Document:

Unassociated Document

     

    Exhibit
10.24

     

    SECURITIES
PURCHASE AGREEMENT

    
       

      This
Securities Purchase Agreement (this “Agreement”) is dated
as of November ____, 2010, between Solar EnerTech Corp., a Delaware corporation
(the “Company”), and each
purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and
collectively the “Purchasers”).

       

      WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
an effective registration statement under the Securities Act of 1933, as amended
(the “Securities
Act”), the Company desires to issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, desires to purchase from the Company,
securities of the Company as more fully described in this
Agreement.

       

      NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and each Purchaser agree as
follows:

       

      ARTICLE
I.

      DEFINITIONS

       

      1.1            Definitions.  In
addition to the terms defined elsewhere in this Agreement, for all purposes of
this Agreement, the following terms have the meanings set forth in this Section
1.1:

       

      “Acquiring Person”
shall have the meaning ascribed to such term in Section 4.5.

       

      “Action” shall have
the meaning ascribed to such term in Section 3.1(j).

       

      “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person as such terms are
used in and construed under Rule 405 under the Securities Act.

       

      “Board of Directors”
means the board of directors of the Company.

       

      “Business Day” means
any day except any Saturday, any Sunday, any day which is a federal legal
holiday in the United States or any day on which banking institutions in the
State of New York are authorized or required by law or other governmental action
to close.

       

      “Closing” means the
closing of the purchase and sale of the Securities pursuant to Section
2.1.

       

      “Closing Date” means
the Trading Day on which all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i)
the Purchasers’ obligations to pay the Subscription Amount and (ii) the
Company’s obligations to deliver the Securities, in each case, have been
satisfied or waived, but in no event later than the third Trading Day following
the date hereof.

       

      
        
           

        

        
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      “Commission” means the
United States Securities and Exchange Commission.

       

      “Common Stock” means
the common stock of the Company, par value $0.001 per share, and any other class
of securities into which such securities may hereafter be reclassified or
changed.

       

      “Common Stock
Equivalents” means any securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, right, option, warrant
or other instrument that is at any time convertible into or exercisable or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

       

      “Company Counsel”
means DLA Piper LLP (US), with offices located at 2000 University Avenue, East
Palo Alto, California 94301.

       

      “Disclosure Schedules”
means the Disclosure Schedules of the Company delivered concurrently
herewith.

       

      “Escrow Agent” means
Signature Bank, a New York State chartered bank and having an office at 261
Madison Avenue, New York, New York 10016.

       

      “Escrow Agreement”
means the escrow agreement entered into prior to the date hereof, by and among
the Company, the Escrow Agent and Rodman & Renshaw, LLC, pursuant to which
the Purchasers shall deposit Subscription Amounts with the Escrow Agent to be
applied to the transactions contemplated hereunder.

       

      “Evaluation Date”
shall have the meaning ascribed to such term in Section 3.1(r).

       

      “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

      

      “Exempt Issuance”
means the issuance of (a) shares of Common Stock or options to employees,
officers or directors of the Company pursuant to any stock or option plan duly
adopted for such purpose, by a majority of the non-employee members of the Board
of Directors or a majority of the members of a committee of non-employee
directors established for such purpose, (b) securities upon the exercise or
exchange of or conversion of any Securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into shares of Common
Stock issued and outstanding on the date of this Agreement, provided that such
securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise price, exchange price
or conversion price of such securities, (c) securities issued pursuant to
acquisitions or strategic transactions approved by a majority of the
disinterested directors of the Company, provided that any such issuance shall
only be to a Person (or to the equityholders of a Person) which is, itself or
through its subsidiaries, an operating company or an owner of an asset in a
business synergistic with the business of the Company and shall provide to the
Company additional benefits in addition to the investment of funds, but shall
not include a transaction in which the Company is issuing securities primarily
for the purpose of raising capital or to an entity whose primary business is
investing in securities and (d) shares of Common Stock in payment of interest on
the Series B-1 Convertible Note issued by the Company on March 19,
2010.

       

      
        
           

        

        
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      “FCPA” means the
Foreign Corrupt Practices Act of 1977, as amended.

       

      “GAAP” shall have the
meaning ascribed to such term in Section 3.1(h).

       

      “Indebtedness” shall
have the meaning ascribed to such term in Section 3.1(z).

       

      “Intellectual Property
Rights” shall have the meaning ascribed to such term in Section
3.1(o).

       

      “Liens” means a lien,
charge, pledge, security interest, encumbrance, right of first refusal,
preemptive right or other restriction.

       

      “Material Adverse
Effect” shall have the meaning assigned to such term in Section
3.1(b).

       

      “Material Permits”
shall have the meaning ascribed to such term in Section 3.1(m).

       

      “Per Share Purchase
Price” equals $_______, subject to adjustment for reverse and forward
stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.

       

      “Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.

       

      “Proceeding” means an
action, claim, suit, investigation or proceeding (including, without limitation,
an informal investigation or partial proceeding, such as a deposition), whether
commenced or threatened.

       

      “Prospectus” means the
final prospectus filed for the Registration Statement.

       

      “Prospectus
Supplement” means the supplement to the Prospectus complying with Rule
424(b) of the Securities Act that is filed with the Commission and delivered by
the Company to each Purchaser at the Closing.

       

      “Purchaser Party”
shall have the meaning ascribed to such term in Section 4.8.

       

      “Registration
Statement” means the effective registration statement with Commission
file No. 333-169045 which registers the sale of the Shares, the Warrants and the
Warrant Shares to the Purchasers.

       

      “Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).

       

      
        
           

        

        
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      “Rule 144” means Rule
144 promulgated by the Commission pursuant to the Securities Act, as such Rule
may be amended or interpreted from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.

       

      “Rule 424” means Rule
424 promulgated by the Commission pursuant to the Securities Act, as such Rule
may be amended or interpreted from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.

       

       “SEC Reports” shall
have the meaning ascribed to such term in Section 3.1(h).

       

      “Securities” means the
Shares, the Warrants and the Warrant Shares.

       

      “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

       

      “Shares” means the
shares of Common Stock issued or issuable to each Purchaser pursuant to this
Agreement.

       

      “Short Sales” means
all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange
Act (but shall not be deemed to include the location and/or reservation of
borrowable shares of Common Stock). 

       

       “Subscription Amount”
means, as to each Purchaser, the aggregate amount to be paid for Shares and
Warrants purchased hereunder as specified below such Purchaser’s name on the
signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.

       

      “Subsidiary” means any
subsidiary of the Company as set forth on Exhibit 21.1 to the Registration
Statement, and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.

       

      “Trading Day” means a
day on which the principal Trading Market is open for trading.

       

      “Trading Market” means
any of the following markets or exchanges on which the Common Stock is listed or
quoted for trading on the date in question: the NYSE AMEX, the Nasdaq Capital
Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange or the OTC Bulletin Board (or any successors to any of the
foregoing).

       

      “Transaction
Documents” means this Agreement, the Warrants and any other documents or
agreements executed in connection with the transactions contemplated
hereunder.

       

      “Transfer Agent” means
Continental Stock Transfer & Trust Company, the current transfer agent of
the Company, with a mailing address of 17 Battery Place, 8th Floor, New York,
New York 10004 and a facsimile number of (212) 509-5150, and any successor
transfer agent of the Company.

       

      
        
           

        

        
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      “Variable Rate
Transaction” shall have the meaning ascribed to such term in Section
4.12(b).

       

      “Warrants” means,
collectively, the Common Stock purchase warrants delivered to the Purchasers at
the Closing in accordance with Section 2.2(a) hereof, which Warrants shall be
exercisable immediately and have a term of exercise equal to five (5) years, in
the form of Exhibit
A attached hereto.

       

      “Warrant Shares” means
the shares of Common Stock issuable upon exercise of the Warrants.

       

      “WS” means Weinstein
Smith LLP with offices located at 420 Lexington Avenue, Suite 2620, New York,
New York 10170-0002.

       

      ARTICLE
II.

      PURCHASE
AND SALE

       

      2.1           Closing.  On
the Closing Date, upon the terms and subject to the conditions set forth herein,
substantially concurrent with the execution and delivery of this Agreement by
the parties hereto, the Company agrees to sell, and the Purchasers, severally
and not jointly,  agree to purchase, up to an aggregate of $__________
of Shares and Warrants to purchase up to an aggregate of ____ shares of Common
Stock.  Each Purchaser shall deliver to the Escrow Agent, via wire
transfer or a certified check, immediately available funds equal to such
Purchaser’s Subscription Amount as set forth on the signature page hereto
executed by such Purchaser and the Company shall deliver to each Purchaser its
respective Shares and a Warrant as determined pursuant to Section 2.2(a), and
the Company and each Purchaser shall deliver the other items set forth in
Section 2.2 deliverable at the Closing.  Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at the offices of WS or such other location as the parties shall mutually
agree.

       

      2.2           Deliveries.

       

      (a)           On
or prior to the Closing Date, the Company shall deliver or cause to be delivered
to each Purchaser the following:

       

      (i)           this
Agreement duly executed by the Company;

       

      (ii)           a
legal opinion of Company Counsel, substantially in the form of Exhibit B attached
hereto;

       

      (iii)           a
copy of the irrevocable instructions to the Company’s transfer agent instructing
the transfer agent to deliver via The Depository Trust Company Deposit or
Withdrawal at Custodian system (“DWAC”) a number of
Shares equal to such Purchaser’s Subscription Amount divided by the Per Share
Purchase Price, registered in the name of such Purchaser;

       

      
        
           

        

        
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      (iv)           a
Warrant registered in the name of such Purchaser to purchase up to a number of
shares of Common Stock equal to ___% of such Purchaser’s Shares, with an
exercise price equal to $_____, subject to adjustment therein (such Warrant
certificate may be delivered within three Trading Days of the Closing Date);
and

       

      (v)           the
Prospectus and Prospectus Supplement (which may be delivered in accordance with
Rule 172 under the Securities Act).

       

      (b)           On
or prior to the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Company or the Escrow Agent, as applicable, the
following:

       

      (i)           this
Agreement duly executed by such Purchaser; and

       

      (ii)           to
the Escrow Agent, such Purchaser’s Subscription Amount by wire transfer to the
account specified in the Escrow Agreement.

       

      2.3           Closing
Conditions.

       

      (a)           The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:

       

      (i)           the
accuracy in all material respects on the Closing Date of the representations and
warranties of the Purchasers contained herein (unless as of a specific date
therein in which case they shall be accurate as of such date);

       

      (ii)           all
obligations, covenants and agreements of each Purchaser required to be performed
at or prior to the Closing Date shall have been performed in all material
respects; and

       

      (iii)           the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this
Agreement.

       

      (b)           The
respective obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being met:

       

      (i)           the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Company contained herein (unless as of a
specific date therein);

       

      (ii)           all
obligations, covenants and agreements of the Company required to be performed at
or prior to the Closing Date shall have been performed in all material
respects;

       

      (iii)           the
delivery by the Company of the items set forth in Section 2.2(a) of this
Agreement;

       

      
        
           

        

        
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      (iv)           there
shall have been no Material Adverse Effect with respect to the Company since the
date hereof; and

       

      (v)           from
the date hereof to the Closing Date, trading in the Common Stock shall not have
been suspended by the Commission or the Company’s principal Trading Market, and,
at any time prior to the Closing Date, trading in securities generally as
reported by Bloomberg L.P. shall not have been suspended or limited, or minimum
prices shall not have been established on securities whose trades are reported
by such service, or on any Trading Market, nor shall a banking moratorium have
been declared either by the United States or New York State authorities nor
shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or
any material adverse change in, any financial market which, in each case, in the
reasonable judgment of such Purchaser, makes it impracticable or inadvisable to
purchase the Securities at the Closing.

       

      ARTICLE
III.

      REPRESENTATIONS
AND WARRANTIES

       

      3.1           Representations and
Warranties of the Company.  Except as set forth in the
Registration Statement, the SEC Reports or the Disclosure Schedules, which
Disclosure Schedules shall be deemed a part hereof and shall qualify any
representation or warranty made herein to the extent of the disclosure contained
in the corresponding section of the Disclosure Schedules (provided that any
disclosure in a section of the Disclosure Schedules may apply to or qualify
disclosure under one or more other sections where it is reasonably evident from
the details of such disclosure that application to such other section would be
appropriate), the Company hereby makes the following representations and
warranties to each Purchaser:

       

      (a)           Subsidiaries.  All
of the direct and indirect subsidiaries of the Company are as set forth on
Exhibit 21.1 to the Registration Statement.  The Company owns,
directly or indirectly, all of the capital stock or other equity interests of
each Subsidiary free and clear of any Liens, and all of the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.  If the Company has no
subsidiaries, all other references to the Subsidiaries or any of them in the
Transaction Documents shall be disregarded.

       

      (b)           Organization and
Qualification.  The Company and each of the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any Subsidiary is in violation nor
default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter
documents.  Each of the Company and the Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in: (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse
Effect”) and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.

       

      
        
           

        

        
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      (c)           Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and each of the other Transaction Documents and otherwise to carry out
its obligations hereunder and thereunder.  The execution and delivery
of this Agreement and each of the other Transaction Documents by the Company and
the consummation by it of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action on the part of the Company and no
further action is required by the Company, the Board of Directors or the
Company’s stockholders in connection herewith or therewith other than in
connection with the Required Approvals.  This Agreement and each other
Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

       

      (d)           No
Conflicts.  The execution, delivery and performance by the
Company of this Agreement and the other Transaction Documents to which it is a
party, the issuance and sale of the Securities and the consummation by it of the
transactions contemplated hereby and thereby do not and will not (i) conflict
with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter
documents, or (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company or any
Subsidiary, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any
agreement, credit facility, debt or other instrument (evidencing a Company or
Subsidiary debt or otherwise) or other understanding to which the Company or any
Subsidiary is a party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not have or reasonably be expected to
result in a Material Adverse Effect.

       

      
        
           

        

        
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      (e)           Filings, Consents and
Approvals.  The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii)
the filing with the Commission of the Prospectus Supplement, (iii)
application(s) to each applicable Trading Market for the listing of the Shares
and Warrant Shares for trading thereon in the time and manner required thereby
and (iv) such filings as are required to be made under applicable state
securities laws (collectively, the “Required
Approvals”).

       

      (f)           Issuance of the Securities;
Registration.  The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company.  The Warrant Shares, when issued in
accordance with the terms of the Warrants, will be validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the
Company.  The Company has reserved from its duly authorized capital
stock the maximum number of shares of Common Stock issuable pursuant to this
Agreement and the Warrants. The Company has prepared and filed the Registration
Statement in conformity with the requirements of the Securities Act, which
became effective on November __, 2010 (the “Effective Date”),
including the Prospectus, and such amendments and supplements thereto as may
have been required to the date of this Agreement.  The Registration
Statement is effective under the Securities Act and no stop order preventing or
suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus has been issued by the Commission and no
proceedings for that purpose have been instituted or, to the knowledge of the
Company, are threatened by the Commission.  The Company, if required
by the rules and regulations of the Commission, proposes to file the Prospectus,
with the Commission pursuant to Rule 424(b).  At the time the
Registration Statement and any amendments thereto became effective, at the date
of this Agreement and at the Closing Date, the Registration Statement and any
amendments thereto conformed and will conform in all material respects to the
requirements of the Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; and
the Prospectus and any amendments or supplements thereto, at time the Prospectus
or any amendment or supplement thereto was issued and at the Closing Date,
conformed and will conform in all material respects to the requirements of the
Securities Act and did not and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

       

      
        
           

        

        
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      (g)           Capitalization.  The
capitalization of the Company is as set forth in the Registration Statement or
the Prospectus Supplement.  The Company has not issued any capital
stock since its most recently filed periodic report under the Exchange Act,
other than pursuant to the exercise of employee stock options under the
Company’s stock option plans, the issuance of shares of Common Stock to
employees pursuant to the Company’s employee stock purchase plans and pursuant
to the conversion and/or exercise of Common Stock Equivalents outstanding as of
the date of the most recently filed periodic report under the Exchange
Act.  No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents.  Except as a result of the
purchase and sale of the Securities or the issuance of stock options or other
equity securities to employees under the Company’s stock option or stock
purchase plans or as disclosed or described in the Registration Statement
(including in any SEC Reports incorporated by reference therein), there are no
outstanding options, warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to issue additional shares of Common Stock
or Common Stock Equivalents.  The issuance and sale of the Securities
will not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Purchasers) and will not result in a
right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under any of such securities. All of the outstanding
shares of capital stock of the Company are duly authorized, validly issued,
fully paid and nonassessable, have been issued in compliance with all federal
and state securities laws, and none of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities.  No further approval or authorization of any
stockholder, the Board of Directors or others is required for the issuance and
sale of the Securities.  There are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders.

       

      (h)           SEC Reports; Financial
Statements.  The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the Company under
the Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as the Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, together with the Prospectus and the
Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The Company has never been an issuer subject to Rule 144(i) under
the Securities Act. The financial statements of the Company included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in
effect at the time of filing.  Such financial statements have been
prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), except as may
be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated Subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.

       

      
        
           

        

        
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      (i)           Material Changes;
Undisclosed Events, Liabilities or Developments.  Since the
date of the latest audited financial statements included within the SEC Reports,
except as specifically disclosed in a subsequent SEC Report filed prior to the
date hereof, (i) there has been no event, occurrence or development that has had
or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company’s financial statements pursuant to GAAP
or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock
option plans.  The Company does not have pending before the Commission
any request for confidential treatment of information.  Except for the
issuance of the Securities contemplated by this Agreement, the disclosure set
forth in the Current Report on Form 8-K required pursuant to Section 4.4 of this
Agreement or as set forth on Schedule 3.1(i), no
event, liability, fact, circumstance, occurrence or development has occurred or
exists or is reasonably expected to occur or exist with respect to the Company
or its Subsidiaries or their respective businesses, prospects, properties,
operations, assets or financial condition that would be required to be disclosed
by the Company under applicable securities laws at the time this representation
is made or deemed made that has not been publicly disclosed at least 1 Trading
Day prior to the date that this representation is made.

       

      (j)           Litigation.  There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect.  Neither the Company nor any Subsidiary, nor any
director or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty.  There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company.  The Commission has not issued any
stop order or other order suspending the effectiveness of any registration
statement filed by the Company or any Subsidiary under the Exchange Act or the
Securities Act.

       

      
        
           

        

        
          - 11
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      (k)           Labor
Relations.  No labor dispute exists or, to the knowledge of the
Company, is imminent with respect to any of the employees of the Company, which
could reasonably be expected to result in a Material Adverse
Effect.  None of the Company’s or its Subsidiaries’ employees is a
member of a union that relates to such employee’s relationship with the Company
or such Subsidiary, and neither the Company nor any of its Subsidiaries is a
party to a collective bargaining agreement, and the Company and its Subsidiaries
believe that their relationships with their employees are good.  To
the knowledge of the Company, no executive officer of the Company or any
Subsidiary, is, or is now expected to be, in violation of any material term of
any employment contract, confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract or agreement or
any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company or any of
its Subsidiaries to any liability with respect to any of the foregoing
matters.  The Company and its Subsidiaries are in compliance with all
U.S. federal, state, local and foreign laws and regulations relating to
employment and employment practices, terms and conditions of employment and
wages and hours, except where the failure to be in compliance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

       

      (l)           Compliance.  Neither
the Company nor any Subsidiary: (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any judgment, decree or
order of any court, arbitrator or other governmental authority or (iii) is or
has been in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety and employment and labor matters, except
in each case as could not have or reasonably be expected to result in a Material
Adverse Effect.

       

      (m)           Regulatory
Permits.  The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not reasonably be expected to result in a Material
Adverse Effect (“Material Permits”),
and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material
Permit.

       

      
        
           

        

        
          - 12
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      (n)           Title to
Assets.  The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for (i) Liens as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be
made of such property by the Company and the Subsidiaries and (ii) Liens for the
payment of federal, state or other taxes, for which appropriate reserves have
been made in accordance with GAAP and, the payment of which is neither
delinquent nor subject to penalties.  Any real property and facilities
held under lease by the Company and the Subsidiaries are held by them under
valid, subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance.

       

      (o)           Intellectual
Property.  The Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights necessary or
required for use in connection with their respective businesses as described in
the SEC Reports and which the failure to so have could have a Material Adverse
Effect (collectively, the “Intellectual Property
Rights”).  None of, and neither the Company nor any Subsidiary
has received a notice (written or otherwise) that any of, the Intellectual
Property Rights has expired, terminated or been abandoned, or is expected to
expire or terminate or be abandoned, within two (2) years from the date of this
Agreement.  Neither the Company nor any Subsidiary has received, since
the date of the latest audited financial statements included within the SEC
Reports, a written notice of a claim or otherwise has any knowledge that the
Intellectual Property Rights violate or infringe upon the rights of any Person,
except as could not have or reasonably be expected to not have a Material
Adverse Effect.  To the knowledge of the Company, all such
Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property
Rights.  The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all of
their intellectual properties, except where failure to do so could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

       

      (p)           Insurance.  The
Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company and the Subsidiaries are
engaged, including, but not limited to, directors and officers insurance
coverage at least equal to the aggregate Subscription Amount.  Neither
the Company nor any Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business without a significant increase in cost.

       

      
        
           

        

        
          - 13
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      (q)           Transactions With Affiliates
and Employees.  Except as set forth in the SEC Reports, none of
the officers or directors of the Company or any Subsidiary and, to the knowledge
of the Company, none of the employees of the Company or any Subsidiary is
presently a party to any transaction with the Company or any Subsidiary (other
than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, providing for
the borrowing of money from or lending of money to or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge
of the Company, any entity in which any officer, director, or any such employee
has a substantial interest or is an officer, director, trustee, stockholder,
member or partner, in each case in excess of $120,000 other than for (i) payment
of salary or consulting fees for services rendered, (ii) reimbursement for
expenses incurred on behalf of the Company and (iii) other employee benefits,
including stock option agreements under any stock option plan of the
Company.

       

      (r)           Sarbanes-Oxley; Internal
Accounting Controls.  The Company and the Subsidiaries are in
material compliance with any and all applicable requirements of the
Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and
all applicable rules and regulations promulgated by the Commission thereunder
that are effective as of the date hereof and as of the Closing
Date.  The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that: (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company and the Subsidiaries have established disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and
the Subsidiaries and designed such disclosure controls and procedures to ensure
that information required to be disclosed by the Company in the reports it files
or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and
forms.  The Company’s certifying officers have evaluated the
effectiveness of the disclosure controls and procedures of the Company and the
Subsidiaries as of the end of the period covered by the most recently filed
periodic report under the Exchange Act (such date, the “Evaluation
Date”).  The Company presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date.  Since the Evaluation
Date, there have been no changes in the internal control over financial
reporting (as such term is defined in the Exchange Act) of the Company and its
Subsidiaries that have materially affected, or is reasonably likely to
materially affect, the internal control over financial reporting of the Company
and its Subsidiaries.

       

      (s)           Certain
Fees.  Except as set forth in the Prospectus Supplement, no
brokerage or finder’s fees or commissions are or will be payable by the Company
or any Subsidiary to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents.  The
Purchasers shall have no obligation with respect to any fees or with respect to
any claims made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated
by the Transaction Documents.

       

      
        
           

        

        
          - 14
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      (t)           Investment Company.
The Company is not, and is not an Affiliate of, and immediately after receipt of
payment for the Securities, will not be or be an Affiliate of, an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.  The Company shall conduct its business in a manner so that
it will not become an “investment company” subject to registration under the
Investment Company Act of 1940, as amended.

       

      (u)           Registration
Rights.  Other than rights which have expired or which the
Company has fully satisfied by the filing of registration statements, no Person
has any right to cause the Company or any Subsidiary to effect the registration
under the Securities Act of any securities of the Company or any
Subsidiary.

       

      (v)           Listing and Maintenance
Requirements.  The Common Stock is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action
designed to, or which to its knowledge is likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act nor has
the Company received any notification that the Commission is contemplating
terminating such registration.  The Company has not, in the 12 months
preceding the date hereof, received notice from any Trading Market on which the
Common Stock is or has been listed or quoted to the effect that the Company is
not in compliance with the listing or maintenance requirements of such Trading
Market. The Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such listing and
maintenance requirements.

       

      (w)           Application of Takeover
Protections.  The Company and the Board of Directors have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Purchasers as a
result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without
limitation as a result of the Company’s issuance of the Securities and the
Purchasers’ ownership of the Securities.

       

      (x)           Disclosure.  Except
with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms that neither it
nor any other Person acting on its behalf has provided any of the Purchasers or
their agents or counsel with any information that it believes constitutes or
might constitute material, non-public information which is not otherwise
disclosed in the Prospectus Supplement.   The Company understands
and confirms that the Purchasers will rely on the foregoing representation in
effecting transactions in securities of the Company.  All of the
disclosure furnished by or on behalf of the Company to the Purchasers regarding
the Company and its Subsidiaries, their respective businesses and the
transactions contemplated hereby, including the Disclosure Schedules to this
Agreement, is true and correct in all material respects and does not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The Company acknowledges and agrees
that no Purchaser makes or has made any representations or warranties with
respect to the transactions contemplated hereby other than those specifically
set forth in Section 3.2 hereof.

       

      
        
           

        

        
          - 15
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      (y)           No Integrated
Offering. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2, neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of
any applicable shareholder approval provisions of any Trading Market on which
any of the securities of the Company are listed or designated.

       

      (z)           Solvency.  Based
on the consolidated financial condition of the Company as of the Closing Date,
after giving effect to the receipt by the Company of the proceeds from the sale
of the Securities hereunder, the current cash flow of the Company, together with
the proceeds the Company would receive, were it to liquidate all of its assets,
after taking into account all anticipated uses of the cash, would be sufficient
to pay all amounts on or in respect of its liabilities when such amounts are
required to be paid.  The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into account the
timing and amounts of cash to be payable on or in respect of its
debt).  Except as set forth in the Prospectus Supplement, the Company
has no knowledge of any facts or circumstances which lead it to believe that it
will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the Closing
Date.  The SEC Reports set forth as of the date hereof all outstanding
secured and unsecured Indebtedness of the Company or any Subsidiary, or for
which the Company or any Subsidiary has commitments.  For the purposes
of this Agreement, “Indebtedness” means
(x) any liabilities for borrowed money or amounts owed in excess of $50,000
(other than trade accounts payable incurred in the ordinary course of business),
(y) all guaranties, endorsements and other contingent obligations in respect of
indebtedness of others, whether or not the same are or should be reflected in
the Company’s consolidated balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and (z) the present
value of any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP.  Neither the Company nor any
Subsidiary is in default with respect to any Indebtedness.

       

      (aa)           Tax
Status.  Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and its Subsidiaries each (i) has made or filed all United
States federal, state and local income and all foreign income and franchise tax
returns, reports and declarations required by any jurisdiction to which it is
subject, (ii) has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) to the extent required by GAAP, has set aside
on its books provision reasonably adequate for the payment of all material taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply.  To the knowledge of the officers of the Company
or of any Subsidiary, there are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the
Company or of any Subsidiary know of no basis for any such claim.

       

      
        
           

        

        
          - 16
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      (bb)           Foreign Corrupt
Practices.  Neither the Company nor any Subsidiary, nor to the
knowledge of the Company or any Subsidiary, any agent or other person acting on
behalf of the Company or any Subsidiary, has (i) directly or indirectly, used
any funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to
any foreign or domestic political parties or campaigns from corporate funds,
(iii) failed to disclose fully any contribution made by the Company or any
Subsidiary (or made by any person acting on its behalf of which the Company is
aware) which is in violation of law, or (iv) violated in any material respect
any provision of FCPA.

       

      (cc)           Accountants.  The
Company’s accounting firm is Ernst & Young Hua Ming.  To the
knowledge and belief of the Company, such accounting firm (i) is a registered
public accounting firm as required by the Exchange Act and (ii) shall express
its opinion with respect to the financial statements to be included in the
Company’s Annual Report for the fiscal year ending September 30,
2010.

       

      (dd)           
Acknowledgment
Regarding Purchasers’ Purchase of Securities.  The Company
acknowledges and agrees that each of the Purchasers is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated thereby.  The Company further
acknowledges that no Purchaser is acting as a financial advisor or fiduciary of
the Company (or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated thereby and any advice given by any
Purchaser or any of their respective representatives or agents in connection
with the Transaction Documents and the transactions contemplated thereby is
merely incidental to the Purchasers’ purchase of the Securities.  The
Company further represents to each Purchaser that the Company’s decision to
enter into this Agreement and the other Transaction Documents has been based
solely on the independent evaluation of the transactions contemplated hereby by
the Company and its representatives.

       

      (ee)           Acknowledgement Regarding
Purchaser’s Trading Activity.  Anything in this Agreement or
elsewhere herein to the contrary notwithstanding (except for
Sections 3.2(e) and 4.14 hereof), it is understood and acknowledged by the
Company that: (i) none of the Purchasers has been asked by the Company to agree,
nor has any Purchaser agreed, to desist from purchasing or selling, long and/or
short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Securities for any specified term; (ii)
past or future open market or other transactions by any Purchaser, specifically
including, without limitation, Short Sales or “derivative” transactions, before
or after the closing of this or future private placement transactions, may
negatively impact the market price of the Company’s publicly-traded securities;
(iii) any Purchaser, and counter-parties in “derivative” transactions to which
any such Purchaser is a party, directly or indirectly, presently may have a
“short” position in the Common Stock; and (iv) each Purchaser shall not be
deemed to have any affiliation with or control over any arm’s length
counter-party in any “derivative” transaction.  The Company further
understands and acknowledges that (y) one or more Purchasers may engage in
hedging activities at various times during the period that the Securities are
outstanding, including, without limitation, during the periods that the value of
the Warrant Shares deliverable with respect to Securities are being determined,
and (z) such hedging activities (if any) could reduce the value of the existing
stockholders' equity interests in the Company at and after the time that the
hedging activities are being conducted.  The Company acknowledges that such
aforementioned hedging activities do not constitute a breach of any of the
Transaction Documents.

       

      
        
           

        

        
          - 17
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      (ff)           Regulation M
Compliance.  The Company has not, and to its knowledge no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to
cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any Person any compensation for soliciting another to purchase any other
securities of the Company, other than, in the case of clauses (ii) and (iii),
compensation paid to the Company’s placement agent in connection with the
placement of the Securities.

       

      (gg)           [RESERVED]

       

      (hh)           Office of Foreign Assets
Control.  Neither the Company nor any Subsidiary nor, to the
Company's knowledge, any director, officer, agent, employee or affiliate of the
Company  or any Subsidiary is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”).

       

      (ii)           U.S. Real Property Holding
Corporation.  The Company is not and has never been a U.S. real
property holding corporation within the meaning of Section 897 of the Internal
Revenue Code of 1986, as amended, and the Company shall so certify upon
Purchaser’s request.

       

      (jj)           Bank Holding Company
Act.  Neither the Company nor any of its Subsidiaries or
Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the
“BHCA”) and to
regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”).  Neither the Company nor any of its Subsidiaries or
Affiliates owns or controls, directly or indirectly, five percent (5%) or more
of the outstanding shares of any class of voting securities or twenty-five
percent or more of the total equity of a bank or any entity that is subject to
the BHCA and to regulation by the Federal Reserve.  Neither the
Company nor any of its Subsidiaries or Affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.

       

      
        
           

        

        
          - 18
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      (kk)           Money
Laundering.  The operations of the Company and its Subsidiaries
are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, applicable money laundering
statutes and applicable rules and regulations thereunder (collectively, the
“Money Laundering
Laws”), and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any Subsidiary with respect to the Money Laundering Laws is pending or, to
the knowledge of the Company or any Subsidiary, threatened.

       

      3.2           Representations and
Warranties of the Purchasers.  Each Purchaser, for itself and
for no other Purchaser, hereby represents and warrants as of the date hereof and
as of the Closing Date to the Company as follows (unless as of a specific date
therein):

       

      (a)           Organization;
Authority.  Such Purchaser is either an individual or an entity
duly incorporated or formed, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation with full right,
corporate, partnership, limited liability company or similar power and authority
to enter into and to consummate the transactions contemplated by this Agreement
and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and performance by such Purchaser of
the transactions contemplated by this Agreement have been duly authorized by all
necessary corporate, partnership, limited liability company or similar action,
as applicable, on the part of such Purchaser.  Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and
when delivered by such Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms, except: (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

       

      (b)           Understandings or
Arrangements.  Such Purchaser is acquiring the Securities as
principal for its own account and has no direct or indirect arrangement or
understandings with any other persons to distribute or regarding the
distribution of such Securities (this representation and warranty not limiting
such Purchaser’s right to sell the Securities pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state
securities laws).  Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business.

       

      (c)           Purchaser
Status.  At the time such Purchaser was offered the Securities,
it was, and as of the date hereof it is, and on each date on which it exercises
any Warrants, it will be either: (i) an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act.  Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.

       

      
        
           

        

        
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      (d)           Experience of Such
Purchaser.  Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment.  Such Purchaser is able to bear the
economic risk of an investment in the Securities and, at the present time, is
able to afford a complete loss of such investment.

       

      (e)           Certain Transactions and
Confidentiality.  Other than consummating the transactions
contemplated hereunder, such Purchaser has not, nor has any Person acting on
behalf of or pursuant to any understanding with such Purchaser, directly or
indirectly executed any purchases or sales, including Short Sales, of the
securities of the Company during the period commencing as of the time that such
Purchaser first received a term sheet (written or oral) from the Company or any
other Person representing the Company setting forth the material terms of the
transactions contemplated hereunder and ending immediately prior to the
execution hereof.  Notwithstanding the foregoing, in the case of a
Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the
representation set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to
purchase the Securities covered by this Agreement.  Other than to
other Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this
transaction). Notwithstanding the foregoing, for avoidance of doubt,
nothing contained herein shall constitute a representation or warranty, or
preclude any actions, with respect to the identification of the availability of,
or securing of, available shares to borrow in order to effect Short Sales or
similar transactions in the future.

       

      The
Company acknowledges and agrees that the representations contained in Section
3.2 shall not modify, amend or affect such Purchaser’s right to rely on the
Company’s representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction Document or
any other document or instrument executed and/or delivered in connection with
this Agreement or the consummation of the transaction contemplated
hereby.

