
                            9/6/2010Stoneridge
      Electronics North America
                            
                            TX
                            
                            UCC
                            
                            De
      Lage Landen
                            
                            090009234471
                            
                            4/2/2009
                            
                            9/6/2010OH00039864883Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            Dell
      Financial Services
                            
                            20062680402
                            
                            9/25/2006
                            
                            9/7/2010OH00048302187Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            Dell
      Financial Services
                            
                            20070800858
                            
                            3/21/2007
                            
                            9/7/2010American
      Express Business Finance
                            
                            OH00048508496Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            Corporation
                            
                            20070920556
                            
                            4/2/2007
                            
                            9/7/2010American
      Express Business Finance
                            
                            OH00049646873Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            Corporation
                            
                            20071240570
                            
                            5/4/2007
                            
                            9/7/2010OH00050199605Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            Dell
      Financial Services
                            
                            20071240752
                            
                            5/4/2007
                            
                            9/7/2010OH00050199827Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            Dell
      Financial Services
                            
                            20071240804
                            
                            5/4/2007
                            
                            9/7/2010OH00050200074Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            Dell
      Financial Services
                            
                            20071240754
                            
                            5/4/2007
                            
                            9/7/2010OH00050200630Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            Dell
      Financial Services
                            
                            20071240694
                            
                            5/4/2007
                            
                            9/7/2010OH00055304524Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            Dell
      Financial Services
                            
                            20071700722
                            
                            6/19/2007
                            
                            9/7/2010American
      Express Business Finance
                            
                            OH00059515050Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            Corporation
                            
                            20073460742
                            
                            12/12/2007
                            
                            9/7/2010Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            Dane
      Systems
                            
                            OH00095036816
                            
                            11/2/2005
                            
                            9/7/2010Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            US
      Bancorp
                            
                            OH00109965559
                            
                            12/17/2006
                            
                            9/7/2010Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            US
      Bancorp
                            
                            OH00110097086
                            
                            12/20/2006
                            
                            9/7/2010Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            US
      Bancorp
                            
                            OH00110100479
                            
                            12/20/2006
                            
                            9/7/2010







Name of Entity
                            
                            State
                            
                            Type of Lien
                            
                            Secured Party (if applicable)
                            
                            Filing #
                            
                            Latest Date
                              of Filing
                            
                            Date of
                              SearchStoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            US
      Bancorp
                            
                            OH00115026496
                            
                            5/11/2007
                            
                            9/7/2010Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            Crown
      Credit Company
                            
                            OH00115640418
                            
                            5/29/2007
                            
                            9/7/2010Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            US
      Bancorp
                            
                            OH00116956195
                            
                            7/6/2007
                            
                            9/7/2010Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            National
      City Business Credit, Inc.
                            
                            OH00120956696
                            
                            11/6/2007
                            
                            9/7/2010Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            De
      Lage Landen
                            
                            OH00123826917
                            
                            2/14/2008
                            
                            9/7/2010Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            US
      Bancorp
                            
                            OH00129811912
                            
                            9/25/2008
                            
                            9/7/2010Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            US
      Bancorp
                            
                            OH00129987620
                            
                            10/2/2008
                            
                            9/7/2010Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            Autocar,
      LLC
                            
                            OH00132334733
                            
                            1/20/2009
                            
                            9/7/2010Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            Crown
      Credit Company
                            
                            OH00132518117
                            
                            2/2/2009
                            
                            9/7/2010Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            Crown
      Credit Company
                            
                            OH00135699142
                            
                            6/30/2009
                            
                            9/7/2010Stoneridge,
      Inc.
                            
                            OH
                            
                            UCC
                            
                            General
      Electric Capital Corporation
                            
                            OH00137749565
                            
                            10/9/2009
                            
                            9/7/2010







Schedule
7.3





Permitted
Guarantees





1.
            Stoneridge,
      Inc. guarantees the lease for the land and building on which the
      Stoneridge Pollak Limited UK facility operates (Mitcheldean
      facility).  It has also provided a letter of comfort to the
      Pension Trustees of the Stoneridge Pollak Limited Pension Scheme that
      Stoneridge, Inc. will indemnify the Trustees should the Trustees incur a
      liability related to  incentive calculations for buyouts from
      the Pension Scheme but solely related to the Deed of Curtailment as well
      as only liabilities not compensated by applicable insurance
      policies.  Stoneridge, Inc. represents that the liability with
      respect to such letter of comfort would not result in a Material Adverse
      Effect.


2.
              Stoneridge,
      Inc. guarantees the revolving asset backed revolving credit facility dated
      October 13, 2009 for a principal amount of up to $3.0 million and an
      installment note dated October 13, 2009 with and original principal
      balance of $527,305 of its BCS
subsidiary.







Schedule
7.4





Permitted
Investments





1.
            Minda
      Instruments Joint Venture (Stoneridge, Inc. owns a 49% equity interest in
      this joint venture in India)


2.
              PST
      Electronica SA Joint Venture (Stoneridge, Inc. owns a 50% equity interest
      in this joint venture in Brazil)


3.
              Bolton
      Conductive Systems LLC (Stoneridge, Inc. owns a 51% equity interest in
      this venture)


4.
            Allmerica
      Shares, issued by the Allmerica Financial Corporation (now part of the
      Hanover Insurance Group).  Stoneridge, Inc. holds a certificate
      for 5,864 shares worth approximately $250,000.  The shares are
      publicly traded under the symbol
“THG.”







Schedule
7.5





Extensions
of Credit





1.
            Loan
      Agreement, by and between Stoneridge International Financial Services
      Company (as lender) and Stoneridge Pollak Holdings Ltd. (as borrower),
      dated May 24, 2000, for an aggregate principal amount up to
      $9,500,000.


2.
              Revolving
      Credit Facility Agreement, by and between Stoneridge International
      Financial Services Company (as lender) and Stoneridge-Pollak Limited (as
      borrower), dated December 2, 2004, for an aggregate principal amount up to
      £3,000,000.


3.
            Loan
      Agreement, by and between Stoneridge International Financial Services
      Company (as lender) and Stoneridge Electronics AB (as borrower), dated
      February 27, 2004, for an aggregate principal amount up to SEK (Swedish
      Kronor) 23,525,929.


4.
              Loan
      Agreement, by and between Stoneridge Pollak Holdings Ltd (as lender,
      subsequently transferred to Stoneridge International Financial Services
      Company) and Stoneridge AB (as borrower) dated December 31, 2009, for an
      aggregate principal amount of  €18,285,554


5.
            Loan
      Agreement, by and between Stoneridge Electronics AB (as lender) and
      Stoneridge Holdings OU (as borrower) dated December 31, 2009, for an
      aggregate principal amount of
€15,711,440


6.
              Loan
      Agreement, by and between Stoneridge Electronics AB (as lender) and
      Stoneridge Electronics Ltd (as borrower) dated December 31, 2009, for an
      aggregate principal amount of € 7,276,932


7.
              Loan
      Agreement, by and between SRI Holdings CV (as lender, subsequently
      transferred to Stoneridge, Inc.) and Stoneridge European Holdings BV (as
      borrower) dated June 22, 2002, for an aggregate principal amount of
      $2,500,000


8.
            Loan
      Agreement, by and between Stoneridge Inc (as lender) and Stoneridge Asia
      Pacific Electronics (Suzhou) C. Ltd. (as borrower), dated April 1, 2010,
      for an aggregate principal amount up to
  $1,000,000.







Schedule
7.8





Permitted
Indebtedness





1.
            Loan
      Agreement, by and between Stoneridge International Financial Services
      Company (as lender) and Stoneridge Pollak Holdings Ltd. (as borrower),
      dated May 24, 2000, for an aggregate principal amount up to
      $9,500,000.


2.
              Revolving
      Credit Facility Agreement, by and between Stoneridge International
      Financial Services Company (as lender) and Stoneridge-Pollak Limited (as
      borrower), dated December 2, 2004, for an aggregate principal amount up to
      £3,000,000.


3.
            Loan
      Agreement, by and between Stoneridge International Financial Services
      Company (as lender) and Stoneridge Electronics AB (as borrower), dated
      February 27, 2004, for an aggregate principal amount up to SEK (Swedish
      Kronor) 23,525,929.


4.
              Loan
      Agreement, by and between Stoneridge Pollak Holdings Ltd (as lender,
      subsequently transferred to Stoneridge International Financial Services
      Company) and Stoneridge AB (as borrower) dated December 31, 2009, for an
      aggregate principal amount of  €18,285,554


5.
            Loan
      Agreement, by and between Stoneridge Electronics AB (as lender) and
      Stoneridge Holdings OU (as borrower) dated December 31, 2009, for an
      aggregate principal amount of
€15,711,440


6.
              Loan
      Agreement, by and between Stoneridge Electronics AB (as lender) and
      Stoneridge Electronics Ltd (as borrower) dated December 31, 2009, for an
      aggregate principal amount of € 7,276,932


7.
            Loan
      Agreement, by and between SRI Holdings CV (as lender, subsequently
      transferred to Stoneridge, Inc.) and Stoneridge European Holdings BV (as
      borrower) dated June 22, 2002, for an aggregate principal amount of
      $2,500,000


8.
              Loan
      Agreement, by and between Stoneridge Inc (as lender) and Stoneridge Asia
      Pacific Electronics (Suzhou) C. Ltd. (as borrower), dated April 1, 2010,
      for an aggregate principal amount up to $1,000,000.


9.
            Loan
      Agreement, by and between Stoneridge Asia Pacific Electronics (Suzhou) C.
      Ltd. (as borrower) and China Merchants Bank (as Lender), dated July 30,
      2010, for an aggregate principal amount up to
  $1,500,000.