       

      ARTICLE
IV.

      OTHER
AGREEMENTS OF THE PARTIES

       

      4.1           Warrant
Shares.  If all or any portion of a Warrant is exercised at a
time when there is an effective registration statement to cover the issuance or
resale of the Warrant Shares or if the Warrant is exercised via cashless
exercise, the Warrant Shares issued pursuant to any such exercise shall be
issued free of all legends.  If at any time following the date hereof
the Registration Statement (or any subsequent registration statement registering
the sale or resale of the Warrant Shares) is not effective or is not otherwise
available for the sale or resale of the Warrant Shares, the Company shall
immediately notify the holders of the Warrants in writing that such registration
statement is not then effective and thereafter shall promptly notify such
holders when the registration statement is effective again and available for the
sale or resale of the Warrant Shares (it being understood and agreed that the
foregoing shall not limit the ability of the Company to issue, or any Purchaser
to sell, any of the Warrant Shares in compliance with applicable federal and
state securities laws).

       

      
        
           

        

        
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      4.2           Furnishing of
Information.  Until the earliest of the time that (i) no
Purchaser owns Securities or (ii) the Warrants have expired, the Company
covenants to use commercially reasonable efforts to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
the Exchange Act even if the Company is not then subject to the reporting
requirements of the Exchange Act.

       

      4.3           Integration.  The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities for
purposes of the rules and regulations of any Trading Market such that it would
require shareholder approval prior to the closing of such other transaction
unless shareholder approval is obtained before the closing of such subsequent
transaction.

       

      4.4           Securities Laws Disclosure;
Publicity.  The Company shall (a) by 9:00 a.m. (New York City
time) on the Trading Day immediately following the date hereof, issue a press
release disclosing the material terms of the transactions contemplated hereby,
and (b) file a Current Report on Form 8-K, including the Transaction Documents
as exhibits thereto, with the Commission within the time required by the
Exchange Act.  From and after the issuance of such press release, the
Company represents to the Purchasers that it shall have publicly disclosed all
material, non-public information delivered to any of the Purchasers by the
Company or any of its Subsidiaries, or any of their respective officers,
directors, employees or agents in connection with the transactions contemplated
by the Transaction Documents.  The Company and each Purchaser shall
consult with each other in issuing any other press releases with respect to the
transactions contemplated hereby, and neither the Company nor any Purchaser
shall issue any such press release nor otherwise make any such public statement
without the prior consent of the Company, with respect to any press release of
any Purchaser, or without the prior consent of each Purchaser, with respect to
any press release of the Company, which consent shall not unreasonably be
withheld or delayed, except if such disclosure is required by law, in which case
the disclosing party shall promptly provide the other party with prior notice of
such public statement or communication.  Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or
include the name of any Purchaser in any filing with the Commission or any
regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except (a) as required by federal securities law in connection with
the filing of final Transaction Documents (including signature pages thereto)
with the Commission and (b) to the extent such disclosure is required by law or
Trading Market regulations, in which case the Company shall provide the
Purchasers with prior notice of such disclosure permitted under this clause
(b).

       

      4.5           Shareholder Rights
Plan.  No claim will be made or enforced by the Company or,
with the consent of the Company, any other Person, that any Purchaser is an
“Acquiring Person” under any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or similar
anti-takeover plan or arrangement in effect or hereafter adopted by the Company,
or that any Purchaser could be deemed to trigger the provisions of any such plan
or arrangement, by virtue of receiving Securities under the Transaction
Documents or under any other agreement between the Company and the
Purchasers.

       

      
        
           

        

        
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      4.6           Non-Public
Information.  Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company covenants and agrees that neither it, nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information
that the Company believes constitutes material non-public information, unless
prior thereto such Purchaser shall have entered into a written agreement with
the Company regarding the confidentiality and use of such
information.  The Company understands and confirms that each Purchaser
shall be relying on the foregoing covenant in effecting transactions in
securities of the Company.

       

      4.7           Use of
Proceeds.  Except as set forth on Schedule 4.7 attached
hereto or in the Registration Statement, the Company shall use the net proceeds
from the sale of the Securities hereunder for working capital purposes and shall
not use such proceeds: (a) for the satisfaction of any portion of the Company’s
debt (other than payment of trade payables in the ordinary course of the
Company’s business and prior practices), (b) for the redemption of any Common
Stock or Common Stock Equivalents, (c) for the settlement of any outstanding
litigation or (d) in violation of FCPA or OFAC regulations.

       

      4.8           Indemnification of
Purchasers.   Subject to the provisions of this Section
4.8, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other
Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser
Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their respective
Affiliates, by any stockholder of the Company who is not an Affiliate of such
Purchaser Party, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of such
Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with
any such stockholder or any violations by such Purchaser Party of state or
federal securities laws or any conduct by such Purchaser Party which constitutes
fraud, gross negligence, willful misconduct or malfeasance).  If any
action shall be brought against any Purchaser Party in respect of which
indemnity may be sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have the right to
assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Purchaser Party.  Any Purchaser Party shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of
counsel, a material conflict on any material issue between the position of the
Company and the position of such Purchaser Party, in which case the Company
shall be responsible for the reasonable fees and expenses of no more than one
such separate counsel.  The Company will not be liable to any
Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party
effected without the Company’s prior written consent, which shall not be
unreasonably withheld or delayed; or (z) to the extent, but only to the extent
that a loss, claim, damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or agreements made
by such Purchaser Party in this Agreement or in the other Transaction Documents.
The indemnity agreements contained herein shall be in addition to any cause of
action or similar right of any Purchaser Party against the Company or others and
any liabilities the Company may be subject to pursuant to law.

       

      
        
           

        

        
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      4.9           Reservation of Common
Stock. As of the date hereof, the Company has reserved and the Company
shall continue to reserve and keep available at all times, free of preemptive
rights, a sufficient number of shares of Common Stock for the purpose of
enabling the Company to issue Shares pursuant to this Agreement and Warrant
Shares pursuant to any exercise of the Warrants.

       

      4.10           Listing of Common
Stock. The Company hereby agrees to use commercially reasonable
efforts to maintain the listing or quotation of the Common Stock on the Trading
Market on which it is currently listed, and concurrently with the Closing,
the Company shall apply to list or quote all of the Shares and Warrant Shares on
such Trading Market and promptly secure the listing of all of the Shares and
Warrant Shares on such Trading Market. The Company further agrees, if the
Company applies to have the Common Stock traded on any other Trading Market, it
will then include in such application all of the Shares and Warrant Shares, and
will take such other action as is necessary to cause all of the Shares and
Warrant Shares to be listed or quoted on such other Trading Market as promptly
as possible.  The Company will then take all action reasonably
necessary to continue the listing and trading of its Common Stock on a Trading
Market and will comply in all respects with the Company’s reporting, filing and
other obligations under the bylaws or rules of the Trading Market.

       

      4.11           [RESERVED]

       

      4.12           Subsequent Equity
Sales.

       

      (a)           From
the date hereof until 180 days after the Closing Date, neither the Company nor
any Subsidiary shall issue, enter into any agreement to issue or announce the
issuance or proposed issuance of any shares of Common Stock or Common Stock
Equivalents.

       

      (b)           From
the date hereof until 12 months after the Closing Date, the Company shall be
prohibited from effecting or entering into an agreement to effect any issuance
by the Company or any of its Subsidiaries of Common Stock or Common Stock
Equivalents for cash consideration (or a combination of units hereof) involving
a Variable Rate Transaction.  “Variable Rate
Transaction” means a transaction in which the Company (i) issues or sells
any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive additional shares of Common
Stock either (A) at a conversion price, exercise price or exchange rate or other
price that is based upon and/or varies with the trading prices of or quotations
for the shares of Common Stock at any time after the initial issuance of such
debt or equity securities, or (B) with a conversion, exercise or exchange price
that is subject to being reset at some future date after the initial issuance of
such debt or equity security or upon the occurrence of specified or contingent
events directly or indirectly related to the business of the Company or the
market for the Common Stock or (ii) enters into any agreement, including, but
not limited to, an equity line of credit, whereby the Company may sell
securities at a future determined price.  Any Purchaser shall be
entitled to obtain injunctive relief against the Company to preclude any such
issuance, which remedy shall be in addition to any right to collect
damages.

       

      
        
           

        

        
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      (c)           Notwithstanding
the foregoing, this Section 4.12 shall not apply in respect of an Exempt
Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance
(provided that, for purposes of this Section 4.12, issuances pursuant to clause
(d) of the definition of Exempt Issuance shall be deemed to not be a Variable
Rate Transaction).

       

      4.13           Equal Treatment of
Purchasers.  No consideration (including any modification of
any Transaction Document) shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration is also offered to all of the parties to
the Transaction Documents.  For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and
negotiated separately by each Purchaser, and is intended for the Company to
treat the Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.

       

      4.14           Certain Transactions and
Confidentiality. Each Purchaser, severally and not jointly with the
other Purchasers, covenants that neither it nor any Affiliate acting on its
behalf or pursuant to any understanding with it will execute any purchases or
sales, including Short Sales of any of the Company’s securities during the
period commencing with the execution of this Agreement and ending at such time
that the transactions contemplated by this Agreement are first publicly
announced pursuant to the initial press release as described in Section
4.4.  Each Purchaser, severally and not jointly with the other Purchasers,
covenants that until such time as the transactions contemplated by this
Agreement are publicly disclosed by the Company pursuant to the initial press
release as described in Section 4.4, such Purchaser will maintain the
confidentiality of the existence and terms of this transaction and the
information included in the Transaction Documents and the Disclosure
Schedules.  Notwithstanding the foregoing and notwithstanding anything
contained in this Agreement to the contrary, the Company expressly acknowledges
and agrees that (i) no Purchaser makes any representation, warranty or covenant
hereby that it will not engage in effecting transactions in any securities of
the Company after the time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the initial press release as described
in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from
effecting any transactions in any securities of the Company in accordance with
applicable securities laws from and after the time that the transactions
contemplated by this Agreement are first publicly announced pursuant to the
initial press release as described in Section 4.4 and (iii) no Purchaser shall
have any duty of confidentiality to the Company or its Subsidiaries after the
issuance of the initial press release as described in Section 4.4. 
Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s assets, the covenant set forth above
shall only apply with respect to the portion of assets managed by the portfolio
manager that made the investment decision to purchase the Securities covered by
this Agreement.

       

      
        
           

        

        
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      4.15           Capital
Changes.  Until the one year anniversary of the Closing Date,
the Company shall not undertake a reverse or forward stock split or
reclassification of the Common Stock without the prior written consent of the
Purchasers holding a majority in interest of the Shares.

       

      ARTICLE
V.

      MISCELLANEOUS

       

      5.1           Termination. 
This Agreement may be terminated by any Purchaser, as to such Purchaser’s
obligations hereunder only and without any effect whatsoever on the obligations
between the Company and the other Purchasers, by written notice to the other
parties, if the Closing has not been consummated on or before November ___,
2010; provided,
however, that
no such termination will affect the right of any party to sue for any breach by
any other party (or parties).

       

      5.2           Fees and
Expenses.  Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement.  The Company shall pay all
Transfer Agent fees, stamp taxes and other taxes and duties levied in connection
with the delivery of any Securities to the Purchasers.

       

      5.3           Entire
Agreement.  The Transaction Documents, together with the
exhibits and schedules thereto, the Prospectus and the Prospectus Supplement,
contain the entire understanding of the parties with respect to the subject
matter hereof and thereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters, which the parties acknowledge
have been merged into such documents, exhibits and schedules.

       

      5.4           Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of: (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto at or prior to 5:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number set forth on the signature pages attached hereto on a day that is not a
Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c)
the second (2nd)
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such
notice is required to be given.  The address for such notices and
communications shall be as set forth on the signature pages attached
hereto.

       

      
        
           

        

        
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      5.5           Amendments;
Waivers.  No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchasers holding at least 67% in
interest of the Shares based on the initial Subscription Amounts hereunder or,
in the case of a waiver, by the party against whom enforcement of any such
waived provision is sought.  No waiver of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right.

       

      5.6           Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.

       

      5.7           Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each Purchaser (other
than by merger).  Any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or transfers
any Securities, provided that such transferee agrees in writing to be bound,
with respect to the transferred Securities, by the provisions of the Transaction
Documents that apply to the “Purchasers.”

       

      5.8           No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.8.

       

      5.9           Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the City of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or is an inconvenient venue for such
proceeding.  Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way
any right to serve process in any other manner permitted by law.  If
either party shall commence an action, suit or proceeding to enforce any
provisions of the Transaction Documents, then, in addition to the obligations of
the Company under Section 4.8, the prevailing party in such action, suit or
proceeding shall be reimbursed by the other party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.

       

      
        
           

        

        
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      5.10           Survival.  The
representations and warranties contained herein shall survive the Closing and
the delivery of the Securities.

       

      5.11           Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to each
other party, it being understood that the parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

       

      5.12           Severability.  If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

       

      5.13           Rescission and Withdrawal
Right.  Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) any of the other Transaction
Documents, whenever any Purchaser exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights; provided, however, that in the
case of a rescission of an exercise of a Warrant, the applicable Purchaser shall
be required to return any shares of Common Stock subject to any such rescinded
exercise notice concurrently with the return to such Purchaser of the aggregate
exercise price paid to the Company for such shares and the restoration of such
Purchaser’s right to acquire such shares pursuant to such Purchaser’s Warrant
(including, issuance of a replacement warrant certificate evidencing such
restored right).

       

      
        
           

        

        
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      5.14           Replacement of
Securities.  If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction.  The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.

       

      5.15           Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the Purchasers and the Company will
be entitled to specific performance under the Transaction
Documents.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agree to waive and
not to assert in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate.

       

      5.16           Payment Set
Aside.  To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

       

      5.17           Independent Nature of
Purchasers’ Obligations and Rights.  The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document.  Nothing contained herein or
in any other Transaction Document, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser shall be entitled to
independently protect and enforce its rights including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.  Each Purchaser
has been represented by its own separate legal counsel in its review and
negotiation of the Transaction Documents.  For reasons of
administrative convenience only, each Purchaser and its respective counsel have
chosen to communicate with the Company through WS.  WS does not
represent any of the Purchasers and only represents Rodman & Renshaw, LLC,
the placement agent.  The Company has elected to provide all
Purchasers with the same terms and Transaction Documents for the convenience of
the Company and not because it was required or requested to do so by any of the
Purchasers.  It is expressly understood and agreed that each provision
contained in this Agreement and in each other Transaction Document is between
the Company and a Purchaser, solely, and not between the Company and the
Purchasers collectively and not between and among the Purchasers.

       

      
        
           

        

        
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      5.18           [RESERVED]

       

      5.19           Saturdays, Sundays, Holidays,
etc.  If the last or appointed day for the taking of any action
or the expiration of any right required or granted herein shall not be a
Business Day, then such action may be taken or such right may be exercised on
the next succeeding Business Day.

       

      5.20           Construction. The
parties agree that each of them and/or their respective counsel have reviewed
and had an opportunity to revise the Transaction Documents and, therefore, 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 the Transaction Documents or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in any
Transaction Document shall be subject to adjustment for reverse and forward
stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.

       

      5.21           WAIVER OF
JURY TRIAL.  IN ANY
ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY
OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST
EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

       

      

       

      (Signature
Pages Follow)

       

      
        
           

        

        
          - 29
-

          
            

          

        

        
           

        

      

       

      IN WITNESS WHEREOF, the parties hereto
have caused this Securities Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

       

      

      
        	
                SOLAR
      ENERTECH CORP.

              	
                Address for
      Notice:

              
	 	 
	 	 
	
                By: 
      __________________________________________

                Name:

                Title:

                With
      a copy to (which shall not constitute notice):

              	
                Fax:
      86.21.5899.7388

                Attention:
      Chief Financial Officer

              
	 	 
	 	 
	
                Eric
      Wang

                DLA
      Piper LLP (USA)

                2000
      University Avenue

                East
      Palo Alto, California 94303

                Fax:
      (650) 687-1205

              	 
      

      

       

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

      SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

       

      
        
           

        

        
          - 30
-

          
            

          

        

        
           

        

      

       

      [PURCHASER
SIGNATURE PAGES TO SOEN SECURITIES PURCHASE AGREEMENT]

      

      IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.

       

      Name of
Purchaser: ________________________________________________________

       

      Signature of Authorized Signatory of
Purchaser: _________________________________

       

      Name of
Authorized Signatory:
_______________________________________________

       

      Title of
Authorized Signatory:
________________________________________________

       

      Email
Address of Authorized
Signatory:_________________________________________

       

      Facsimile
Number of Authorized Signatory:
__________________________________________

       

      Address
for Notice to Purchaser:

       

       

      Address
for Delivery of Securities to Purchaser (if not same as address for
notice):

       

       

      Subscription
Amount: $_________________

      

      Shares:
_________________

      

      Warrant
Shares: __________________

      

      EIN
Number:  [PROVIDE
THIS UNDER SEPARATE COVER]

      

      o  Notwithstanding
anything contained in this Agreement to the contrary, by checking this box (i)
the obligations of the above-signed to purchase the securities set forth in this
Agreement to be purchased from the Company by the above-signed, and the
obligations of the Company to sell such securities to the above-signed, shall be
unconditional and all conditions to Closing shall be disregarded, (ii) the
Closing shall occur on the third (3rd)
Trading Day following the date of this Agreement and (iii) any condition to
Closing contemplated by this Agreement (but prior to being disregarded by clause
(i) above) that required delivery by the Company or the above-signed of any
agreement, instrument, certificate or the like or purchase price (as applicable)
shall no longer be a condition and shall instead be an unconditional obligation
of the Company or the above-signed (as applicable) to deliver such agreement,
instrument, certificate or the like or purchase price (as applicable) to such
other party on the Closing Date.

      

      

      [SIGNATURE
PAGES CONTINUE]

       

       

      - 31 -Unassociated Document

    EXECUTION
VERSION

    

    THIRD AMENDED AND RESTATED

    CREDIT AGREEMENT

    

    Dated as of November 10, 2010

    

    Among

    

    STANDARD MOTOR PRODUCTS, INC. and

    STANRIC, INC.,

    

    as Borrowers,

    

    THE OTHER CREDIT PARTIES SIGNATORY
HERETO,

    as Credit Parties,

    THE LENDERS SIGNATORY HERETO

    FROM TIME TO TIME,

    as Lenders,

    

    GENERAL ELECTRIC CAPITAL
CORPORATION,

    as Agent and a Lender,

    

    BANK OF AMERICA, N.A.,

    as a Lender and as Co-Syndication
Agent,

    

    WELLS FARGO CAPITAL FINANCE, LLC

    as a Lender and as Co-Syndication
Agent

    

    And

    

    JPMORGAN CHASE BANK, N.A.

    as a Lender and as Documentation
Agent

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE OF CONTENTS

     

    
      
        
          
            	
                    1.

                  	
                    AMOUNT
      AND TERMS OF CREDIT

                  	
                    2

                  
	 
      	
                    1.1.

                  	
                    Credit
      Facilities

                  	
                    2

                  
	 
      	
                    1.2.

                  	
                    Letters
      of Credit

                  	
                    4

                  
	 
      	
                    1.3.

                  	
                    Prepayments

                  	
                    6

                  
	 
      	
                    1.4.

                  	
                    Use
      of Proceeds

                  	
                    7

                  
	 
      	
                    1.5.

                  	
                    Interest
      and Applicable Margins

                  	
                    8

                  
	 
      	
                    1.6.

                  	
                    Eligible
      Accounts

                  	
                    10

                  
	 
      	
                    1.7.

                  	
                    Eligible
      Inventory

                  	
                    12

                  
	 
      	
                    1.8.

                  	
                    Cash
      Management Systems

                  	
                    14

                  
	 
      	
                    1.9.

                  	
                    Fees

                  	
                    14

                  
	 
      	
                    1.10.

                  	
                    Receipt
      of Payments

                  	
                    15

                  
	 
      	
                    1.11.

                  	
                    Application
      and Allocation of Payments

                  	
                    15

                  
	 
      	
                    1.12.

                  	
                    Loan
      Account and Accounting

                  	
                    16

                  
	 
      	
                    1.13.

                  	
                    Indemnity

                  	
                    16

                  
	 
      	
                    1.14.

                  	
                    Access

                  	
                    17

                  
	 
      	
                    1.15.

                  	
                    Taxes

                  	
                    18

                  
	 
      	
                    1.16.

                  	
                    Capital
      Adequacy; Increased Costs; Illegality

                  	
                    19

                  
	 
      	
                    1.17.

                  	
                    Single
      Loan

                  	
                    20

                  
	 
      	
                    1.18.

                  	
                    Increase
      of the Maximum Amount by Borrowers

                  	
                    20

                  
	 
      	 
      	 
      	 
      
	
                    2.

                  	
                    CONDITIONS
      PRECEDENT

                  	
                    22

                  
	 
      	
                    2.1.

                  	
                    Conditions
      to the Initial Loans

                  	
                    22

                  
	 
      	
                    2.2.

                  	
                    Further
      Conditions to Each Loan

                  	
                    23

                  
	 
      	 
      	 
      	 
      
	
                    3.

                  	
                    REPRESENTATIONS
      AND WARRANTIES

                  	
                    24

                  
	 
      	
                    3.1.

                  	
                    Corporate
      Existence; Compliance with Law

                  	
                    24

                  
	 
      	
                    3.2.

                  	
                    Executive
      Offices, Collateral Locations, FEIN

                  	
                    24

                  
	 
      	
                    3.3.

                  	
                    Corporate
      Power, Authorization, Enforceable Obligations

                  	
                    24

                  
	 
      	
                    3.4.

                  	
                    Financial
      Statements and Projections

                  	
                    25

                  
	 
      	
                    3.5.

                  	
                    Material
      Adverse Effect

                  	
                    25

                  
	 
      	
                    3.6.

                  	
                    Ownership
      of Property; Liens

                  	
                    26

                  
	 
      	
                    3.7.

                  	
                    Labor
      Matters

                  	
                    26

                  
	 
      	
                    3.8.

                  	
                    Ventures,
      Subsidiaries and Affiliates; Outstanding Stock and
      Indebtedness

                  	
                    27

                  
	 
      	
                    3.9.

                  	
                    Government
      Regulation

                  	
                    27

                  
	 
      	
                    3.10.

                  	
                    Margin
      Regulations

                  	
                    27

                  
	 
      	
                    3.11.

                  	
                    Taxes

                  	
                    28

                  
	 
      	
                    3.12.

                  	
                    ERISA

                  	
                    28

                  
	 
      	
                    3.13.

                  	
                    No
      Litigation

                  	
                    29

                  
	 
      	
                    3.14.

                  	
                    Brokers

                  	
                    29

                  
	 
      	
                    3.15.

                  	
                    Intellectual
      Property

                  	
                    29

                  
	 
      	
                    3.16.

                  	
                    Full
      Disclosure

                  	
                    29

                  
	 
      	
                    3.17.

                  	
                    Environmental
      Matters

                  	
                    30

                  
	 
      	
                    3.18.

                  	
                    Insurance

                  	
                    30

                  
	 
      	
                    3.19.

                  	
                    Deposit
      and Disbursement Accounts

                  	
                    30

                  

          

        

      

    

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    

    
      
        
          
            	 
      	
                    3.20.

                  	
                    Government
      Contracts

                  	
                    31

                  
	 
      	
                    3.21.

                  	
                    Customer
      and Trade Relations

                  	
                    31

                  
	 
      	
                    3.22.

                  	
                    Agreements
      and Other Documents

                  	
                    31

                  
	 
      	
                    3.23.

                  	
                    Solvency

                  	
                    31

                  
	 
      	
                    3.24.

                  	
                    Subordinated
      Debt

                  	
                    31

                  
	 
      	
                    3.25.

                  	
                    Anti-Terrorism
      Laws

                  	
                    32

                  
	 
      	
                    3.26.

                  	
                    Trading
      with the Enemy

                  	
                    32

                  
	 
      	 
      	 
      	 
      
	
                    4.

                  	
                    FINANCIAL
      STATEMENTS AND INFORMATION

                  	
                    33

                  
	 
      	
                    4.1.

                  	
                    Reports
      and Notices

                  	
                    33

                  
	 
      	
                    4.2.

                  	
                    Communication
      with Accountants

                  	
                    33

                  
	 
      	 
      	 
      	 
      
	
                    5.

                  	
                    AFFIRMATIVE
      COVENANTS

                  	
                    33

                  
	 
      	
                    5.1.

                  	
                    Maintenance
      of Existence and Conduct of Business

                  	
                    33

                  
	 
      	
                    5.2.

                  	
                    Payment
      of Charges

                  	
                    33

                  
	 
      	
                    5.3.

                  	
                    Books
      and Records

                  	
                    34

                  
	 
      	
                    5.4.

                  	
                    Insurance;
      Damage to or Destruction of Collateral.

                  	
                    34

                  
	 
      	
                    5.5.

                  	
                    Compliance
      with Laws

                  	
                    36

                  
	 
      	
                    5.6.

                  	
                    Supplemental
      Disclosure

                  	
                    36

                  
	 
      	
                    5.7.

                  	
                    Intellectual
      Property

                  	
                    36

                  
	 
      	
                    5.8.

                  	
                    Environmental
      Matters

                  	
                    37

                  
	 
      	
                    5.9.

                  	
                    Landlords’
      Agreements, Mortgagee Agreements, Bailee Letters and Real Estate
      Purchases

                  	
                    37

                  
	 
      	
                    5.10.

                  	
                    Further
      Assurances

                  	
                    38

                  
	 
      	
                    5.11.

                  	
                    Intentionally
      Omitted

                  	
                    38

                  
	 
      	
                    5.12.

                  	
                    BSE
      Sale

                  	
                    38

                  
	 
      	 
      	 
      	 
      
	
                    6.

                  	
                    NEGATIVE
      COVENANTS

                  	
                    38

                  
	 
      	
                    6.1.

                  	
                    Mergers,
      Subsidiaries, Etc

                  	
                    38

                  
	 
      	
                    6.2.

                  	
                    Investments;
      Loans and Advances

                  	
                    41

                  
	 
      	
                    6.3.

                  	
                    Indebtedness

                  	
                    41

                  
	 
      	
                    6.4.

                  	
                    Employee
      Loans and Affiliate Transactions

                  	
                    42

                  
	 
      	
                    6.5.

                  	
                    Capital
      Structure and Business

                  	
                    43

                  
	 
      	
                    6.6.

                  	
                    Guaranteed
      Indebtedness

                  	
                    43

                  
	 
      	
                    6.7.

                  	
                    Liens

                  	
                    44

                  
	 
      	
                    6.8.

                  	
                    Sale
      of Stock and Assets

                  	
                    44

                  
	 
      	
                    6.9.

                  	
                    ERISA

                  	
                    44

                  
	 
      	
                    6.10.

                  	
                    Financial
      Covenants

                  	
                    44

                  
	 
      	
                    6.11.

                  	
                    Hazardous
      Materials

                  	
                    45

                  
	 
      	
                    6.12.

                  	
                    Sale
      Leasebacks

                  	
                    45

                  
	 
      	
                    6.13.

                  	
                    Cancellation
      of Indebtedness

                  	
                    45

                  
	 
      	
                    6.14.

                  	
                    Restricted
      Payments

                  	
                    45

                  
	 
      	
                    6.15.

                  	
                    Change
      of Corporate Name, State of Incorporation or Location; Change of Fiscal
      Year

                  	
                    45

                  
	 
      	
                    6.16.

                  	
                    No
      Impairment of Intercompany Transfers

                  	
                    46

                  
	 
      	
                    6.17.

                  	
                    No
      Speculative Transactions

                  	
                    46

                  
	 
      	
                    6.18.

                  	
                    Leases

                  	
                    46

                  

          

        

      

    

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    

    
      
        
          
            	 
      	
                    6.19.

                  	
                    Changes
      Relating to Subordinated Debt; Material Contracts

                  	
                    46

                  
	 
      	
                    6.20.

                  	
                    Inactive
      Subsidiaries

                  	
                    47

                  
	 
      	
                    6.21.

                  	
                    No
      Amendment to Auto Supplier Program Documents

                  	
                    47

                  
	 
      	 
      	 
      	 
      
	
                    7.

                  	
                    TERM

                  	
                    47

                  
	 
      	
                    7.1.

                  	
                    Termination

                  	
                    47

                  
	 
      	
                    7.2.

                  	
                    Survival
      of Obligations Upon Termination of Financing Arrangements

                  	
                    47

                  
	 
      	 
      	 
      	 
      
	
                    8.

                  	
                    EVENTS
      OF DEFAULT; RIGHTS AND REMEDIES

                  	
                    47

                  
	 
      	
                    8.1.

                  	
                    Events
      of Default

                  	
                    47

                  
	 
      	
                    8.2.

                  	
                    Remedies

                  	
                    49

                  
	 
      	
                    8.3.

                  	
                    Waivers
      by Credit Parties

                  	
                    50

                  
	 
      	 
      	 
      	 
      
	
                    9.

                  	
                    ASSIGNMENT
      AND PARTICIPATIONS; APPOINTMENT OF AGENT

                  	
                    50

                  
	 
      	
                    9.1.

                  	
                    Assignment
      and Participations

                  	
                    50

                  
	 
      	
                    9.2.

                  	
                    Appointment
      of Agent

                  	
                    53

                  
	 
      	
                    9.3.

                  	
                    Agent’s
      Reliance, Etc

                  	
                    54

                  
	 
      	
                    9.4.

                  	
                    GE
      Capital and Affiliates

                  	
                    54

                  
	 
      	
                    9.5.

                  	
                    Lender
      Credit Decision

                  	
                    54

                  
	 
      	
                    9.6.

                  	
                    Indemnification

                  	
                    55

                  
	 
      	
                    9.7.

                  	
                    Successor
      Agent

                  	
                    55

                  
	 
      	
                    9.8.

                  	
                    Setoff
      and Sharing of Payments

                  	
                    56

                  
	 
      	
                    9.9.

                  	
                    Advances;
      Payments; Non-Funding Lenders; Information; Actions in
    Concert

                  	
                    56

                  
	 
      	
                    9.10.

                  	
                    Syndication
      and Documentation Agents

                  	
                    58

                  
	 
      	 
      	 
      	 
      
	
                    10.

                  	
                    SUCCESSORS
      AND ASSIGNS

                  	
                    58

                  
	 
      	
                    10.1.

                  	
                    Successors
      and Assigns

                  	
                    58

                  
	 
      	 
      	 
      	 
      
	
                    11.

                  	
                    MISCELLANEOUS

                  	
                    59

                  
	 
      	
                    11.1.

                  	
                    Complete
      Agreement; Modification of Agreement

                  	
                    59

                  
	 
      	
                    11.2.

                  	
                    Amendments
      and Waivers

                  	
                    59

                  
	 
      	
                    11.3.

                  	
                    Fees
      and Expenses

                  	
                    61

                  
	 
      	
                    11.4.

                  	
                    No
      Waiver

                  	
                    62

                  
	 
      	
                    11.5.

                  	
                    Remedies

                  	
                    62

                  
	 
      	
                    11.6.

                  	
                    Severability

                  	
                    63

                  
	 
      	
                    11.7.

                  	
                    Conflict
      of Terms

                  	
                    63

                  
	 
      	
                    11.8.

                  	
                    Confidentiality

                  	
                    63

                  
	 
      	
                    11.9.

                  	
                    GOVERNING
      LAW

                  	
                    63

                  
	 
      	
                    11.10.

                  	
                    Notices

                  	
                    64

                  
	 
      	
                    11.11.

                  	
                    Section
      Titles

                  	
                    64

                  
	 
      	
                    11.12.

                  	
                    Counterparts

                  	
                    64

                  
	 
      	
                    11.13.

                  	
                    WAIVER
      OF JURY TRIAL

                  	
                    65

                  
	 
      	
                    11.14.

                  	
                    Press
      Releases and Related Matters

                  	
                    65

                  
	 
      	
                    11.15.

                  	
                    Reinstatement

                  	
                    65

                  
	 
      	
                    11.16.

                  	
                    Advice
      of Counsel

                  	
                    65

                  
	 
      	
                    11.17.

                  	
                    No
      Strict Construction

                  	
                    66

                  

          

        

      

    

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    

    
      
        
          
            	 
      	
                    11.18.

                  	
                    Reaffirmation
      of Collateral Documents

                  	
                    66

                  
	 
      	
                    11.19.

                  	
                    Certifications
      From Banks and Participants; US PATRIOT Act

                  	
                    66

                  
	 
      	 
      	 
      	 
      
	
                    12.

                  	
                    CROSS-GUARANTY

                  	
                    66

                  
	 
      	
                    12.1.

                  	
                    Cross-Guaranty

                  	
                    66

                  
	 
      	
                    12.2.

                  	
                    Waivers
      by Borrowers

                  	
                    67

                  
	 
      	
                    12.3.

                  	
                    Benefit
      of Guaranty

                  	
                    67

                  
	 
      	
                    12.4.

                  	
                    Subordination
      of Subrogation, Etc

                  	
                    67

                  
	 
      	
                    12.5.

                  	
                    Election
      of Remedies

                  	
                    68

                  
	 
      	
                    12.6.

                  	
                    Limitation

                  	
                    68

                  
	 
      	
                    12.7.

                  	
                    Contribution
      with Respect to Guaranty Obligations

                  	
                    68

                  
	 
      	
                    12.8.