Exhibit
A
 
 AMENDED
AND RESTATED CREDIT AND SECURITY
  AGREEMENT
  PNC
BANK, NATIONAL ASSOCIATION
  (AS
LENDER, ISSUER AND AGENT)
 and
 SUCH
OTHER LENDERS WHICH ARE NOW OR HEREAFTER A PARTY HERETO
 and
 STONERIDGE,
INC.,
  (AS
BORROWER),
 SUCH
OTHER BORROWERS WHICH ARE NOW OR HEREAFTER A PARTY HERETO
 and
 SUCH
GUARANTORS WHICH ARE NOW OR HEREAFTER A PARTY HERETO
 and
 PNC
BANK, NATIONAL ASSOCIATION
  (AS
LEAD ARRANGER AND BOOK RUNNER)
 
 
 Dated
as of September 20, 2010
 
 
 Closing  Agenta/Checklist
 Parties and
Counsel:
 Agent:
              PNC
      Bank, National Association (“PNC ”)Issuer:
              PNC,
      and JPMorgan Chase with respect to one particular Letter of
      CreditLenders:
              PNC,
      JPMorgan Chase Bank, N.A., Comerica Bank, and Fifth Third
    BankBorrowers:
              Stoneridge,
      Inc., an Ohio corporation (“Stoneridge”), Stoneridge Electronics, Inc., a
      Texas corporation (“Electronics”), and Stoneridge Control Devices, Inc.
      (“Controls”)Borrowing
      Agent:
              ParentGuarantors:
              None
      at closingParent:
              StoneridgeLoan
      Parties:
              Borrowers
      and GuarantorsAlphabet:
              Alphabet
      do Brazil Ltda.SSD:
              Squire,
      Sanders & Dempsey L.L.P., counsel to PNCBH:
              Baker
      & Hostetler LLP, counsel to the Loan PartiesBL:
              Burns
      & Levinson LLP, Massachusetts counsel to the Loan
    PartiesEGAO:
              Enríquez,
      González, Aguirre y Ochoa, S.C., Mexican counsel to the Loan
      PartiesGR:
              Galicia
      y Robles, S.C., Mexican counsel to PNCFR
              França
      Ribeiro Advocacia
 
 
 Document
              Document
      Number
              Responsibility
              Signed
      By
              StatusA.PRIMARY DOCUMENTS1.Amended and Restated
      Credit and Security Agreement
              1171613
              SSD
              Borrowers,
      Guarantors, Agent, Lenders, Issuer
              ReceivedSchedule
      2.9                 
      Existing letters of Credit
                Schedule
      4.1                 
      Commercial Tort Claims
                Schedule
      4.14(c)           Chief
      Executive Offices
                Schedule
      4.14(g)         
       Lockboxes; Bank Accounts
                Schedule
      4.14(j)            Securities
      Accounts
                Schedule
      5.2                  Incorporation/Organization/
                Qualification
                Schedule
      5.3                  Officers,
      Directors, Shareholders,
                Capitalization
                Schedule
      5.5                  FEINS/Tax
      Returns
                Schedule
      5.7                  Corporate
      Names
                Schedule
      5.8                  O.S.H.A.
      and Environmental
                Compliance
                Schedule
      5.10                ERISA
      Plans
                Schedule
      5.11                Patents,
      Trademarks, Copyrights
                and Licenses
                Schedule
      5.15                Labor
      Contracts
                Schedule
      5.22                Businesds
      Activities
                Schedule
      5.23                Locations
                Schedule
      5.25                Material
      Business Agreements
                Schedule
      7.1                  Sale
      of Assets
                Schedule
      7.2                  Permitted
      Encumbrances
                Schedule
      7.3                  Permitted
      Guarantees
                Schedule
      7.4                  Permitted
      Investments
                Schedule
      7.5                  Extensions
      of Credit
                Schedule
      7.8                  Permitted
      Indebtedness
              
              BH
                BH
                BH
                BH
                BH
                BH
                
                BH
                
                BH
                BH
                BH
                
                BH
                BH
                
                BH
                BH
                BH
                BH
                BH
                BH
                BH
                BH
                BH
                BH
              
              Received
      (with two outstanding comments)
  
 Document
              Document
      Number
              Responsibility
              Signed
      By
              StatusEXHIBIT
      A                   Closing
      Agenda
                EXHIBIT
      B                   
      Form of Revolving Note
                EXHIBIT
      C                   
      Form of Revolving Advance
                Request for Libor Rate Loans
                EXHIBIT
      D                   
      Form of Borrowing Base Certificate
                EXHIBIT
      E                    Form
      of Compliance Certificate
                EXHIBIT
      F                   
      Form of Financial Condition Certificate
                EXHIBIT
      G-1               
      Form of Landlord Waiver
                EXHIBIT
      G-2               
      Form of Processor/Bailee Waiver
                EXHIBIT
      G-3               
      Form of Mortgagee Waiver
                EXHIBIT
      G-4                Form
      of Consignee Waiver
                EXHIBIT
      H                  
      Projections
                EXHIBIT
      I                   
      Form of Assignment and Assumption
                EXHIBIT
      J                   
      Form of Borrower Joinder Agreement
                EXHIBIT
      K                 
      Form of Guarantor Joinder Agreement
              908849
                918107
                922554
                
                92255
                918225
                918273
                904790
                903982
                918350
                918393
                N/A
                918440
                918478
                918516
              SSD
                SSD
                PNC
                
                PNC
                SSD
                SSD
                SSD
                SSD
                SSD
                SSD
                BH/Parent
                SSD
                SSD
                SSD
              
              Completed2.Revolving
      Notes
                PNC
                JPMorgan
      Chase Bank
                Comerica
      Bank
                Fifth
      Third Bank
              
              SSD
              Borrowers
              Received3.Pledge and Security
      Agreement
                
                Schedules
      thereto
                Blank
      Stock Powers for Stock of each U.S. Subsidiary and each first-tier Foreign
      Subsidiary
              1178120
              SSD
              Loan
      Parties
              Received—need
      stock powers4.Pledge Agreement
      (Brazil) regarding pledge by Stoneridge of its interest in
      Alphabet
              
              BH/FR
              Stoneridge,
      Alphabet and PNC
              Received5.Pledge Agreement
      (Brazil) regarding pledge by Alphabet of its interest in PST Electronica
      S.A.
              
              BH/FR
              Alphabet,
      PST and PNC
              Post-Closing6.Copyright Security
      Agreement
                
                Schedule
              917808
      (form)
              SSD
                
                BH
              Loan
      Parties
              Received
  
 Document
              Document
      Number
              Responsibility
              Signed
      By
              Status7.Patent Security
      Agreement
                
                Schedule
              917810
      (form)
              SSD
                
                BH
              Loan
      Parties
              Received8.Trademark Security
      Agreement
                
                Schedule
              917812
      (form)
              SSD
                
                BH
              Loan
      Parties
              Received9.2010 Note Intercreditor
      Agreement
              1171194
              SSD
              Loan
      Parties, Agent and 2010 Note Collateral Agent
              Received10.Delivery of any
      Collateral items required to be delivered to Agent
              
              BH
              
              NoneB.LETTER OF CREDIT DOCUMENTS1.List of existing
      outstanding Letters of Credit
              
              BH/Loan
      Parties
              
              ReceivedC.WAIVERS1.Landlord Waiver for
      Stoneridge – 340 South Mill Street, Lexington, Ohio
    location
              
              BH/Loan
      Parties (SSD as to form)
              Landlord
      and Stoneridge
              Post-Closing2.Landlord Waiver for
      Stoneridge -- 632 East Church Street, Galion, Ohio
location
              
              BH/Loan
      Parties (SSD as to form)
              Landlord
      and Stoneridge
              Post-Closing3.Landlord Waiver for
      Stoneridge --  25 Walnut Street, Rear, Lexington ,Ohio
      location
              
              BH/Loan
      Parties (SSD as to form)
              Landlord
      and Stoneridge
              Post-Closing4.Landlord Waiver for
      Stoneridge --  8640 East Market Street, Warren Ohio
      location
              
              BH/Loan
      Parties (SSD as to form)
              Landlord
      and Stoneridge
              Post-Closing5.Landlord Waiver for
      Stoneridge --  415 West Water Street, Portland, Indiana
      location
              
              BH/Loan
      Parties (SSD as to form)
              Landlord
      and Stoneridge
              Post-Closing6.Landlord Waiver for
      Electronics -- #7 Zane Grey, Unit #203, El Paso, Texas
      location
              
              BH/
      Loan Parties (SSD as to form)
              Landlord
      and Electronics
              Post-Closing7.Landlord Waiver for
      Controls -- 28001 Cabot Drive, Novi, Michigan location
              
              BH/
      Loan Parties (SSD as to form)
              Landlord
      and Controls
              Post-Closing
  
 Document
              Document
      Number
              Responsibility
              Signed
      By
              Status8.Copy of Lease for
      Stoneridge – 340 South Mill Street, Lexington, Ohio
    location
              
              BH/
      Loan Parties
              
              Post-Closing9.Copy of Lease for
      Stoneridge --  632 East Church Street, Galion, Ohio
      location
              
              BH/Loan
      Parties
              
              Post-Closing10.Copy of Lease for
      Stoneridge --  25 Walnut Street, Rear, Lexington ,Ohio
      location
              
              BH/Loan
      Parties
              
              Post-Closing11.Copy of Lease for
      Stoneridge --  8640 East Market Street, Warren Ohio
      location
              
              BH/Loan
      Parties
              
              Post-Closing12.Copy of Lease for
      Stoneridge --  415 West Water Street, Portland, Indiana
      location
              
              BH/Loan
      Parties
              
              Post-Closing13.Copy of Lease for
      Electronics -- #7 Zane Grey, Unit #203, El Paso, Texas
      location
              
              BH/
      Loan Parties
              
              Post-Closing14.Copy of Lease for
      Controls --  28001 Cabot Drive, Novi, Michigan
      location
              
              BH/
      Loan Parties
              
              Post-ClosingD.MEXICAN SECURITY DOCUMENTS1.Schedule of Mexican
      locations
              
              BH/Loan
      Parties
              
              Received2.Reaffirmation of Pledge
      Agreement (Stoneridge)
              
              SSD/GR
              Stoneridge,
      Agent,  three Depositaries
              Received
      (other than Depositary Signature)3.Reaffirmation of Pledge
      Agreement (Electronics)
              
              SSD/GR
              Electronics,
      Agent, Depositary
              Received
      (other than Depositary Signature)4.Reaffirmation of Pledge
      Agreement (Controls)
              
              SSD/GR
              Controls,
      Agent, Depositary
              Received
      (other than Depositary Signature)5.Bylaws of TED de
      Mexico
              
              EGAO/Loan
      Parties
              
              Received6.Power of Attorney for
      Ted de Mexico
              
              EGAO/Loan
      Parties
              
              Received7.Bylaws of Alphabet de
      Mexico de Monclova, S.A. de C.V.
              
              EGAO/Loan
      Parties
              
              Received8.Power of Attorney for
      Alphabet de Mexico de Monclova, S.A. de C.V.
              
              EGAO/Loan
      Parties
              
              Received9.Bylaws of Alphabet de
      Mexico, S.A. de C.V.
              
              EGAO/Loan
      Parties
              
              Received
  
 Document
              Document
      Number
              Responsibility
              Signed
      By
              Status10.Power of Attorney for
      Alphabet de Mexico, S.A. de C.V.
              