                  	
                    Liability
      Cumulative

                  	
                    69

                  

          

        

      

    

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

    INDEX OF
APPENDICES

     

    
      
        	
                Annex
      A (Recitals)

              	
                Definitions

              
	
                Annex
      B (Section 1.2)

              	
                Letters
      of Credit

              
	
                Annex
      C (Section 1.8)

              	
                Cash
      Management System

              
	
                Annex
      D-1 (Section 2.1(a))

              	
                Closing
      Checklist

              
	
                Annex
      E (Section 4.1(a))

              	
                Financial
      Statements and Projections—Reporting

              
	
                Annex
      F (Section 4.1(b))

              	
                Collateral
      Reports

              
	
                Annex
      G (Section 6.10)

              	
                Financial
      Covenants

              
	
                Annex
      H (Section 9.9(a))

              	
                Lenders’
      Wire Transfer Information

              
	
                Annex
      I (Section 11.10)

              	
                Notice
      Addresses

              
	
                Annex
      J (from Annex A

              	
                Commitments
      as of Closing Date

              
	
                Commitments
      definition)

              	 
      
	 
      	 
      
	
                Exhibit
      1.1(a)(i)

              	
                Form
      of Notice of Revolving Credit Advance

              
	
                Exhibit
      1.1(a)(i)(A)

              	
                Form
      of Combined Notice of Revolving Credit Advance and Collateral Activity
      Report

              
	
                Exhibit
      1.1(a)(ii)

              	
                Form
      of Revolving Note

              
	
                Exhibit
      1.5(d)

              	
                Form
      of Notice of Conversion/Continuation

              
	
                Exhibit
      4.1(b)

              	
                Form
      of Borrowing Base Certificate

              
	
                Exhibit
      9.1(a)

              	
                Form
      of Assignment Agreement

              
	
                Exhibit
      B-1

              	
                Application
      for Standby Letter of Credit

              
	
                Exhibit
      B-2

              	
                Application
      and Agreement for Documentary Letter of Credit

              
	
                Exhibit
      B-3

              	
                Application
      for Documentary Letter of Credit

              
	 
      	 
      
	
                Schedule
      1.1

              	
                Agent’s
      Representatives

              
	 
      	 
      
	
                Disclosure
      Schedule 1.4

              	
                Sources
      and Uses; Funds Flow Memorandum

              
	
                Disclosure
      Schedule 1.6

              	
                Customer
      Program Financial Institutions

              
	
                Disclosure
      Schedule 3.1

              	
                Type
      of Entity; State of Organization

              
	
                Disclosure
      Schedule 3.2

              	
                Executive
      Offices, Collateral Locations, FEIN

              
	
                Disclosure
      Schedule 3.4(a)

              	
                Financial
      Statements

              
	
                Disclosure
      Schedule 3.4(b)

              	
                Projections

              
	
                Disclosure
      Schedule 3.6

              	
                Real
      Estate and Leases

              
	
                Disclosure
      Schedule 3.7

              	
                Labor
      Matters

              
	
                Disclosure
      Schedule 3.8

              	
                Ventures,
      Subsidiaries and Affiliates; Outstanding Stock

              
	
                Disclosure
      Schedule 3.11

              	
                Tax
      Matters

              
	
                Disclosure
      Schedule 3.12

              	
                ERISA
      Plans

              
	
                Disclosure
      Schedule 3.13

              	
                Litigation

              
	
                Disclosure
      Schedule 3.15

              	
                Intellectual
      Property

              
	
                Disclosure
      Schedule 3.17

              	
                Hazardous
      Materials

              
	
                Disclosure
      Schedule 3.18

              	
                Insurance

              
	
                Disclosure
      Schedule 3.19

              	
                Deposit
      and Disbursement Accounts

              
	
                Disclosure
      Schedule 3.20

              	
                Government
      Contracts

              
	
                Disclosure
      Schedule 3.22

              	
                Agreements
      and Other Documents

              
	
                Disclosure
      Schedule 5.1

              	
                Trade
      Names

              

      

    

    
      
         

      

      
        v

        
          

        

      

      
         

      

    

    

    
      
        	
                Disclosure
      Schedule 6.2

              	
                Investments

              
	
                Disclosure
      Schedule 6.3

              	
                Indebtedness

              
	
                Disclosure
      Schedule 6.4(a)

              	
                Transactions
      with Affiliates

              
	
                Disclosure
      Schedule 6.6

              	
                Guaranteed
      Indebtedness

              
	
                Disclosure
      Schedule 6.7

              	
                Existing
      Liens

              
	
                Disclosure
      Schedule E

              	
                Equipment
      subject to Capital Leases

              

      

    

    
      
         

      

      
        vi

        
          

        

      

      
         

      

    

    This
THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”), dated as
of November 10, 2010 among STANDARD MOTOR PRODUCTS, INC., a New York corporation
(“SMP”) and
STANRIC, INC., a Delaware corporation (“SI”) (SMP and SI are
sometimes collectively referred to herein as the “Borrowers” and
individually as a “Borrower”); the other
Credit Parties signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation (in its individual capacity, “GE Capital”), for
itself, as a Lender, and as Agent for Lenders, BANK OF AMERICA, N.A., for
itself, as a Lender, and as a Co-Syndication Agent, WELLS FARGO CAPITAL FINANCE,
LLC, for itself as a Lender, and as a Co-Syndication Agent, JPMORGAN CHASE BANK,
N.A., for itself as a Lender, and as Documentation Agent and GE CAPITAL MARKETS,
INC. as sole lead arranger and sole bookrunner and the other Lenders signatory
hereto from time to time.

     

    RECITALS

     

    WHEREAS,
Credit Parties and Original Lenders were parties to the Original Credit
Agreement pursuant to which Original Lenders extended revolving credit
facilities to Borrowers of up to One Hundred and Ninety Million Dollars
($190,000,000) in the aggregate (plus an optional Fifty Million Dollar
($50,000,000) accordion facility); and

     

    WHEREAS,
Borrowers have requested that Lenders (i) amend and restate the Original Credit
Agreement and (ii) extend revolving credit facilities to Borrowers of up to One
Hundred Ninety Million Dollars ($190,000,000) in the aggregate (plus an optional
Fifty Million Dollar ($50,000,000) accordion facility) for the purpose of (a)
providing working capital financing for the general corporate purposes of
Borrowers and (b) providing funds for other purposes permitted hereunder;
including, without limitation, the refinancing, repurchase and/or redemption of
Subordinated Debt, on the terms and conditions set forth herein, and Lenders are
willing to make certain loans and other extensions of credit to Borrowers upon
the terms and conditions set forth herein; and

     

    WHEREAS,
Credit Parties have agreed to secure all of their obligations under the Loan
Documents by granting to Agent, for the benefit of Agent and Lenders, a security
interest in and lien upon substantially all of their existing and after-acquired
personal and real property; and

     

    WHEREAS,
capitalized terms used in this Agreement shall have the meanings ascribed to
them in Annex A and, for purposes of this Agreement and the other Loan
Documents, the rules of construction set forth in Annex A shall
govern.  All Annexes, Disclosure Schedules, Exhibits and other
attachments (collectively, “Appendices”) hereto, or expressly identified to this
Agreement, are incorporated herein by reference, and taken together with this
Agreement, shall constitute but a single agreement.  These Recitals
shall be construed as part of the Agreement.

     

    NOW,
THEREFORE, in consideration of the premises and the mutual covenants hereinafter
contained, and for other good and valuable consideration, the parties hereto
agree as follows:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    AMENDMENT AND RESTATEMENT

     

    As of the
date of this Agreement, the terms, conditions, covenants, agreements,
representations and warranties contained in the Original Credit Agreement shall
be deemed amended and restated in their entirety as follows and the Original
Credit Agreement shall be consolidated with and into and superseded by this
Agreement without breaking continuity; provided, however, that nothing contained
in this Agreement shall impair, limit or affect the security interests
heretofore granted, pledged and or assigned to Agent as security for the
Obligations under the Original Credit Agreement and this Agreement does not
constitute a novation of the Original Credit Agreement or the security interests
granted in connection therewith.  Outstanding Revolving Credit
Advances under the Original Credit Agreement shall constitute Revolving Credit
Advances under this Agreement.  Outstanding Letter of Credit
Obligations under the Original Credit Agreement shall constitute Letter of
Credit Obligations under this Agreement

     

    
      	
              1.

            	
              AMOUNT
      AND TERMS OF CREDIT

            

    

     

    1.1.        Credit
Facilities.

     

    (a)          Revolving Credit
Facility.

     

    (i)       
    Subject to the terms and conditions hereof each Lender
agrees to make available to Borrowers from time to time until the Commitment
Termination Date its Pro Rata Share of advances (each, a “Revolving Credit
Advance”).  The Pro Rata Share of the Revolving Loans of any
Lender shall not at any time exceed its separate Commitment.  The
obligations of each Lender hereunder shall be several and not
joint.  Until the Commitment Termination Date, Borrowers may borrow,
repay and reborrow under this Section 1.1(a)(i); provided that the amount of any
Revolving Credit Advance to be made at any time shall not exceed Borrowing
Availability at such time.  Borrowing Availability may be reduced by
Reserves imposed by Agent in its reasonable credit
judgment.  Moreover, Revolving Loans outstanding to any Borrower shall
not exceed at any time that Borrower’s separate Borrowing Base.  Each
Revolving Credit Advance shall be made on notice by Borrower Representative on
behalf of the applicable Borrower to one of the representatives of Agent
identified in Schedule 1.1 at the address specified therein.  Any such
notice must be given no later than (1) noon (New York time) on the Business Day
of the proposed Revolving Credit Advance, in the case of an Index Rate Loan, or
(2) noon (New York time) on the date which is three (3) Business Days prior to
the proposed Revolving Credit Advance, in the case of a LIBOR
Loan.  Each such notice must be given in writing (by telecopy or
overnight courier) substantially in the form of Exhibit 1.1(a)(i) or, in the
event that that the aggregate daily Aggregate Borrowing Availability (after
giving effect to such requested Advance) for any day is $50,000,000 or less,
then Borrowers shall submit a notice substantially in the form of Exhibit
1.1(a)(i)(A) (as applicable, a “Notice of Revolving Credit
Advance”), and shall include the information required in such Exhibit and
such other information as may be reasonably required by Agent.  If any
Borrower desires to have the Revolving Credit Advances bear interest by
reference to a LIBOR Rate, Borrower Representative must comply with Section
1.5(d).  Notwithstanding the foregoing to the contrary, in the event
that Borrower Representative shall send notice to Agent (or one of Agent’s
representatives identified on Schedule 1.1) that it requests a Revolving Loan at
any time that the aggregate daily Aggregate Borrowing Availability (after giving
effect to such Advance) for any day is $20,000,000 or less, then Borrowers shall
submit, together with such notice, evidence that Borrowers are in compliance
with the Fixed Charge Coverage Ratio required under item 1(a) of Annex G, which
evidence shall consist of the most recent monthly financial statements already
delivered to Agent pursuant to item (a) of Annex E for the twelve month period
then ended.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (ii)           Except
as provided in Section 1.12, each Borrower shall execute and deliver to each
Lender a note to evidence the Commitment of that Lender.  Each note
shall be in the principal amount of the Commitment of the applicable Lender,
dated the Closing Date and substantially in the form of Exhibit 1.1(a)(ii) (each
a “Revolving
Note” and, collectively, the “Revolving
Notes”).  Each Revolving Note shall represent the obligation of
the applicable Borrower to pay the amount of the applicable Lender’s Commitment
or, if less, such Lender’s Pro Rata Share of the aggregate unpaid principal
amount of all Revolving Credit Advances to such Borrower together with interest
thereon as prescribed in Section 1.5.  The entire unpaid balance of
the aggregate Revolving Loan and all other non-contingent Obligations shall be
immediately due and payable in full in immediately available funds on the
Commitment Termination Date.

     

    (iii)          Anything
in this Agreement to the contrary notwithstanding, at the request of Borrower
Representative, in its discretion Agent may (but shall have absolutely no
obligation to), make Revolving Credit Advances to Borrowers on behalf of Lenders
in amounts that cause the outstanding balance of the aggregate Revolving Loan to
exceed the Aggregate Borrowing Base or which cause the outstanding balance of
the Revolving Loan owing by any Borrower to exceed that Borrower’s separate
Borrowing Base (any such excess Revolving Credit Advances are herein referred to
collectively as “Overadvances”) which
the Agent, in its reasonable business judgment, deems necessary or desirable (a)
to preserve or protect the Collateral, or any portion thereof, (b) to enhance
the likelihood of, or maximize the amount of, repayment of the Revolving Loans
and other Obligations, or (c) to pay any other amount chargeable to the
Borrowers pursuant to the terms of this Agreement; provided that (A) no such
event or occurrence shall cause or constitute a waiver of Agent’s or Lenders’
right to refuse to make any further Overadvances or Revolving Credit Advances,
or incur any Letter of Credit Obligations, as the case may be, at any time that
an Overadvance exists, and (B) no Overadvance shall result in a Default or Event
of Default based on Borrowers’ failure to comply with Section 1.3(b)(i) for so
long as Agent permits such Overadvances to be outstanding, but solely with
respect to the amount of such Overadvance.  In addition, Overadvances
may be made even if the conditions to lending set forth in Section 2 have not
been met.  All Overadvances shall constitute Index Rate Loans, shall
bear interest at the Default Rate and shall be payable on the earlier of demand
or the Commitment Termination Date.  Except as otherwise provided in
Section 1.11(b), the authority of Agent to make Overadvances is limited to an
aggregate amount not to exceed $15,000,000 at any time, shall not cause the
aggregate Revolving Loan to exceed the Maximum Amount, and may be revoked
prospectively by a written notice to Agent (with a copy thereof to Borrower
Representative) signed by Requisite Lenders.

     

    (iv)          In
no event, at any time, shall (x) the Aggregate Amortizing Availability included
in determining the Aggregate Borrowing Base plus the SMP Canada
Amortizing Availability exceed $25,000,000, and (y) the amount included in
Aggregate Amortizing Availability based upon the Fair Market Value of Eligible
Real Estate exceed 50% of such Aggregate Amortizing
Availability.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (b)           At
Borrowing Representative’s option, the Aggregate Amortizing Availability may be
increased to an amount not to exceed the lesser of (x) $25,000,000 and (y) the
sum of the SI Amortizing Availability, SMP Amortizing Availability and SMP
Canada Amortizing Availability as calculated based upon the Reloading Appraisal,
provided that (1) the option may only be exercised once, (2) at the time the
option is exercised Agent shall have received a certificate of Borrower
Representative certifying that no Default or Event of Default shall have
occurred and be continuing as of the effective date of any such increase and (3)
Agent shall have has no less than ten (10) Business Days to review the Reloading
Appraisal and any concerns of Agent shall have been addressed to the reasonable
satisfaction of Agent.

     

    (c)           INTENTIONALLY
OMITTED.

     

    (d)           Reliance on Notices;
Appointment of Borrower Representative.  Agent shall be
entitled to rely upon, and shall be fully protected in relying upon, any Notice
of Revolving Credit Advance, any Notice of Conversion/Continuation or any
similar notice believed by Agent to be genuine.  Agent may assume that
each Person executing and delivering any notice in accordance herewith was duly
authorized, unless the responsible individual acting thereon for Agent has
actual knowledge to the contrary.  Each Borrower hereby designates SMP
as its representative and agent on its behalf for the purposes of issuing
Notices of Revolving Credit Advances and Notices of Conversion/ Continuation,
giving instructions with respect to the disbursement of the proceeds of the
Loans, selecting interest rate options, requesting Letters of Credit, giving and
receiving all other notices and consents hereunder or under any of the other
Loan Documents and taking all other actions (including in respect of compliance
with covenants) on behalf of any Borrower or Borrowers under the Loan
Documents.  Borrower Representative hereby accepts such
appointment.  Agent and each Lender may regard any notice or other
communication pursuant to any Loan Document from Borrower Representative as a
notice or communication from all Borrowers, and may give any notice or
communication required or permitted to be given to any Borrower or Borrowers
hereunder to Borrower Representative on behalf of such Borrower or
Borrowers.  Each Borrower agrees that each notice, election,
representation and warranty, covenant, agreement and undertaking made on its
behalf by Borrower Representative shall be deemed for all purposes to have been
made by such Borrower and shall be binding upon and enforceable against such
Borrower to the same extent as if the same had been made directly by such
Borrower.

     

    1.2.        Letters of
Credit.  Subject to and in accordance with the terms and
conditions contained herein and in Annex B, Borrower Representative, on behalf
of the applicable Borrower, shall have the right to request, and, Lenders agree
to incur, or purchase participations in, Letter of Credit Obligations in respect
of each Borrower.

     

    1.2A.     Swap Related Reimbursement
Obligations.

     

    (a)          Borrowers
agree to reimburse GE Capital in immediately available funds in the amount of
any payment made by GE Capital under a Swap Related L/C (such reimbursement
obligation, whether contingent upon payment by GE Capital under the Swap Related
L/C or otherwise, being herein called a “Swap Related Reimbursement
Obligation”).  No Swap Related Reimbursement Obligation for any
Swap Related L/C may exceed the amount of the payment obligations owed by
Borrowers under the interest rate protection or hedging agreement or transaction
supported by the Swap Related L/C.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (b)          A
Swap Related Reimbursement Obligation shall be due and payable by Borrowers
within one (1) Business Day after the date on which the related payment is made
by GE Capital under the Swap Related L/C.

     

    (c)          Any
Swap Related Reimbursement Obligation shall, during the period in which it is
unpaid, bear interest at the rate per annum equal to the LIBOR Rate plus one
percent (1%), as if the unpaid amount of the Swap Related Reimbursement
Obligation were a LIBOR Loan, and not at any otherwise applicable Default
Rate.  Such interest shall be payable upon demand.  The
following additional provisions apply to the calculation and charging of
interest on Swap Related Reimbursement Obligations by reference to the LIBOR
Rate:

     

    (i)     
      The LIBOR Rate shall be determined for each
successive one-month LIBOR Period during which the Swap Related Reimbursement
Obligation is unpaid, notwithstanding the occurrence of any Event of Default and
even if the LIBOR Period were to extend beyond the Commitment Termination
Date.

     

    (ii)           If
a Swap Related Reimbursement Obligation is paid during a monthly period for
which the LIBOR Rate is determined, interest shall be prorated and charged for
the portion of the monthly period during which the Swap Related Reimbursement
Obligation was unpaid.  Section 1.3(b) shall not apply to any payment
of a Swap Related Reimbursement Obligation during the monthly
period.

     

    (d)          Except
as provided in the foregoing provisions of this Section 1.2A and in Section
11.3, Borrowers shall not be obligated to pay to GE Capital or any of its
Affiliates any Letter of Credit Fee, or any other fees, charges or expenses, in
respect of a Swap Related L/C or arranging for any interest rate protection or
hedging agreement or transaction supported by the Swap Related
L/C.  GE Capital and its Affiliates shall look to the beneficiary of a
Swap Related L/C for payment of any such letter of credit fees or other fees,
charges or expenses and such beneficiary may factor such fees, charges, or
expenses into the pricing of any interest rate protection or hedging arrangement
or transaction supported by the Swap Related L/C.

     

    (e)          If
any Swap Related L/C is revocable prior to its scheduled expiry date, GE Capital
agrees not to revoke the Swap Related L/C unless the Commitment Termination Date
or an Event of Default has occurred.

     

    (f)          GE
Capital or any of its Affiliates shall be permitted to (i) provide confidential
or other information furnished to it by any of the Credit Parties (including,
without limitation, copies of any documents and information in or referred to in
the Closing Checklist, Financial Statements and Compliance Certificates) to a
beneficiary or potential beneficiary of a Swap Related L/C and (ii) receive
confidential or other information from the beneficiary or potential beneficiary
relating to any agreement or transaction supported or to be supported by the
Swap Related L/C.  However, no confidential information shall be
provided to any Person under this paragraph unless the Person has agreed to
comply with the covenant substantially as contained in Section 11.8 of this
Agreement.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    1.3.        Prepayments.

     

    (a)          Voluntary
Prepayments.  Borrowers may at any time on at least five (5)
days’ prior written notice by Borrower Representative to Agent terminate the
Commitment; provided that upon such termination, all Loans and other Obligations
shall be immediately due and payable in full and all Letter of Credit
Obligations shall be cash collateralized or otherwise satisfied in accordance
with Annex B.  Any such termination of the Commitment must be
accompanied by the payment of any LIBOR funding breakage costs in accordance
with Section 1.13(b).  Upon any termination of the Commitment, each
Borrower’s right to request Revolving Credit Advances, or request that Letter of
Credit Obligations be incurred on its behalf shall simultaneously be
terminated.

     

    (b)          Mandatory
Prepayments.

     

    (i)         
  If at any time the aggregate outstanding balances of the Revolving
Loan exceed the lesser of (A) the Maximum Amount and (B) the Aggregate Borrowing
Base, Borrowers shall immediately repay the aggregate outstanding Revolving
Credit Advances to the extent required to eliminate such excess.  If
any such excess remains after repayment in full of the aggregate outstanding
Revolving Credit Advances, Borrowers shall provide cash collateral for the
Letter of Credit Obligations in the manner set forth in Annex B to the extent
required to eliminate such excess.  Furthermore, if, at any time, the
outstanding balance of the Revolving Loan of any Borrower exceeds that
Borrower’s separate Borrowing Base, the applicable Borrower shall immediately
repay its Revolving Credit Advances in the amount of such excess (and, if
necessary, shall provide cash collateral for its Letter of Credit Obligations as
described above).  Notwithstanding the foregoing, any Overadvance made
pursuant to Section 1.1(a)(iii) shall be repaid in accordance with Section
1.1(a)(iii).

     

    (ii)           Within
three (3) Business Days after receipt by any Credit Party of cash proceeds of
any asset disposition (excluding proceeds of asset dispositions permitted by
Section 6.8 (a)), any sale leaseback permitted by Section 6.12 or any sale of
Stock of any Subsidiary of any Credit Party (other than a sale to any Credit
Party), Borrowers shall prepay the Loans in an amount equal to all such
proceeds, net of (A) commissions and other reasonable and customary transaction
costs, fees and expenses properly attributable to such transaction and payable
by Borrowers in connection therewith (in each case, paid to non-Affiliates), (B)
transfer or other related taxes, (C) amounts payable to holders of senior Liens
on such assets (to the extent such Liens constitute Permitted Encumbrances
hereunder), if any, (D) an appropriate reserve for income taxes in accordance
with GAAP in connection therewith, and (E) amounts permitted to be retained by
the Credit Parties in the form of cash or cash equivalents pursuant to Section
6.2 of this Agreement.  Any such prepayment shall be applied in
accordance with Section 1.3(c).

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    (iii)          If
any Borrower issues Stock to any non-Borrower or non-Credit Party third party
for cash consideration, no later than the Business Day following the date of
receipt of the proceeds thereof, the issuing Borrower shall prepay the Loans
(and cash collateralize Letter of Credit Obligations) in an amount equal to all
such proceeds, net of underwriting discounts and commissions and other
reasonable costs paid to non-Affiliates in connection therewith.  Any
such prepayment shall be applied in accordance with Section 1.3(c).

     

    (c)          Application of Certain
Mandatory Prepayments.  Any prepayments made by any Borrower
pursuant to Sections 1.3(b)(ii) or (b)(iii) above shall be applied as follows:
first, to Fees and reimbursable expenses of Agent then due and payable pursuant
to any of the Loan Documents; second, to interest then due and payable on
Revolving Credit Advances made to that Borrower; third, to the principal balance
of Revolving Credit Advances outstanding to that Borrower until the same has
been paid in full; fourth, to any Letter of Credit Obligations of such Borrower
to provide cash collateral therefor in the manner set forth in Annex B, until
all such Letter of Credit Obligations have been fully cash collateralized in the
manner set forth in Annex B; fifth, to interest then due and payable on the
Revolving Credit Advances outstanding to each other Borrower, pro rata; sixth,
to the principal balance of the Revolving Credit Advances made to each other
Borrower, pro rata, until the same has been paid in full; seventh, to any Letter
of Credit Obligations of each other Borrower, pro rata, to provide cash
collateral therefore in the manner set forth in Annex B, until all such Letter
of Credit Obligations have been fully cash collateralized; eighth, to any Rate
Protection Obligations and Swap Related Reimbursement Obligations which may be
due and payable by such Borrower, ratably in proportion to the aggregate amounts
owed as to each Rate Protection Obligation and unpaid Swap Related Reimbursement
Obligation, as applicable, until the same have been paid in full; and ninth, to
any Rate Protection Obligations and unpaid Swap Related Reimbursement
Obligations which may be due and payable by each other Borrower, ratably in
proportion to the aggregate amounts owed as to each such Rate Protection
Obligation and Swap Related Reimbursement Obligation, as applicable, until the
same have been paid in full.  The Commitment shall not be permanently
reduced by the amount of any such prepayments.

     

    (d)          Application of Prepayments
from Insurance and Condemnation Proceeds.  Prepayments from
insurance or condemnation proceeds in accordance with Section 5.4(c) and the
Mortgage(s), respectively, shall be applied, to the Revolving Credit Advances of
the Borrower that incurred such casualties or losses.  The Commitment
shall not be permanently reduced by the amount of any such
prepayments.  If insurance or condemnation proceeds received by a
particular Borrower exceed the outstanding principal balances of the Loans to
that Borrower, or if the precise amount of insurance or condemnation proceeds
allocable to Inventory as compared to Equipment, Fixtures and Real Estate are
not otherwise determined, the allocation and application of those proceeds shall
be determined by Agent, subject to the approval of Requisite
Lenders.

     

    (e)          No Implied
Consent.  Nothing in this Section 1.3 shall be construed to
constitute Agent’s or any Lender’s consent to any transaction that is not
permitted by other provisions of this Agreement or the other Loan
Documents.

     

    1.4.        Use of
Proceeds.  Borrowers shall utilize the proceeds of the Loans
solely for the financing of Borrowers’ ordinary working capital and general
corporate needs, including, without limitation, to fund any refinancing,
purchase or redemption of Subordinated Debt otherwise permitted pursuant to
Section 6.14.  Disclosure Schedule (1.4) contains a description of
Borrowers’ sources and uses of funds as of the Closing Date, including Loans and
Letter of Credit Obligations to be made or incurred on that date, and a funds
flow memorandum directing the Agent how funds from each source are to be
transferred to particular uses.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    1.5.        Interest
and Applicable Margins.

     

    (a)           (i)          
 Intentionally
Omitted.

     

    (ii)          
On and after the Closing Date, Borrowers shall pay interest to Agent, for the
ratable benefit of Lenders in accordance with the various Loans being made by
each Lender, in arrears on each applicable Interest Payment Date, at a
fluctuating rate equal to (A) the Index Rate plus the Applicable Revolver Index
Margin per annum or (B) at the election of Borrower Representative, the
applicable LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum, in
each case based on the aggregate Revolving Credit Advances outstanding from time
to time.

     

    (iii)          As
of the Closing Date, the Applicable Margins are set at Level III of the
Applicable Margin grid set forth below, and commencing upon receipt by Agent of
Borrowers’ Borrowing Base Certificate for the period ended December 31, 2010 and
in accordance with clause (iv) below, the Applicable Margins shall be subject to
adjustment (up or down) prospectively based on Excess Formula Availability for
the four Fiscal Quarters then ended, each in accordance with the following
grids, which will be in effect on and after the Closing Date:

     

    
      
        
          
            
              
                	
                        If Excess Formula Availability
      is:

                      	 	
                        Level of Applicable

                        Margins

                      
	 
      	 	 
      
	
                        <$40
      Million

                      	 	
                        Level
      I

                      
	
                        ≥$40
      Million but ≤$60 Million

                      	 	
                        Level
      II

                      
	
                        >$60
      Million

                      	 	
                        Level
      III

                      

              

            

          

        

      

    

    

    
      
        
          
            
              
                	
                        Applicable Margins

                      	 
	 
      	 	 	 	 	 	 	 	 	 
	 
      	 	
                        Level I

                      	 	 	
                        Level II

                      	 	 	
                        Level III

                      	 
	
                        Applicable
      Revolver Index Margin

                      	 	 	1.75	%	 	 	1.50	%	 	 	1.25	%
	
                        Applicable
      Revolver LIBOR Margin

                      	 	 	3.25	%	 	 	3.00	%	 	 	2.75	%
	
                        Applicable
      L/C Fee Margin

                      	 	 	3.25	%	 	 	3.00	%	 	 	2.75	%
	
                        Applicable
      Unused Line Fee Margin

                      	 	 	0.50	%	 	 	0.50	%	 	 	0.50	%

              

            

          

        

      

    

    

    (iii)           All
adjustments in the Applicable Margins shall be implemented on a prospective
basis on the first day of each Fiscal Quarter based upon Agent’s determination
of Excess Formula Availability, for each calendar month.  If a Default
or Event of Default has occurred and is continuing at the time any reduction in
the Applicable Margins is to be implemented, that reduction shall be deferred
until the first day of the first calendar month following the date on which such
Default or Event of Default is waived or cured.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    If any
payment on any Loan becomes due and payable on a day other than a Business Day,
the maturity thereof will be extended to the next succeeding Business Day
(except as set forth in the definition of LIBOR Period) and, with respect to
payments of principal, interest thereon shall be payable at the then applicable
rate during such extension.

     

    (b)           All
computations of Fees calculated on a per annum basis and interest shall be made
by Agent on the basis of a 360-day year, in each case for the actual number of
days occurring in the period for which such interest and Fees are
payable.  The Index Rate is a floating rate determined for each
day.  Each determination by Agent of an interest rate and Fees
hereunder shall be final, binding and conclusive on Borrowers, absent manifest
error.

     

    (c)           So
long as an Event of Default has occurred and is continuing under Section 8.1(a),
(h) or (i) or so long as any other Event of Default has occurred and is
continuing and at the election of Agent (or upon the written request of
Requisite Lenders) confirmed by written notice from Agent to Borrower
Representative, the interest rates applicable to the Loans and the Letter of
Credit Fees shall be increased by two percentage points (2%) per annum above the
rates of interest or the rate of such Letter of Credit Fees otherwise applicable
hereunder unless Agent (not having received any prior written request of
Requisite Lenders and, in any event, subject to the consent of Requisite
Lenders) elects to impose a smaller increase (“Default Rate”), and
all outstanding Obligations shall bear interest at the Default Rate applicable
to such Obligations.  Interest and Letter of Credit Fees at the
Default Rate shall accrue from the initial date of such Event of Default until
that Event of Default is cured or waived and shall be payable upon
demand.

     

    (d)           Subject
to the conditions precedent set forth in Section 2.2, Borrower Representative
shall have the option to (i) request that any Revolving Credit Advance be made
as a LIBOR Loan, (ii) convert at any time all or any part of outstanding Loans
from Index Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan to an Index
Rate Loan, subject to payment of LIBOR breakage costs in accordance with Section
1.13(b) if such conversion is made prior to the expiration of the LIBOR Period
applicable thereto, or (iv) continue all or any portion of any Loan as a LIBOR
Loan upon the expiration of the applicable LIBOR Period and the succeeding LIBOR
Period of that continued Loan shall commence on the first day after the last day
of the LIBOR Period of the Loan to be continued.  Any Loan or group of
Loans having the same proposed LIBOR Period to be made or continued as, or
converted into, a LIBOR Loan must be in a minimum amount of $1,000,000 and
integral multiples of $500,000 in excess of such amount.  Any such
election must be made by noon (New York time) on the third Business Day prior to
(1) the date of any proposed Advance which is to bear interest at the LIBOR
Rate, (2) the end of each LIBOR Period with respect to any LIBOR Loans to be
continued as such, or (3) the date on which Borrower Representative wishes to
convert any Index Rate Loan to a LIBOR Loan for a LIBOR Period designated by
Borrower Representative in such election.  If no election is received
with respect to a LIBOR Loan by noon (New York time) on the third Business Day
prior to the end of the LIBOR Period with respect thereto (or if a Default or an
Event of Default has occurred and is continuing or if the additional conditions
precedent set forth in Section 2.2 shall not have been satisfied), that LIBOR
Loan shall be converted to an Index Rate Loan at the end of its LIBOR
Period.  Borrower Representative must make such election by notice to
Agent in writing, by telecopy or overnight courier.  In the case of
any conversion or continuation, such election must be made pursuant to a written
notice (a “Notice of
Conversion/Continuation”) in the form of Exhibit 1.5(d).

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (e)           Notwithstanding
anything to the contrary set forth in this Section 1.5, if a court of competent
jurisdiction determines in a final order that the rate of interest payable
hereunder exceeds the highest rate of interest permissible under law (the “Maximum Lawful
Rate”), then so long as the Maximum Lawful Rate would be so exceeded, the
rate of interest payable hereunder shall be equal to the Maximum Lawful Rate;
provided, however, that if at any time thereafter the rate of interest payable
hereunder is less than the Maximum Lawful Rate, Borrowers shall continue to pay
interest hereunder at the Maximum Lawful Rate until such time as the total
interest received by Agent, on behalf of Lenders, is equal to the total interest
that would have been received had the interest rate payable hereunder been (but
for the operation of this paragraph) the interest rate payable since the Closing
Date as otherwise provided in this Agreement.  Thereafter, interest
hereunder shall be paid at the rate(s) of interest and in the manner provided in
Sections 1.5(a) through (e), unless and until the rate of interest again exceeds
the Maximum Lawful Rate, and at that time this paragraph shall again
apply.  In no event shall the total interest received by any Lender
pursuant to the terms hereof exceed the amount that such Lender could lawfully
have received had the interest due hereunder been calculated for the full term
hereof at the Maximum Lawful Rate.  If the Maximum Lawful Rate is
calculated pursuant to this paragraph, such interest shall be calculated at a
daily rate equal to the Maximum Lawful Rate divided by the number of days in the
year in which such calculation is made.  If, notwithstanding the
provisions of this Section 1.5(e), a court of competent jurisdiction shall
finally determine that a Lender has received interest hereunder in excess of the
Maximum Lawful Rate, Agent shall, to the extent permitted by law, promptly apply
such excess in the order specified in Section 1.11 and thereafter shall refund
any excess to Borrowers or as a court of competent jurisdiction may otherwise
order.

     

    1.6.        Eligible
Accounts.  All of the Accounts owned by each Borrower and
reflected in the most recent Borrowing Base Certificate delivered by each
Borrower to Agent shall be “Eligible Accounts”
for purposes of this Agreement, except any Account to which any of the
exclusionary criteria set forth below applies.  Agent shall have the
right to establish, modify or eliminate Reserves against Eligible Accounts from
time to time in its reasonable credit judgment.  In addition, Agent
reserves the right, at any time and from time to time after the Closing Date, to
adjust any of the criteria set forth below, to establish new criteria and to
adjust advance rates with respect to Eligible Accounts, in its reasonable credit
judgment, subject to the approval of Supermajority Lenders in the case of
adjustments or new criteria or changes in advance rates (subject to Section
11.2(c)(vii)) or the elimination of Reserves (except no such approval shall be
required with respect to the reduction or elimination of Reserves which may be
established and maintained from time to time by Agent with respect to Rate
Protection Obligations under Rate Protection Agreements) which have the effect
of making more credit available.  Eligible Accounts shall not include
any Account of any Borrower:

     

    (a)          that
does not arise from the sale of goods or the performance of services by such
Borrower in the ordinary course of its business;

    
      
         

      

      
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    (b)          (i)
upon which such Borrower’s right to receive payment is not absolute or is
contingent upon the fulfillment of any condition whatsoever or (ii) as to which
such Borrower is not able to bring suit or otherwise enforce its remedies
against the Account Debtor through judicial process or (iii) if the Account
represents a progress billing consisting of an invoice for goods sold or used or
services rendered pursuant to a contract under which the Account Debtor’s
obligation to pay that invoice is subject to such Borrower’s completion of
further performance under such contract or is subject to the equitable lien of a
surety bond issuer;

     

    (c)          to
the extent that any defense, counterclaim, setoff or dispute is asserted as to
such Account or to the extent that any credits which have been issued have not
been applied to an Account Debtor’s statement or account, but only to the extent
of such defense, counterclaim, setoff, dispute, or credit;

     

    (d)          that
is not a true and correct statement of bona fide indebtedness incurred in the
amount of the Account for merchandise sold to or services rendered and accepted
by the applicable Account Debtor, including pre-billed items;

     

    (e)          with
respect to which an invoice, reasonably acceptable to Agent in form and
substance, has not been sent to the applicable Account Debtor;

     

    (f)           that
(i) is not owned by such Borrower or (ii) is subject to any Lien of any other
Person, other than Liens in favor of Agent, on behalf of itself and
Lenders;

     

    (g)          that
arises from a sale to any director, officer, other employee or Affiliate of any
Credit Party, or to any entity that has any common officer or director with any
Credit Party;

     

    (h)          that
is the obligation of an Account Debtor that is the United States government or a
political subdivision thereof, or any state, county or municipality or
department, agency or instrumentality thereof unless Agent, in its sole
discretion, has agreed to the contrary in writing and such Borrower, if
necessary or desirable, has complied with respect to such obligation with the
Federal Assignment of Claims Act of 1940, or any applicable state, county or
municipal law restricting assignment thereof.

     

    (i)           that
is the obligation of an Account Debtor located in a foreign country other than
Canada unless payment thereof is assured by a letter of credit assigned and
delivered to Agent, reasonably satisfactory to Agent as to form, amount and
issuer.

     

    (j)           to
the extent such Borrower or any Subsidiary thereof is liable for goods sold or
services rendered by the applicable Account Debtor to such Borrower or any
Subsidiary thereof but only to the extent of the potential offset;

     

    (k)          that
arises with respect to goods that are delivered on a bill and hold, cash on
delivery basis or placed on consignment, guaranteed sale or other terms by
reason of which the payment by the Account Debtor is or may be
conditional;

     

    (l)           that
is in default; provided, that, without limiting the generality of the foregoing,
an Account shall be deemed in default upon the occurrence of any of the
following:

     

    (i)        
   [Intentionally Omitted];

    
      
         

      

      
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    (ii)           the
Account Debtor obligated upon such Account suspends business, makes a general
assignment for the benefit of creditors or fails to pay its debts generally as
they come due; or

     

    (iii)          a
petition is filed by or against any Account Debtor obligated upon such Account
under any bankruptcy law or any other federal, state or foreign (including any
provincial) receivership, insolvency relief or other law or laws for the relief
of debtors;

     

    (m)         that
is the obligation of an Account Debtor if fifty percent (50%) or more of the
Dollar amount of all Accounts owing by that Account Debtor are ineligible under
the other criteria set forth in this Section 1.6 other than with respect to Car
Quest Long Term Accounts;

     

    (n)          as
to which Agent’s Lien thereon, on behalf of itself and Lenders, is not a first
priority perfected Lien;

     

    (o)          as
to which any of the representations or warranties in the Loan Documents are
untrue;

     

    (p)          to
the extent such Account is evidenced by a judgment, Instrument or Chattel
Paper;

     

    (q)          to
the extent such Account exceeds any credit limit established by Agent, in its
reasonable credit judgment;

     

    (r)           [Intentionally
Omitted];

     

    (s)          that
is payable in any currency other than Dollars; or

     

    (t)           that
is otherwise unacceptable to Agent in its reasonable credit
judgment.

     

    For
purposes of this Section 1.6, Customer
Drafts received by SMP from any Customer Program (in each case for so long as
such drafts remain the property of SMP and have not been sold to any third
party), shall be treated as if they constituted “Accounts” so long as
Agent or its designee has possession of such Customer Drafts or otherwise has a
first priority perfected security interest in any electronic Customer
Drafts.

     

    1.7.        Eligible
Inventory.  All of the Inventory owned by the Borrowers and
reflected in the most recent Borrowing Base Certificate delivered by each
Borrower to Agent shall be “Eligible Inventory”
for purposes of this Agreement, except any Inventory to which any of the
exclusionary criteria set forth below applies.  Agent shall have the
right to establish or modify or eliminate Reserves against Eligible Inventory
from time to time in its reasonable credit judgment.  In addition,
Agent reserves the right, at any time and from time to time after the Closing
Date, to adjust any of the criteria set forth below, to establish new criteria
and to adjust advance rates with respect to Eligible Inventory, in its
reasonable credit judgment, subject to the approval of Supermajority Lenders in
the case of adjustments or new criteria or changes in advance rates (subject to
Section 11.2(c)(vii)) or the elimination of Reserves (except no such approval
shall be required with respect to the reduction or elimination of Reserves which
may be established and maintained from time to time by Agent with respect to
Rate Protection Obligations under Rate Protection Agreements) which have the
effect of making more credit available.  Eligible Inventory shall not
include any Inventory of any Borrower that:

    
      
         

      

      
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    (a)           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 Agent,
on behalf of itself and Lenders, and Permitted Encumbrances in favor of
landlords and bailees to the extent permitted in Section 5.9 hereof (subject to
Reserves established by Agent in accordance with Section 5.9
hereof);

     

    (b)           (i)
is not located on premises owned, leased or rented by such Borrower and set
forth in Disclosure Schedule (3.2) or identified pursuant to Section 6.15, or
(ii) is stored at a leased location, unless Agent has given its prior consent
thereto and unless either (x) a reasonably satisfactory landlord waiver has been
delivered to Agent, or (y) Reserves reasonably satisfactory to Agent have been
established with respect thereto or (iii) is stored with a bailee or
warehouseman unless a reasonably satisfactory, acknowledged bailee letter has
been received by Agent or Reserves reasonably satisfactory to Agent have been
established with respect thereto, or (iv) is located at an owned location
subject to a mortgage in favor of a lender other than Agent unless a reasonably
satisfactory mortgagee waiver has been delivered to Agent or Reserves reasonably
satisfactory to Agent have been established with respect thereto, or (v) other
than with respect to 3 locations which Borrowers may designate in writing to
Agent from time to time, is located at any site if the aggregate book value of
Inventory at any such location is less than $100,000; or (vi) is located outside
of the United States of America, its territories or Canada;

     

    (c)           is
placed on consignment or is in transit, except for Inventory in transit between
domestic locations of Credit Parties as to which Agent’s Liens have been
perfected at origin and destination.

     

    (d)           is
covered by a negotiable document of title, unless such document has been
delivered to Agent with all necessary endorsements, free and clear of all Liens
except those in favor of Agent and Lenders;

     

    (e)           is
excess, obsolete, unsalable, shopworn, seconds (excluding cores), damaged or
unfit for sale;

     

    (f)   
        consists of display items or
packing or shipping materials, manufacturing supplies, work in process Inventory
or replacement parts;

     

    (g)           consists
of goods which have been returned by the buyer unless such returned goods
consist of (i) cores or (ii) goods which have been restored to Inventory as
first quality, saleable merchandise;

     

    (h)           is
not of a type held for sale in the ordinary course of such Borrower’s
business;

     

    (i)    
       is not subject to a first priority
lien in favor of Agent on behalf of itself and Lenders;

    
      
         

      

      
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    (j)
           breaches any
of the representations or warranties pertaining to Inventory set forth in the
Loan Documents;

     

    (k)           consists
of any costs associated with “freight in” charges or favorable purchase price
variances;

     

    (l)     
      consists of Hazardous Materials or goods
that can be transported or sold only with licenses that are not readily
available;

     

    (m)           is
not covered by casualty insurance reasonably acceptable to Agent;
or

     

    (n)           is
subject to any patent or trademark license requiring the payment of royalties or
fees or requiring the consent of the licensor for a sale thereof by Agent (where
such consent has not been obtained); or

     

    (o)           is
otherwise unacceptable to Agent in its reasonable credit judgment.

     

    1.8.        Cash Management
Systems.  On or prior to the Closing Date, Borrowers will
establish and will maintain until the Termination Date, the cash management
systems described in Annex C (the “Cash Management
Systems”).

     

    1.9.        Fees.

     

    (a)          Borrowers
shall pay to GE Capital, individually, the Fees specified in that certain
amended and restated fee letter dated November 10, 2010 (as amended, the “2010
GE Capital Fee Letter”), between Borrower Representative and GE Capital, at the
times specified for payment therein.

     

    (b)         (i)            On
the Closing Date, Borrowers shall pay to Agent, for the ratable benefit of
Lenders a non-refundable closing fee in the amount of $475,000.

     

    (ii)           As
additional compensation for the Lenders, Borrowers shall pay to Agent, for the
ratable benefit of such Lenders, in arrears, on the first Business Day of each
month prior to the Commitment Termination Date and on the Commitment Termination
Date, a Fee for Borrower’s non-use of available funds in an amount equal to the
Applicable Unused Line Fee Margin per annum (calculated on the basis of a
360-day year for actual days elapsed) multiplied by the difference between (x)
the Maximum Amount, and (y) the average for the period of the daily closing
balances of the aggregate Revolver Loan outstanding during the period for which
such Fee is due. For purposes of determining the unused line fee hereunder, the
2009 Indenture Maturity Reserve shall be deemed to be $0.

     

    (c)           Intentionally
Omitted.

     

    (d)           Borrowers
shall pay to Agent, for the ratable benefit of Lenders, the Letter of Credit Fee
as provided in Annex B.

     

    (e)           Any
time Borrowers elect to consummate a Borrower Revolver Increase, Borrowers shall
pay to Agent the fees referenced in Section 1.18(b).

    
      
         

      

      
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    1.10.      Receipt of
Payments.  Borrowers shall make each payment under this
Agreement not later than 2:00 p.m.  (New York time) on the day when
due in immediately available funds in Dollars to the Collection
Account.  For purposes of computing interest and Fees and determining
Borrowing Availability as of any date, all payments shall be deemed received on
the Business Day on which immediately available funds therefor are received in
the Collection Account prior to 2:00 p.m.  New York
time.  Payments received after 2:00 p.m.  New York time on
any Business Day or on a day that is not a Business Day shall be deemed to have
been received on the following Business Day.

     

    1.11.      Application
and Allocation of Payments.

     

    (a)           So
long as no Default or Event of Default has occurred and is continuing, (i)
payments consisting of proceeds of Accounts received in the ordinary course of
business shall be applied to, the Revolving Loan; (ii) voluntary prepayments
shall be applied in accordance with the provisions of Section 1.3(a); and (iii)
mandatory prepayments shall be applied as set forth in Sections 1.3(c) and
1.3(d).  All payments and prepayments applied to a particular Loan
shall be applied ratably to the portion thereof held by each Lender as
determined by its Pro Rata Share.  As to any other payment, and as to
all payments made when a Default or Event of Default has occurred and is
continuing or following the Commitment Termination Date, each Borrower hereby
irrevocably waives the right to direct the application of any and all payments
received from or on behalf of such Borrower, and each Borrower hereby
irrevocably agrees that Agent shall have the continuing exclusive right to apply
any and all such payments against the Obligations of Borrowers then due and
payable in the following order: (1) to Fees and Agent’s expenses reimbursable
hereunder; (2) to interest on the Revolving Loans; (3) to principal payments on
the Revolving Loans and to provide cash collateral for Letter of Credit
Obligations in the manner described in Annex B, ratably to the aggregate,
combined principal balance of the Revolving Loans and outstanding Letter of
Credit Obligations; (4) to all other Obligations (other than Rate Protection
Agreements and Swap Related Reimbursement Obligations), including expenses to
Lenders to the extent reimbursable under Section 11.3, and to payments under the
Canadian Guaranty; and (5) to Rate Protection Agreements and unpaid Swap Related
Reimbursement Obligations ratably in proportion to the aggregate amounts owed as
to each Rate Protection Agreement and unpaid Swap Related Reimbursement
Obligation, as applicable.

     

    (b)           Agent
is authorized to, and at its sole election may, charge to the Revolving Loan
balance on behalf of each Borrower and cause to be paid all Fees, expenses,
Charges, costs (including insurance premiums in accordance with Section 5.4(a))
and interest and principal, other than principal of the Revolving Loan, owing by
Borrowers under this Agreement or any of the other Loan Documents if and to the
extent Borrowers fail to pay promptly any such amounts as and when due, even if
the amount of such charges would exceed Borrowing Availability at such time or
would cause the balance of the Revolving Loan to any Borrower to exceed such
Borrower’s separate Borrowing Base after giving effect to such
charges.  At Agent’s option and to the extent permitted by law, any
charges so made shall constitute part of the Revolving Loan
hereunder.

    
      
         

      

      
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    1.12.      Loan Account and
Accounting.  Agent shall maintain a loan account (the “Loan Account”) on its
books to record: all Advances, all payments made by Borrowers, and all other
debits and credits as provided in this Agreement with respect to the Loans or
any other Obligations.  All entries in the Loan Account shall be made
in accordance with Agent’s customary accounting practices as in effect from time
to time.  The balance in the Loan Account, as recorded on Agent’s most
recent printout or other written statement, shall, absent manifest error, be
presumptive evidence of the amounts due and owing to Agent and Lenders by each
Borrower; provided that any failure to so record or any error in so recording
shall not limit or otherwise affect any Borrower’s duty to pay the
Obligations.  Agent shall render to Borrower Representative a monthly
accounting of transactions with respect to the Loans setting forth the balance
of the Loan Account as to each Borrower for the immediately preceding
month.  Unless Borrower Representative notifies Agent in writing of
any objection to any such accounting (specifically describing the basis for such
objection), within sixty (60) days after the date thereof, each and every such
accounting shall (absent manifest error) be deemed final, binding and conclusive
on Borrowers in all respects as to all matters reflected
therein.  Only those items expressly objected to in such notice shall
be deemed to be disputed by Borrowers.  Notwithstanding any provision
herein contained to the contrary, any Lender may elect (which election may be
revoked) to dispense with the issuance of Notes to that Lender and may rely on
the Loan Account as evidence of the amount of Obligations from time to time
owing to it.

     

    1.13.      Indemnity.

     

    (a)           Each
Credit Party that is a signatory hereto shall jointly and severally indemnify
and hold harmless each of Agent, Lenders and their respective Affiliates, and
each such Person’s respective officers, directors, employees, attorneys, agents
and representatives (each, an “Indemnified Person”),
from and against any and all suits, actions, proceedings, claims, damages,
losses, liabilities and expenses (including reasonable attorneys’ fees and
disbursements and other costs of investigation or defense, including those
incurred upon any appeal) that may be instituted or asserted against or incurred
by any such Indemnified Person as the result of credit having been extended,
suspended or terminated under this Agreement and the other Loan Documents and
the administration of such credit, and in connection with or arising out of the
transactions contemplated hereunder and thereunder and any actions or failures
to act in connection therewith, including any and all Environmental Liabilities
and reasonable legal costs and expenses arising out of or incurred in connection
with disputes between or among any parties to any of the Loan Documents
(collectively, “Indemnified
Liabilities”); provided, that no such Credit Party shall be liable for
any indemnification to an Indemnified Person to the extent that any such suit,
action, proceeding, claim, damage, loss, liability or expense results from that
Indemnified Person’s gross negligence or willful misconduct.  NO
INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN
DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR
ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT,
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF
CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR
AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR
THEREUNDER.

    
      
         

      

      
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    (b)           To
induce Lenders to provide the LIBOR Rate option on the terms provided herein, if
(i) any LIBOR Loans are repaid in whole or in part prior to the last day of any
applicable LIBOR Period (whether that repayment is made pursuant to any
provision of this Agreement or any other Loan Document or occurs as a result of
acceleration, by operation of law or otherwise); (ii) any Borrower shall default
in payment when due of the principal amount of or interest on any LIBOR Loan;
(iii) any Borrower shall refuse to accept any borrowing of, or shall request a
termination of, any borrowing of, conversion into or continuation of, LIBOR
Loans after Borrower Representative has given notice requesting the same in
accordance herewith; or (iv) any Borrower shall fail to make any prepayment of a
LIBOR Loan after Borrower Representative has given a notice thereof in
accordance herewith, then Borrowers shall jointly and severally indemnify and
hold harmless each Lender from and against all losses, costs and expenses
resulting from or arising from any of the foregoing.  Such
indemnification shall include any loss (including loss of margin) or expense
arising from the reemployment of funds obtained by it or from fees payable to
terminate deposits from which such funds were obtained.  For the
purpose of calculating amounts payable to a Lender under this subsection, each
Lender shall be deemed to have actually funded its relevant LIBOR Loan through
the purchase of a deposit bearing interest at the LIBOR Rate in an amount equal
to the amount of that LIBOR Loan and having a maturity comparable to the
relevant LIBOR Period; provided, that each Lender may fund each of its LIBOR
Loans in any manner it sees fit, and the foregoing assumption shall be utilized
only for the calculation of amounts payable under this
subsection.  This covenant shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable
hereunder.  As promptly as practicable under the circumstances, each
Lender shall provide Borrower Representative with its written calculation of all
amounts payable pursuant to this Section 1.13(b), and (absent manifest error)
such calculation shall be binding on the parties hereto unless Borrower
Representative shall object in writing within ten (10) Business Days of receipt
thereof, specifying the basis for such objection in detail.

     

    1.14.      Access.  Each
Credit Party that is a party hereto shall, during normal business hours, from
time to time upon at least two (2) Business Days’ prior notice as frequently as
Agent reasonably determines to be appropriate: (a) provide Agent and any of its
officers, employees and agents access to its properties, facilities, advisors
and employees (including officers) of each Credit Party and to the Collateral,
(b) permit Agent, and any of its officers, employees and agents, to inspect,
audit and make extracts from any Credit Party’s books and records, and (c)
permit Agent, and its officers, employees and agents, to inspect, review,
evaluate and make test verifications and counts of the Accounts, Inventory and
other Collateral of any Credit Party; provided, however, that unless a Default
or Event of Default has occurred and is continuing, Borrowers’ obligation to pay
for such audits shall be limited to two per calendar year.  If a
Default or Event of Default has occurred and is continuing or if access is
necessary to preserve or protect the Collateral as determined by Agent, each
such Credit Party shall provide such access to Agent and to each Lender at all
times and without advance notice.  Furthermore, so long as any Event
of Default has occurred and is continuing, Borrowers shall provide Agent and
each Lender with access to their suppliers and customers.  Each Credit
Party shall make available to Agent and its counsel, as quickly as is possible
under the circumstances, originals or copies of all books and records that Agent
may reasonably request.  Each Credit Party shall deliver any document
or instrument necessary for Agent, as it may from time to time reasonably
request, to obtain records from any service bureau or other Person that
maintains records for such Credit Party, and shall maintain duplicate records or
supporting documentation on media, including computer tapes and discs owned by
such Credit Party.  Agent will give Lenders at least fifteen (15)
days’ prior written notice of regularly scheduled
audits.  Representatives of other Lenders may accompany Agent’s
representatives on regularly scheduled audits at no charge to
Borrowers.

    
      
         

      

      
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    1.15.      Taxes.

     

    (a)           Any
and all payments by each Borrower hereunder (including any payments made
pursuant to Section 12) or under the Notes shall be made, in accordance with
this Section 1.15, free and clear of and without deduction for any and all
present or future Taxes.  If any Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder (including any
sum payable pursuant to Section 12) or under the Notes, (i) the sum payable
shall be increased as much as shall be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 1.15) Agent or Lenders, as applicable, receive an amount
equal to the sum they would have received had no such deductions been made, (ii)
such Borrower shall make such deductions, and (iii) such Borrower shall pay the
full amount deducted to the relevant taxing or other authority in accordance
with applicable law.  Within thirty (30) days after the date of any
payment of Taxes, Borrower Representative shall furnish to Agent the original or
a certified copy of a receipt evidencing payment thereof.  Agent and
Lenders shall not be obligated to return or refund any amounts received pursuant
to this Section.

     

    (b)           Each
Credit Party that is a signatory hereto shall jointly and severally indemnify
and, within ten (10) days of demand therefor, pay Agent and each Lender for the
full amount of Taxes (including any Taxes imposed by any jurisdiction on amounts
payable under this Section 1.15) paid by Agent or such Lender, as appropriate,
and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto, whether or not such Taxes were correctly or legally
asserted.  Agent and affected Lenders shall provide Borrower
Representative with an original or certified copy of a receipt evidencing the
payment of such amounts by Agent or such Lenders.

     

    (c)           Each
Lender organized under the laws of a jurisdiction outside the United States (a
“Foreign
Lender”) as to which payments to be made under this Agreement or under
the Notes are exempt from United States withholding tax under an applicable
statute or tax treaty shall provide to Borrower Representative and Agent a
properly completed and executed IRS Form W 8ECI or Form W 8BEN or other
applicable form, certificate or document prescribed by the IRS or the United
States certifying as to such Foreign Lender’s entitlement to such exemption (a
“Certificate of
Exemption”).  Any foreign Person that seeks to become a Lender
under this Agreement shall provide a Certificate of Exemption to Borrower
Representative and Agent prior to becoming a Lender hereunder.  No
foreign Person may become a Lender hereunder if such Person fails to deliver a
Certificate of Exemption in advance of becoming a Lender.

    
      
         

      

      
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    1.16.      Capital
Adequacy; Increased Costs; Illegality.

     

    (a)           If
any Lender shall have determined that any law, treaty, governmental (or quasi
governmental) rule, regulation, guideline or order regarding capital adequacy,
reserve requirements or similar requirements or compliance by any Lender with
any request or directive regarding capital adequacy, reserve requirements or
similar requirements (whether or not having the force of law), in each case,
adopted after the Closing Date, from any central bank or other Governmental
Authority increases or would have the effect of increasing the amount of
capital, reserves or other funds required to be maintained by such Lender and
thereby reducing the rate of return on such Lender’s capital as a consequence of
its obligations hereunder, then Borrowers shall from time to time upon demand by
such Lender (with a copy of such demand to Agent) pay to Agent, for the account
of such Lender, additional amounts sufficient to compensate such Lender for such
reduction.  A certificate as to the amount of that reduction and
showing the basis of the computation thereof submitted by such Lender to
Borrower Representative and to Agent shall, absent manifest error, be final,
conclusive and binding for all purposes.

     

    (b)           If,
due to either (i) the introduction of or any change in any law or regulation (or
any change in the interpretation thereof) or (ii) the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), in each case adopted after the Closing
Date, there shall be any increase in the cost to any Lender of agreeing to make
or making, funding or maintaining any Loan, then Borrowers shall from time to
time, upon demand by such Lender (with a copy of such demand to Agent), pay to
Agent for the account of such Lender additional amounts sufficient to compensate
such Lender for such increased cost.  A certificate as to the amount
of such increased cost, submitted to Borrower Representative and to Agent by
such Lender, shall be conclusive and binding on Borrowers for all purposes,
absent manifest error.  Each Lender agrees that, as promptly as
practicable after it becomes aware of any circumstances referred to above which
would result in any such increased cost, the affected Lender shall, to the
extent not inconsistent with such Lender’s internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by Borrowers pursuant to this Section
1.16(b).

     

    (c)           Notwithstanding
anything to the contrary contained herein, if the introduction of or any change
in any law or regulation (or any change in the interpretation thereof) shall
make it unlawful, or any central bank or other Governmental Authority shall
assert that it is unlawful, for any Lender to agree to make or to make or to
continue to fund or maintain any LIBOR Loan, then, unless that Lender is able to
make or to continue to fund or to maintain such LIBOR Loan at another branch or
office of that Lender without, in that Lender’s opinion, adversely affecting it
or its Loans or the income obtained therefrom, on notice thereof and demand
therefor by such Lender to Borrower Representative through Agent, (i) the
obligation of such Lender to agree to make or to make or to continue to fund or
maintain LIBOR Loans shall terminate and (ii) each Borrower shall forthwith
prepay in full all outstanding LIBOR Loans owing by such Borrower to such
Lender, together with interest accrued thereon, unless Borrower Representative
on behalf of such Borrower, within five (5) Business Days after the delivery of
such notice and demand, converts all LIBOR Loans into Index Rate
Loans.

    
      
         

      

      
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    (d)           Within
fifteen (15) days after receipt by Borrower Representative of written notice and
demand from any Lender (an “Affected Lender”) for
payment of additional amounts or increased costs as provided in Sections
1.15(a), 1.16(a) or 1.16(b), Borrower Representative may, at its option, notify
Agent and such Affected Lender of its intention to replace the Affected
Lender.  So long as no Default or Event of Default has occurred and is
continuing, Borrower Representative, with the consent of Agent, may obtain, at
Borrowers’ expense, a replacement Lender (“Replacement Lender”)
for the Affected Lender, which Replacement Lender must be reasonably
satisfactory to Agent.  If Borrowers obtain a Replacement Lender
within ninety (90) days following notice of their intention to do so, the
Affected Lender must sell and assign its Loans and Commitments to such
Replacement Lender for an amount equal to the principal balance of all Loans
held by the Affected Lender and all accrued interest and Fees with respect
thereto through the date of such sale and such assignment shall not require the
payment of an assignment fee to Agent; provided, that Borrowers shall have
reimbursed such Affected Lender for the additional amounts or increased costs
that it is entitled to receive under this Agreement through the date of such
sale and assignment.  Notwithstanding the foregoing, Borrowers shall
not have the right to obtain a Replacement Lender if the Affected Lender
rescinds its demand for increased costs or additional amounts (effective
retroactively to the date of such demand) within fifteen (15) days following its
receipt of Borrowers’ notice of intention to replace such Affected
Lender.  Furthermore, if Borrowers give a notice of intention to
replace and do not so replace such Affected Lender within ninety (90) days
thereafter, Borrowers’ rights under this Section 1.16(d) shall terminate with
respect to such Affected Lender and Borrowers shall promptly pay all increased
costs or additional amounts demanded by such Affected Lender pursuant to
Sections 1.15(a), 1.16(a) and 1.16(b).

     

    1.17.      Single
Loan.  All Loans to each Borrower and all of the other
Obligations of each Borrower arising under this Agreement and the other Loan
Documents shall constitute one general obligation of that Borrower secured,
until the Termination Date, by all of the Collateral.

     

    1.18.      Increase
of the Maximum Amount by Borrowers.

     

    (a)           The
Borrowers may at any time, by written notice to the Agent, request that Agent
increase the Maximum Amount (each a “Borrower Revolver
Increase”) by (i) adding one or more new lenders to the revolving credit
facility under this Agreement (each a “Section 1.18 New
Lender”) who wish to participate in such Borrower Revolver Increase
and/or (ii) increasing the Commitment of one or more Lenders party to this
Agreement who wish to participate in such Borrower Revolver Increase; provided,
however, that (w) the Borrowers may only add a Section 1.18 New Lender if, and
only to the extent, there is insufficient participation on behalf of the
existing Lenders, (x) no Default or Event of Default shall have occurred and be
continuing as of the date of such request or as of the effective date of such
Borrower Revolver Increase (each a “Borrower Increase
Date”) or shall occur as a result thereof, (y) any Section 1.18 New
Lender that becomes party to this Agreement pursuant to this Section 1.18 shall
satisfy the requirements of Section 9.1 hereof and shall be acceptable to Agent
and (z) the other conditions set forth in this Section 1.18 are
satisfied.  The Agent shall use commercially reasonable efforts to
arrange for the syndication of any Borrower Revolver Increase.  The
Agent shall promptly inform the Lenders of any such request made by the
Borrowers.  The aggregate amount of Borrower Revolver Increases
hereunder shall not exceed $50,000,000; no single Borrower Revolver Increase
shall be for an amount less than $10,000,000 and any Borrower Revolver Increase
shall be in integral multiples of $10,000,000.

    
      
         

      

      
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    (b)           On
a Borrower Increase Date, (i) each Section 1.18 New Lender that has chosen to
participate in such Borrower Revolver Increase shall, subject to the conditions
set forth in Section 1.18(a), become a Lender party to this Agreement as of such
Borrower Increase Date and shall have a Commitment in an amount equal to its
share of such Borrower Revolver Increase (and its Commitment percentage shall be
equal to the percentage equivalent of a fraction the numerator of which shall be
the Commitment of such Section 1.18 New Lender and the denominator of which
shall be the Maximum Amount after giving effect to such Borrower Revolver
Increase) and (ii) each Lender that has chosen to increase its Commitment
pursuant to this Section 1.18 will have its Commitment increased by the amount
of its share of the Borrower Revolver Increase as of such Borrower Increase Date
(and its Commitment percentage shall be adjusted as appropriate); provided,
however, that (y) Agent shall have received from the Borrowers (i) payment of
the arrangement fee referenced in the 2010 GE Capital Fee Letter with respect to
such Borrower Revolver Increase, (ii) a non-refundable fee for the benefit of
each Section 1.18 New Lender and each Lender that has chosen to increase its
Commitment pursuant to this Section 1.18, in an amount equal to 0.15% of such
Section 1.18 New Lenders’ Commitment or such Lenders’ increase of its Commitment
pursuant hereto, as the case may be, and (iii) payment of all reasonable
out-of-pocket costs and expenses incurred by Agent or any Lender in connection
with such Borrower Revolver Increase, and (z) Agent shall have received on or
before such Borrower Increase Date the following, each dated such
date:

     

    (i)     
      an assumption agreement from each Section
1.18 New Lender participating in such Borrower Revolver Increase, if any, in
form and substance satisfactory to the Agent, duly executed by such Section 1.18
New Lender, the Agent and the Borrowers;

     

    (ii)           confirmation
from each Lender, if any, participating in such Borrower Revolver Increase of
the increase in the amount of its Commitment and of any change in its Commitment
percentage, in form and substance satisfactory to the Agent;

     

    (iii)          a
certificate of Borrower Representative certifying that no Default or Event of
Default shall have occurred and be continuing or shall occur as a result of such
Borrower Revolver Increase;

     

    (iv)          a
certificate of Borrower Representative certifying that the representations and
warranties made by each Credit Party herein and in the Loan Documents are true
and complete in all material respects with the same force and effect as if made
on and as of such date (or, to the extent any such representation or warranty
specifically relates to an earlier date, such representation or warranty is true
and complete in all material respects as of such earlier date);

     

    (v)           supplements
or modifications to this Agreement and the Loan Documents and such additional
Loan Documents, including any new Revolving Notes to Section 1.18 New Lenders
and replacement Revolving Notes to Lenders that agree to participate in such
Borrower Revolver Increase, that the Agent reasonably deems necessary in order
to document such Borrower Revolver Increase and otherwise assure and give effect
to the rights of the Agent and the Lenders in this Agreement and the Loan
Documents; and

     

    (vi)          such
other documents, instruments and information as the Agent or its counsel shall
reasonably deem necessary in connection with such Borrower Revolver
Increase.

    
      
         

      

      
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    (c)           On
such Borrower Increase Date, upon fulfillment of the conditions set forth in
this Section 1.18, the Agent shall (i) effect a settlement of all outstanding
Advances among the Lenders that will reflect the adjustments to the Commitments
and Commitment percentages of the Lenders as a result of such Borrower Revolver
Increase and (ii) notify the Lenders, any Section 1.18 New Lenders participating
in such Borrower Revolver Increase and the Borrowers, on or before noon (New
York time), by telecopier or e-mail, of the occurrence of such Borrower Revolver
Increase to be effected on such Borrower Increase Date.

     

    
      	
              2.

            	
              CONDITIONS
      PRECEDENT

            

    

     

    2.1.        Conditions to the Initial
Loans.  No Lender shall be obligated to make any Loan or incur
any Letter of Credit Obligations on the Closing Date, or to take, fulfill, or
perform any other action hereunder, until the following conditions have been
satisfied or provided for in a manner satisfactory to Agent, or waived in
writing by Agent and Lenders:

     

    (a)           Credit Agreement; Loan
Documents.  This Agreement or counterparts hereof shall have
been duly executed by Borrowers and each other Credit Party, and delivered to
Agent and Lenders; and Agent shall have received such documents, instruments,
agreements and legal opinions as Agent shall reasonably request in connection
with the transactions contemplated by this Agreement and the other Loan
Documents, including all those listed in the Closing Checklist attached hereto
as Annex D-1, each in form and substance reasonably satisfactory to
Agent.

     

    (b)           [INTENTIONALLY
OMITTED]

     

    (c)           Approvals.  Agent
shall have received (i) satisfactory evidence that the Credit Parties have
obtained all required consents and approvals of all Persons including all
requisite Governmental Authorities, to the execution, delivery and performance
of this Agreement and the other Loan Documents and the consummation of the
transactions contemplated thereunder or (ii) an officer’s certificate in form
and substance reasonably satisfactory to Agent affirming that no such consents
or approvals are required.

     

    (d)           Payment of
Fees.  Borrowers shall have paid the Fees required to be paid
on the Closing Date in the respective amounts specified in Section 1.9
(including the Fees specified in the 2010 GE Capital Fee Letter), and shall have
reimbursed Agent for all reasonable fees, costs and expenses of closing
presented as of the Closing Date.

     

    (e)           Capital Structure: Other
Indebtedness.  The capital structure of each Credit Party and
the terms and conditions of all Indebtedness of each Credit Party not being
repaid shall be acceptable to Agent in its reasonable discretion.

     

    (f) 
          Due
Diligence.  Agent shall have completed its business and legal
due diligence, including a roll forward of its previous Collateral audit with
results reasonably satisfactory to Agent.

     

    (g)           Intentionally
Omitted.