              EGAO/Loan
      Parties
              
              ReceivedE.CORPORATE DOCUMENTS1.Secretary’s Certificate
      (Stoneridge) certifying, attaching and/or including:
                a.Resolutions;
                b.Incumbency;
                c.Articles of
      Incorporation (certified by Secretary of State); and
                d.Code of
      Regulations
              919254
      (form)
              BH
              Stoneridge
      (Secretary or Ass’t Secretary)
              Received2.Secretary’s Certificate
      (Electronics) certifying, attaching and/or including:
                a.Resolutions;
                b.Incumbency;
                c.Articles of
      Incorporation (certified by Secretary of State); and
                d.Bylaws
              
              BH
              Electronics
      (Secretary or Ass’t Secretary)
              Received3.Secretary’s Certificate
      (Controls) certifying, attaching and/or including:
                a.Resolutions;
                b.Incumbency;
                c.Articles of Organization
      (certified by Secretary of Commonwealth); and
                d.Bylaws
              
              BH
              Controls
      (Secretary or Ass’t Secretary)
              Received4.Secretary’s Certificate
      (Alphabet) certifying, attaching and/or including:
                a.Resolutions;
                b.Incumbency;
                c.Relevant filed
      organizational document (certified by relevant governmental
      authority)
              
              
              Alphabet
      (appropriate officer)
              Received5.Good Standing
      Certificates
                a.
      Stoneridge (Ohio)
                b.
      Electronics (Texas)
                c.
      Controls (Massachusetts)
                d.
      Alphabet (Brazil***)
              
              BH
              
              Received
  
 Document
              Document
      Number
              Responsibility
              Signed
      By
              Status6.Foreign
      Qualifications
                a.
      Stoneridge (Michigan, Indiana,
                Massachusetts,
      Florida, Texas)
                b.
      Controls (Michigan)
              
              BH
              
              Received—need
      Controls in MichiganF.TRANSACTION CERTIFICATES1.Authorization
      Certificate
              917209
      (form)
              BH
              Borrowing
      Agent (Secretary or Ass’t Secretary)
              Received2.Authorization for
      Verbal Advances
              918203
      (form)
              BH
              Borrowing
      Agent (Secretary or Ass’t Secretary)
              Received3.Bring-Down Certificate
      (see section 8.1(bb) of Credit Agreement) (Stoneridge)
              919259
      (form)
              BH/
      Stoneridge
              Stoneridge
              Received4.Bring-Down Certificate
      (Electronics)
              
              BH/
      Electronics
              Electronics
              Received5.Bring-Down Certificate
      (Controls)
              
              BH/
      Controls
              Controls
              Received6.Certificate of officer
      of Parent, certifying, attaching and/or including (see section 8.1(aa) of
      Credit Agreement):
                a.2010 Note
      Documents;
                b.No Default or Event of
      Default (as defined in the Indenture);
                c.All Obligations
      constitute “Permitted Indebtedness”; and
                d.Any other matter with
      respect to the 2010 Note Documents that the Agent deems
      appropriate
              
              BH/Alphabet
              Alphabet
              ReceivedG.PERFECTION OF LIENS/UCC ITEMS1.Perfection Certificate
      (Stoneridge, Electronics and Controls combined))
              
              BH
      (SSD as to form)
              Stoneridge,
      Electronics and Controls
              Received2.Lien searches and
      search reports described on Annex A
      attached hereto
              
              SSD
              
              Received3.Lien terminations
      described on Annex B attached
      hereto
              
              SSD/BH
              
              Post-Closing
  
 Document
              Document
      Number
              Responsibility
              Signed
      By
              Status4.New Lien filings and
      registrations [or amendments thereto] described on Annex C attached hereto
              
              SSD
              
              Received5.New UCC fixture filings
      in all local filing offices where fixtures of the Loan Parties are
      located
              
              BH/SSD
              
              Post-ClosingH.ACCOUNT CONTROL AGREEMENTS1.Existing Blocked
      Account Agreement-Borrower (National City Bank) for Collection
      Accounts
              
              Borrowers
      (SSD as to form)
              Stoneridge,
      Agent, PNC.NCB
              Received2.Existing Blocked
      Account Agreement-Lender (National City Bank) for Cash Concentration
      Accounts
              
              Borrowers
      (SSD as to form)
              Stoneridge,Agent,
      PNC/NCB
              Received3.Any new blocked account
      or account control agreements for newly disclosed accounts as Agent may
      require
              
              Borrowers
              Applicable
      depositary banks
              Post-Closing4.Evidence satisfactory
      to Agent that each Borrower shall, upon the Closing Date, send a notice to
      all Account Debtors instructing such Account Debtors to remit payments to
      the Collection Accounts
              
              BH/Borrowers
              
              Post-ClosingI.FINANCIAL STATEMENTS AND CERTIFICATES1.Audited consolidated
      financial statements of Parent and its consolidated Subsidiaries as of
      [December 31, 2009], accompanied by report/opinions without qualification
      by independent certified public accountants
              
              Parent
              
              Received2.Financial Condition
      Certificate, in the form of Exhibit
      F
              
              BH
      (SSD as to form)
              
              Received3.Borrowing Base
      Certificate as of August 31, 2010 (showing Undrawn Availability of at
      least $55,000,000)
              
              BH/Borrowing
      Agent (PNC  as to form)
              Borrowing
      Agent
              Received4.Compliance Certificate
      for quarter ending June 30, 2010
                Schedule
      I
              
              BH/Borrowing
      Agent  (SSD as to form)
              Borrowing
      Agent
              Received
  
 Document
              Document
      Number
              Responsibility
              Signed
      By
              Status5.First page of federal
      tax return for most recent two years for Stoneridge, Inc. and its
      consolidated Subsidiaries
              
              BH/Loan
      Parties
              
              ReceivedJ.OPINIONS1.Opinion of Baker &
      Hostetler LLP
              
              BH
              BH
              Draft2.Opinion of Burns &
      Levinson (Massachusetts)
              
              BH/BL
              BL
              Draft3.Opinion of EGAO
      (Mexican Counsel)
              
              BH/EGAO
              EAGO
              Post-Closing4.Opinion of FR
      (Brazilian Counsel)
              
              BH/
      FR
              FR
              Post-ClosingK.MISCELLANEOUS1.Agent’s Fee
      Letter
              
              SSD
              Parent,
      Agent
              Received2.Insurance
      Certificates
                Liability
      Insurance
                Property
      Insurance
              
              Loan
      Parties
              
              Post-Closing3.Payment of Fees in
      connection with the execution, delivery and performance of the Credit
      Agreement and the Other Loan Documents
              
              Loan
      Parties
              
              Post-Closing4.Evidence satisfactory
      to Agent that (i) since December 31, 2009 there has been no event
      which could be reasonably expected to have a Material Adverse Effect and
      (ii) no representations or information supplied to Agent have been proven
      inaccurate or misleading
              
              BH/Loan
      Parties
              
              Received5.Evidence satisfactory
      to Agent that the 2010 Notes have been issued by the Parent and the
      proceeds of such issuance have been received by Parent and applied to
      tendered 2002 Notes6.Receipt by the Agent of
      any and all Consents necessary to effectuate the
    transaction
              
              BH/Loan
      Parties
              
              None
  
 Document
              Document
      Number
              Responsibility
              Signed
      By
              StatusL.POST-CLOSING ITEMS1.Post-Closing Waiver
      Letter
              
              SSD
              Borrowers,
      Lenders, Issuer, Agent
              Received
 
 
  ANNEX
A
 
 LIEN
SEARCHES
 
 Entity
              Jurisdiction
              SearchStoneridge,
      Inc.
              Ohio
      Secretary of State
                Trumbull
      County, Ohio
              UCC
      (state/local)
                Federal/State
      Tax
                Federal/Local
      JudgmentStoneridge
      Control Devices, Inc.
              Massachusetts
      Secretary of Commonwealth
                Norfolk
      County, Massachusetts
                Canton
      City Town Clerk, Massachusetts
              UCC
      (state/local)
                Federal/State
      Tax
                Federal/Local
      JudgmentStoneridge
      Electronics, Inc.
              Texas
      Secretary of State
                El
      Paso County, Texas
              UCC
      (state/local)
                Federal/State
      Tax
                Federal/Local
      Judgment
  
 ANNEX
B
 
 UCC
TERMINATIONS
 
 Debtor
              Secured
      Party
              Location
              Filing
      InfoStoneridge
      Electronics, Inc.
              NoneStoneridge
      Control Devices, Inc.
              NoneStoneridge,
      Inc.
              None
 
 Other
terminations:  Termination of the judgment lien of the Ohio Department
of Taxation against Stoneridge filed 11/7/2008 in the amount of
$518.95.
 
 FOREIGN
RELEASES
 
 None
 
 INTELLECTUAL
PROPERTY RELEASES
 
 None
 
 OTHER
RELEASES
 
 1.  Trumbell
County Recorder – Release of Local School District Tax Lien -- 2008JL202027
Filed 11/7/08
 
 
  ANNEX
C
 
 UCC-3
FINANCING STATEMENTS
 
 DEBTOR
              SECURED PARTY
              FILING OFFICEStoneridge,
      Inc.
              National
      City Business Credit, Inc., as Agent
              Ohio
      Secretary of StateStoneridge
      Electronics, Inc.
              National
      City Business Credit, Inc., as Agent
              Texas
      Secretary of StateStoneridge
      Control Devices, Inc.
              National
      City Business Credit, Inc., as Agent
              Massachusetts
      Secretary of the Commonwealth[
 
 
 INTELLECTUAL
PROPERTY FILINGS
 
 Patent
Security Agreement, dated as of October 4, 2010, among the Loan Parties and
PNC
  Trademark
Security Agreement, dated as of October 4, 2010, among the Loan Parties and
PNC
  Copyright
Security Agreement, dated as October 4, 2010, among the Loan Parties and
PNC
  FOREIGN
FILINGS
  1.  Appropriate
filings in Brazil to evidence the pledge of PST Electronica.


EXHIBIT
B





FORM
OF


AMENDED
AND RESTATED REVOLVING NOTE





$_________________________
            Date:  October
      ___, 2010Cleveland,
      Ohio




This
Amended and Restated Revolving Note (this “Note”) is executed
and delivered under and pursuant to the terms of that certain Amended and
Restated Credit and Security Agreement, dated as of September 20, 2010 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit
Agreement”), among Stoneridge, Inc., an Ohio corporation, Stoneridge
Electronics, Inc., a Texas corporation, Stoneridge Control Devices, Inc., a
Massachusetts corporation, and each other borrower party thereto from time to
time (collectively, the “Borrowers” and each,
individually, a “Borrower”), the
Guarantors now or hereafter a party thereto, the Lenders which are signatories
thereto, and PNC Bank, National Association, a national banking association, as
Lead Arranger, Issuer, collateral agent and administrative agent (the “Agent”).  Capitalized
terms used but not otherwise defined herein shall have the meanings provided for
such terms in the Credit Agreement.