    
      
         

      

      
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    (h)           Material Adverse
Events.  As of the Closing Date, there will have been (i) since
August 31, 2010, no material adverse change, individually or in the aggregate,
in the business, financial or other condition of Borrowers taken as a whole, the
industry in which Borrowers operate, or the Collateral which will be subject to
the security interest granted to Agent or in the projections of Borrowers taken
as a whole, (ii) no litigation commenced which, if successful, would have a
material adverse impact on Borrowers taken as a whole, their businesses, or
their ability to repay the loans, or which would challenge the transactions
under consideration, and (iii) since August 31, 2010, no material increase in
the liabilities, liquidated or contingent, of Borrowers taken as a whole, or a
material decrease in the assets of Borrowers taken as a whole.

     

    (i)        
   Background Checks.
Agent shall have completed background and reference checks on each Borrower and
selected officers of Borrowers with results reasonably satisfactory to
Agent.

     

    2.2.        Further Conditions to Each
Loan.  Except as otherwise expressly provided herein, no Lender
shall be obligated to fund any Advance, convert or continue any Loan as a LIBOR
Loan or incur any Letter of Credit Obligation, if, as of the date
thereof:

     

    (a)           any
representation or warranty by any Credit Party contained herein or in any other
Loan Document is untrue or incorrect as of such date, except to the extent that
such representation or warranty expressly relates to an earlier date and except
for changes therein expressly permitted or expressly contemplated by this
Agreement and Agent or Requisite Lenders have determined not to make such
Advance, convert or continue any Loan as LIBOR Loan or incur such Letter of
Credit Obligation as a result of the fact that such warranty or representation
is untrue or incorrect;

     

    (b)           any
event or circumstance having a Material Adverse Effect has occurred since the
date hereof as determined by the Requisite Lenders and Agent or Requisite
Lenders have determined not to make such Advance, convert or continue any Loan
as a LIBOR Loan or incur such Letter of Credit Obligation as a result of the
fact that such event or circumstance has occurred;

     

    (c)           any
Default or Event of Default has occurred and is continuing or would result after
giving effect to any Advance (or the incurrence of any Letter of Credit
Obligation), and Agent or Requisite Lenders shall have determined not to make
any Advance, convert or continue any Loan as a LIBOR Loan or incur any Letter of
Credit Obligation as a result of that Default or Event of Default;
or

     

    (d)           after
giving effect to any Advance (or the incurrence of any Letter of Credit
Obligations), (i) the outstanding principal amount of the aggregate Revolving
Loan would exceed the lesser of the Aggregate Borrowing Base and the Maximum
Amount or (ii) the outstanding principal amount of the Revolving Loan of the
applicable Borrower would exceed such Borrower’s separate Borrowing
Base.

     

    The
request and acceptance by any Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the
date thereof, (i) a representation and warranty by Borrowers that the conditions
in this Section 2.2 have been satisfied and (ii) a reaffirmation by Borrowers of
the cross-guaranty provisions set forth in Section 12 and of the granting and
continuance of Agent’s Liens, on behalf of itself and Lenders, pursuant to the
Collateral Documents.

    
      
         

      

      
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              3.

            	
              REPRESENTATIONS
      AND WARRANTIES

            

    

     

    To induce
Lenders to make the Loans and to incur Letter of Credit Obligations, the Credit
Parties executing this Agreement, jointly and severally, make the following
representations and warranties to Agent and each Lender with respect to all
Credit Parties, each and all of which shall survive the execution and delivery
of this Agreement.

     

    3.1.        Corporate Existence;
Compliance with Law.  Each Credit Party (a) is a corporation,
limited liability company or limited partnership duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation or organization set forth in Disclosure Schedule (3.1); (b) is
duly qualified to conduct business and is in good standing in each other
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified would not result in exposure to losses, damages or liabilities in
excess of $250,000; (c) has the requisite power and authority and the legal
right to own, pledge, mortgage or otherwise encumber and operate its properties,
to lease the property it operates under lease and to conduct its business as
now, heretofore and proposed to be conducted; (d) subject to specific
representations regarding Environmental Laws and any scheduled exceptions
thereto, has all material licenses, permits, consents or approvals from or by,
and has made all material filings with, and has given all material notices to,
all Governmental Authorities having jurisdiction, to the extent required for
such ownership, operation and conduct; (e) is in compliance with its charter and
bylaws or partnership or operating agreement, as applicable; and (f) subject to
specific representations and any scheduled exceptions thereto set forth herein
regarding ERISA, Environmental Laws, tax and other laws, is in compliance with
all applicable provisions of law, except where the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

     

    3.2.        Executive Offices,
Collateral Locations, FEIN.  As of the Closing Date, the
current location of each Credit Party’s chief executive office and the
warehouses and premises at which any Collateral is located are set forth in
Disclosure Schedule (3.2), and, except as set forth in Disclosure Schedule
(3.2), none of such locations has changed within the twelve (12) months
preceding the Closing Date.  In addition, Disclosure Schedule (3.2)
lists the federal employer identification number of each Credit
Party.

     

    3.3.        Corporate Power,
Authorization, Enforceable Obligations.  The execution,
delivery and performance by each Credit Party of the Loan Documents to which it
is a party and the creation of all Liens provided for therein: (a) are within
such Person’s power; (b) have been duly authorized by all necessary corporate,
limited liability company or limited partnership action; (c) do not contravene
any provision of such Person’s charter, bylaws or partnership or operating
agreement as applicable; (d) do not violate any law or regulation, or any order
or decree of any court or Governmental Authority; (e) do not conflict with or
result in the breach or termination of, constitute a default under or accelerate
or permit the acceleration of any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to which such
Person is a party or by which such Person or any of its property is bound; (f)
do not result in the creation or imposition of any Lien upon any of the property
of such Person other than those in favor of Agent, on behalf of itself and
Lenders, pursuant to the Loan Documents; and (g) do not require the consent or
approval of any Governmental Authority or any other Person, except those
referred to in Section 2.1(c), all of which will have been duly obtained, made
or complied with prior to the Closing Date.  Each of the Loan
Documents shall be duly executed and delivered by each Credit Party that is a
party thereto and each such Loan Document shall constitute a legal, valid and
binding obligation of such Credit Party enforceable against it in accordance
with its terms.

    
      
         

      

      
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    3.4.        Financial Statements and
Projections.  Except for the Projections, all Financial
Statements concerning Borrowers and their respective Subsidiaries that are
referred to below have been prepared in accordance with GAAP consistently
applied throughout the periods covered (except as disclosed therein and except,
with respect to unaudited Financial Statements, for the absence of footnotes and
normal year-end audit adjustments) and present fairly in all material respects
the financial position of the Persons covered thereby as at the dates thereof
and the results of their operations and cash flows for the periods then
ended.

     

    (a)          Financial
Statements.  The following Financial Statements attached hereto
as Disclosure Schedule (3.4(a)) have been delivered on the date
hereof:

     

    (i)          
 The audited consolidated and consolidating balance sheets at December 31,
2009 and the related statements of income and cash flows of Borrowers and their
Subsidiaries for the Fiscal Years then ended, certified by Grant Thorton
LLP.

     

    (ii)           The
unaudited balance sheet(s) at August 31, 2010 and the related statement(s) of
income and cash flows of Borrowers and their Subsidiaries for the eight months
then ended.

     

    (b)          Projections.  The
Projections delivered on the date hereof and attached hereto as Disclosure
Schedule (3.4(b)) have been prepared by Borrowers in light of the past
operations of their businesses and reflect projections for the Fiscal Year
2011.  The Projections are based upon the same accounting principles
as those used in the preparation of the financial statements described above and
the estimates and assumptions stated therein, all of which Borrowers believe to
be reasonable and fair in light of current conditions and current facts known to
Borrowers and, as of the Closing Date, reflect Borrowers’ good faith and
reasonable estimates of the future financial performance of
Borrowers.

     

    3.5.        Material Adverse
Effect.  Between August 31, 2010 and the Closing Date: (a) no
Credit Party has incurred any obligations, contingent or noncontingent
liabilities, liabilities for Charges, long-term leases or unusual forward or
long-term commitments that are not reflected in the Financial Statements and
that, alone or in the aggregate, could reasonably be expected to have a Material
Adverse Effect, (b) no contract, lease or other agreement or instrument has been
entered into by any Credit Party or has become binding upon any Credit Party’s
assets and no law or regulation applicable to any Credit Party has been adopted
that in either case has had or could reasonably be expected to have a Material
Adverse Effect, and (c) no Credit Party is in default and to the best of
Borrowers’ knowledge no third party is in default under any material contract,
lease or other agreement or instrument, which defaults alone or in the aggregate
could reasonably be expected to have a Material Adverse
Effect.  Between August 31, 2010 and the Closing Date no event has
occurred, that alone or together with other events, could reasonably be expected
to have a Material Adverse Effect.

    
      
         

      

      
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    3.6.        Ownership of Property;
Liens.  As of the Closing Date, the real estate (“Real Estate”) listed
in Disclosure Schedule (3.6) constitutes all of the real property owned, leased,
subleased, or used by any Credit Party.  Each Credit Party owns good
and marketable fee simple title to all of its owned Real Estate, and valid
leasehold interests in all of its leased Real Estate, all as described on
Disclosure Schedule (3.6), and copies of all such leases or a summary of terms
thereof reasonably satisfactory to Agent have been delivered to
Agent.  Disclosure Schedule (3.6) further describes any Real Estate
with respect to which any Credit Party is a lessor, sublessor or assignor as of
the Closing Date.  Each Credit Party also has good and marketable
title to, or valid leasehold interests in, all of its personal property and
assets.  As of the Closing Date, none of the properties and assets of
any Credit Party are subject to any Liens other than Permitted Encumbrances, and
except as disclosed on Disclosure Schedule 3.17, there are no facts,
circumstances or conditions known to any Credit Party that may result in any
Liens (including Liens arising under Environmental Laws) other than Permitted
Encumbrances.  Each Credit Party has received all deeds, assignments,
waivers, consents, nondisturbance and attornment or similar agreements, bills of
sale and other documents, and has duly effected all recordings, filings and
other actions necessary to establish, protect and perfect such Credit Party’s
right, title and interest in and to all such Real Estate and other properties
and assets.  Disclosure Schedule (3.6) also describes any purchase
options, rights of first refusal or other similar contractual rights pertaining
to any Real Estate.  As of the Closing Date, no portion of any Credit
Party’s Real Estate has suffered any material damage by fire or other casualty
loss that has not heretofore been repaired and restored in all material respects
to its original condition or otherwise remedied.  As of the Closing
Date, all material permits required to have been issued or appropriate to enable
the Real Estate to be lawfully occupied and used for all of the purposes for
which it is currently occupied and used have been lawfully issued and are in
full force and effect.

     

    3.7.        Labor
Matters.  As of the Closing Date (a) no strikes or other
material labor disputes against any Credit Party are pending or, to any Credit
Party’s knowledge, threatened; (b) hours worked by and payment made to employees
of each Credit Party comply with the Fair Labor Standards Act and each other
federal, state, local or foreign law applicable to such matters; (c) all
payments due from any Credit Party for employee health and welfare insurance
have been paid or accrued as a liability on the books of such Credit Party; (d)
except as set forth in Disclosure Schedule (3.7), no Credit Party is a party to
or bound by any collective bargaining agreement, management agreement,
consulting agreement, employment agreement (with senior level officers or
directors), bonus, restricted stock, stock option, or stock appreciation plan or
agreement or any similar plan, agreement or arrangement (and true and complete
copies of any agreements described on Disclosure Schedule (3.7) have been
delivered to Agent); (e) there is no organizing activity involving any Credit
Party pending or, to any Credit Party’s knowledge, threatened by any labor union
or group of employees; (f) there are no representation proceedings pending or,
to any Credit Party’s knowledge, threatened with the National Labor Relations
Board, and no labor organization or group of employees of any Credit Party has
made a pending demand for recognition; and (g) except as set forth in Disclosure
Schedule (3.7), there are no material complaints or charges against any Credit
Party pending or, to the knowledge of any Credit Party, threatened to be filed
with any Governmental Authority or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment by any Credit Party of any individual.

    
      
         

      

      
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    3.8.        Ventures, Subsidiaries and
Affiliates; Outstanding Stock and Indebtedness.  Except as set
forth in Disclosure Schedule (3.8), as of the Closing Date, no Credit Party has
any Subsidiaries, is engaged in any joint venture or partnership with any other
Person, or is an Affiliate of any other Person.  All of the issued and
outstanding Stock of each Credit Party is owned by each of the Stockholders and
in the amounts set forth in Disclosure Schedule (3.8).  Except as set
forth in Disclosure Schedule (3.8), there are no outstanding rights to purchase,
options, warrants or similar rights or agreements pursuant to which any Credit
Party may be required to issue, sell, repurchase or redeem any of its Stock or
other equity securities or any Stock or other equity securities of its
Subsidiaries.  All outstanding Indebtedness and Guaranteed
Indebtedness of each Credit Party as of the Closing Date (except for the
Obligations) is described in Section 6.3 (including Disclosure Schedule
(6.3)).  None of the Credit Parties or their Subsidiaries identified
on Disclosure Schedule (3.8) as “inactive” has any material assets (except Stock
of their Subsidiaries) or any Indebtedness or Guaranteed Indebtedness or
conducts any trade or business.

     

    3.9.        Government
Regulation.  No Credit Party is an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an
“investment company,” as such terms are defined in the Investment Company Act of
1940.  No Credit Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, or any other federal
or state statute that restricts or limits its ability to incur Indebtedness or
to perform its obligations hereunder.  The making of the Loans by
Lenders to Borrowers, the incurrence of the Letter of Credit Obligations on
behalf of Borrowers, the application of the proceeds thereof and repayment
thereof and the consummation of the transactions hereunder will not violate any
provision of any such statute or any rule, regulation or order issued by the
Securities and Exchange Commission.

     

    3.10.      Margin
Regulations.  No Credit Party 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” as such
terms are defined in Regulation U of the Federal Reserve Board as now and from
time to time hereafter in effect (such securities being referred to herein as
“Margin
Stock”).  No Credit Party owns any Margin Stock, and none of
the proceeds of the Loans or other extensions of credit under this Agreement
will be used, directly or indirectly, for the purpose of purchasing or carrying
any Margin Stock, for the purpose of reducing or retiring any Indebtedness that
was originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any of the Loans or other extensions of credit under
this Agreement to be considered a “purpose credit” within the meaning of
Regulations T, U or X of the Federal Reserve Board.  No Credit Party
will take or permit to be taken any action that might cause any Loan Document to
violate any regulation of the Federal Reserve Board.

    
      
         

      

      
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    3.11.      Taxes.  All
tax returns, reports and statements, including information returns, required by
any Governmental Authority to be filed by any Credit Party have been filed with
the appropriate Governmental Authority and all Charges have been paid prior to
the date on which any fine, penalty, interest or late charge may be added
thereto for nonpayment thereof (or any such fine, penalty, interest, late charge
or loss has been paid), excluding (a) Charges or other amounts being contested
in accordance with Section 5.2(b) and (b) filings relating to local
qualifications to do business where the exposure to losses, damages or
liabilities is less than $100,000 in the aggregate for all
jurisdictions.  Proper and accurate amounts have been withheld by each
Credit Party from its respective employees for all periods in full and complete
compliance with all applicable federal, state, local and foreign laws and such
withholdings have been timely paid to the respective Governmental
Authorities.  Disclosure Schedule (3.11) sets forth as of the Closing
Date those taxable years for which any Credit Party’s tax returns are currently
being audited by the IRS or any other applicable Governmental Authority, and any
assessments or threatened assessments in connection with such audit, or
otherwise currently outstanding.  Except as described in Disclosure
Schedule (3.11), no Credit Party has executed or filed with the IRS or any other
Governmental Authority any agreement or other document extending, or having the
effect of extending, the period for assessment or collection of any
Charges.  None of the Credit Parties and their respective predecessors
are liable for any Charges: (a) under any agreement (including any tax sharing
agreements) or (b) to each Credit Party’s knowledge, as a
transferee.  As of the Closing Date, no Credit Party has agreed or
been requested to make any adjustment under IRC Section 481(a), by reason of a
change in accounting method or otherwise, which would reasonably be expected to
have a Material Adverse Effect.

     

    3.12.      ERISA.

     

    (a)           Disclosure
Schedule (3.12) lists (i) all ERISA Affiliates and (ii) all Plans and separately
identifies all Pension Plans, including Title IV Plans, Multiemployer Plans,
ESOPs and Welfare Plans, including all Retiree Welfare Plans.  Copies
of all such listed Plans, together with a copy of the latest form IRS/DOL
5500-series, as applicable, for each such Plan, have been made available to
Agent.  Except with respect to Multiemployer Plans, each Qualified
Plan has been determined by the IRS to qualify under Section 401 of the IRC, the
trusts created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the IRC, and nothing has occurred that would cause
the loss of such qualification or tax exempt status.  Each Plan is in
compliance with the applicable provisions of ERISA, the IRC and its terms,
including the timely filing of all reports required under the IRC or ERISA,
including the statement required by 29 CFR Section 2520.104
23.  Neither any Credit Party nor ERISA Affiliate has failed to make
any contribution or pay any amount due as required by either Section 412 of the
IRC or Section 302 of ERISA or the terms of any such Plan.  No
“prohibited transaction,” as defined in Section 406 of ERISA and Section 4975 of
the IRC, has occurred with respect to any Plan, that would subject any Credit
Party to a material tax on prohibited transactions imposed by Section 502(i) of
ERISA or Section 4975 of the IRC.

    
      
         

      

      
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    (b)           Except
as set forth in Disclosure Schedule (3.12): (i) no Title IV Plan has any
Unfunded Pension Liability; (ii) no ERISA Event has occurred or is reasonably
expected to occur; (iii) there are no pending, or to the knowledge of any Credit
Party, threatened claims (other than claims for benefits in the normal course),
sanctions, actions or lawsuits, asserted or instituted against any Plan or any
Person as fiduciary or sponsor of any Plan; (iv) no Credit Party or ERISA
Affiliate has incurred or reasonably expects to incur any liability as a result
of a complete or partial withdrawal from a Multiemployer Plan; (v) within the
last five years no Title IV Plan of any Credit Party or ERISA Affiliate has been
terminated, whether or not in a “standard termination” as that term is used in
Section 4041(b)(1) of ERISA, nor has any Title IV Plan of any Credit Party or
any ERISA Affiliate (determined at any time within the last five years) with
Unfunded Pension Liabilities been transferred outside of the “controlled group”
(within the meaning of Section 4001(a)(14) of ERISA) of any Credit Party or
ERISA Affiliate (determined at such time); (vi) except in the case of any ESOP,
Stock of all Credit Parties and their ERISA Affiliates makes up, in the
aggregate, no more than 10% of fair market value of the assets of any Plan
measured on the basis of fair market value as of the latest valuation date of
any Plan; and (vii) no liability under any Title IV Plan has been satisfied with
the purchase of a contract from an insurance company that is not rated AAA by
the Standard & Poor’s Corporation or an equivalent rating by another
nationally recognized rating agency.

     

    3.13.      No
Litigation.  No action, claim, lawsuit, demand, investigation
or proceeding is now pending or, to the knowledge of any Credit Party,
threatened against any Credit Party, before any Governmental Authority or before
any arbitrator or panel of arbitrators (collectively, “Litigation”), (a)
that challenges any Credit Party’s right or power to enter into or perform any
of its obligations under the Loan Documents to which it is a party, or the
validity or enforceability of any Loan Document or any action taken thereunder,
or (b) that has a reasonable risk of being determined adversely to any Credit
Party and that, if so determined, could be reasonably be expected to have a
Material Adverse Effect.  Except as set forth on Disclosure Schedule
(3.13), as of the Closing Date there is no Litigation pending or, to any Credit
Party’s knowledge, threatened, that seeks damages in excess of $250,000 or
injunctive relief against, or alleges criminal misconduct of, any Credit
Party.

     

    3.14.      Brokers.  No
broker or finder brought about the obtaining, making or closing of the Loans,
and no Credit Party or Affiliate thereof has any obligation to any Person in
respect of any finder’s or brokerage fees in connection therewith.

     

    3.15.      Intellectual
Property.  As of the Closing Date, each Credit Party owns or
has rights to use all Intellectual Property necessary to continue to conduct its
business as now or heretofore conducted by it or proposed to be conducted by it,
and each Patent, Trademark, Copyright and License is listed, together with
application or registration numbers, as applicable, in Disclosure Schedule
(3.15).  Each Credit Party uses reasonable commercial efforts to
conduct its business and affairs so as to avoid infringement of or interference
with any Intellectual Property of any other Person in any material
respect.  Except as set forth in Disclosure Schedule (3.15), no Credit
Party is aware of any infringement claim by any other Person with respect to any
Intellectual Property.

     

    3.16.      Full
Disclosure.  No information contained in this Agreement, any of
the other Loan Documents, any Projections, Financial Statements or Collateral
Reports or other written reports from time to time prepared by any Credit Party
and delivered hereunder or any written statement prepared by any Credit Party
and furnished by or on behalf of any Credit Party to Agent or any Lender
pursuant to the terms of this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading in
light of the circumstances under which they were made.  The Liens
granted to Agent, on behalf of itself and Lenders, pursuant to the Collateral
Documents will at all times be fully perfected first priority Liens in and to
the Collateral described therein, subject, as to priority, only to Permitted
Encumbrances.

    
      
         

      

      
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    3.17.      Environmental
Matters.

     

    (a)           Except
as set forth in Disclosure Schedule (3.17), as of the Closing Date: (i) the Real
Estate is free of contamination from any Hazardous Material except for such
contamination that would not adversely impact the value or marketability of such
Real Estate and that would not result in Environmental Liabilities that could
reasonably be expected to exceed $200,000; (ii) no Credit Party has caused or
suffered to occur any Release of Hazardous Materials on, at, in, under, above,
to, from or about any of its Real Estate in violation of Environmental Laws and
Environmental Permits; (iii) the Credit Parties are and have been in compliance
with all Environmental Laws, except for such noncompliance that would not result
in Environmental Liabilities which could reasonably be expected to exceed
$200,000; (iv) the Credit Parties have obtained, and are in compliance with, all
Environmental Permits required by Environmental Laws for the operations of their
respective businesses as presently conducted or as proposed to be conducted,
except where the failure to so obtain or comply with such Environmental Permits
would not result in Environmental Liabilities that could reasonably be expected
to exceed $200,000, and all such Environmental Permits are valid, uncontested
and in good standing; (v) no Credit Party is involved in operations or knows of
any facts, circumstances or conditions, including any Releases of Hazardous
Materials, that are likely to result in any Environmental Liabilities of such
Credit Party which could reasonably be expected to exceed $200,000, and no
Credit Party has consented to any current or former tenant or occupant of the
Real Estate engaging in any such operations; (vi) there is no Litigation arising
under or related to any Environmental Laws, Environmental Permits or Hazardous
Material that seeks damages, penalties, fines, costs or expenses in excess of
$200,000 or injunctive relief against, or that alleges criminal misconduct by,
any Credit Party; (vii) no notice has been received by any Credit Party
identifying it as a “potentially responsible party” or requesting information
under CERCLA or analogous state statutes, and to the knowledge of the Credit
Parties, there are no facts, circumstances or conditions that may result in any
Credit Party being identified as a “potentially responsible party” under CERCLA
or analogous state statutes; and (viii) the Credit Parties have provided to
Agent copies of all existing environmental reports, reviews and audits and all
written information pertaining to actual or potential Environmental Liabilities,
in each case relating to any Credit Party.

     

    (b)           Each
Credit Party hereby acknowledges and agrees that Agent (i) is not now, and has
not ever been, in control of any of the Real Estate or any Credit Party’s
affairs, and (ii) does not have the capacity through the provisions of the Loan
Documents or otherwise to influence any Credit Party’s conduct with respect to
the ownership, operation or management of any of its Real Estate or compliance
with Environmental Laws or Environmental Permits.

     

    3.18.      Insurance.  Disclosure
Schedule (3.18) lists all insurance policies of any nature maintained, as of the
Closing Date, for current occurrences by each Credit Party, as well as a summary
of the terms of each such policy.

     

    3.19.      Deposit and Disbursement
Accounts.  Disclosure Schedule (3.19) lists all banks and other
financial institutions at which any Credit Party maintains deposit or other
accounts as of the Closing Date, including any Disbursement Accounts, and such
Schedule correctly identifies the name, address and telephone number of each
depository, the name in which the account is held, a description of the purpose
of the account, and the complete account number therefor.

    
      
         

      

      
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    3.20.      Government
Contracts.  Except as set forth in Disclosure Schedule (3.20),
as of the Closing Date, no Credit Party is a party to any contract or agreement
with any Governmental Authority and no Credit Party’s Accounts are subject to
the Federal Assignment of Claims Act (31 U.S.C. Section 3727) or any similar
state or local law.

     

    3.21.      Customer and Trade
Relations.  As of the Closing Date, there exists no actual or,
to the knowledge of any Credit Party, threatened termination or cancellation of,
or any material adverse modification or change in: the business relationship of
any Credit Party with any customer or group of customers whose purchases during
the preceding 12 months caused them to be ranked among the ten largest customers
of such Credit Party; or the business relationship of any Credit Party with any
supplier material to its operations.

     

    3.22.      Agreements and Other
Documents.  Disclosure Schedule (3.22) accurately lists each of
the following agreements or documents to which any Credit Party is subject as of
the Closing Date: supply agreements and purchase agreements not terminable by
such Credit Party within 60 days following written notice issued by such Credit
Party and involving transactions in excess of $3,000,000 with respect to vendor
supply agreements and $6,000,000 with respect to customer purchase agreements,
in each case per annum; leases of Equipment having a remaining term of one year
or longer and requiring aggregate rental and other payments in excess of
$500,000 per annum; any surety bond agreement or bonding requirement with
respect to products or services sold by it or any trademark or patent license
agreement with respect to products sold by it; any other licenses and permits
held by the Credit Parties, the absence of which could be reasonably likely to
have a Material Adverse Effect; instruments and documents evidencing any
Indebtedness or Guaranteed Indebtedness of such Credit Party and any Lien
granted by such Credit Party with respect thereto; and instruments and
agreements evidencing the issuance of any equity securities, warrants, rights or
options to purchase equity securities of such Credit Party.

     

    3.23.      Solvency.  Both
before and after giving effect to (a) the Loans and Letter of Credit Obligations
to be made or incurred on the Closing Date or such other date as Loans and
Letter of Credit Obligations requested hereunder are made or incurred and the
other transactions contemplated hereunder, (b) the disbursement of the proceeds
of such Loans pursuant to the instructions of Borrower Representative; and (c)
the payment and accrual of all transaction costs in connection with the
foregoing, each Credit Party is and will be Solvent.

     

    3.24.      Subordinated
Debt.  As of the Closing Date, Borrowers have delivered to
Agent a complete and correct copy of the Subordinated Debt Documents then in
effect (including all schedules, exhibits, amendments, supplements,
modifications, assignments and all other documents delivered pursuant thereto or
in connection therewith).  SMP has the corporate power and authority
to incur the Indebtedness evidenced by such Subordinated Debt
Documents.  The subordination provisions of such Subordinated Debt
Documents are enforceable against the holders of such Subordinated Debt
Documents by Agent and Lenders.  All Obligations, including the Letter
of Credit Obligations, constitute senior Indebtedness entitled to the benefits
of the subordination provisions contained in such Subordinated Debt
Documents.  Borrowers acknowledge that Agent and each Lender are
entering into this Agreement and are extending the Commitments in reliance upon
the subordination provisions of such Subordinated Debt Documents and this Section
3.24.

    
      
         

      

      
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    3.25.      Anti-Terrorism
Laws.

     

    (a)          General.  Neither
any Borrower nor any Affiliate of any Borrower is in violation 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)          Executive Order No.
13224.  Neither any Borrower nor any Affiliate of any Borrower
or their respective agents acting or benefiting in any capacity in connection
with the Advances 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 or entity with which any Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;

     

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

     

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

     

    Neither
any Borrower nor to the knowledge of any Borrower, any of its agents acting in
any capacity in connection with the Advances 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.

     

    3.26.      Trading with the
Enemy.  No Borrower has engaged, nor does it intend to engage,
in any business or activity prohibited by the Trading with the Enemy
Act.

    
      
         

      

      
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              4.

            	
              FINANCIAL
      STATEMENTS AND INFORMATION

            

    

     

    4.1.        Reports
and Notices.

     

    (a)           SMP,
in its capacity as Borrower Representative, hereby agrees that from and after
the Closing Date and until the Termination Date, it shall deliver to Agent or to
Agent and Lenders, as required, the Financial Statements, notices, Projections
and other information at the times, to the Persons and in the manner set forth
in Annex E.

     

    (b)           SMP,
in its capacity as Borrower Representative, hereby agrees that, from and after
the Closing Date and until the Termination Date, it shall deliver to Agent or to
Agent and Lenders, as required, the various Collateral Reports (including
Borrowing Base Certificates in the form of Exhibit 4.1(b)) at the times, to the
Persons and in the manner set forth in Annex F.

     

    4.2.        Communication with
Accountants.  Each Credit Party executing this Agreement
authorizes (a) Agent and (b) so long as an Event of Default has occurred and is
continuing, each Lender, to communicate directly with its independent certified
public accountants, including Grant Thorton LLP and KPMG LLC, and authorizes
and, at Agent’s request, shall instruct those accountants and advisors to
disclose and make available to Agent and each Lender any and all Financial
Statements and other supporting financial documents, schedules and information
relating to any Credit Party (including copies of any issued management letters)
with respect to the business, financial condition and other affairs of any
Credit Party.  Unless an Event of Default has occurred which is then
continuing, Agent shall (i) notify SMP at least five (5) Business Days prior to
any such communication with its accountants, and (ii) permit Borrowers to
participate in any such discussions or meetings.

     

    
      	
              5.

            	
              AFFIRMATIVE
      COVENANTS

            

    

     

    Each
Credit Party executing this Credit Agreement jointly and severally agrees as to
all Credit Parties that from and after the date hereof and until the Termination
Date:

     

    5.1.        Maintenance of Existence and
Conduct of Business.  Each Credit Party shall: do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence and its rights and franchises; continue to conduct its
business substantially as now conducted or as otherwise permitted hereunder; at
all times maintain, preserve and protect all of its assets and properties used
or useful in the conduct of its business, and keep the same in good repair,
working order and condition in all material respects (taking into consideration
ordinary wear and tear) and from time to time make, or cause to be made, all
necessary or appropriate repairs, replacements and improvements thereto
consistent with industry practices; and transact business only in such corporate
and trade names as are set forth in Disclosure Schedule (5.1) or reported in
accordance with Section 6.15.  Notwithstanding the foregoing or any
provision herein to the contrary, SI may be dissolved or liquidated at any time
at the discretion of SMP, provided that any assets then owned by SI are
transferred to SMP and the applicable Borrowing Bases are recalculated
accordingly.

     

    5.2.        Payment
of Charges.

     

    (a)           Subject
to Section 5.2(b), each Credit Party shall pay and discharge or cause to be paid
and discharged promptly all Charges payable by it, including (i) Charges imposed
upon it, its income and profits, or any of its property (real, personal or
mixed) and all Charges with respect to tax, social security and unemployment
withholding with respect to its employees, (ii) lawful claims for labor,
materials, supplies and services or otherwise, and (iii) all storage or rental
charges payable to warehousemen or bailees, in each case, before any thereof
shall become past due.

    
      
         

      

      
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    (b)           Each
Credit Party may in good faith contest, by appropriate proceedings, the validity
or amount of any Charges, Taxes or claims described in Section 5.2(a); provided,
that (i) adequate reserves with respect to such contest are maintained on the
books of such Credit Party, in accordance with GAAP; (ii) no Lien shall be
imposed to secure payment of such Charges (other than payments to warehousemen
and/or bailees) that is superior to any of the Liens securing the Obligations
and such contest is maintained and prosecuted continuously and with diligence
and operates to suspend collection or enforcement of such Charges; (iii) none of
the Collateral becomes subject to forfeiture or loss as a result of such
contest; and (iv) such Credit Party shall promptly pay or discharge such
contested Charges, Taxes or claims and all additional charges, interest,
penalties and expenses, if any, and shall deliver to Agent evidence reasonably
acceptable to Agent of such compliance, payment or discharge, if such contest is
terminated or discontinued adversely to such Credit Party or the conditions set
forth in this Section 5.2(b) are no longer met.

     

    5.3.        Books and
Records.  Each Credit Party shall keep adequate books and
records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP and on a
basis consistent with the Financial Statements attached as Disclosure Schedule
(3.4(a)).

     

    5.4.        Insurance;
Damage to or Destruction of Collateral.

     

    (a)           The
Credit Parties shall, at their sole cost and expense, maintain the policies of
insurance described on Disclosure Schedule (3.18) as in effect on the date
hereof or otherwise in form and amounts and with insurers reasonably acceptable
to Agent.  Such policies of insurance (or the loss payable and
additional insured endorsements delivered to Agent) shall contain provisions
pursuant to which the insurer agrees to provide thirty (30) days prior written
notice (or 10 days in the case of non-payment of premiums) to Agent in the event
of any non-renewal, cancellation or amendment of any such insurance
policy.  If any Credit Party at any time or times hereafter shall fail
to obtain or maintain any of the policies of insurance required above, or to pay
all premiums relating thereto, Agent may at any time or times thereafter obtain
and maintain such policies of insurance and pay such premiums and take any other
action with respect thereto that Agent deems advisable.  Agent shall
have no obligation to obtain insurance for any Credit Party or pay any premiums
therefor.  By doing so, Agent shall not be deemed to have waived any
Default or Event of Default arising from any Credit Party’s failure to maintain
such insurance or pay any premiums therefor.  All sums so disbursed,
including reasonable attorneys’ fees, court costs and other charges related
thereto, shall be payable on demand by Borrowers to Agent and shall be
additional Obligations hereunder secured by the Collateral.

    
      
         

      

      
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    (b)           Agent
reserves the right at any time upon any change in any Credit Party’s risk
profile (including any change in the product mix maintained by any Credit Party
or any laws affecting the potential liability of such Credit Party), upon
delivery to the Borrower Representative of no less than thirty (30) days’ prior
written notice to such effect, to require additional forms and limits of
insurance to, in Agent’s opinion, adequately protect both Agent’s and Lenders’
interests in all or any portion of the Collateral and to ensure that each Credit
Party is protected by insurance in amounts and with coverage customary for its
industry.  If reasonably requested by Agent, each Credit Party shall
deliver to Agent from time to time a report of a reputable insurance broker,
reasonably satisfactory to Agent, with respect to its insurance
policies.