This Note
amends and restates (as well as supersedes and replaces) that certain Revolving
Note executed by the Borrowers and certain other borrower that were party to
thereto in favor of the Payee (as defined hereinafter), dated as of November 2,
2007 (the “Original
Note”).  This Note represents a renewal of, and not a novation
of, and is issued in substitution and exchange for, and not in satisfaction of,
the indebtedness outstanding under the Original Note (the “Original
Debt”).  Nothing herein contained shall be construed to deem
such Original Debt paid, or to release or terminate any lien or security
interest given to secure such Original Debt or any guaranty
thereof.  Payment in full of and the satisfaction of all obligations
under this Note shall also be deemed to be payment in full and satisfaction of
the Original Debt.





FOR VALUE
RECEIVED, each Borrower hereby jointly and severally promises to pay to the
order of _____________________________ (the “Payee”):




(i)           the
principal sum of ___________________________ and ___/100 Dollars
($_______________________________) or, if different from such amount, the unpaid
principal balance of the Payee’s Revolving Advances as may be due and owing
under the Credit Agreement, payable in accordance with the provisions of the
Credit Agreement; and




(ii)           interest
on the principal amount of this Note from time to time outstanding until such
principal amount is paid in full at the applicable interest rates described in
the Credit Agreement.




In no
event, however, shall interest payable on this Note exceed the maximum interest
rate permitted by law.  Upon the occurrence of an Event of Default,
which is continuing, interest on this Note may be payable at the Default Rate in
accordance with the provisions of the Credit Agreement.




This Note
is one of the Revolving Notes referred to in the Credit Agreement and is secured
by the Liens granted pursuant to the Credit Agreement and the Other Loan
Documents, is entitled to the benefits of the Credit Agreement and the Other
Loan Documents and is subject to all of the agreements, terms and conditions
therein contained.  This Note is subject to mandatory prepayment and
may be voluntarily prepaid, in whole or in part, on the terms and conditions set
forth in the Credit Agreement.




If any
Event of Default shall occur, then this Note may, as provided in the Credit
Agreement, become immediately due and payable, without notice.  Each
Borrower expressly waives any presentment, demand, protest, notice of protest,
or notice of any kind except as expressly provided in the Credit
Agreement.




This Note
shall be construed and enforced in accordance with the laws of the State of
Ohio.




WAIVER OF TRIAL BY
JURY.  EACH BORROWER HEREBY EXPRESSLY, KNOWINGLY AND
VOLUNTARILY WAIVES ALL BENEFIT AND ADVANTAGE OF ANY RIGHT TO A TRIAL BY JURY,
AND EACH BORROWER AGREES THAT IT WILL NOT AT ANY TIME INSIST UPON, OR PLEAD OR
IN ANY MANNER WHATSOEVER CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF A TRIAL BY
JURY IN ANY ACTION ARISING IN CONNECTION WITH THIS NOTE, THE CREDIT AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS.









WARRANT OF
ATTORNEY.  Each Borrower authorizes any attorney of record to
appear for it in any court of record in the State of Ohio, after maturity of
this Note, whether by its terms or upon default, acceleration or otherwise, to
waive the issuance and service of process, and release all errors, and to
confess judgment against it in favor of the Agent for the principal sum due
herein together with interest, charges, court costs and attorneys’
fees.  Stay of execution and all exemptions are hereby
waived.  If this Note or any Obligation is referred to an attorney for
collection, and the payment is obtained without the entry of a judgment, the
Borrowers jointly and severally shall liable to the holder of such Obligations
its attorneys’ fees.  EACH BORROWER AND ANY ENDORSER OR ANY GUARANTOR
AGREES THAT AN ATTORNEY WHO IS COUNSEL TO THE AGENT OR ANY OTHER HOLDER OF SUCH
OBLIGATION MAY ALSO ACT AS ATTORNEY OF RECORD FOR SUCH BORROWER WHEN TAKING THE
ACTIONS DESCRIBED ABOVE IN THIS PARAGRAPH.  EACH BORROWER AGREES THAT
ANY ATTORNEY TAKING SUCH ACTIONS MAY BE PAID FOR THOSE SERVICES BY THE AGENT OR
SUCH HOLDER OF SUCH OBLIGATION.  EACH BORROWER WAIVES ANY CONFLICT OF
INTEREST THAT MAY BE CREATED BECAUSE THE ATTORNEY REPRESENTING SUCH BORROWER IS
BEING PAID BY THE AGENT OR THE HOLDER OF SUCH OBLIGATION.




[INTENTIONALLY
LEFT BLANK]




IN
WITNESS WHEREOF, and intending to be legally bound, each Borrower has executed,
issued and delivered this Note in Cleveland, Ohio as of the day and year above
first written.


WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR
      RIGHT TO NOTICE AND COURT TRIAL.  IF YOU DO NOT PAY ON TIME A
      COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND
      THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY
      CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS,
      FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER
      CAUSE.


[_______________________]By:Name:Title:[_______________________]By:Name:Title:









EXHIBIT
C





FORM
OF


REVOLVING
ADVANCE REQUEST FOR LIBOR RATE LOANS










1900 E. Ninth Street, 34th Floor, Locator
      B7-YB13-34-3, Cleveland, Ohio  44114LIBOR
      NOTIFICATIONTO:
                                                                                          
                                                                                          PNC
      Bank, National Association, as AgentFROM:
                                                                                          
                                                                                          Stoneridge,
      Inc., as Borrowing AgentRE:
                                                                                          
                                                                                          LIBOR
      ACTIVITYEffective
      Date:Maturing
      amount:Maturing
      Date :Indicative
      Quoted Rates - (rate includes applicable spread)Please
      select option elected:Minimum
      $500,000 w/multiples of $100,000; Maximum of  9
      LIBOR  loans outstanding at one timeSpread:(effective
      x/xx/xx)Option
                                                                                          
                                                                                          COF
                                                                                          
                                                                                          Quoted Rate
                                                                                          
                                                                                          
                                                                                          Selected
                                                                                            Options
                                                                                          
                                                                                          New Maturity Date1
      month2
      months3
      months6
      monthsThis
      is your authorization to schedule the following activity pertaining to the
      above referenced:Maturing
      Loan
                                                                                          
                                                                                          $                                                   -Convert
      to Prime
                                                                                          
                                                                                          $                                                   -Convert
      from Prime
                                                                                          
                                                                                          $                                                   -New
      money borrowing
                                                                                          
                                                                                          $                                                   -Payment
                                                                                          
                                                                                          $                                                   -New
      Libor amount
                                                                                          
                                                                                          $                                                   -Authorized
      By:Title
                                                                                          
                                                                                          
                                                                                          
                                                                                          DatePLEASE
      RETURN TO:  Toni Coniglio Fax: (216) 222-9555 Phone: (216)
      222-9530









EXHIBIT
E





FORM
OF COMPLIANCE CERTIFICATE





THE
UNDERSIGNED HEREBY CERTIFIES THAT:




(1)          I
am the duly appointed [______________]1 of Stoneridge, Inc., an
Ohio corporation (the “Borrowing
Agent”).




(2)          I
am familiar with the terms of that certain Amended and Restated Credit and
Security Agreement, dated as of September 20, 2010 (as heretofore amended,
restated, supplemented or modified, the “Credit Agreement”),
by and among Stoneridge, Inc., an Ohio corporation (“Parent”), Stoneridge
Electronics, Inc., a Texas corporation, Stoneridge Control Devices, Inc., a
Massachusetts corporation, and the other Borrowers party thereto from time to
time (together, the “Borrowers”), and such
Persons as are from time to time parties thereto as Guarantors, various
financial institutions parties thereto from time to time (the “Lenders”), and PNC
Bank, National Association, as Issuer, collateral agent and administrative agent
(the “Agent”).  I
have made, or have caused to be made under my supervision, a review in
reasonable detail of the transactions and condition of the Borrowers and their
Subsidiaries during the accounting period covered by the attached financial
statements.




(3)          The
attached [INDICATE SELECTION]




[_]          audited
balance sheet of Parent and its consolidated Subsidiaries on a consolidated
basis as of ___________ ______, 20__, audited statements of income or operations
and shareholders’ equity and cash flow of Parent and its consolidated
Subsidiaries on a consolidated basis for the fiscal year ending _________ ___,
20__, and the attached calculation of financial covenant compliance, dated
_____________  ____, ________ for the Parent and its
Subsidiaries




[_]          unaudited
balance sheet of Parent and its consolidated Subsidiaries on a consolidated
basis as of ____________ ___, 20___, unaudited statements of income or
operations and shareholders’ equity and cash flow of Parent and its consolidated
Subsidiaries on a consolidated basis for the fiscal quarter ending _________ __,
20___ (which shall set forth, in each case in comparative form, the figures from
the projected annual operation budget delivered pursuant to Section 9.11 of the
Credit Agreement covering the current  fiscal year, and the attached
calculation of financial covenant compliance, dated
_____________  ____, ________ for the Parent and its
Subsidiaries




are, in
each case, complete and correct in all material respects and fairly present the
matters stated therein in all material respects and have been prepared on a
basis consistent with such financial statements/projections prepared for prior
periods and in accordance with GAAP.




(4)          There
has been no Change of Control.




(5)          Based
on an examination sufficient to permit me to make an informed
statement:




[  ]
            no
      Default or Event of Default existed at the end of the accounting period
      covered by the attached financial statements or exists as of the date of
      this Compliance Certificate;




[  ]
            one
      or more Defaults or Events of Default exists.  Attached to this
      Compliance Certificate is an addendum specifying each such Default or
      Event of Default, its nature, the best estimation after due inquiry of the
      Loan Parties of when it occurred, whether it is continuing and the steps
      being taken by the Loan Parties or their respective Subsidiaries with
      respect to such event.




(6)
            As
      of the date of this Compliance
Certificate:





1 Insert
title of appropriate authorized officer per terms of the Credit
Agreement.









[  ]
            each
      Loan Party and each Subsidiary thereof is in compliance with all federal,
      state and local laws relating to environmental protection and control and
      occupational safety and health, except to the extent noncompliance has not
      had or could not reasonably be expected to have a Material Adverse Effect
      or has not resulted in or could not reasonably be expected to result in
      aggregate liabilities in excess of Five Million Dollars
      ($5,000,000);




[  ]
            a
      Loan Party or any Subsidiary thereof is not in compliance with all
      federal, state and local laws relating to environmental protection and
      control and occupational safety and health, and such noncompliance has had
      or could reasonably be expected to have a Material Adverse Effect or has
      resulted in or could reasonably be expected to result in aggregate
      liabilities in excess of Five Million Dollars
      ($5,000,000).  Attached to this Compliance Certificate is an
      addendum specifying all areas of non-compliance and the proposed action
      such Loan Party or such Subsidiary will implement in order to achieve such
      compliance.




(7)         Set
forth on Attachment
I hereto are calculations of the financial covenants required pursuant to
Sections 6.42, 7.6
and 7.11 of the Credit Agreement.




Capitalized
terms not otherwise defined herein shall have the meanings provided in the
Credit Agreement.




By:Name:Title:





Date:




2
Applicable if Undrawn Availability is at any time less than Twenty Million
Dollars ($20,000,000).







Attachment
I




Covenant
Compliance




6.4         Fixed Charge Coverage
Ratio.




Calculation:
                                
                                Actual
                                
                                CovenantCombined
      EBITDA for the applicable fiscal period ending ______,
    20__**
                                
                                
                                
                                —Less:Capital
      Expenditures not specifically financed by Indebtedness (other than
      Revolving  Advances):
                                
                                
                                
                                —Cash
      payments of taxes :
                                
                                
                                
                                —Cash
      dividends distributions (other than Income Tax
      Distributions  permitted by Section 7.7 of the Credit
      Agreement)
                                
                                
                                
                                —Subtotal
      (a)
                                
                                
                                
                                —Consolidated
      Fixed Charges:Consolidated
      Interest Expense paid in cash
                                
                                
                                
                                —Scheduled
      principal payments on the Advances and other Indebtedness
                                
                                
                                
                                —Subtotal
      (b)
                                
                                
                                
                                —Fixed
      Charge Coverage Ratio [(a) divided by (b)]
                                
                                
                                
                                Not
      less than 1.10 to
1.00





**Calculated
as of the last day of each fiscal quarter for the period equal to the four
consecutive fiscal quarters then ending





7.6             Capital
Expenditures.




Calculation:
                
                Actual
                
                CovenantCalendar
      year ending _________, 20___
                
                $___________
                
                Not
      greater than
                  $37,000,000









7.11             Leases.




Calculation:
                
                Aggregate Rental
                  Payments
                
                CovenantCalendar
      year ending _________, 20___
                
                $___________
                
                Not
      greater than
                  $10,000,000







EXHIBIT
F





FORM
OF


FINANCIAL
CONDITION CERTIFICATE




The
undersigned, ___________________, as the ___________________ of Stoneridge,
Inc., an Ohio corporation (the “Borrowing Agent”),
hereby certifies that:




I.            
The Loan Parties and each of their Subsidiaries (as defined in the Credit
Agreement referred to below) are duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization.




II.          
I am familiar, in all material respects, with all of the business and financial
affairs of the Loan Parties and each of their Subsidiaries, including, without
limiting the generality of the foregoing, all of the matters hereinafter
described.




III.        
 This Financial Condition Certificate is made pursuant to the Amended and
Restated Credit and Security Agreement, dated as of September 20, 2010 (the
“Credit
Agreement”), among the Borrowers, the Guarantors, various financial
institutions parties thereto from time to time (the “Lenders”), and PNC
Bank, National Association, a national banking association as successor to both
National City Bank, as lead arranger and the issuer, and National City Business
Credit, Inc., as administrative agent and collateral agent (the “Agent”), and
delivered to the Lenders, and the Agent for the purpose of inducing the Agent
and the Lenders, now and from time to time hereafter, to make Advances to and
issue Letters of Credit on behalf of the Loan Parties.  All
capitalized terms used and not otherwise defined herein shall have the meanings
set forth in the Credit Agreement.




IV.      
   I understand that the Lenders and the Agent are relying on
this Financial Condition Certificate.




V.    
      I have reviewed the following and am
familiar with the process pursuant by which it was generated:




FIRST,the four-quarter
      cash flow projections of Stoneridge, Inc. (the “Parent”) and
      its consolidated Subsidiaries for the fiscal year ending on December 31,
      2010 and for the two fiscal years ending on December 31, 2012, and their
      projected balance sheets as of September 30, 2010, prepared by or under
      the supervision of the chief financial officer of Parent attached hereto
      as Exhibit
      A (the “Projections”)




The
Projections fairly present the financial condition of the Loan Parties (taking
into account the consummation of the transactions contemplated by the Credit
Agreement and the Other Loan Documents), and are based on underlying assumptions
and estimates which I in good faith believe provide a reasonable basis for the
projections contained therein and reflect my reasonable judgment based on
present circumstances of the most likely set of conditions and course of action
for the projected period. The Projections demonstrate that each Loan Party will
have sufficient cash flow to enable it to pay its debts as they
mature.




VI.       
 After giving effect to the transactions contemplated by the Credit
Agreement, each Loan Party and each Material Subsidiary thereof will be solvent,
will be able to pay its respective debts as they mature, will have capital
sufficient to carry on its respective business and all businesses in which it is
about to engage, and, as of the Closing Date, the fair present saleable value of
its respective assets, calculated on a going concern basis, is in excess of the
amount of its respective liabilities.




VII.       
The Credit Agreement was and the Other Loan Documents were and will be executed
and delivered by the Loan Parties to the Agent and the Lenders in good faith and
in exchange for reasonably equivalent value and fair consideration.







VIII.    
 Since December 31, 2009, no event, condition or state of facts has
occurred which could reasonably be expected to have a Material Adverse
Effect.  Further, no representations made or information supplied to
the Agent by the Loan Parties has proven to be inaccurate or misleading in any
material respect.




[Signature
Follows on Next Page]








IN WITNESS WHEREOF, I have
executed this Financial Condition Certificate as of the _________ day of
October, 2010.





George
      E. Strickler, Executive Vice President, Chief FinancialOfficer
      and Treasurer









EXHIBIT
A





PROJECTIONS





[ATTACHED]









EXHIBIT
G-1


TO
CREDIT AGREEMENT





FORM
OF


LANDLORD
WAIVER





[PRINT ON
LANDLORD LETTERHEAD]





To:         PNC
Bank, National Association


1900 East Ninth Street


34th
Floor


Locator B7-YB13-34-3


Cleveland,
Ohio, 44114


Attention:  ____________________





_____________________, a[n]
_________________ [corporation/limited liability company] (the “Tenant”), is the
tenant of the premises located on all or a portion of the property owned by
___________________, a[n] ________________ [corporation/limited liability
company] (the “Landlord”) at
___________________________ (the “Premises”), which
Premises are more fully described in the [Lease Agreement], dated ____________
___, 20__ between [Landlord, as landlord, and the Tenant, as tenant] (as the
same may hereafter be amended, supplemented, amended and restated, renewed or
otherwise modified from time to time, the “Lease”) attached
hereto as Exhibit A and
made a part hereof.  The Landlord is the sole owner of the Premises
and the Financing Parties (as hereinafter defined) have certain of their assets
located on the Premises.





Pursuant to a certain financing and
security agreement (the “Credit Agreement”)
and various other documents executed in connection therewith (collectively, the
“Loan
Documents”), the Tenant and various affiliates of the Tenant (together,
the “Financing
Parties”) have granted a security interest to PNC Bank, National
Association, as administrative and collateral agent (the “Agent”), for the
benefit of various secured parties (the “Secured Parties”),
in, among other things, all of the Financing Parties’ personal property located
on the Premises (the “Collateral”).





To induce the Secured Parties to enter
into such financing arrangements, and for other good and valuable consideration,
the undersigned hereby agrees that:





(i)           it
will not assert against any of the Collateral any statutory or possessory liens,
including, without limitation, rights of levy or distraint for rent, all of
which it hereby waives;





(ii)          none
of the Collateral shall be deemed to be part of the realty constituting the
Premises, whether or not attached to the real estate demised by the
Lease;





(iii)         it
or its beneficiaries will notify the Agent if the Tenant defaults on its
obligations to it under the Lease and allow the Agent fifteen (15) business days
from its sending of such notice in which to cure or cause the Tenant to cure any
such default;





(iv)         if,
for any reason whatsoever, the undersigned either deems itself entitled to
redeem or to take possession of the Premises during the term of the Lease, the
undersigned will notify the Agent fifteen (15) business days before taking such
action;





(v)          if
a Financing Party defaults on its obligations to the Secured Parties and, as a
result, the Agent undertakes to enforce its security interest in the Collateral,
the undersigned will permit the Agent (or its agents):  (a) to remain
on the Premises for up to three hundred sixty (360) days (in the Agent’s sole
discretion), provided that the Agent pays the undersigned rent for such period
that the Agent remains on the Premises, or (b) at the Agent’s option, to remove
the Collateral from the Premises within a reasonable time, not to exceed three
hundred sixty (360) days, provided that the Agent pays the undersigned rent for
such period that the Collateral remains on the Premises.  The
undersigned will not hinder the Agent’s actions in enforcing its liens on the
Collateral, provided that the Agent repairs, or reimburses the undersigned for
the cost of repairs to the Premises occasioned by such removal.  The
rent to be paid by the Agent under subparagraph (v)(a) and (b) above shall be at
a rate mutually agreeable to the Agent and the undersigned (but, if such parties
cannot agree, the rent shall be at the same rate as otherwise would have been
paid under the Lease for such period); and











(vi)         other
than the Lease, the undersigned has not granted or conveyed any interest in the
Premises to any person or entity.





Any notice(s) required or desired to be
given hereunder shall be directed by certified mail to the party to be notified
at the address stated herein.





The agreements contained herein shall
continue in force until all of the Financing Parties’ obligations and
liabilities to the Secured Parties under the Loan Documents are paid and
satisfied in full and all financing arrangements between the Secured Parties and
the Financing Parties have been terminated, or until the Lease has been
terminated.





The undersigned will notify all
successor owners, transferees, purchasers and mortgagees of the Premises of the
existence of this waiver.  The agreements contained herein may not be
modified or terminated orally, shall run to the benefit of the Secured Parties
their successors and assigns, and shall be binding upon the successors, assigns
and personal representatives of the undersigned, upon any successor owner or
transferee of the Premises, and upon any purchasers, including any mortgagee,
from the undersigned.





[Signatures
Follow on Next Page]









Executed and delivered this ________
day of October, 2010





Landlord:


Witness:                                                                 
___________________________








_________________________________              By______________________________


Name:                                                                                     Its:______________________________


Address:__________________________


_________________________________


_________________________________




STATE OF
_________        )


)  SS


COUNTY OF
________      )








On this _____ day of _______________,
20___, before me personally appeared _____________________________, known to me
to be the _______________ of the above named ______________________, and that he
or she, as such ____________________, being authorized so to do, executed the
foregoing instrument for the purposes therein contained, by signing the name of
such company by himself or herself as such officer.





IN WITNESS WHEREOF, I have hereunto set
my hand and official seal.





[SEAL]Notary
      PublicMy
      commission expires:





This
instrument prepared by:





Squire,
Sanders & Dempsey L.L.P.