     

    (c)           Each
Credit Party shall deliver to Agent, in form and substance reasonably
satisfactory to Agent, endorsements to (i) all “All Risk” and business
interruption insurance naming Agent, on behalf of itself and Lenders, as loss
payee, and (ii) all general liability and other liability policies naming Agent,
on behalf of itself and Lenders, as additional insured.  Each Credit
Party irrevocably makes, constitutes and appoints Agent (and all officers,
employees or agents designated by Agent), so long as any Event of Default has
occurred and is continuing or the anticipated insurance proceeds exceed
$500,000, as such Credit Party’s true and lawful agent and attorney in fact for
the purpose of making, settling and adjusting claims under such “All Risk”
policies of insurance, endorsing the name of such Credit Party on any check or
other item of payment for the proceeds of such “All Risk” policies of insurance
and for making all determinations and decisions with respect to such “All Risk”
policies of insurance.  Agent shall have no duty to exercise any
rights or powers granted to it pursuant to the foregoing
power-of-attorney.  Borrower Representative shall promptly notify
Agent of any loss, damage, or destruction to the Collateral in the amount of
$250,000 or more, whether or not covered by insurance.  After
deducting from such proceeds (i) the expenses, if any, incurred by Agent in the
collection or handling thereof, and (ii) the amounts required to be paid to
creditors (other than Lenders) having Permitted Encumbrances, Agent may, at its
option, apply such proceeds to the reduction of the Obligations in accordance
with Section 1.3(d) (provided that in the case of insurance proceeds pertaining
to any Credit Party that is not a Borrower, such insurance proceeds shall be
applied ratably to all of the Loans owing by each Borrower), or permit or
require the applicable Credit Party to use such money, or any part thereof, to
replace, repair, restore or rebuild the Collateral in a diligent and expeditious
manner with materials and workmanship of substantially the same quality as
existed before the loss, damage or destruction.  Notwithstanding the
foregoing, if the casualty giving rise to such insurance proceeds could not
reasonably be expected to have a Material Adverse Effect and such insurance
proceeds do not exceed $500,000 in the aggregate, Agent shall permit the
applicable Credit Party to replace, restore, repair or rebuild the property;
provided that if such Credit Party shall not have completed or entered into
binding agreements to complete such replacement, restoration, repair or
rebuilding within 180 days of such casualty, Agent may apply such insurance
proceeds to the Obligations in accordance with Section 1.3(d); provided,
further, that in the case of insurance proceeds pertaining to any Credit Party
that is not a Borrower, such insurance proceeds shall be applied ratably to all
of the Loans owing by each Borrower.  All insurance proceeds that are
to be made available to any Borrower to replace, repair, restore or rebuild the
Collateral shall be applied by Agent to reduce the outstanding principal balance
of the Revolving Loan of such Borrower (which application shall not result in a
permanent reduction of the Commitment) and upon such application, Agent shall
establish a Reserve against the separate Borrowing Base of the affected Borrower
in an amount equal to the amount of such proceeds so applied.  All
insurance proceeds made available to any Credit Party that is not a Borrower to
replace, repair, restore or rebuild Collateral shall be deposited in a cash
collateral account.  Thereafter, such funds shall be made available to
that Borrower or Credit Party to provide funds to replace, repair, restore or
rebuild the Collateral as follows: (i) Borrower Representative shall request a
Revolving Credit Advance or a release from the cash collateral account be made
to such Borrower or Credit Party in the amount requested to be released; (ii) so
long as the conditions set forth in Section 2.2 have been met, Lenders shall
make such Revolving Credit Advance or Agent shall release funds from the cash
collateral account; and (iii) in the case of insurance proceeds applied against
the Revolving Loan, the Reserve established with respect to such insurance
proceeds shall be reduced by the amount of such Revolving Credit
Advance.  To the extent not used to replace, repair, restore or
rebuild the Collateral, such insurance proceeds shall be applied in accordance
with Section 1.3(d); provided that in the case of insurance proceeds pertaining
to any Credit Party that is not a Borrower, such insurance proceeds shall be
applied ratably to all of the Loans owing by each Borrower.

    
      
         

      

      
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    5.5.        Compliance with
Laws.  Each Credit Party shall comply with all federal, state,
local and foreign laws and regulations applicable to it, including those
relating to ERISA, labor laws and Environmental Laws and Environmental Permits,
except to the extent that the failure to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.

     

    5.6.        Supplemental
Disclosure.  From time to time as may be reasonably requested
by Agent (which request will not be made more frequently than once each year
absent the occurrence and continuance of a Default or an Event of Default) or at
Credit Parties’ election, the Credit Parties shall supplement each Disclosure
Schedule hereto, or any representation herein or in any other Loan Document,
with respect to any matter hereafter arising that, if existing or occurring at
the date of this Agreement, would have been required to be set forth or
described in such Disclosure Schedule or as an exception to such representation
or that is necessary to correct any information in such Disclosure Schedule or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Disclosure Schedule, such Disclosure Schedule shall be
appropriately marked to show the changes made therein); provided that (a) except
as provided below, no such supplement to any such Disclosure Schedule or
representation shall amend, supplement or otherwise modify any Disclosure
Schedule or representation, or be or be deemed a waiver of any Default or Event
of Default resulting from the matters disclosed therein, except as consented to
by Agent and Requisite Lenders in writing, and (b) no supplement shall be
required or permitted as to representations and warranties that relate solely to
the Closing Date.

     

    5.7.        Intellectual
Property.  Each Credit Party will conduct its business and
affairs without infringement of or interference with any Intellectual Property
of any other Person in any material respect and shall comply in all material
respects with the terms of its Licenses.

    
      
         

      

      
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    5.8.        Environmental
Matters.  Each Credit Party shall and shall cause each Person
within its control to: (a) conduct its operations and keep and maintain its Real
Estate in compliance with all Environmental Laws and Environmental Permits other
than noncompliance that could not reasonably be expected to have a Material
Adverse Effect; (b) implement any and all investigation, remediation, removal
and response actions that are appropriate or necessary to comply with
Environmental Laws and Environmental Permits pertaining to the presence,
generation, treatment, storage, use, disposal, transportation or Release of any
Hazardous Material on, at, in, under, above, to, from or about any of its Real
Estate; (c) notify Agent promptly after such Credit Party becomes aware of any
violation of Environmental Laws or Environmental Permits or any Release on, at,
in, under, above, to, from or about any Real Estate that is reasonably likely to
result in Environmental Liabilities in excess of $100,000; and (d) promptly
forward to Agent a copy of any order, notice, request for information or any
written communication or report received by such Credit Party in connection with
any such violation or Release or any other matter relating to any Environmental
Laws or Environmental Permits that could reasonably be expected to result in
Environmental Liabilities in excess of $100,000, in each case whether or not the
Environmental Protection Agency or any Governmental Authority has taken or
threatened any action in connection with any such violation, Release or other
matter.  If Agent at any time has a reasonable basis to believe that
there may be a violation of any Environmental Laws or Environmental Permits by
any Credit Party or any Environmental Liability arising thereunder, or a Release
of Hazardous Materials on, at, in, under, above, to, from or about any of its
Real Estate, that, in each case, could reasonably be expected to have a Material
Adverse Effect, then each Credit Party shall, upon Agent’s written request, and
subject to the requirements and restrictions imposed by any Person from which
such Credit Party leases the applicable Real Estate, (i) cause the performance
of such environmental audits including subsurface sampling of soil and
groundwater, and preparation of such environmental reports, at Borrowers’
expense, as Agent may from time to time reasonably request, which shall be
conducted by reputable environmental consulting firms reasonably acceptable to
Agent and shall be in form and substance reasonably acceptable to Agent, and
(ii) permit Agent or its representatives to have reasonable access to all Real
Estate for the purpose of conducting such environmental audits and testing as
Agent deems appropriate, including subsurface sampling of soil and
groundwater.  Borrowers shall reimburse Agent for the costs of such
audits and tests and the same will constitute a part of the Obligations secured
hereunder.

     

    5.9.        Landlords’ Agreements,
Mortgagee Agreements, Bailee Letters and Real Estate
Purchases.  Each Credit Party shall obtain a landlord’s
agreement, mortgagee agreement or bailee letter, as applicable, from the lessor
of each leased property, mortgagee of owned property or bailee with respect to
any warehouse, processor or converter facility or other location where
Collateral is stored or located, which agreement or letter shall contain a
waiver or subordination of all Liens or claims that the landlord, mortgagee or
bailee may assert against the Collateral at that location, and shall otherwise
be reasonably satisfactory in form and substance to Agent.  With
respect to such locations or warehouse space leased or owned as of the Closing
Date and thereafter, if Agent has not received a landlord or mortgagee agreement
or bailee letter as of the Closing Date (or, if later, as of the date such
location is acquired or leased), any Borrower’s Eligible Inventory at that
location shall, in Agent’s discretion, be excluded from the Borrowing Base or be
subject to such Reserves as may be established by Agent in its reasonable credit
judgment.  After the Closing Date, no real property or warehouse space
shall be leased by any Credit Party and no Inventory shall be shipped to a
processor or converter under arrangements established after the Closing Date
without the prior written consent of Agent (which consent, in Agent’s
discretion, may be conditioned upon the exclusion from the Borrowing Base of
Eligible Inventory at that location or the establishment of Reserves acceptable
to Agent) or, unless and until a reasonably satisfactory landlord agreement or
bailee letter, as appropriate, shall first have been obtained with respect to
such location.  Each Credit Party shall timely and fully pay and
perform its obligations under all leases and other agreements with respect to
each leased location or public warehouse where any Collateral is or may be
located.  To the extent otherwise permitted hereunder, if any Credit
Party proposes to acquire a fee ownership interest in Real Estate after the
Closing Date, it shall first provide to Agent a mortgage or deed of trust
granting Agent a first priority Lien on such Real Estate, together with
environmental audits, mortgage title insurance commitment, real property survey,
local counsel opinion(s), and, if required by Agent, supplemental casualty
insurance and flood insurance, and such other documents, instruments or
agreements reasonably requested by Agent, in each case, in form and substance
reasonably satisfactory to Agent.

    
      
         

      

      
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    5.10.      Further
Assurances.  Each Credit Party executing this Agreement agrees
that it shall and shall cause each other Credit Party to, at such Credit Party’s
expense and upon request of Agent, duly execute and deliver, or cause to be duly
executed and delivered, to Agent such further instruments and do and cause to be
done such further acts as may be necessary or proper in the reasonable opinion
of Agent to carry out more effectively the provisions and purposes of this
Agreement and each Loan Document.

     

    5.11.      Intentionally
Omitted.

     

    5.12.      BSE
Sale.  (a)  SMP Canada shall cause its share of the
cash proceeds of the BSE Sale to be distributed and/or lent to SMP and SMP shall
apply such amounts, together with its share of the cash proceeds of the BSE
Sale, to prepay the Loans in accordance with the provisions of Section
1.3(b)(ii) of the Agreement.

     

    (a)           The
BSE Deferred Payment shall be evidenced by a promissory note in form and
substance reasonably satisfactory to Agent, which promissory note, upon the
consummation of the BSE Sale, shall be duly pledged, endorsed and delivered to
Agent as collateral security for the Obligations hereunder and shall be subject
to a first priority Lien in favor of Agent, for its benefit and for the ratable
benefit of Lenders, and SMP and SMP Canada shall execute and deliver such
amendments to the applicable Pledge Agreement as is reasonably requested by
Agent to evidence such Lien.

     

    
      	
              6.

            	
              NEGATIVE
      COVENANTS

            

    

     

    Each
Credit Party executing this Agreement jointly and severally agrees as to all
Credit Parties that from and after the date hereof until the Termination
Date:

     

    6.1.        Mergers, Subsidiaries,
Etc.  No Credit Party shall directly or indirectly, by
operation of law or otherwise, (a) except as otherwise permitted in connection
with a Permitted Acquisition, form any Subsidiary, or (b) merge with,
consolidate with, acquire all or substantially all of the assets or Stock of, or
otherwise combine with or acquire, any Person, except that any Borrower may
merge with another Borrower and any other Credit Party may merge into any
Borrower, provided that
Borrower Representative shall be the survivor of any such merger to which it is
a party.  Notwithstanding the foregoing clause (b), any Borrower, may
acquire or, subject to the last sentence of this Section 6.1, form a Subsidiary
to acquire, all or substantially all of the assets or Stock of any Person (the
“Target”) (in
each case, a “Permitted
Acquisition”) subject to the satisfaction of each of the following
conditions.

     

    (i)           Agent
shall receive at least fifteen (15) Business Days’ prior written notice of such
proposed Permitted Acquisition, which notice shall include a reasonably detailed
description of such proposed Permitted Acquisition, and with respect to any
proposed Permitted Acquisition involving a purchase price consideration
(inclusive of any assumption of liabilities) in excess of $25,000,000, Requisite
Lenders shall have consented to such Proposed Acquisition;

    
      
         

      

      
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    (ii)          such
Permitted Acquisition shall only involve assets comprising a business, or those
assets of a business, of, or similar to, the types engaged in by Borrowers as of
the Closing Date, and which business would not subject 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 Documents other than
approvals applicable to the exercise of such rights and remedies with respect to
Borrowers prior to such Permitted Acquisition;

     

    (iii)         such
Permitted Acquisition shall be consensual and shall have been approved by the
Target’s board of directors;

     

    (iv)         Concurrently
with delivery of the notice referred to in clause (i) above, with respect to any
Permitted Acquisition involving a purchase price consideration (inclusive of any
assumption of liabilities) in excess of $7,500,000, Borrowers shall have
delivered to Agent, in form and substance reasonably satisfactory to
Agent:

     

    (A)           a
pro forma consolidated balance sheet, income statement and cash flow statement
of Borrowers and their respective Subsidiaries (the “Acquisition Pro
Forma”), based on recent financial statements, which shall be complete
and shall fairly present in all material respects the assets, liabilities,
financial condition and results of operations of Borrowers and their respective
Subsidiaries in accordance with GAAP consistently applied, but taking into
account such Permitted Acquisition and the funding of all Loans in connection
therewith;

     

    (B)           updated
versions of the most recently delivered Projections covering the 1-year period
commencing on the date of such Permitted Acquisition and otherwise prepared in
accordance with the Projections (the “Acquisition
Projections”) and based upon historical financial data of a recent date
reasonably satisfactory to Agent, taking into account such Permitted
Acquisition; and

     

    (C)           a
certificate of the chief financial officer or treasurer of each Borrower to the
effect that: (w) each Borrower (after taking into consideration all rights of
contribution and indemnity such Borrower has against each other Subsidiary of
each Borrower) will be Solvent upon the consummation of the Permitted
Acquisition; (x) the Acquisition Pro Forma fairly presents the financial
condition of Borrowers (on a consolidated basis) as of the date thereof after
giving effect to the Permitted Acquisition; (y) the Acquisition Projections are
reasonable estimates of the future financial performance of Borrowers subsequent
to the date thereof based upon the historical performance of Borrowers and the
Target and show that Borrowers shall continue to be in compliance with the
financial covenants set forth in Annex G for the 3-year period thereafter; and
(z) Borrowers have completed their due diligence investigation with respect to
the Target and such Permitted Acquisition, which investigation was conducted in
a manner similar to that which would have been conducted by a prudent purchaser
of a comparable business and the results of which investigation were delivered
to Agent and Lenders;

    
      
         

      

      
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    (v)           on
or prior to the date of such Permitted Acquisition, Agent shall have received
copies of the acquisition agreement and related agreements and instruments, and
all opinions, certificates, lien search results and other documents relating
thereto; and

     

    (vi)           at
the time of such Permitted Acquisition and after giving effect thereto, (x)
Borrowing Availability of all Borrowers exceeds $20,000,000 and (y) no Default
or Event of Default has occurred and is continuing.

     

    Notwithstanding
the foregoing, (a) the Accounts, Inventory, Equipment and Real Estate of the
Target shall not be included in Eligible Accounts, Eligible Inventory, Eligible
Equipment and Eligible Real Estate until (x) Agent determines, on the basis of
any field examinations and appraisals conducted by it in connection with such
Permitted Acquisition, the appropriate advance rates and Reserves applicable
thereto and (y) such assets become subject to the first priority perfected
security interests of Agent and otherwise meet the eligibility criteria which
apply to such assets and (b) whether or not the assets thereof become part of
the Borrowing Base, if a new Subsidiary is formed in connection with any
Permitted Acquisition, or, if the Permitted Acquisition is of Stock of a Person
which, upon consummation thereof, would become a Subsidiary, such Subsidiary
shall (i) if a domestic Subsidiary, (x) become a Credit Party hereunder, (y)
enter into a guaranty and a security agreement, each in form and substance
identical to the Subsidiary Guaranty and the Security Agreement, and (z) take
such other action as may be reasonably requested by Agent to have the assets of
such Subsidiary become subject to the first priority perfected security
interests of Agent, and (ii) if a foreign Subsidiary, take such action as may be
reasonably requested by Agent to have 51% of the Stock of such foreign
Subsidiary to be pledged to Agent and subject to the first priority perfected
security interest of Agent provided that if such .foreign Subsidiary is a “check
the box” subsidiary, 100% of the stock shall be pledged to Agent and subject to
the first priority perfected security interest of Agent.

    
      
         

      

      
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    6.2.        Investments; Loans and
Advances.  Except as otherwise expressly permitted by this
Section 6, no Credit Party shall make or permit to exist any investment in, or
make, accrue or permit to exist loans or advances of money to, any Person,
through the direct or indirect lending of money, holding of securities or
otherwise, except that: (a) Borrowers may hold investments comprised of notes
payable, or stock or other securities issued by Account Debtors to any Borrower
pursuant to negotiated agreements with respect to settlement of such Account
Debtor’s Accounts in the ordinary course of business, so long as the aggregate
amount of such Accounts so settled by Borrowers does not exceed, without the
prior written approval of Agent, $1,500,000, plus those in existence on the
Closing Date which are set forth on Disclosure Schedule
(6.2); (b) each Credit Party may maintain its existing investments in its
Subsidiaries, and joint ventures identified on Disclosure Schedule
(6.2), as of the Closing Date plus up to the sum of $5,000,000 during
each Fiscal Year (with respect to such joint ventures), so long as after giving
effect thereto (x) Borrowing Availability of all Borrowers exceeds $20,000,000
and (y) no Default or Event of Default has occurred and is continuing; (c) SMP
HK may maintain deposits of cash and investments in cash equivalents in an
amount not to exceed $10,000,000 at anytime, so long as after giving effect
thereto (x) Borrowing Availability of all Borrowers exceeds $20,000,000 and (y)
no Default or Event of Default has occurred and is continuing; (d)
[Intentionally Omitted]; (e) SMP may maintain deposits of cash and investments
in cash equivalents in an amount not to exceed, in the aggregate, $5,000,000 at
any time; (f) Borrowers may make overnight investments of credit balances with
respect to Index Rate Loans in Permitted Overnight Investments; (g) Borrowers
may make loans to its Subsidiaries, so long as after giving effect thereto (x)
Borrowing Availability of all Borrowers exceeds $20,000,000 and (y) no Default
or Event of Default has occurred and is continuing, up to the sum of $20,000,000
at any time outstanding in the aggregate, less the amount of loans converted to
equity pursuant to clause (i) hereinbelow; (h) Borrowers may increase their
investments in Subsidiaries, and/or purchase a minority stock interest in other
entities, not earlier than fifteen (15) Business Days after delivering to Agent
a notice similar to that required under Section 6.1(a)(i)
together with financial statements substantially similar to an Acquisition Pro
Forma described in Section 6.1(a)(iv)(A)
indicating that (x) average daily Borrowing Availability of all Borrowers for
the 30-day period preceding the consummation of such investment would have
exceeded $20,000,000 on a pro forma basis (after giving effect to such
investment and all Loans funded in connection therewith as if made on the first
day of such period) and (y) on a pro forma basis, no Event of Default has
occurred and is continuing or would result after giving effect to such
investment, and (i) from and after the Closing Date, Borrowers may convert to
equity up to an aggregate amount of $6,000,000 of loans due from Subsidiaries so
long as after giving effect to such conversion Borrowing Availability of all
Borrowers exceeds $20,000,000.

     

    6.3.        Indebtedness.

     

    (a)           No
Credit Party shall create, incur, assume or permit to exist any Indebtedness,
except (without duplication) (i) Indebtedness secured by purchase money security
interests and Capital Leases permitted in Section 6.7(c) or as otherwise
permitted in Section 6.7(c), (ii) the Loans and the other Obligations, (iii)
unfunded pension fund and other employee benefit plan obligations and
liabilities to the extent they are permitted to remain unfunded under applicable
law, (iv) existing Indebtedness described in Disclosure Schedule (6.3) and
refinancings thereof or amendments or modifications thereto that do not have the
effect of increasing the principal amount thereof or changing the amortization
thereof (other than to extend the same) and that are otherwise on terms and
conditions no less favorable to any Credit Party, Agent or any Lender, as
determined by Agent, than the terms of the Indebtedness being refinanced,
amended or modified, (v) Indebtedness consisting of intercompany loans and
advances made by SMP Canada or any Borrower to any other Borrower or to SMP
Canada as the case may be; provided, that: (A) each Borrower and SMP Canada
shall have executed and delivered to each other Borrower or SMP Canada as the
case may be, on the Closing Date, a demand note (collectively, the “Intercompany Notes”)
to evidence any such intercompany Indebtedness owing at any time by such
Borrower or SMP Canada to such other Borrowers or SMP Canada, as the case may
be, which Intercompany Notes shall be in form and substance reasonably
satisfactory to Agent and shall be pledged and delivered to Agent pursuant to
the applicable Pledge Agreement or Security Agreement as additional collateral
security for the Obligations; (B) each Borrower and SMP Canada shall record all
intercompany transactions on its books and records in a manner reasonably
satisfactory to Agent; (C) the obligations of each Borrower and SMP Canada under
any such Intercompany Notes shall be subordinated to the Obligations of such
Borrower or SMP Canada hereunder in a manner reasonably satisfactory to Agent;
(D) at the time any such intercompany loan or advance is made by any Borrower to
any other Borrower or SMP Canada and after giving effect thereto, each such
Borrower shall be Solvent; (E) no Default or Event of Default would occur and be
continuing after giving effect to any such proposed intercompany loan; and (F)
in the case of any intercompany Indebtedness, the Borrower advancing such funds
shall have Borrowing Availability under its separate Borrowing Base of not less
than (x) $1,850,000 in the case of SMP and (y) $350,000 in the case of SI, each
after giving effect to such intercompany loan, (vi) Indebtedness consisting of
intercompany loans and advances made by a Subsidiary of any Credit Party which
is not itself a Credit Party to any other Credit Party, (vii) Capital Leases to
the extent they are permitted in Section 6.7(a), (viii) Indebtedness incurred
pursuant to the Canadian Loan Agreement, (ix) Indebtedness incurred pursuant to
Rate Protection Agreements and any interest rate swap, cap, collar, or similar
agreement arranged by GE Capital and supported by a Swap Related L/C
and  (x) to the extent that the purchase of Auto Supplier Accounts by
any special purpose vehicle pursuant to an Auto Supplier Program is judicially
re-characterized as a grant of collateral by any Borrower to secure financing,
Indebtedness in respect of the applicable Auto Supplier
Program.

    
      
         

      

      
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    (b)           No
Credit Party shall, directly or indirectly, voluntarily purchase, redeem,
defease or prepay any principal of, premium, if any, interest or other amount
payable in respect of any Indebtedness prior to its scheduled maturity, other
than (i) the Obligations; (ii) the refinancing, repurchase and/or redemption of
Subordinated Debt in accordance with the terms of Section 6.14(e)(iii); (iii)
Indebtedness secured by a Permitted Encumbrance if the asset securing such
Indebtedness has been sold or otherwise disposed of in accordance with Sections
6.8(b) or (c); (iv) Indebtedness permitted by Section 6.3(a)(iv) upon any
refinancing thereof in accordance with Section 6.3(a)(iv); and (v) as otherwise
permitted in Section 6.14.

     

    6.4.        Employee
Loans and Affiliate Transactions.

     

    (a)           Except
as otherwise expressly permitted in this Section 6 with respect to Affiliates,
no Credit Party shall enter into or be a party to any transaction with any other
Credit Party or any Affiliate thereof except in the ordinary course of and
pursuant to the reasonable requirements of such Credit Party’s business and upon
fair and reasonable terms that are no less favorable to such Credit Party than
would be obtained in a comparable arm’s length transaction with a Person not an
Affiliate of such Credit Party.  In addition, if any such transaction
or series of related transactions not otherwise permitted under Article 6
involves payments in excess of $50,000 for any single transaction or $250,000 in
the aggregate for all Credit Parties, the terms of these transactions must be
disclosed in advance to Agent and Lenders.  All such transactions
existing as of the date hereof are described in Disclosure Schedule
(6.4(a)).

    
      
         

      

      
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    (b)           No
Credit Party shall enter into any lending or borrowing transaction with any
employees of any Credit Party, except (i) loans to its respective employees in
the ordinary course of business consistent with past practices for travel and
entertainment expenses, (ii) loans to its respective employees in an amount not
to exceed for each employee 25% of the employee’s compensation to finance such
employee’s purchase of SMP Stock, (iii) loans to executive officers to finance
their purchase of SMP Stock in which under Credit Parties’ policies such
officers are to have invested at any time an amount equal to 50% of their
current compensation, and (iv) loans to employees who have been relocated at a
Credit Party’s request to assist them in financing the purchase of a new
residence and related moving expenses pending the sale of their former
residence, not to exceed, in the aggregate with respect to all such employee or
executive officer loans described in clauses (i), (ii), (iii) and (iv) of this
subsection (b), a maximum of $1,000,000 to any employee or executive officer and
up to a maximum of $2,000,000 in the aggregate at any one time outstanding for
all employees and executive officers.

     

    6.5.        Capital Structure and
Business.  No Credit Party shall (a) make any changes in any of
its business objectives, purposes or operations that could reasonably be
expected to have or result in a Material Adverse Effect, (b) make any change in
its capital structure as described in Disclosure Schedule (3.8), including the
issuance or sale of any shares of Stock, warrants or other securities
convertible into Stock or any revision of the terms of its outstanding Stock;
provided that (i) any Credit Party may issue or sell shares of its stock to any
other Credit Party, and (ii) SMP may buy or sell shares of its Stock for cash so
long as (x) the proceeds thereof are applied in prepayment of the Obligations as
required by Section 1.3(b)(iii), and (y) no Change of Control occurs after
giving effect thereto, or (c) amend its charter or bylaws in a manner that would
adversely affect Agent or Lenders or such Credit Party’s duty or ability to
repay the Obligations.  No Credit Party shall engage in any business
other than the businesses currently engaged in by it or businesses reasonably
similar or related thereto. Notwithstanding the foregoing, Agent and Lenders
consent to the dissolution of SI, provided, that (i) upon the dissolution of SI,
the assets of SI shall have been transferred to SMP and remain subject to
Agent’s and Lenders’ first priority perfected security interest and (ii) upon
dissolution of SI, the amount of SI Amortizing Availability, shall become $0 and
the amount of SI Amortizing Availability, immediately prior to such dissolution
shall be added to SMP Amortizing Availability.

     

    6.6.        Guaranteed
Indebtedness.  No Credit Party shall create, incur, assume or
permit to exist any Guaranteed Indebtedness except (a) by endorsement of
instruments or items of payment for deposit to the general account of any Credit
Party, (b) for Guaranteed Indebtedness incurred for the benefit of any other
Credit Party if the primary obligation is expressly permitted by this Agreement
other than Indebtedness, if any, of a Target existing at the time such Target is
acquired, (c) Guaranteed Indebtedness incurred by SMP for the payment or
performance of lease obligations for the benefit of its Subsidiaries not to
exceed $5,000,000 in the aggregate at any time, (d) for Guaranteed Indebtedness
incurred pursuant to the Guaranty dated June 27, 2003 made by SMP in favor of
JPMorgan Chase Bank in connection with the transfer of ownership to SMP LLC of
the Real Estate of SMP located in Long Island City, New York and (e) for
Guaranteed Indebtedness in place as of the date hereof and listed on Schedule
6.6 hereto.

    
      
         

      

      
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    6.7.        Liens.  No
Credit Party shall create, incur, assume or permit to exist any Lien on or with
respect to its Accounts or any of its other properties or assets (whether now
owned or hereafter acquired) except for (a) Permitted Encumbrances; (b) Liens in
existence on the date hereof and summarized on Disclosure Schedule (6.7)
securing the Indebtedness described on Disclosure Schedule (6.3) and permitted
refinancings, extensions and renewals thereof, including extensions or renewals
of any such Liens; provided that the principal amount of the Indebtedness so
secured is not increased and the Lien does not attach to any other property; (c)
Liens created after the date hereof (i) by conditional sale or other title
retention agreements (including Capital Leases) or (ii) in connection with
purchase money Indebtedness with respect to Equipment, Fixtures and Real Estate
acquired by any Credit Party in the ordinary course of business, involving the
incurrence of an aggregate amount of purchase money Indebtedness and Capital
Lease Obligations of not more than $10,000,000 outstanding at any one time for
all such Liens (provided that all such Liens described in this subsection
6.7(c)(ii) attach only to the assets subject to such purchase money debt and
such Indebtedness is incurred within 20 days following such purchase and does
not exceed 100% of the purchase price of the subject assets); (d) Liens securing
the Indebtedness incurred under or pursuant to the Canadian Loan Agreement; and
(e) Liens in respect of any Auto Supplier Accounts of any Borrower owed by an
Account Debtor participating in any Auto Supplier Program securing Indebtedness
permitted under Section 6.3(a)(xi).

     

    6.8.        Sale of Stock and
Assets.  No Credit Party shall sell, transfer, convey, assign
or otherwise dispose of any of its properties or other assets, including the
Stock of any of its Subsidiaries (whether in a public or a private offering or
otherwise) or any of its Accounts, other than (a) the sale of Inventory in the
ordinary course of business, and (b) the sale, transfer, conveyance or other
disposition by a Credit Party of Equipment, Fixtures or Real Estate that are
obsolete or no longer used or useful in such Credit Party’s business and having
a net book value, not exceeding $2,000,000 in the aggregate in any Fiscal Year;
(c) other Equipment and Fixtures having a net book value not exceeding
$5,000,000 in the aggregate in any Fiscal Year (d) the sale of approximately 8
acres of vacant land located in Coppell, Texas; (e) licenses of Intellectual
Property for uses not pursued by Credit Parties or in geographic markets not
served by Credit Parties or in order to enable a supplier to manufacture
Inventory for a Credit Party as long as the proceeds from such licenses are
remitted to Agent for application to the Loans; (f) the sale of the Real Estate
owned by the Credit Parties in Forth Worth, Texas; (g) Draft Monetization; (h)
the BSE Sale; (i) the sale of Borrowers’ Real Estate located in Reno, Nevada;
(j) the sale of Borrower’s Real Estate located in Grapevine, Texas and (k) the
sale of Auto Supplier Accounts in an aggregate amount not to exceed $5,000,000
at any one time outstanding.  With respect to any disposition of
assets or other properties permitted pursuant to clauses (b), (c), (d), (h)
and(i) above, subject to Section 1.3(b), Agent agrees on reasonable prior
written notice to release its Lien on such assets or other properties in order
to permit the applicable Credit Party to effect such disposition and shall
execute, if necessary, and deliver to Borrowers, at Borrowers’ expense,
appropriate UCC-3 termination statements and other releases as reasonably
requested by Borrowers.

     

    6.9.        ERISA.  No
Credit Party shall, or shall cause or permit any ERISA Affiliate to, cause or
permit to occur (i) an event that could result in the imposition of a Lien under
Section 412 of the IRC or Section 302 or 4068 of ERISA or (ii) cause or permit
to occur an ERISA Event to the extent such ERISA Event could reasonably be
expected to have a Material Adverse Effect.

     

    6.10.      Financial
Covenants.  Any time the aggregate average daily Aggregate
Borrowing Availability in the aggregate for any continuous thirty (30) day
period is less than $30,000,000 or the aggregate daily Aggregate Borrowing
Availability is $20,000,000 or less, Borrowers shall not breach or fail to
comply with any of the Financial Covenants.  In the event the
foregoing Aggregate Borrowing Availability threshold is violated, Borrowers
shall be required to comply with the Financial Covenants until Borrowers have
maintained an average Aggregate Borrowing Availability of $30,000,000 or greater
for a continuous ninety (90) day period, as determined by Agent in its
reasonable discretion.

    
      
         

      

      
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    6.11.      Hazardous
Materials.  No Credit Party shall cause or permit a Release of
any Hazardous Material on, at, in, under, above, to, from or about any of the
Real Estate where such Release would (a) violate in any respect, or form the
basis for any Environmental Liabilities under, any Environmental Laws or
Environmental Permits or (b) otherwise adversely impact the value or
marketability of any of the owned Real Estate or any of the Collateral, other
than such violations or Environmental Liabilities that could not reasonably be
expected to have a Material Adverse Effect.

     

    6.12.      Sale
Leasebacks.  No Credit Party shall engage in any sale
leaseback, synthetic lease or similar transaction involving any of its assets
other than sale leasebacks of the Excluded Real Property.

     

    6.13.      Cancellation of
Indebtedness.  No Credit Party shall cancel any claim or debt
owing to it, except for reasonable consideration negotiated on an arm’s length
basis and in the ordinary course of its business consistent with past
practices.

     

    6.14.      Restricted
Payments.  No Credit Party shall make any Restricted Payment,
except (a) intercompany loans and advances between Borrowers to the extent
permitted by Section 6.3, (b) dividends and distributions by Subsidiaries of any
Borrower paid to such Borrower, (c) employee loans permitted under Section 6.4(b), (d)
payments of principal and interest of Intercompany Notes issued in accordance
with Section
6.3 and, to the extent not prohibited by any applicable subordination
provisions, payments of interest on Subordinated Debt; and (e) subject to the
provisos which follow in each of subsections (i), (ii) and (iii) below, SMP may
(i) pay cash dividends up to $12,000,000 in any twelve (12) month period
provided that (x) Credit Parties shall have Excess Formula Availability on a pro
forma basis of not less than $20,000,000 and (y) no Default or Event of Default
shall have occurred and be continuing or would occur as a result of the payment
of such cash dividend, (ii) make payments on account of the purchase or
redemption of its common stock, provided that (x) the aggregate cash utilized to
effectuate such purchases or redemptions shall not exceed $5,000,000 from and
after the Closing Date, (y) Credit Parties shall have Excess Formula
Availability on a pro forma basis of not less than $30,000,000 and (z) no
Default or Event of Default shall have occurred and be continuing or would occur
as a result of such purchases or redemptions, and (iii) refinance, repurchase or
redeem Subordinated Debt under the 2009 Indenture provided that (w) the
aggregate amount of such refinanced, repurchased or redeemed Subordinated Debt
shall not exceed $50,000,000, (x) no Default or Event of Default shall have
occurred or be continuing or would occur as result of such refinance, repurchase
or redemption and (y) Credit Parties shall have Excess Formula Availability on a
pro forma basis of not less than $30,000,000 after giving effect to such
refinance, repurchase or redemption.

     

    6.15.      Change of Corporate Name,
State of Incorporation or Location; Change of Fiscal Year.  No
Credit Party shall (a) change its corporate name or trade name or (b) change its
chief executive office, principal place of business, corporate offices or
warehouses or locations at which Collateral is held or stored, or the location
of its records concerning the Collateral, in each case without at least thirty
(30) days prior written notice to Agent and after Agent’s written acknowledgment
that any reasonable action requested by Agent in connection therewith, including
to continue the perfection of any Liens in favor of Agent, on behalf of Lenders,
in any Collateral, has been completed or taken, and provided that any such new
location shall be in the continental United States or, with respect to SMP
Canada, Canada.  No Credit Party shall change its Fiscal
Year.

    
      
         

      

      
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    6.16.      No Impairment of
Intercompany Transfers.  No Credit Party shall directly or
indirectly enter into or become bound by any agreement, instrument, indenture or
other obligation (other than this Agreement and the other Loan Documents) that
could directly or indirectly restrict, prohibit or require the consent of any
Person with respect to the payment of dividends or distributions or the making
or repayment of intercompany loans by a Subsidiary of any Borrower to any
Borrower or between Borrowers.

     

    6.17.      No Speculative
Transactions.  No Credit Party shall engage in any transaction
involving commodity options, futures contracts or similar transactions, except
solely to hedge against fluctuations in the prices of commodities owned or
purchased by it and the values of foreign currencies receivable or payable by it
and interest swaps, caps or collars, so long as such proposed hedging
transaction is upon prior notice of same to Agent and the agreements
effectuating such proposed hedging transaction are satisfactory to Agent in form
and substance.

     

    6.18.      Leases.  No
Credit Party shall enter into any operating lease for (A) Equipment if the
aggregate amount of all such operating lease payments payable in any Fiscal Year
for all Credit Parties on a consolidated basis would exceed One Hundred Twenty
percent (120%) of the aggregate amount of all such payments in the prior Fiscal
Year or for (B) Real Estate if the aggregate amount of all such operating lease
payments payable in any Fiscal Year for all Credit Parties on a consolidated
basis would exceed One Hundred Twenty percent (120%) of the aggregate of all
such payments in the prior Fiscal Year plus the value of the annualized lease
payments with respect to any Excluded Property in which a sale leaseback
transaction was consummated for such property in the prior Fiscal
Year.

     

    6.19.      Changes
Relating to Subordinated Debt; Material Contracts.

     

    (a)           No
Credit Party shall change or amend the terms of any Subordinated Debt (or any
indenture or agreement in connection therewith) if the effect of such amendment
is to: (a) increase the interest rate on such Subordinated Debt; (b) change the
dates upon which payments of principal or interest are due on such Subordinated
Debt other than to extend such dates; (c) change any default or event of default
other than to delete or make less restrictive any default provision therein, or
add any covenant with respect to such Subordinated Debt; (d) change the
redemption or prepayment provisions of such Subordinated Debt other than to
extend the dates therefor or to reduce the premiums payable in connection
therewith; (e) except as otherwise provided in the last sentence of Section 6.3,
grant any security or collateral to secure payment of such Subordinated Debt; or
(f) change or amend any other term if such change or amendment would materially
increase the obligations of the Credit Party thereunder or confer additional
material rights on the holder of such Subordinated Debt in a manner adverse to
any Credit Party, Agent or any Lender.

    
      
         

      

      
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    (b)           No
Credit Party shall change or amend the terms of any of purchase or sale
agreement involving the acquisition or disposition of any business of such
Credit Party relating to indemnity provisions or deferred purchase
payments.

     

    6.20.      Inactive
Subsidiaries.  None of the Credit Parties or their Subsidiaries
identified on Disclosure Schedule (3.8) as “inactive” shall engage in any trade
or business, or own any assets (other than Stock of their Subsidiaries) or incur
any Indebtedness or Guaranteed Indebtedness (other than the
Obligations).

     

    6.21.      No Amendment to Auto
Supplier Program Documents.  No Credit Party shall, without the
prior written consent of Agent, amend or otherwise modify (or agree to an
amendment or other modification to) any term of any documents executed in
connection with any Auto Supplier Program.

     

    
      	
              7.

            	
              TERM

            

    

     

    7.1.        Termination.  The
financing arrangements contemplated hereby shall be in effect until the
Commitment Termination Date, and the Loans and all other Obligations shall be
automatically due and payable in full on such date.

     

    7.2.        Survival of Obligations Upon
Termination of Financing Arrangements.  Except as otherwise
expressly provided for in the Loan Documents, no termination or cancellation
(regardless of cause or procedure) of any financing arrangement under this
Agreement shall in any way affect or impair the obligations, duties and
liabilities of the Credit Parties or the rights of Agent and Lenders relating to
any unpaid portion of the Loans or any other Obligations, due or not due,
liquidated, contingent or unliquidated, or any transaction or event occurring
prior to such termination, or any transaction or event, the performance of which
is required after the Commitment Termination Date.  Except as
otherwise expressly provided herein or in any other Loan Document, all
undertakings, agreements, covenants, warranties and representations of or
binding upon the Credit Parties, and all rights of Agent and each Lender, all as
contained in the Loan Documents, shall not terminate or expire, but rather shall
survive any such termination or cancellation and shall continue in full force
and effect until the Termination Date; provided, that the provisions of Section
11, the payment obligations under Sections 1.15 and 1.16, and the indemnities
contained in the Loan Documents shall survive the Termination Date.

     

    
      	
              8.

            	
              EVENTS
      OF DEFAULT; RIGHTS AND REMEDIES

            

    

     

    8.1.        Events of
Default.  The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an “Event of
Default” hereunder:

     

    (a)           Any
Borrower (i) fails to make any payment of principal of, or interest on, or Fees
owing in respect of, the Loans or any of the other Obligations when due and
payable, or (ii) fails to pay or reimburse Agent or Lenders for any expense
reimbursable hereunder or under any other Loan Document within ten (10) days
following Agent’s demand for such reimbursement or payment of
expenses.

    
      
         

      

      
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    (b)           Any
Credit Party fails or neglects to perform, keep or observe any of the provisions
of Sections 1.4, 1.8, 5.4(a) or 6, or any of the provisions set forth in Annexes
C or G, respectively.

     

    (c)           Any
Borrower fails or neglects to perform, keep or observe any of the provisions of
Section 4 or any provisions set forth in Annexes E or F, respectively, and the
same shall remain unremedied for five (5) Business Days or more.

     

    (d)           Any
Credit Party fails or neglects to perform, keep or observe any other provision
of this Agreement or of any of the other Loan Documents (other than any
provision embodied in or covered by any other clause of this Section 8.1) and
the same shall remain unremedied for thirty (30) days or more.

     

    (e)           A
default or breach occurs under any other agreement, document or instrument to
which any Credit Party is a party that is not cured or waived within any
applicable grace period therefor, and such default or breach (i) involves the
failure to make any payment when due in respect of any Indebtedness or
Guaranteed Indebtedness (other than the Obligations) of any Credit Party in
excess of $500,000 in the aggregate (including (x) undrawn committed or
available amounts and (y) amounts owing to all creditors under any combined or
syndicated credit arrangements), or (ii) causes, or permits any holder of such
Indebtedness or Guaranteed Indebtedness or a trustee to cause, Indebtedness or
Guaranteed Indebtedness or a portion thereof in excess of $500,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment, or cash collateral in respect thereof to be
demanded, in each case, regardless of whether such default is waived beyond any
applicable cure period, or such right is exercised, by such holder or
trustee.

     

    (f)           Any
information contained in any Borrowing Base Certificate is untrue or incorrect
in any respect (other than inadvertent, immaterial errors not exceeding
$2,000,000 in the aggregate in any Borrowing Base Certificate), or any
representation or warranty herein or in any Loan Document or in any written
statement, report, financial statement or certificate (other than a Borrowing
Base Certificate) made or delivered to Agent or any Lender by any Credit Party
is untrue or incorrect in any material respect as of the date when made or
deemed made.

     

    (g)           Assets
of any Credit Party with a fair market value of $100,000 or more are attached,
seized, levied upon or subjected to a writ or distress warrant, or come within
the possession of any receiver, trustee, custodian or assignee for the benefit
of creditors of any Credit Party and such condition continues for thirty (30)
days or more.

     

    (h)           A
case or proceeding is commenced against any Credit Party seeking a decree or
order in respect of such Credit Party (i) under the Bankruptcy Code, or any
other applicable federal, state or foreign bankruptcy or other similar law, (ii)
appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator
(or similar official) for such Credit Party or for any substantial part of any
such Credit Party’s assets, or (iii) ordering the winding up or liquidation of
the affairs of such Credit Party, and such case or proceeding shall remain
undismissed or unstayed for sixty (60) days or more or a decree or order
granting the relief sought in such case or proceeding is granted by a court of
competent jurisdiction.

    
      
         

      

      
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    (i)
           Any Credit
Party (i) files a petition seeking relief under the Bankruptcy Code, or any
other applicable federal, state or foreign bankruptcy or other similar law, (ii)
consents to or fails to contest in a timely and appropriate manner the
institution of proceedings thereunder or the filing of any such petition or the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for such Credit Party or
for any substantial part of any such Credit Party’s assets, (iii) makes an
assignment for the benefit of creditors, (iv) takes any action in furtherance of
any of the foregoing; or (v) admits in writing its inability to, or is generally
unable to, pay its debts as such debts become due.

     

    (j)       
    A final judgment or judgments for the payment of money
in excess of $500,000 in the aggregate at any time are outstanding against one
or more of the Credit Parties and the same are not, within thirty (30) days
after the entry thereof, discharged or execution thereof stayed or bonded
pending appeal, or such judgments are not discharged prior to the expiration of
any such stay.

     

    (k)           Any
material provision of any Loan Document for any reason ceases to be valid,
binding and enforceable in accordance with its terms (or any Credit Party shall
challenge the enforceability of any Loan Document or shall assert in writing, or
engage in any action or inaction based on any such assertion, that any provision
of any of the Loan Documents has ceased to be or otherwise is not valid, binding
and enforceable in accordance with its terms), or any Lien created under any
Loan Document (other than due to the gross negligence or willful misconduct of
Agent or any Lender following timely compliance by each Credit Party with all of
the requirements of each relevant Loan Document) ceases to be a valid and
perfected first priority Lien (except as otherwise permitted herein or therein)
in any of the Collateral purported to be covered thereby.

     

    (l)       
    Any Change of Control occurs.

     

    (m)          Any
event occurs, whether or not insured or insurable, as a result of which
revenue-producing activities cease or are substantially curtailed at facilities
of Borrowers generating more than 15% of Borrowers’ consolidated revenues for
the Fiscal Year preceding such event and 15% of Borrowers’ EBITDA for the
preceding twelve Fiscal Months and such cessation or curtailment continues for
more than ninety (90) days.

     

    8.2.        Remedies.

     

    (a)           If
any Event of Default has occurred and is continuing, Agent may (and at the
written request of the Requisite Lenders shall), without notice, suspend the
Revolving Loan facility with respect to additional Advances and/or the
incurrence of additional Letter of Credit Obligations, whereupon any additional
Advances and additional Letter of Credit Obligations shall be made or incurred
in Agent’s sole discretion (or in the sole discretion of the Requisite Lenders,
if such suspension occurred at their direction) so long as such Default or Event
of Default is continuing.  If any Event of Default has occurred and is
continuing, Agent may (and at the written request of Requisite Lenders shall),
without notice except as otherwise expressly provided herein, increase the rate
of interest applicable to the Loans and the Letter of Credit Fees to the Default
Rate.

    
      
         

      

      
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    (b)           If
any Event of Default has occurred and is continuing, Agent may (and at the
written request of the Requisite Lenders shall), upon written notice: (i)
terminate the Revolving Loan facility with respect to further Advances or the
incurrence of further Letter of Credit Obligations; (ii) reduce the Commitment
from time to time; (iii) declare all or any portion of the Obligations,
including all or any portion of any Loan to be forthwith due and payable, and
require that the Letter of Credit Obligations be cash collateralized in the
manner set forth in Annex B, all without presentment, demand, protest or further
notice of any kind, all of which are expressly waived by Borrowers and each
other Credit Party; or (iv) exercise any rights and remedies provided to Agent
under the Loan Documents or at law or equity, including all remedies provided
under the Code; provided, that upon the occurrence of an Event of Default
specified in Sections 8.1(h) or (i), the Revolving Loan facility shall be
immediately terminated and all of the Obligations, including the aggregate
Revolving Loan, shall become immediately due and payable without declaration,
notice or demand by any Person.

     

    8.3.        Waivers by Credit
Parties.  Except as otherwise provided for in this Agreement or
by applicable law, each Credit Party waives (including for purposes of Section
12): (a) presentment, demand and protest and notice of presentment, dishonor,
notice of intent to accelerate, notice of acceleration, protest, default,
nonpayment, maturity, release, compromise, settlement, extension or renewal of
any or all commercial paper, accounts, contract rights, documents, instruments,
chattel paper and guaranties at any time held by Agent on which any Credit Party
may in any way be liable, and hereby ratifies and confirms whatever Agent may do
in this regard, (b) all rights to notice and a hearing prior to Agent’s taking
possession or control of, or to Agent’s replevy, attachment or levy upon, the
Collateral or any bond or security that might be required by any court prior to
allowing Agent to exercise any of its remedies, and (c) the benefit of all
valuation, appraisal, marshaling and exemption laws.

     

    
      	
              9.

            	
              ASSIGNMENT
      AND PARTICIPATIONS; APPOINTMENT OF
AGENT

            

    

     

    9.1.        Assignment
and Participations.

     

    (a)           Subject
to the terms of this Section 9.1, any Lender may make an assignment to a
Qualified Assignee of, or sell participations in, at any time or times, the Loan
Documents, Loans, Letter of Credit Obligations and any Commitment or any portion
thereof or interest therein, including any Lender’s rights, title, interests,
remedies, powers or duties thereunder.  Any assignment by a Lender
shall: (i) require the consent of Agent (which consent shall not be unreasonably
withheld or delayed with respect to a Qualified Assignee) and the execution of
an assignment agreement (an “Assignment
Agreement”) substantially in the form attached hereto as Exhibit 9.1(a)
and otherwise in form and substance reasonably satisfactory to, and acknowledged
by, Agent; (ii) be conditioned on such assignee Lender representing to the
assigning Lender and Agent that it is purchasing the applicable Loans to be
assigned to it for its own account, for investment purposes and not with a view
to the distribution thereof; (iii) after giving effect to any such partial
assignment, the assignee Lender shall have Commitments in an amount at least
equal to $5,000,000 and the assigning Lender shall have retained Commitments in
an amount at least equal to $5,000,000; and (iv) include a payment to Agent of
an assignment fee of $3,500, except no assignment fee is payable for assignments
to an Affiliate of such assigning Lender.  In the case of an
assignment by a Lender under this Section 9.1, the assignee shall have, to the
extent of such assignment, the same rights, benefits and obligations as all
other Lenders hereunder.  The assigning Lender shall be relieved of
its obligations hereunder with respect to its Commitments or assigned portion
thereof from and after the date of such assignment.  Each Borrower
hereby acknowledges and agrees that any assignment shall give rise to a direct
obligation of Borrowers to the assignee and that the assignee shall be
considered to be a “Lender”.  In all instances, each Lender’s
liability to make Loans hereunder shall be several and not joint and shall be
limited to such Lender’s Pro Rata Share of the applicable
Commitment.  In the event Agent or any Lender assigns or otherwise
transfers all or any part of the Obligations, Agent or any such Lender shall so
notify Borrowers and Borrowers shall, upon the request of Agent or such Lender,
execute new Notes in exchange for the Notes, if any, being
assigned.  Notwithstanding the foregoing provisions of this Section
9.1(a), any Lender may at any time pledge the Obligations held by it and such
Lender’s rights under this Agreement and the other Loan Documents to a Federal
Reserve Bank, and any Lender that is an investment fund may assign the
Obligations held by it and such Lender’s rights under this Agreement and the
other Loan Documents to another investment fund managed by the same investment
advisor; provided, that no such pledge to a Federal Reserve Bank shall release
such Lender from such Lender’s obligations hereunder or under any other Loan
Document.

    
      
         

      

      
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    (b)           Any
participation by a Lender of all or any part of its Commitments shall be made
with the understanding that all amounts payable by Borrowers hereunder shall be
determined as if that Lender had not sold such participation, and that the
holder of any such participation shall not be entitled to require such Lender to
take or omit to take any action hereunder except actions directly affecting (i)
any reduction in the principal amount of, or interest rate or Fees payable with
respect to, any Loan in which such holder participates, (ii) any extension of
the scheduled amortization of the principal amount of any Loan in which such
holder participates or the final maturity date thereof, and (iii) any release of
all or substantially all of the Collateral (other than in accordance with the
terms of this Agreement, the Collateral Documents or the other Loan
Documents).  Solely for purposes of Sections 1.13, 1.15, 1.16 and 9.8,
each Borrower acknowledges and agrees that a participation shall give rise to a
direct obligation of Borrowers to the participant and the participant shall be
considered to be a “Lender”; provided, however, that a participant shall not be
entitled to receive any greater payment under Sections 1.13, 1.15 or 1.16 than
the Lender from which such participant acquired its participation would be
entitled to receive in respect of the amount of the
participation.  Except as set forth in the preceding sentence no
Borrower or Credit Party shall have any obligation or duty to any
participant.  Neither Agent nor any Lender (other than the Lender
selling a participation) shall have any duty to any participant and may continue
to deal solely with the Lender selling a participation as if no such sale had
occurred.

     

    (c)           Except
as expressly provided in this Section 9.1, no Lender shall, as between Borrowers
and that Lender, or Agent and that Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment, transfer or negotiation of, or
granting of participation in, all or any part of the Loans, the Notes or other
Obligations owed to such Lender.

    
      
         

      

      
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    (d)           Each
Credit Party executing this Agreement shall assist any Lender permitted to sell
assignments or participations under this Section 9.1 as reasonably required to
enable the assigning or selling Lender to effect any such assignment or
participation, including the execution and delivery of any and all agreements,
notes and other documents and instruments as shall be requested and, if
requested by Agent, the preparation of informational materials for, and the
participation of management in meetings with, potential assignees or
participants.  Each Credit Party executing this Agreement shall
certify the correctness, completeness and accuracy of all descriptions of the
Credit Parties and their respective affairs contained in any selling materials
provided by them and all other information provided by them and included in such
materials, except that any Projections delivered by Borrowers shall only be
certified by Borrowers as having been prepared by Borrowers in compliance with
the representations contained in Section 3.4(b).

     

    (e)           Any
Lender may furnish any information concerning Credit Parties in the possession
of such Lender from time to time to assignees and participants (including
prospective assignees and participants); provided that such Lender shall obtain
from assignees or participants confidentiality covenants substantially
equivalent to those contained in Section 11.8.

     

    (f)       
    So long as no Event of Default has occurred and is
continuing, no Lender shall assign or sell participations in any portion of its
Loans or Commitments to a potential Lender or participant, if, as of the date of
the proposed assignment or sale, the assignee Lender or participant would be
subject to capital adequacy or similar requirements under Section 1.16(a),
increased costs under Section 1.16(b), an inability to fund LIBOR Loans under
Section 1.16(c), or withholding taxes in accordance with Section 1.15(a) to an
extent greater than that applicable to the assigning or selling
Lender.

     

    (g)           Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”),
may grant to a special purpose funding vehicle (an “SPC”), identified as
such in writing by the Granting Lender to Agent and Borrowers, the option to
provide to Borrowers all or any part of any Loans that such Granting Lender
would otherwise be obligated to make to Borrowers pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPC to
make any Loan; and (ii) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Loan, the Granting Lender
shall be obligated to make such Loan pursuant to the terms
hereof.  The making of a Loan by an SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if such Loan were
made by such Granting Lender.  No SPC shall be liable for any
indemnity or similar payment obligation under this Agreement (all liability for
which shall remain with the Granting Lender).  Any SPC may (i) with
notice to, but without the prior written consent of, Borrowers and Agent and
without paying any processing fee therefor assign all or a portion of its
interests in any Loans to the Granting Lender or to any financial institutions
(consented to by Borrowers and Agent) providing liquidity and/or credit support
to or for the account of such SPC to support the funding or maintenance of Loans
and (ii) disclose on a confidential basis any non-public information relating to
its Loans to any rating agency, commercial paper dealer or provider of any
surety, guarantee or credit or liquidity enhancement to such
SPC.  This Section 9.1(g) may not be amended without the prior written
consent of each Granting Lender, all or any of whose Loans are being funded by
an SPC at the time of such amendment.  For the avoidance of doubt, the
Granting Lender shall for all purposes, including without limitation, the
approval of any amendment or waiver of any provision of any Loan Document or the
obligation to pay any amount otherwise payable by the Granting Lender under the
Loan Documents, continue to be the Lender of record hereunder.

    
      
         

      

      
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    (h)           Nothing
contained in this Section 9 shall require the consent of any party for GE
Capital to assign any of its rights in respect of any Swap Related Reimbursement
Obligation.

     

    9.2.        Appointment of
Agent.  GE Capital is hereby appointed to act on behalf of all
Lenders as Agent under this Agreement and the other Loan
Documents.  The provisions of this Section 9.2 are solely for the
benefit of Agent and Lenders and no Credit Party nor any other Person shall have
any rights as a third party beneficiary of any of the provisions
hereof.  In performing its functions and duties under this Agreement
and the other Loan Documents, Agent shall act solely as an agent of Lenders and
does not assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any Credit Party or any other
Person.  Agent shall have no duties or responsibilities except for
those expressly set forth in this Agreement and the other Loan
Documents.  The duties of Agent shall be mechanical and administrative
in nature and Agent shall not have, or be deemed to have, by reason of this
Agreement, any other Loan Document or otherwise a fiduciary relationship in
respect of any Lender.  Except as expressly set forth in this
Agreement and the other Loan Documents, Agent shall not have any duty to
disclose, and shall not be liable for failure to disclose, any information
relating to any Credit Party or any of their respective Subsidiaries or any
Account Debtor that is communicated to or obtained by GE Capital or any of its
Affiliates in any capacity.  Neither Agent nor any of its Affiliates
nor any of their respective officers, directors, employees, agents or
representatives shall be liable to any Lender for any action taken or omitted to
be taken by it hereunder or under any other Loan Document, or in connection
herewith or therewith, except for damages caused by its or their own gross
negligence or willful misconduct.

     

    If Agent
shall request instructions from Requisite Lenders, Supermajority Lenders or all
affected Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any other Loan Document, then Agent shall be
entitled to refrain from such act or taking such action unless and until Agent
shall have received instructions from Requisite Lenders, Supermajority Lenders
or all affected Lenders, as the case may be, and Agent shall not incur liability
to any Person by reason of so refraining.  Agent shall be fully
justified in failing or refusing to take any action hereunder or under any other
Loan Document (a) if such action would, in the opinion of Agent, be contrary to
law or the terms of this Agreement or any other Loan Document, (b) if such
action would, in the opinion of Agent, expose Agent to Environmental Liabilities
or (c) if Agent shall not first be indemnified to its satisfaction against any
and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.  Without limiting the foregoing,
no Lender shall have any right of action whatsoever against Agent as a result of
Agent acting or refraining from acting hereunder or under any other Loan
Document in accordance with the instructions of Requisite Lenders, Supermajority
Lenders or all affected Lenders, as applicable.

    
      
         

      

      
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    9.3.        Agent’s Reliance,
Etc.  Neither Agent nor any of its Affiliates nor any of their
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement or the other Loan Documents, except for damages caused by its or
their own gross negligence or willful misconduct.  Without limiting
the generality of the foregoing, Agent: (a) may treat the payee of any Note as
the holder thereof until Agent receives written notice of the assignment or
transfer thereof signed by such payee and in form reasonably satisfactory to
Agent; (b) may consult with legal counsel, independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements, warranties
or representations made in or in connection with this Agreement or the other
Loan Documents; (d) unless specifically directed, in writing, by the Requisite
Lenders shall not have any duty to ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions of this Agreement or
the other Loan Documents on the part of any Credit Party or to inspect the
Collateral (including the books and records) of any Credit Party; (e) shall not
be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; and (f) shall incur no liability under or in respect of this Agreement
or the other Loan Documents by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopy, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper party or
parties.

     

    9.4.        GE Capital and
Affiliates.  With respect to its Commitments hereunder, GE
Capital shall have the same rights and powers under this Agreement and the other
Loan Documents as any other Lender and may exercise the same as though it were
not Agent; and the term “Lender” or “Lenders” shall, unless otherwise expressly
indicated, include GE Capital in its individual capacity.  GE Capital
and its Affiliates may lend money to, invest in, and generally engage in any
kind of business with, any Credit Party, any of their Affiliates and any Person
who may do business with or own securities of any Credit Party or any such
Affiliate, all as if GE Capital were not Agent and without any duty to account
therefor to Lenders.  GE Capital and its Affiliates may accept fees
and other consideration from any Credit Party for services in connection with
this Agreement or otherwise without having to account for the same to
Lenders.  Each Lender acknowledges the potential conflict of interest
between GE Capital as a Lender holding disproportionate interests in the Loans
and GE Capital as Agent.

     

    9.5.        Lender Credit
Decision.  Each Lender acknowledges that it has, independently
and without reliance upon Agent or any other Lender and based on the Financial
Statements referred to in Section 3.4(a) and such other documents and
information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement.  Each Lender also acknowledges that it will, independently
and without reliance upon Agent or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this
Agreement.  Each Lender acknowledges the potential conflict of
interest of each other Lender as a result of Lenders holding disproportionate
interests in the Loans, and expressly consents to, and waives any claim based
upon, such conflict of interest.

    
      
         

      

      
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    9.6.        Indemnification.  Lenders
agree to indemnify Agent (to the extent not reimbursed by Credit Parties and
without limiting the obligations of Credit Parties hereunder), ratably according
to their respective Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any action taken or omitted to
be taken by Agent in connection therewith; provided, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from Agent’s gross negligence or willful misconduct.  Without limiting
the foregoing, each Lender agrees to reimburse Agent promptly upon demand for
its ratable share of any out-of-pocket expenses (including reasonable counsel
fees) incurred by Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement and each other Loan Document,
to the extent that Agent is not reimbursed for such expenses by Credit
Parties.

     

    9.7.        Successor
Agent.  Agent may resign at any time by giving not less than
thirty (30) days’ prior written notice thereof to Lenders and Borrower
Representative.  Upon any such resignation, the Requisite Lenders
shall have the right to appoint a successor Agent.  If no successor
Agent shall have been so appointed by the Requisite Lenders and shall have
accepted such appointment within thirty (30) days after the resigning Agent’s
giving notice of resignation, then the resigning Agent may, on behalf of
Lenders, appoint a successor Agent, which shall be a Lender, if a Lender is
willing to accept such appointment, or otherwise shall be a commercial bank or
financial institution or a subsidiary of a commercial bank or financial
institution if such commercial bank or financial institution is organized under
the laws of the United States of America or of any State thereof and has a
combined capital and surplus of at least $300,000,000.  If no
successor Agent has been appointed pursuant to the foregoing, within thirty (30)
days after the date such notice of resignation was given by the resigning Agent,
such resignation shall become effective and the Requisite Lenders shall
thereafter perform all the duties of Agent hereunder until such time, if any, as
the Requisite Lenders appoint a successor Agent as provided
above.  Any successor Agent appointed by Requisite Lenders or the
resigning Agent hereunder shall be subject to the approval of Borrower
Representative, such approval not to be unreasonably withheld or delayed;
provided that such approval shall not be required if a Default or an Event of
Default has occurred and is continuing.  Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning Agent.  Upon the earlier of the acceptance of any
appointment as Agent hereunder by a successor Agent or the effective date of the
resigning Agent’s resignation, the resigning Agent shall be discharged from its
duties and obligations under this Agreement and the other Loan Documents, except
that any indemnity rights or other rights in favor of such resigning Agent shall
continue.  After any resigning Agent’s resignation hereunder, the
provisions of this Section 9 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was acting as Agent under this Agreement
and the other Loan Documents.

    
      
         

      

      
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    9.8.        Setoff and Sharing of
Payments.  In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default and subject to
Section 9.9(f), each Lender is hereby authorized at any time or from time to
time, without prior notice to any Credit Party or to any Person other than
Agent, any such notice being hereby expressly waived, to offset and to
appropriate and to apply any and all balances held by it at any of its offices
for the account of any Borrower or Guarantor (regardless of whether such
balances are then due to such Borrower or Guarantor) and any other properties or
assets at any time held or owing by that Lender or that holder to or for the
credit or for the account of any Borrower or Guarantor against and on account of
any of the Obligations that are not paid when due, provided that the Lender
exercising such offset rights shall give notice thereof to the affected Credit
Party promptly after exercising such rights.  Any Lender exercising a
right of setoff or otherwise receiving any payment on account of the Obligations
in excess of its Pro Rata Share thereof shall purchase for cash (and the other
Lenders or holders shall sell) such participations in each such other Lender’s
or holder’s Pro Rata Share of the Obligations as would be necessary to cause
such Lender to share the amount so offset or otherwise received with each other
Lender or holder in accordance with their respective Pro Rata Shares (other than
offset rights exercised by any Lender with respect to Sections 1.13, 1.15 or
1.16).  Each Credit Party that is a Borrower or Guarantor
agrees, to the fullest extent permitted by law, that (a) any Lender may exercise
its right to offset with respect to amounts in excess of its Pro Rata Share of
the Obligations and may sell participations in such amounts so offset to other
Lenders and holders and (b) any Lender so purchasing a participation in the
Loans made or other Obligations held by other Lenders or holders may exercise
all rights of offset, bankers’ lien, counterclaim or similar rights with respect
to such participation as fully as if such Lender or holder were a direct holder
of the Loans and the other Obligations in the amount of such
participation.  Notwithstanding the foregoing, if all or any portion
of the offset amount or payment otherwise received is thereafter recovered from
the Lender that has exercised the right of offset, the purchase of
participations by that Lender shall be rescinded and the purchase price restored
without interest.

     

    9.9.        Advances;
Payments; Non-Funding Lenders; Information; Actions in Concert.

     

    (a)          Advances;
Payments.

     

    (i)
           Each Lender
shall make the amount of such Lender’s Pro Rata Share of such Revolving Credit
Advance available to Agent in same day funds by wire transfer to Agent’s account
as set forth in Annex H not later than 3:00 p.m.  (New York time) on
the requested funding date, in the case of an Index Rate Loan, and not later
than 11:00 a.m.  (New York time) on the requested funding date, in the
case of a LIBOR Loan.  After receipt of such wire transfers (or, in
the Agent’s sole discretion, before receipt of such wire transfers), subject to
the terms hereof, Agent shall make the requested Revolving Credit Advance to the
Borrower designated by Borrower Representative in the Notice of Revolving Credit
Advance.  All payments by each Lender shall be made without setoff,
counterclaim or deduction of any kind.

     

    (ii)           On
the 2nd Business Day of each calendar week or more frequently at Agent’s
election (each, a “Settlement Date”),
Agent shall advise each Lender by telephone, or telecopy of the amount of such
Lender’s Pro Rata Share of principal, interest and Fees paid for the benefit of
Lenders with respect to each applicable Loan.  Provided that each
Lender has funded all payments or Advances required to be made by it and has
purchased all participations required to be purchased by it under this Agreement
and the other Loan Documents as of such Settlement Date, Agent shall pay to each
Lender such Lender’s Pro Rata Share of principal, interest and Fees paid by
Borrowers since the previous Settlement Date for the benefit of such Lender on
the Loans held by it.  To the extent that any Lender (a “Non Funding Lender”)
has failed to fund all such payments and Advances or failed to fund the purchase
of all such participations, Agent shall be entitled to set off the funding short
fall against that Non Funding Lender’s Pro Rata Share of all payments received
from Borrowers.  Such payments shall be made by wire transfer to such
Lender’s account (as specified by such Lender in Annex H or the applicable
Assignment Agreement) not later than 2:00 p.m. (New York time) on the next
Business Day following each Settlement Date.

    
      
         

      

      
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    (b)          Availability of Lender’s Pro
Rata Share.  Agent may assume that each Lender will make its
Pro Rata Share of each Revolving Credit Advance available to Agent on each
funding date.  If such Pro Rata Share is not, in fact, paid to Agent
by such Lender when due, Agent will be entitled to recover such amount on demand
from such Lender without setoff, counterclaim or deduction of any
kind.  If any Lender fails to pay the amount of its Pro Rata Share
forthwith upon Agent’s demand, Agent shall promptly notify Borrower
Representative and Borrowers shall immediately repay such amount to
Agent.  Nothing in this Section 9.9(b) or elsewhere in this Agreement
or the other Loan Documents shall be deemed to require Agent to advance funds on
behalf of any Lender or to relieve any Lender from its obligation to fulfill its
Commitments hereunder or to prejudice any rights that Borrowers may have against
any Lender as a result of any default by such Lender hereunder.  To
the extent that Agent advances funds to any Borrower on behalf of any Lender and
is not reimbursed therefor on the same Business Day as such Advance is made,
Agent shall be entitled to retain for its account all interest accrued on such
Advance until reimbursed by the applicable Lender.