4900 Key
Tower


127
Public Square


Cleveland,
Ohio 44114










EXHIBIT A





LEASE





[Attached]










Exhibit
G-2





FORM
OF


PROCESSOR/BAILEE
WAIVER





[Letterhead
of the applicable Borrower]





October
____, 2010





[Processor/Bailee]


_____________________


_____________________


_____________________


Attention:_____________





Re:
            Security
      Interest of PNC Bank, National Association, as Agent in Assets of
      [applicable Borrower]





Ladies
and Gentlemen:





_____________, a _________ ________
(the “Company”), has from time to time delivered and will continue to deliver or
cause to be delivered certain items of merchandise and inventory of the Company
(collectively, the “Company Goods”) for final processing and/or storage in your
facility located at the address specified above (the “Facility”).





Pursuant to a certain financing and
security agreement (the “Credit Agreement”), the Company has granted a security
interest to PNC Bank, National Association, as administrative and collateral
agent (the “Agent”), for the benefit of various secured parties (the “Secured
Parties”), in, among other things, the Company Goods and the proceeds
thereof.





In furtherance of the
foregoing,





1.           You
are hereby notified that, pursuant to the terms of the Credit Agreement, the
Company will grant to the Agent a lien on and security interest in the Company
Goods and the proceeds thereof (the Company Goods and such proceeds being
collectively referred to as the “Collateral”), and you hereby acknowledge and
agree that, as of the date of this letter, you hold the Collateral for the
benefit of the Agent on behalf of the Secured Parties.





2.           You
are hereby authorized to grant to the Agent the same access to the Company Goods
which is available to the Company and you further agree to allow the Agent
access to enforce any rights and remedies it may have under the Credit Agreement
or law against the Collateral.





3.           Your
authority to release the Company Goods to the Company will continue subject to
the condition that, upon the written direction of the Agent, you shall refuse to
release the Company Goods or any portion of the Company Goods to the Company,
the Company’s agent or any other person, and you shall in all circumstances
release the Collateral only to the Agent or such other party designated by the
Agent in such written direction.





4.           The
Company agrees that you will have no liability to the Company if you comply with
the Agent’s written direction as described above.  However, the
Company agrees that it will continue to pay all fees and other expenses related
to the storage or processing of the Company Goods and will reimburse you for all
reasonable costs and expenses incurred as a direct result of your compliance
with the terms and provisions of this letter agreement.





5.           You
acknowledge and agree that, other than your possessing the Company Goods for the
benefit of the Agent for the Secured Parties, you possess the Company Goods for
the sole and express purpose of processing and\or storing the Company Goods
pursuant to the Company’s specifications and that title in the Company Goods
will at all times remain with the Company.  You agree not to assert
against any of the Collateral any statutory or possessory liens available to you
all of which you hereby waive and you agree not to assert any claim or set off
against the Collateral for any claims you may have against the Company or
amounts owing to you by the Company.










6.           You
agree that the authorizations hereunder, rights of the Agent hereunder and the
agreements of the parties hereunder shall be effective notwithstanding any
termination of your arrangements with the Company or any default by the Company
of its obligations to you under such arrangements.





7.           You
agree that the Agent may exercise in respect of the Collateral, in addition to
other rights and remedies provided for in the Credit Agreement or otherwise
available to it, all the rights and remedies of a secured party on default under
the Uniform Commercial Code and also may (i) require the Company to assemble, at
its expense, all or part of the Collateral as directed by the Agent and make it
available to the Agent at the Facility or at another place designated by the
Agent, and (ii) without notice to you, sell the Collateral or any part thereof
in one or more parcels at public or private sale, at any of the Agent’s offices
or elsewhere, to third parties or to itself.





8.           This
letter agreement is governed by and shall be construed in accordance with the
laws of the State of Ohio.





[Signatures
Follow On Next Page]





Very
      truly yours,[COMPANY]By:Title:





Acknowledged
and agreed to


as of the
date first above


written.





[PROCESSOR\BAILEE]





By:Title:





PNC
      BANK, NATIONAL ASSOCIATION,as
      AgentBy:Title:










EXHIBIT
G-3





FORM
OF


MORTGAGEE
WAIVER





[PRINT ON
MORTGAGEE LETTERHEAD]





To:         PNC
Bank, National Association


1900 East Ninth Street


34th
Floor


Locator B7-YB13-34-3


Cleveland,
Ohio, 44114


Attention:  _____________________





_________________________________, a
_____________ [corporation/limited liability company] (the “Mortgagor”), is the
mortgagor of the premises known as ______________________________________ (the
“Premises”),
more fully described in the_________[describe
Mortgage]_____________, dated _______________________, and recorded at
________________ of the _____________________ County, ________________ real
estate records (the “Mortgage”).  The
Financing Parties (as hereinafter defined) have certain assets located on the
Premises.





Pursuant to a certain financing and
security agreement (the “Credit Agreement”)
and various other documents executed in connection therewith (collectively, the
“Loan
Documents”), the Mortgagor and various affiliates of the Mortgagor
(together, the “Financing Parties”)
have granted a security interest to PNC Bank, National Association,a national banking
association., as administrative agent and collateral agent (the “Agent”), for
the benefit of various secured parties (the “Secured Parties”), in, among other
things, all of the Financing Parties’ personal property located on the Premises
(the “Collateral”).





To induce the Secured Parties to enter
into said financing arrangements, and for other good and valuable consideration,
the undersigned hereby agrees that:





(i)  it will not assert
against any of the Collateral any liens, including, without limitation,
statutory or possessory liens, rights of levy or distraint for rent, all of
which it hereby waives, or exercise any rights or remedies with respect to any
security interests it may have in the Collateral, which security interests, if
any, are hereby subordinated to the Agent’s security interests in the
Collateral;





(ii)  none of the Collateral
shall be deemed to be part of the realty constituting the Premises, whether or
not attached to the real estate;





(iii)  it
will notify the Agent if the Mortgagor defaults on its obligations with respect
to the Mortgage and allow the Agent thirty (30) business days from the
undersigned’s sending of notice in which to cure or cause the Mortgagor to cure
any such default;





(iv) if, for any reason whatsoever,
the undersigned either deems itself entitled to redeem or to take possession of
the Premises during the term of the Mortgage, the undersigned will notify the
Agent thirty (30) business days before taking such action; and





(v) if any Financing Party defaults on
its obligations to the Secured Parties and, as a result, the Agent undertakes to
enforce its security interest in the Collateral, the undersigned will permit the
Agent (or its agents):  (a) to remain on the Premises for three
hundred and sixty (360) days (in the Agent’s sole discretion), provided the
Agent pays the obligations owing from the Mortgagor with respect to the Mortgage
(including, without limitation, real estate taxes and insurance) payable under
the Mortgage for such period that the Agent remains on the Premises, and (b) at
the Agent’s option, to remove the Collateral from the Premises within a
reasonable time, not to exceed three hundred and sixty (360) days, provided the
Agent pays the obligations owing from the Mortgagor with respect to the Mortgage
(including, without limitation, real estate taxes and insurance) payable under
the Mortgage for the period the Collateral remains on the
Premises.  The undersigned will not hinder the Agent’s actions in
enforcing its liens on the Collateral, provided that the Agent repairs, or
reimburses the undersigned for the cost of repairs to the Premises occasioned by
such removal.  The obligations to be paid by the Agent under
subparagraphs (v)(a) and (b) above shall be at a rate mutually agreeable to the
Agent and the undersigned (but, if such parties cannot agree, the obligations
shall be at the same rate as otherwise would have been paid under the Mortgage
for such period).









Any notice(s) required or desired to be
given hereunder shall be directed by certified mail to the party to be notified
at the address stated herein.





The agreements contained herein shall
continue in force until all of the Financing Parties’ obligations and
liabilities to the Secured Parties under the Loan Documents are paid and
satisfied in full or until the Mortgage has been terminated.





The undersigned will notify all of its
successor owners, transferees, purchasers and mortgagees of the Premises of the
existence of this waiver.  The agreements contained herein may not be
modified or terminated orally, shall run to the benefit of the Secured Parties
and their successors and assigns, and shall be binding upon the successors,
assigns and personal representatives of the undersigned, upon any successor
owner or transferee of the Premises, and upon any purchasers, including any
mortgagee, from the undersigned.





[Signatures
Follow on Next Page]










Executed and delivered this _____ day
of October, 2010, at _________________________________.





Witness:                                                                  [MORTGAGEE]




_________________________________              By______________________________


Name:                                                                                     Its:______________________________


Address:__________________________


_________________________________


_________________________________





STATE OF
_________       )


)  SS


COUNTY OF
________      )





On this _____ day of _______________,
20__, before me personally appeared _____________________________, known to me
to be the _______________ of the above named ______________________, and that he
or she, as such ____________________, being authorized so to do, executed the
foregoing instrument for the purposes therein contained, by signing the name of
such company by himself or herself as such officer.





IN WITNESS WHEREOF, I have hereunto set
my hand and official seal.





[SEAL]Notary
      PublicMy
      commission expires:





This
instrument prepared by:





Squire,
Sanders & Dempsey L.L.P.


4900 Key
Tower


127
Public Square


Cleveland,
Ohio 44114










EXHIBIT
G-4





FORM
OF


CONSIGNEE
WAIVER





[Letterhead
of Company]





_____________,
2010





[Consignee]


_____________________


_____________________


_____________________


Attention:_____________





Re:
            Security
      Interest of PNC Bank, National Association, as Agent in Assets of
      [applicable Borrower]





Ladies
and Gentlemen:





_____________________________, a[n]
[______________] [corporation/limited liability company] (the “Company”), has from
time to time delivered and will continue to deliver or cause to be delivered
certain items of merchandise and inventory of the Company (collectively, the
“Company
Goods”) to you on consignment basis to your facility located at the
address specified above (the “Facility”).





Pursuant to a certain financing and
security agreement (the “Credit Agreement”) and various other documents executed
in connection therewith (collectively, the “Loan Documents”), the Company has
granted a security interest to PNC Bank, National Association, as administrative
agent and collateral agent (the “Agent”), for the benefit of various secured
parties (the “Secured Parties”), in, among other things, the Company Goods and
the proceeds thereof.





In furtherance of the
foregoing,





1.           You
are hereby notified that, pursuant to the terms of the Loan Documents, the
Company will grant to the Agent a lien on and security interest in the Company
Goods and the proceeds thereof (the Company Goods and such proceeds being
collectively referred to as the “Collateral”), and you
hereby acknowledge and agree that you hold the Collateral as a consignee and
that, as of __________ ___, 2010, you hold the Collateral for the benefit of the
Agent on behalf of the Secured Parties.





2.           You
are hereby authorized to grant to the Agent the same access to the Company Goods
which is available to the Company and you further agree to allow the Agent
access to enforce any rights and remedies it may have under the Loan Documents
or law against the Collateral; provided, however the Agent
shall indemnify you against any damage caused as a result of the Agent’s
negligence or willful misconduct.





3.           Your
authority to sell or use the Company Goods following notice of a default with
respect to the Loan Documents will continue subject to the conditions that (i)
all payments owing by you to the Company for the Collateral shall be remitted
directly to the Agent and (ii) to the extent, if any, that you have the right to
elect not to buy any of the Company Goods, or to return the Company Goods to the
Company, upon the written direction of the Agent, you shall refuse to release
the Company Goods or any portion of the Company Goods to the Company, the
Company’s agent or any other person, and you shall in all such circumstances
release the Collateral only to the Agent or such other party designated by the
Agent in such written direction.





4.           The
Company agrees that you will have no liability to the Company if you comply with
the Agent’s written direction as described above.










5.           You
acknowledge and agree that, other than your possessing the Collateral for the
benefit of the Agent for the Secured Parties, you possess the Company Goods for
the sole and express purpose of selling such Company Goods on consignment
pursuant to the Company’s specifications and that until such Company Goods are
sold or used by you title in the Company Goods will at all times remain with the
Company.  You agree not to assert against any of the Collateral any
statutory or possessory liens available to you, all of which you hereby waive,
and you agree not to assert any claim or set off against the Collateral for any
claims you may have against the Company or amounts owing to you by the Company
and that until such Company Goods are sold or used by you the Agent’s security
interest in the Company Goods is and shall be senior to all other liens, claims
and interests.  For the avoidance of doubt, the parties hereto agree
that nothing set forth in this letter limits your rights to invoice the Company
for your charges related to the Company Goods and to collect such amounts from
the Company when due.





6.           You
acknowledge and agree that you shall keep the Company Goods segregated from your
inventory and labeled as the property of the Company until sold or used by
you.





7.           You
acknowledge and agree to the filing of a Uniform Commercial Code financing
statement in favor of the Company and covering the Collateral, which financing
statement may be assigned by the Company to the Agent.





8.           You
agree that the authorizations hereunder, rights of the Agent hereunder and the
agreements of the parties hereunder shall be effective notwithstanding any
termination of your arrangements with the Company or any default by the Company
of its obligations to you under such arrangements.





9.           This
letter agreement is governed by and shall be construed in accordance with the
laws of the State of Ohio.





Very
      truly yours,[COMPANY]By:Title:





Acknowledged
and agreed to


as of the
date first above


written.





[Consignee]By:Title:





PNC
      BANK, NATIONAL ASSOCIATION,as
      AgentBy:Title:







EXHIBIT
I





FORM
OF


ASSIGNMENT
AND ASSUMPTION





This Assignment and Assumption (the
“Assignment and Assumption”) is dated as of the Effective Date set forth below
and is entered into by and between [Insert name of Assignor] (the “Assignor”)
and [Insert name of Assignee] (the “Assignee”).  Capitalized terms
used but not defined herein shall have the meanings given to them in the Amended
and Restated Credit and Security Agreement identified below (the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee.  The Standard Terms and Conditions set forth in Annex 1
attached hereto are hereby agreed to and incorporated herein by reference and
made a part of this Assignment and Assumption as if set forth herein in
full.





For an agreed consideration, the
Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee
hereby irrevocably purchases and assumes from the Assignor, subject to and in
accordance with the Standard Terms and Conditions set forth in Annex I attached
hereto and the Credit Agreement, as of the Effective Date as contemplated below:
(i) all of the Assignor’s rights and obligations in its capacity as a Lender
under the Credit Agreement and any other documents or instruments delivered
pursuant thereto to the extent related to the amount and percentage interest
identified below of all of such outstanding rights and obligations of the
Assignor under the respective facilities identified below (including without
limitation any letters of credit, and guarantees included in such facilities)
and (ii) to the extent permitted to be assigned under applicable law, all
claims, suits, causes of action and any other right of the Assignor (in its
capacity as a Lender) against any Person, whether known or unknown, arising
under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby
or in any way based on or related to any of the foregoing, including, but not
limited to, contract claims, tort claims, malpractice claims, statutory claims
and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold
and assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the “Assigned Interest”).  Such sale and assignment
is without recourse to the Assignor and, except as expressly provided in this
Assignment and Assumption, without representation or warranty by the
Assignor.





1.
              
              Assignor:
              
              ______________________________2.
              
              Assignee:
              
              ______________________________[if
      applicable —and is an Affiliate/Approved Fund of [identify
      Lender]]3.
              
              Borrowing
      Agent:
              
              Stoneridge,
      Inc.4.
              
              Credit
      Agreement:
              
              Amended
      and Restated Credit and Security Agreement, dated as of September 20, 2010
      (as amended, supplemented or otherwise modified from time to time, the
      “Credit Agreement”), among Stoneridge, Inc., Stoneridge Electronics, Inc.,
      Stoneridge Control Devices, Inc. (the “Borrowers”), the lenders which are
      signatories thereto (the “Lenders”), and PNC Bank, National Association,
      as Issuer, collateral agent and administrative agent (the
      “Agent”).5.
              
              Assigned
      Interest:





Facility Assigned
                      
                      Aggregate Amount of
                        Commitment/Loans for
                        Lender
                      
                      
                      Amount of
                        Commitment/Loans
                        Assigned
                      
                      
                      Percentage Assigned of
                        Commitment/Loans [9
                        decimals]$
                      
                      
                      
                      $
                      
                      
                      
                      
                      
                      %$
                      
                      
                      
                      $
                      
                      
                      
                      
                      
                      %$
                      
                      
                      
                      $
                      
                      
                      
                      
                      
                      %




Effective
Date:   _____________ ___, 20___









The terms
set forth in this Assignment and Assumption are hereby agreed to:





ASSIGNOR[NAME
      OF ASSIGNOR]By:Its:ASSIGNEE[NAME
      OF ASSIGNEE]By:Its:





Accepted
[and consented to]: [AGENT CONSENT REQUIRED UNLESS ASSIGNMENT SPECIFICALLY
EXEMPTED BY SECTION 15.5 OF THE CREDIT AGREEMENT]





PNC
      BANK, NATIONAL ASSOCIATIONBy:Its:





Consented
and agreed to:  [ONLY TO BE USED IF REQUIRED PURSUANT TO SECTION 15.5
OF THE CREDIT AGREEMENT]





[Stoneridge,
      Inc.,as
      Borrowing AgentBy:Its:
                            
                            ]









ANNEX
1





STANDARD
TERMS AND CONDITIONS FOR


ASSIGNMENT
AND ASSUMPTION





1.  Representations and
Warranties.





1.1 Assignor. The
Assignor (a) represents and warrants that (i) it is the legal and beneficial
owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of
any lien, encumbrance or other adverse claim and (iii) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated
hereby; and (b) assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the Credit Agreement
or any Other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
Other Loan Document or any collateral thereunder, (iii) the financial condition
of each Loan Party, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of the Credit Agreement or any Other Loan Document or (iv)
the performance or observance each Loan Party, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under the
Credit Agreement or any Other Loan Document.





1.2.  Assignee.  The
Assignee (a) represents and warrants that (i) it has full power and authority,
and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become
a Lender under the Credit Agreement, (ii) it meets all requirements of an
Eligible Assignee under the Credit Agreement (subject to receipt of such
consents as may be required under the Credit Agreement), (iii) from and after
the Effective Date, it shall be bound by the provisions of the Credit Agreement
as a Lender thereunder and, to the extent of the Assigned Interest, shall have
the obligations of a Lender thereunder, (iv) it is sophisticated with respect to
decisions to acquire assets of the type represented by the Assigned Interest and
either it, or the person exercising discretion in making its decision to
acquired the Assigned Interest, is experienced in acquiring assets of such type,
(v) it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to Sections 9.7 and 9.8
thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on the Agent, and (vi) if it is a Lender that is not a United States
person (as defined in Section 7701(a)(30) of the Code), attached to the
Assignment and Assumption is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Agent, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement or any Other Loan
Document, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement and the Other Loan
Documents are required to be performed by it as a Lender.





2. Payments. From and
after the Effective Date, the Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignor for amounts which have accrued to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after
the Effective Date.





3. General Provisions.
This Assignment and Assumption shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and assigns. This
Assignment and Assumption may be executed in any number of counterparts, which
together shall constitute one instrument. Delivery of an executed counterpart of
a signature page of this Assignment and Assumption by telecopy shall be
effective as delivery of a manually executed counterpart of this Assignment and
Assumption. This Assignment and Assumption shall be governed by, and construed
in accordance with, the law of the State of Ohio.











EXHIBIT
J




FORM
OF


BORROWER JOINDER
AGREEMENT




This
Borrower Joinder Agreement (this “Borrower Joinder
Agreement”) is made as of the ___ day of _________________, 20__ by and
among ___________________, a[n] _______________ [corporation][limited liability
company] (the “New
Borrower”), Stoneridge, Inc., an Ohio corporation, Stoneridge
Electronics, Inc., a Texas corporation, Stoneridge Control Devices, Inc., a
Massachusetts corporation and each other borrower from time to time party to the
Credit Agreement (as hereinafter defined) (collectively, the “Existing Borrowers”),
and each guarantor from time to time party to the Credit Agreement
(collectively, the “Guarantors” and,
together with the Existing Borrowers, the “Existing Loan
Parties”), the financial institutions which are now or which hereafter
become a party to the Credit Agreement (collectively, the “Lenders” and
individually, a “Lender”), and PNC
Bank, National Association, a national banking association, as Issuer,
collateral agent and administrative agent (the “Agent” and together
with the Lenders, the “Credit
Parties”).




WHEREAS, the Existing Loan
Parties and the Credit Parties executed that certain Amended and Restated Credit
and Security Agreement, dated as of September 20, 2010 (as amended or modified
to the date hereof, the “Credit Agreement”),
pursuant to which the Credit Parties have agreed to make available to the
Existing Borrowers certain credit facilities, including letters of credit
(collectively, the “Loans”);




WHEREAS, the New Borrower has
been created or acquired by the Parent or one of the other Existing Loan Parties
and wishes to request and receive Loans under the Credit Agreement as set forth
therein and, as a result of the foregoing and pursuant to the definition of
“Borrowers” in the Credit Agreement, New Borrower is required to become a
Borrower and a joint and several co-obligor with the Borrowers under the Credit
Agreement and the Other Loan Documents.  As used herein, terms defined
in the Credit Agreement are used herein with the same meaning;




WHEREAS, the New Borrower, the
Existing Borrowers and the Agent have agreed to execute this Borrower Joinder
Agreement and to cause the New Borrower to become a Borrower under the Credit
Agreement.




NOW, THEREFORE, for and in
consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:




1.           Pursuant
to Section 1.7 of the Credit Agreement, the New Borrower is executing this
Borrower Joinder Agreement in order to become a Borrower under the Credit
Agreement.  By executing this Borrower Joinder Agreement, the New
Borrower agrees that it shall (i) become a party to the Credit Agreement as if
an original signatory thereto, (ii) be bound by all of the provisions of the
Credit Agreement as if an original signatory thereto, and (iii) be considered a
Borrower for all purposes of the Credit Agreement and have the rights and
obligations of a Borrower thereunder.




2.           The
New Borrower’s contact information for notice for purposes of Section 15.8 of
the Credit Agreement is as described below its signature hereto.




3.           The
New Borrower (a) confirms that it has received a copy of the Credit Agreement,
together with copies of all other documents and information as it has deemed
appropriate to make its own decision to enter into this Borrower Joinder
Agreement, (b) agrees that it will perform in accordance with all of the
obligations and comply with all of the covenants that by the terms of Credit
Agreement and the Other Loan Documents are required of it as a Borrower
thereunder, (c) confirms that the representations and warranties contained in
the Credit Agreement and in any Other Loan Document applicable to a Borrower are
true and correct as of the date hereof with respect to the New Borrower and (d)
authorizes Stoneridge, Inc., as Borrowing Agent, to act in such capacity on its
behalf under the Credit Agreement.




4.           In
order to confirm the New Borrower’s grant of a security interest to the Agent,
for itself and the ratable benefit of each Lender and the Issuer, pursuant to
Section 4.1 of the Credit Agreement, to secure the payment and performance of
the Obligations under the Credit Agreement, the New Borrower hereby grants and
pledges to the Agent, for itself and the ratable benefit of each Lender and the
Issuer, a continuing security interest in and a pledge of all of the New
Borrower’s Collateral, whether now owned or existing or hereafter acquired or
arising and wherever located.










5.           Attached
hereto as Exhibit
A are supplemental Schedules to the Credit Agreement to reflect the
addition of the New Borrower.  As of the effective date of this
Borrower Joinder Agreement, such Schedules shall become a part of the Schedules
to the Credit Agreement for all purposes hereof.




6.           Attached
hereto as Exhibit
B are updates of certain enumerated Schedules to the Credit Agreement to
reflect any change in the disclosures made therein, each acceptable to the Agent
in its sole discretion.  As of the effective date of this Borrower
Joinder Agreement, such Schedules shall amend the corresponding Schedule to the
Credit Agreement for all purposes hereof.




7.           As
a condition precedent to the effectiveness of this Borrower Joinder Agreement,
the Loan Parties shall deliver to the Agent new Notes reflecting all
Borrowers.




8.           This
Borrower Joinder Agreement shall inure to the benefit of each party hereto and
each such party’s respective successors and assigns; provided that any
assignment by any Borrower (including the New Borrower) of its rights hereunder
shall be void.




9.           Each
of the Existing Loan Parties fully consents to the New Borrower becoming a
Borrower.




10.         Each
Borrower, including the New Borrower, confirms that it is jointly and severally
liable for all Obligations under the Credit Agreement to the extent provided in
Section 14.2 of the Credit Agreement.




11.         This
Borrower Joinder Agreement is an Other Loan Document.




12.         This
Borrower Joinder Agreement shall be governed by, and construed in accordance
with, the laws of the State of Ohio (without giving effect to the conflict of
laws principles thereof).




13.         This
Borrower Joinder Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.




[Signatures
Follow]











IN WITNESS WHEREOF, each of the
undersigned has caused this Borrower Joinder Agreement to be executed by its
duly authorized officer(s) thereunto duly authorized as of the day and year
first above written.


NEW
      BORROWER:[________________________]Name:Title:By:[______________][______________][______________]Attention:  [______________]Telephone:
      [______________]Telecopier:
      [______________]Email:  [______________]AGENT:PNC
      BANK, NATIONAL ASSOCIATIONName:Title:By:EXISTING
      LOAN PARTIES:[________________________]Name:Title:By:







EXHIBIT
A





SUPPLEMENTAL
SCHEDULES





[To be
provided by Loan Parties.]










EXHIBIT
B





UPDATES
TO SCHEDULES





[To be
provided by Loan Parties.]











EXHIBIT
K




FORM
OF


GUARANTOR JOINDER
AGREEMENT




This
Guarantor Joinder Agreement (this “Guarantor Joinder
Agreement”) is made as of the ___ day of _________________, 20__ by and
among ___________________, a[n] _______________ [corporation][limited liability
company] (the “New
Guarantor”), Stoneridge, Inc., an Ohio corporation, Stoneridge
Electronics, Inc., a Texas corporation, Stoneridge Control Devices, Inc., a
Massachusetts corporation, and each other borrower from time to time party to
the Credit Agreement (as hereinafter defined) (collectively, the “Borrowers”), each
guarantor from time to time party to the Credit Agreement (collectively, the
“Existing
Guarantors” and, together with the Borrowers, the “Existing Loan
Parties”), the financial institutions which are now or which hereafter
become a party to the Credit Agreement (collectively, the “Lenders” and
individually, a “Lender”), and PNC
Bank, National Association, a national banking association, as Issuer,
collateral agent and administrative agent (the “Agent” and together
with the Lenders, the “Credit
Parties”).




WHEREAS, the Existing Loan
Parties and the Credit Parties executed that certain Amended and Restated Credit
and Security Agreement, dated as of September 20, 2010 (as amended or modified
to the date hereof, the “Credit Agreement”),
pursuant to which the Credit Parties have agreed to make available to the
Borrowers certain credit facilities, including letters of credit (collectively,
the “Loans”);




WHEREAS, the New Guarantor has
been created or acquired by the Parent or one of the other Existing Loan Parties
and wishes to guarantee the Obligations of the Loan Parties and, as a result of
the foregoing and pursuant to the definition of “Guarantor” in the Credit
Agreement, the New Guarantor is required to become a Guarantor and a joint and
several co-obligor with the Guarantors under the Credit Agreement and the Other
Loan Documents.  As used herein, terms defined in the Credit Agreement
are used herein with the same meaning;




WHEREAS, the New Guarantor,
the Existing Guarantors and the Agent have agreed to execute this Guarantor
Joinder Agreement and to cause the New Guarantor to become a Guarantor under the
Credit Agreement.




NOW, THEREFORE, for and in
consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:




14.           Pursuant
to Section 7.12 of the Credit Agreement, the New Guarantor is executing this
Guarantor Joinder Agreement in order to become a Guarantor under the Credit
Agreement.  By executing this Guarantor Joinder Agreement, the New
Guarantor agrees that it shall (i) become a party to the Credit Agreement as if
an original signatory thereto, (ii) be bound by all of the provisions of the
Credit Agreement as if an original signatory thereto, and (iii) be considered a
Guarantor for all purposes of the Credit Agreement and have the rights and
obligations of a Guarantor thereunder.




15.           The
New Guarantor’s contact information for notice for purposes of Section 15.8 of
the Credit Agreement is as described below its signature hereto.




16.           The
New Guarantor (a) confirms that it has received a copy of the Credit Agreement,
together with copies of all other documents and information as it has deemed
appropriate to make its own decision to enter into this Guarantor Joinder
Agreement, (b) agrees that it will perform in accordance with all of the
obligations and comply with all of the covenants that by the terms of Credit
Agreement and the Other Loan Documents are required of it as a Guarantor
thereunder, (c) confirms that the representations and warranties contained in
the Credit Agreement and in any Other Loan Document applicable to a Guarantor
are true and correct as of the date hereof with respect to the New Guarantor and
(d) authorizes Stoneridge, Inc., as Borrowing Agent, to act in such capacity on
its behalf under the Credit Agreement.




17.           In
order to confirm the New Guarantor’s grant of a security interest to the Agent,
for itself and the ratable benefit of each Lender and the Issuer, pursuant to
Section 4.1 of the Credit Agreement, to secure the payment and performance of
the Obligations under the Credit Agreement, the New Guarantor hereby grants and
pledges to the Agent, for itself and the ratable benefit of each Lender and the
Issuer, a continuing security interest in and a pledge of all of the New
Guarantor’s Collateral, whether now owned or existing or hereafter acquired or
arising and wherever located.




18.           Attached
hereto as Exhibit
A are supplemental Schedules to the Credit Agreement to reflect the
addition of the New Guarantor.  As of the effective date of this
Guarantor Joinder Agreement, such Schedules shall become a part of the Schedules
to the Credit Agreement for all purposes hereof.









19.           Attached
hereto as Exhibit
B are updates of certain enumerated Schedules to the Credit Agreement to
reflect any change in the disclosures made therein, each acceptable to the Agent
in its sole discretion.  As of the effective date of this Guarantor
Joinder Agreement, such Schedules shall amend the corresponding Schedule to the
Credit Agreement for all purposes hereof.




20.           This
Guarantor Joinder Agreement shall inure to the benefit of each party hereto and
each such party’s respective successors and assigns; provided that any
assignment by any Guarantor (including the New Guarantor) of its rights
hereunder shall be void.




21.           Each
of the Existing Loan Parties fully consents to the New Guarantor becoming a
Guarantor.




22.           Each
Guarantor, including the New Guarantor, confirms that it unconditionally and
irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all Obligations of the other Loan
Parties, of every type and description and agrees jointly and severally to pay
any and all reasonable expenses which may be incurred by the Agent in enforcing
its rights with respect to such guaranty, to the extent provided in Section 14.2
of the Credit Agreement.




23.           This
Guarantor Joinder Agreement is an Other Loan Document.




24.           This
Guarantor Joinder Agreement shall be governed by, and construed in accordance
with, the laws of the State of Ohio (without giving effect to the conflict of
laws principles thereof).




25.           This
Guarantor Joinder Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.




[Signatures
Follow]











IN WITNESS WHEREOF, each of the
undersigned has caused this Guarantor Joinder Agreement to be executed by its
duly authorized officer(s) thereunto duly authorized as of the day and year
first above written.


NEW
      GUARANTOR:[________________________]Name:Title:By:[______________][c/o
      Stoneridge, Inc., as Borrowing Agent][______________][______________]Attention:  [______________]Telephone:
      [______________]Telecopier:
      [______________]Email:  [______________]AGENT:PNC
      BANK, NATIONAL ASSOCIATIONName:Title:By:EXISTING
      LOAN PARTIES:[________________________]Name:Title:By:









EXHIBIT
A





SUPPLEMENTAL
SCHEDULES





[To be
provided by Loan Parties.]










EXHIBIT
B





UPDATES
TO SCHEDULES





[To be
provided by Loan Parties.]