     

    (c)          Return of
Payments.

     

    (i) 
          If Agent pays an
amount to a Lender under this Agreement in the belief or expectation that a
related payment has been or will be received by Agent from Borrowers and such
related payment is not received by Agent, then Agent will be entitled to recover
such amount from such Lender on demand without setoff, counterclaim or deduction
of any kind.

     

    (ii)           If
Agent determines at any time that any amount received by Agent under this
Agreement must be returned to any Borrower or paid to any other Person pursuant
to any insolvency law or otherwise, then, notwithstanding any other term or
condition of this Agreement or any other Loan Document, Agent will not be
required to distribute any portion thereof to any Lender.  In
addition, each Lender will repay to Agent on demand any portion of such amount
that Agent has distributed to such Lender, together with interest at such rate,
if any, as Agent is required to pay to any Borrower or such other Person,
without setoff, counterclaim or deduction of any kind.

     

    (d)           Non-Funding
Lenders.  The failure of any Non Funding Lender to make any
Revolving Credit Advance or any payment required by it hereunder shall not
relieve any other Lender (each such other Lender, an “Other Lender”) of its
obligations to make such Advance or purchase such participation on such date,
but neither any Other Lender nor Agent shall be responsible for the failure of
any Non-Funding Lender to make an Advance, purchase a participation or make any
other payment required hereunder.  Notwithstanding anything set forth
herein to the contrary, a Non-Funding Lender shall not have any voting or
consent rights under or with respect to any Loan Document or constitute a
“Lender” (or be included in the calculation of “Requisite Lenders” or
“Supermajority Lenders” hereunder) for any voting or consent rights under or
with respect to any Loan Document.  At Borrower Representative’s
request, Agent or a Person reasonably acceptable to Agent shall have the right
with Agent’s consent and in Agent’s sole discretion (but shall have no
obligation) to purchase from any Non-Funding Lender, and each Non-Funding Lender
agrees that it shall, at Agent’s request, sell and assign to Agent or such
Person, all of the Commitments of that Non-Funding Lender for an amount equal to
the principal balance of all Loans held by such Non-Funding Lender and all
accrued interest and fees with respect thereto through the date of sale, such
purchase and sale to be consummated pursuant to an executed Assignment
Agreement.

    
      
         

      

      
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    (e)           Dissemination of
Information.  Agent shall use commercially reasonable efforts
to provide Lenders with any notice of Default or Event of Default received by
Agent from, or delivered by Agent to, any Credit Party, with notice of any Event
of Default of which Agent has actually become aware and with notice of any
action taken by Agent following any Event of Default; provided, that Agent shall
not be liable to any Lender for any failure to do so, except to the extent that
such failure is attributable to Agent’s gross negligence or willful
misconduct.  Lenders acknowledge that Borrowers are required to
provide Financial Statements and Collateral Reports to Lenders in accordance
with Annexes E and F hereto and agree that Agent shall have no duty to provide
the same to Lenders.

     

    (f)           Actions in
Concert.  Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of setoff) without first
obtaining the prior written consent of Agent and Requisite Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of Agent or Requisite Lenders.

     

    9.10.      Syndication and
Documentation Agents.  The entities identified on the cover
page of this Agreement as the “Syndication Agent” and the “Documentation Agent”,
respectively, shall, in each case, not have any right, power, obligation,
liability, responsibility or duty under this Agreement (or any other Loan
Document) other than those applicable to all Lenders as such.  Without
limiting the foregoing, the entities so identified as the “Syndication Agent”
and the “Documentation Agent”, respectively, shall not have or be deemed to have
any fiduciary relationship with any Lender.  Each Lender acknowledges
that it has not relied, and will not rely, on the entities so identified as the
“Syndication Agent” and the “Documentation Agent”, respectively, in deciding to
enter into this Agreement and each other Loan Document to which it is a party or
in taking or not taking action hereunder or thereunder.

     

    
      	
              10.

            	
              SUCCESSORS
      AND ASSIGNS

            

    

     

    10.1.      Successors and
Assigns.  This Agreement and the other Loan Documents shall be
binding on and shall inure to the benefit of each Credit Party, Agent, Lenders
and their respective successors and assigns (including, in the case of any
Credit Party, a debtor-in-possession on behalf of such Credit Party), except as
otherwise provided herein or therein.  No Credit Party may assign,
transfer, hypothecate or otherwise convey its rights, benefits, obligations or
duties hereunder or under any of the other Loan Documents without the prior
express written consent of Agent and Lenders.  Any such purported
assignment, transfer, hypothecation or other conveyance by any Credit Party
without the prior express written consent of Agent and Lenders shall be
void.  The terms and provisions of this Agreement are for the purpose
of defining the relative rights and obligations of each Credit Party, Agent and
Lenders with respect to the transactions contemplated hereby and no Person shall
be a third party beneficiary of any of the terms and provisions of this
Agreement or any of the other Loan Documents.

    
      
         

      

      
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              11.

            	
              MISCELLANEOUS

            

    

     

    11.1.      Complete Agreement;
Modification of Agreement.  The Loan Documents constitute the
complete agreement between the parties with respect to the subject matter
thereof and may not be modified, altered or amended except as set forth in
Section 11.2.  Any letter of interest, commitment letter, or fee
letter (other than the 2010 GE Capital Fee Letter) or confidentiality agreement
between any Credit Party and Agent or any Lender or any of their respective
Affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement.

     

    11.2.      Amendments
and Waivers.

     

    (a)           Except
for actions expressly permitted to be taken by Agent, no amendment,
modification, termination or waiver of any provision of this Agreement or any
other Loan Document, or any consent to any departure by any Credit Party
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Agent and Borrowers, and by Requisite Lenders, Supermajority
Lenders, or all affected Lenders, as applicable.  Except as set forth
in clauses (b) and (c) below, all such amendments, modifications, terminations
or waivers requiring the consent of any Lenders shall require the written
consent of Requisite Lenders.

     

    (b)           No
amendment, modification, termination or waiver of or consent with respect to any
provision of this Agreement that makes less restrictive the nondiscretionary
criteria for exclusion from Eligible Accounts and Eligible Inventory set forth
in Sections 1.6 and 1.7, shall be effective unless the same shall be in writing
and signed by Agent, Supermajority Lenders and Borrowers.  No
amendment, modification, termination or waiver of or consent with respect to any
provision of this Agreement that waives compliance with the conditions precedent
set forth in Section 2.2 to the making of any Loan or the incurrence of any
Letter of Credit Obligations shall be effective unless the same shall be in
writing and signed by Agent, Requisite Lenders and
Borrowers.  Notwithstanding anything contained in this Agreement to
the contrary, no waiver or consent with respect to any Default or any Event of
Default shall be effective for purposes of the conditions precedent to the
making of Loans or the incurrence of Letter of Credit Obligations set forth in
Section 2.2 unless the same shall be in writing and signed by Agent, Requisite
Lenders and Borrowers.

    
      
         

      

      
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    (c)          No
amendment, modification, termination or waiver shall, unless in writing and
signed by Agent and each Lender directly affected thereby: (i) increase the
principal amount of any Lender’s Commitment (which action shall be deemed to
directly affect all Lenders); (ii) reduce the principal of, rate of interest on
or Fees payable with respect to any Loan or Letter of Credit Obligations of any
affected Lender; (iii) extend any scheduled payment date (other than payment
dates of mandatory prepayments under Section 1.3(b)(ii)-(iii)) or final maturity
date of the principal amount of any Loan of any affected Lender; (iv) waive,
forgive, defer, extend or postpone any payment of interest or Fees as to any
affected Lender; (v) release any Guaranty (except in connection with a sale of
the Stock of the applicable Guarantor which is not in violation of the terms of
this Agreement) or, except as otherwise permitted herein or in the other Loan
Documents, release, subordinate the Agent’s Lien or permit any Credit Party to
sell or otherwise dispose of, any Collateral with a value exceeding $5,000,000
in the aggregate (which action shall be deemed to directly affect all Lenders);
(vi) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans that shall be required for Lenders or any of them
to take any action hereunder; (vii) increase the percentage advance rates set
forth in the definition of the SMP Borrowing Base or the SI Borrowing Base, or
the percentage in Section 1.1(a)(iv)(y) beyond the rates in effect on the
Closing Date, or the aggregate amount of Overadvances permitted pursuant to
Section 1.1(a)(iii); (viii) amend or waive this Section 11.2 or the definitions
of the terms “Requisite Lenders” or “Supermajority Lenders” insofar as such
definitions affect the substance of this Section 11.2 and (ix) amend Section
1.11(a).  Furthermore, no amendment, modification, termination or
waiver affecting the rights or duties of Agent or L/C Issuer, or of GE Capital
in respect of any Swap Related Reimbursement Obligations, under this Agreement
or any other Loan Document, including any release of any Guaranty or Collateral
requiring a writing signed by all Lenders, shall be effective unless in writing
and signed by Agent or L/C Issuer or GE Capital, as the case may be, in addition
to Lenders required hereinabove to take such action.  Each amendment,
modification, termination or waiver shall be effective only in the specific
instance and for the specific purpose for which it was given.  No
amendment, modification, termination or waiver shall be required for Agent to
take additional Collateral pursuant to any Loan Document.  No
amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the holder of that
Note.  No notice to or demand on any Credit Party in any case shall
entitle such Credit Party or any other Credit Party to any other or further
notice or demand in similar or other circumstances.  Any amendment,
modification, termination, waiver or consent effected in accordance with this
Section 11.2 shall be binding upon each Lender at such time and each future
Lender.

     

    (d)          If,
in connection with any proposed amendment, modification, waiver or termination
(a “Proposed
Change”):

     

    (i)       
    (requiring the consent of all affected Lenders, the
consent of Requisite Lenders is obtained, but the consent of other Lenders whose
consent is required is not obtained (any such Lender whose consent is not
obtained as described in this clause (i) and in clauses (ii), (iii) and (iv)
below being referred to as a “Non-Consenting
Lender”),

     

    (ii)           requiring
the consent of Supermajority Lenders, the consent of Requisite Lenders is
obtained, but the consent of Supermajority Lenders is not obtained,

     

    (iii)          requiring
the consent of Requisite Lenders, the consent of Lenders holding 51% or more of
the aggregate applicable Commitments is obtained, but the consent of Requisite
Lenders, is not obtained, or

     

    (iv)          requiring
the consent of Requisite Lenders, the consent of Lenders holding 51% or more of
the aggregate Commitments is obtained, but the consent of the Requisite Lenders
is not obtained,

    
      
         

      

      
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    then, so
long as Agent is not a Non-Consenting Lender, at Borrower Representative’s
request, Agent or a Person reasonably acceptable to Agent shall have the right
with Agent’s consent and in Agent’s sole discretion (but shall have no
obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon Agent’s request, sell and
assign to Agent or such Person, all of the Commitments of such Non-Consenting
Lenders for an amount equal to the principal balance of all Loans held by the
Non-Consenting Lenders and all accrued interest and Fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to
an executed Assignment Agreement within 180 days from the time such consent is
requested.

     

    (e)           Upon
payment in full in cash and performance of all of the Obligations (other than
indemnification Obligations), termination of the Commitments and a release of
all claims against Agent and Lenders (other than claims for gross negligence or
willful misconduct), and so long as no suits, actions, proceedings or claims are
pending or threatened against any Indemnified Person asserting any damages,
losses or liabilities that are Indemnified Liabilities, Agent shall deliver to
Borrowers termination statements, mortgage releases and other documents
necessary or appropriate to evidence the termination of the Liens securing
payment of the Obligations.

     

    11.3.      Fees and
Expenses.  Borrowers shall reimburse (i) Agent for all fees,
costs and expenses (including the reasonable fees and expenses of all of its
counsel, advisors, consultants and auditors) and (ii) Agent (and, with respect
to clauses (c) and (d) below, all Lenders) for all fees, costs and expenses,
including the reasonable fees, costs and expenses of counsel or other advisors
(including environmental and management consultants and appraisers), incurred in
connection with the negotiation and preparation of the Loan Documents and
incurred in connection with:

     

    (a)           the
forwarding to Borrowers or any other Person on behalf of Borrowers by Agent of
the proceeds of any Loan (including a wire transfer fee of $10 per wire
transfer);

     

    (b)           any
amendment, modification or waiver of, consent with respect to, or termination
of, any of the Loan Documents or advice in connection with the syndication and
administration of the Loans made pursuant hereto or its rights hereunder or
thereunder;

     

    (c)           any
litigation, contest, dispute, suit, proceeding or action (whether instituted by
Agent, any Lender, any Borrower or any other Person and whether as a party,
witness or otherwise) in any way relating to the Collateral, any of the Loan
Documents or any other agreement to be executed or delivered in connection
herewith or therewith, including any litigation, contest, dispute, suit, case,
proceeding or action, and any appeal or review thereof, in connection with a
case commenced by or against any or all of the Borrowers or any other Person
that may be obligated to Agent by virtue of the Loan Documents; including any
such litigation, contest, dispute, suit, proceeding or action arising in
connection with any work-out or restructuring of the Loans during the pendency
of one or more Events of Default; provided that in the case of reimbursement of
counsel for Lenders other than Agent, such reimbursement shall be limited to one
counsel for all such Lenders; provided, further, that no Person shall be
entitled to reimbursement under this clause (c) in respect of any litigation,
contest, dispute, suit, proceeding or action to the extent any of the foregoing
results from such Person’s gross negligence or willful
misconduct;

    
      
         

      

      
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    (d)           any
attempt to enforce any remedies of Agent against any or all of the Credit
Parties or any other Person that may be obligated to Agent or any Lender by
virtue of any of the Loan Documents, including any such attempt to enforce any
such remedies in the course of any work-out or restructuring of the Loans during
the pendency of one or more Events of Default; provided, that in the case of
reimbursement of counsel for Lenders other than Agent, such reimbursement shall
be limited to one counsel for all such Lenders;

     

    (e)           any
workout or restructuring of the Loans during the pendency of one or more Events
of Default; and

     

    (f)           efforts
to (i) monitor the Loans or any of the other Obligations, (ii) evaluate, observe
or assess any of the Credit Parties or their respective affairs, and (iii)
verify, protect, evaluate, assess, appraise, collect, sell, liquidate or
otherwise dispose of any of the Collateral;

     

    including,
as to each of clauses (a) through (f) above, all reasonable attorneys’ and other
professional and service providers’ fees arising from such services and other
advice, assistance or other representation, including those in connection with
any appellate proceedings, and all reasonable expenses, costs, charges and other
fees incurred by such counsel and others in connection with or relating to any
of the events or actions described in this Section 11.3, all of which shall be
payable, on demand, by Borrowers to Agent.  Without limiting the
generality of the foregoing, such expenses, costs, charges and fees may include:
fees, costs and expenses of accountants, environmental advisors, appraisers,
investment bankers, management and other consultants and paralegals; court costs
and expenses; photocopying and duplication expenses; court reporter fees, costs
and expenses; long distance telephone charges; air express charges; telegram or
telecopy charges; secretarial overtime charges; and expenses for travel, lodging
and food paid or incurred in connection with the performance of such legal or
other advisory services.

     

    11.4.      No
Waiver.  Agent’s or any Lender’s failure, at any time or times,
to require strict performance by the Credit Parties of any provision of this
Agreement or any other Loan Document shall not waive, affect or diminish any
right of Agent or such Lender thereafter to demand strict compliance and
performance herewith or therewith.  Any suspension or waiver of an
Event of Default shall not suspend, waive or affect any other Event of Default
whether the same is prior or subsequent thereto and whether the same or of a
different type.  Subject to the provisions of Section 11.2, none of
the undertakings, agreements, warranties, covenants and representations of any
Credit Party contained in this Agreement or any of the other Loan Documents and
no Default or Event of Default by any Credit Party shall be deemed to have been
suspended or waived by Agent or any Lender, unless such waiver or suspension is
by an instrument in writing signed by an officer of or other authorized employee
of Agent and the applicable required Lenders, and directed to Borrowers
specifying such suspension or waiver.

     

    11.5.      Remedies.  Agent’s
and Lenders’ rights and remedies under this Agreement shall be cumulative and
nonexclusive of any other rights and remedies that Agent or any Lender may have
under any other agreement, including the other Loan Documents, by operation of
law or otherwise.  Recourse to the Collateral shall not be
required.

    
      
         

      

      
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    11.6.      Severability.  Wherever
possible, each provision of this Agreement and the other Loan Documents shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement or any other Loan Document shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Agreement or such other Loan Document.

     

    11.7.      Conflict of
Terms.  Except as otherwise provided in this Agreement or any
of the other Loan Documents by specific reference to the applicable provisions
of this Agreement, if any provision contained in this Agreement conflicts with
any provision in any of the other Loan Documents, the provision contained in
this Agreement shall govern and control.

     

    11.8.      Confidentiality.  Agent
and each Lender agree to use commercially reasonable efforts (equivalent to the
efforts Agent or such Lender applies to maintaining the confidentiality of its
own confidential information) to maintain as confidential all confidential
information provided to them by the Credit Parties and designated as
confidential for a period of two (2) years following the Termination Date,
except that Agent and any Lender may disclose such information (a) to Affiliates
and/or Persons employed or engaged by Agent or such Lender in evaluating,
approving, structuring or administering the Loans and the Commitments; (b) to
any bona fide assignee or participant or potential assignee or participant that
has agreed to comply with the covenant contained in this Section 11.8 (and any
such bona fide assignee or participant or potential assignee or participant may
disclose such information to Persons employed or engaged by them as described in
clause (a) above); (c) as required or requested by any Governmental Authority or
reasonably believed by Agent or such Lender to be compelled by any court decree,
subpoena or legal or administrative order or process; (d) as, on the advice of
Agent’s or such Lender’s counsel, is required by law; (e) in connection with the
exercise of any right or remedy under the Loan Documents or in connection with
any Litigation to which Agent or such Lender is a party; or (f) that ceases to
be confidential through no fault of Agent or any Lender.

     

    11.9.      GOVERNING
LAW.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN
DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA.  EACH PARTY HERETO HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY,
CITY OF NEW YORK, NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS;
PROVIDED, THAT AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW
YORK COUNTY; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY
OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
AGENT.  EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH
CREDIT PARTY HEREBY WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED
UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS.  EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET
FORTH IN ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF SUCH CREDIT PARTY’S ACTUAL RECEIPT THEREOF OR
THREE (3) DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE
PREPAID.

    
      
         

      

      
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    11.10.    Notices.  Except
as otherwise provided herein, whenever it is provided herein that any notice,
demand, request, consent, approval, declaration or other communication shall or
may be given to or served upon any of the parties by any other parties, or
whenever any of the parties desires to give or serve upon any other parties any
communication with respect to this Agreement, each such notice, demand, request,
consent, approval, declaration or other communication shall be in writing and
shall be deemed to have been validly served, given or delivered: (a) upon the
earlier of actual receipt and three (3) Business Days after deposit in the
United States Mail, registered or certified mail, return receipt requested, with
proper postage prepaid; (b) upon transmission, when sent by telecopy or other
similar facsimile transmission (with such telecopy or facsimile promptly
confirmed by delivery of a copy by personal delivery or United States Mail as
otherwise provided in this Section 11.10); (c) one (1) Business Day after
deposit with a reputable overnight courier with all charges prepaid or (d) when
delivered, if hand delivered by messenger, all of which shall be addressed to
the party to be notified and sent to the address or facsimile number indicated
in Annex I or to such other address (or facsimile number) as may be substituted
by notice given as herein provided.  The giving of any notice required
hereunder may be waived in writing by the party entitled to receive such
notice.  Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to any Person
(other than Borrower Representative or Agent) designated in Annex I to receive
copies shall in no way adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other
communication.

     

    11.11.    Section
Titles.  The Section titles and Table of Contents contained in
this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreement between the parties
hereto.

     

    11.12.    Counterparts.  This
Agreement may be executed in any number of separate counterparts, each of which
shall collectively and separately constitute one agreement.

    
      
         

      

      
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    11.13.    WAIVER OF JURY
TRIAL.  BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX
FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE
LAWS.  THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY
CREDIT PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.

     

    11.14.    Press Releases and Related
Matters.  Each Credit Party executing this Agreement agrees
that neither it nor its Affiliates will in the future issue any press releases
or other public disclosure using the name of GE Capital or its affiliates or
referring to this Agreement, the other Loan Documents without at least two (2)
Business Days’ prior notice to GE Capital and without the prior written consent
of GE Capital unless (and only to the extent that) such Credit Party or
Affiliate is required to do so under law and then, in any event, such Credit
Party or Affiliate will consult with GE Capital before issuing such press
release or other public disclosure.  Each Credit Party consents to the
publication by Agent or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement
using Borrowers’ name, product photographs, logo or trademark.  Agent
or such Lender shall provide a draft of any advertising material to each Credit
Party for review and comment prior to the publication thereof.  Agent
reserves the right to provide to industry trade organizations information
necessary and customary for inclusion in league table measurements.

     

    11.15.    Reinstatement.  This
Agreement shall remain in full force and effect and continue to be effective
should any petition be filed by or against any Borrower for liquidation or
reorganization, should any Borrower become insolvent or make an assignment for
the benefit of any creditor or creditors or should a receiver or trustee be
appointed for all or any significant part of any Borrower’s assets, and shall
continue to be effective or to be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Obligations, whether as a “voidable preference,”
“fraudulent conveyance,” or otherwise, all as though such payment or performance
had not been made.  In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.

     

    11.16.    Advice of
Counsel.  Each of the parties represents to each other party
hereto that it has discussed this Agreement and, specifically, the provisions of
Sections 11.9 and 11.13, with its counsel.

    
      
         

      

      
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    11.17.    No Strict
Construction.  The parties hereto have participated jointly in
the negotiation and drafting of this Agreement.  In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.

     

    11.18.    Reaffirmation of Collateral
Documents.  Each Credit Party (i) acknowledges and confirms
that notwithstanding the execution of this Agreement and the consummation of the
transactions contemplated hereunder or any other facts and circumstances, all of
the terms and conditions, representations and covenants contained in the
Collateral Documents are and shall remain in full force and effect in accordance
with their respective terms and the security interests and liens theretofore
granted, pledged and/or assigned under the Collateral Documents as security for
the Obligations shall not be impaired, limited or affected in any manner
whatsoever; and (ii) represents, warrants and confirms that no offsets,
counterclaims or defenses exist with respect to each of the Credit Parties’
obligations under the Collateral Documents.

     

    11.19.    Certifications From Banks
and Participants; US PATRIOT Act.  Each Lender or assignee or
participant of a Lender that is not incorporated under the Laws of the United
States of America 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 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 10 days
after the Closing Date, and (2) as such other times as are required under the
USA PATRIOT Act.

     

    
      	
              12.

            	
              CROSS-GUARANTY

            

    

     

    12.1.      Cross-Guaranty.  Each
Borrower hereby agrees that such Borrower is jointly and severally liable for,
and hereby absolutely and unconditionally guarantees to Agent and Lenders and
their respective successors and assigns, the full and prompt payment (whether at
stated maturity, by acceleration or otherwise) and performance of, all
Obligations owed or hereafter owing to Agent and Lenders by each other
Borrower.  Each Borrower agrees that its guaranty obligation hereunder
is a continuing guaranty of payment and performance and not of collection, that
its obligations under this Section 12 shall not be discharged until payment and
performance, in full, of the Obligations has occurred, and that its obligations
under this Section 12 shall be absolute and unconditional, irrespective of, and
unaffected by,

     

    (a)           the
genuineness, validity, regularity, enforceability or any future amendment of, or
change in, this Agreement, any other Loan Document or any other agreement,
document or instrument to which any Borrower is or may become a
party;

     

    (b)           the
absence of any action to enforce this Agreement (including this Section 12) or
any other Loan Document or the waiver or consent by Agent and Lenders with
respect to any of the provisions thereof;

    
      
         

      

      
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    (c)           the
existence, value or condition of, or failure to perfect its Lien against, any
security for the Obligations or any action, or the absence of any action, by
Agent and Lenders in respect thereof (including the release of any such
security);

     

    (d)           the
insolvency of any Credit Party; or

     

    (e)           any
other action or circumstances that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor.

     

    Each
Borrower shall be regarded, and shall be in the same position, as principal
debtor with respect to the Obligations guaranteed hereunder.

     

    12.2.      Waivers by
Borrowers.  Each Borrower expressly waives all rights it may
have now or in the future under any statute, or at common law, or at law or in
equity, or otherwise, to compel Agent or Lenders to marshal assets or to proceed
in respect of the Obligations guaranteed hereunder against any other Credit
Party, any other party or against any security for the payment and performance
of the Obligations before proceeding against, or as a condition to proceeding
against, such Borrower.  It is agreed among each Borrower, Agent and
Lenders that the foregoing waivers are of the essence of the transaction
contemplated by this Agreement and the other Loan Documents and that, but for
the provisions of this Section 12 and such waivers, Agent and Lenders would
decline to enter into this Agreement.

     

    12.3.      Benefit of
Guaranty.  Each Borrower agrees that the provisions of this
Section 12 are for the benefit of Agent and Lenders and their respective
successors, transferees, endorsees and assigns, and nothing herein contained
shall impair, as between any other Borrower and Agent or Lenders, the
obligations of such other Borrower under the Loan Documents.

     

    12.4.      Subordination of
Subrogation, Etc.  Notwithstanding anything to the contrary in
this Agreement or in any other Loan Document, and except as set forth in Section
12.7, each Borrower hereby expressly and irrevocably subordinates to payment of
the Obligations any and all rights at law or in equity to subrogation,
reimbursement, exoneration, contribution, indemnification or set off and any and
all defenses available to a surety, guarantor or accommodation co-obligor until
the Obligations are indefeasibly paid in full in cash.  Each Borrower
acknowledges and agrees that this subordination is intended to benefit Agent and
Lenders and shall not limit or otherwise affect such Borrower’s liability
hereunder or the enforceability of this Section 12, and that Agent, Lenders and
their respective successors and assigns are intended third party beneficiaries
of the waivers and agreements set forth in this Section 12.4.

    
      
         

      

      
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    12.5.      Election of
Remedies.  If Agent or any Lender may, under applicable law,
proceed to realize its benefits under any of the Loan Documents giving Agent or
such Lender a Lien upon any Collateral, whether owned by any Borrower or by any
other Person, either by judicial foreclosure or by non judicial sale or
enforcement, Agent or any Lender may, at its sole option, determine which of its
remedies or rights it may pursue without affecting any of its rights and
remedies under this Section 12.  If, in the exercise of any of its
rights and remedies, Agent or any Lender shall forfeit any of its rights or
remedies, including its right to enter a deficiency judgment against any
Borrower or any other Person, whether because of any applicable laws pertaining
to “election of remedies” or the like, each Borrower hereby consents to such
action by Agent or such Lender and waives any claim based upon such action, even
if such action by Agent or such Lender shall result in a full or partial loss of
any rights of subrogation that each Borrower might otherwise have had but for
such action by Agent or such Lender.  Any election of remedies that
results in the denial or impairment of the right of Agent or any Lender to seek
a deficiency judgment against any Borrower shall not impair any other Borrower’s
obligation to pay the full amount of the Obligations.  In the event
Agent or any Lender shall bid at any foreclosure or trustee’s sale or at any
private sale permitted by law or the Loan Documents, Agent or such Lender may
bid all or less than the amount of the Obligations and the amount of such bid
need not be paid by Agent or such Lender but shall be credited against the
Obligations.  The amount of the successful bid at any such sale,
whether Agent, Lender or any other party is the successful bidder, shall be
conclusively deemed to be the fair market value of the Collateral and the
difference between such bid amount and the remaining balance of the Obligations
shall be conclusively deemed to be the amount of the Obligations guaranteed
under this Section 12, notwithstanding that any present or future law or court
decision or ruling may have the effect of reducing the amount of any deficiency
claim to which Agent or any Lender might otherwise be entitled but for such
bidding at any such sale.

     

    12.6.      Limitation.  Notwithstanding
any provision herein contained to the contrary, each Borrower’s liability under
this Section 12 (which liability is in any event in addition to amounts for
which such Borrower is primarily liable under Section 1) shall be limited to an
amount not to exceed as of any date of determination the greater
of:

     

    (a)           the
net amount of all Loans advanced to any other Borrower under this Agreement and
then re-loaned or otherwise transferred to, or for the benefit of, such
Borrower; and

     

    (b)           the
amount that could be claimed by Agent and Lenders from such Borrower under this
Section 12 without rendering such claim voidable or avoidable under Section 548
of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or
common law after taking into account, among other things, such Borrower’s right
of contribution and indemnification from each other Borrower under Section
12.7.

     

    12.7.      Contribution
with Respect to Guaranty Obligations.

     

    (a)           To
the extent that any Borrower shall make a payment under this Section 12 of all
or any of the Obligations (other than Loans made to that Borrower for which it
is primarily liable) (a “Guarantor Payment”)
that, taking into account all other Guarantor Payments then previously or
concurrently made by any other Borrower, exceeds the amount that such Borrower
would otherwise have paid if each Borrower had paid the aggregate Obligations
satisfied by such Guarantor Payment in the same proportion that such Borrower’s
“Allocable Amount” (as defined below) (as determined immediately prior to such
Guarantor Payment) bore to the aggregate Allocable Amounts of each of the
Borrowers as determined immediately prior to the making of such Guarantor
Payment, then, following indefeasible payment in full in cash of the Obligations
and termination of the Commitments, such Borrower shall be entitled to receive
contribution and indemnification payments from, and be reimbursed by, each other
Borrower for the amount of such excess, pro rata based upon their respective
Allocable Amounts in effect immediately prior to such Guarantor
Payment.

    
      
         

      

      
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    (b)           As
of any date of determination, the “Allocable Amount” of any Borrower shall be
equal to the maximum amount of the claim that could then be recovered from such
Borrower under this Section 12 without rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law.

     

    (c)           This
Section 12.7 is intended only to define the relative rights of Borrowers and
nothing set forth in this Section 12.7 is intended to or shall impair the
obligations of Borrowers, jointly and severally, to pay any amounts as and when
the same shall become due and payable in accordance with the terms of this
Agreement, including Section 12.1.  Nothing contained in this Section
12.7 shall limit the liability of any Borrower to pay the Loans made directly or
indirectly to that Borrower and accrued interest, Fees and expenses with respect
thereto for which such Borrower shall be primarily liable.

     

    (d)           The
parties hereto acknowledge that the rights of contribution and indemnification
hereunder shall constitute assets of the Borrower to which such contribution and
indemnification is owing.

     

    (e)           The
rights of the indemnifying Borrowers against other Credit Parties under this
Section 12.7 shall be exercisable upon the full and indefeasible payment of the
Obligations and the termination of the Commitments.

     

    12.8.      Liability
Cumulative.  The liability of Borrowers under this Section 12
is in addition to and shall be cumulative with all liabilities of each Borrower
to Agent and Lenders under this Agreement and the other Loan Documents to which
such Borrower is a party or in respect of any Obligations or obligation of the
other Borrower, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically provides to
the contrary.

    
      
         

      

      
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    IN
WITNESS WHEREOF, this Agreement has been duly executed as of the date first
written above.

     

    
      
        	
                STANDARD
      MOTOR PRODUCTS, INC.

              
	 
      	 
      
	
                By:

              	
                  

              
	
                Name:

              	
                  

              
	
                Title:

              	
                  

              
	 
      	 
      
	
                STANRIC,
      INC.

              
	 
      	 
      
	
                By:

              	
                  

              
	
                Name:

              	
                  

              
	
                Title:

              	
                  

              
	 
      	 
      
	
                SMP
      MOTOR PRODUCTS LTD.

              
	 
      	 
      
	
                By:

              	
                  

              
	
                Name:

              	
                  

              
	
                Title:

              	
                  

              

      

    

    

    (Signatures
continued on next page)

     

    Signature
Page to Third Amended and Restated Loan Agreement - 1924818

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        	
                GENERAL
      ELECTRIC CAPITAL

              
	
                CORPORATION,
      as Agent and a Lender

              
	 
      	 
      
	
                By:

              	
                  

              
	
                Name:

              	
                  

              
	
                Title:

              	
                  

              
	 
      	 
      
	
                BANK
      OF AMERICA, N.A.,

              
	
                as
      Co-Syndication Agent and a Lender

              
	 
      	 
      
	
                By:

              	
                  

              
	
                Name:

              	
                  

              
	
                Title:

              	
                  

              
	 
      	 
      
	
                WELLS
      FARGO CAPITAL FINANCE, LLC,

              
	
                as
      Co-Syndication Agent and a Lender

              
	 
      	 
      
	
                By:

              	
                  

              
	
                Name:

              	
                  

              
	
                Title:

              	
                  

              
	 
      	 
      
	
                JPMORGAN
      CHASE BANK, N.A., as

                Documentation
      Agent and a Lender

              
	 
      	 
      
	
                By:

              	
                  

              
	
                Name:

              	
                  

              
	
                Title:

              	
                  

              

      

    

    

    (Signatures
continued on next page)

     

    Signature
Page to Third Amended and Restated Loan Agreement - 1924818

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        	
                HSBC
      BANK USA, NATIONAL ASSOCIATION,

                as
      a Lender

              
	 
      	 
      
	
                By:

              	
                  

              
	
                Name:

              	
                  

              
	
                Title:

              	
                  

              
	 
      	 
      
	
                GE
      BUSINESS FINANCIAL SERVICES INC., as

                a
      Lender

              
	 
      	 
      
	
                By:

              	
                  

              
	
                Name:

              	
                  

              
	
                Title:

              	
                  

              

      

    

    

    Signature
Page to Third Amended and Restated Loan Agreement - 1924818

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ANNEX A (Recitals)

     

    To

     

    CREDIT AGREEMENT

     

    DEFINITIONS

     

    Capitalized
terms used in the Loan Documents shall have (unless otherwise provided elsewhere
in the Loan Documents) the following respective meanings, and all references to
Sections, Exhibits, Schedules or Annexes in the following definitions shall
refer to Sections, Exhibits, Schedules or Annexes of or to the
Agreement:

     

    “2009 Indenture” means
that certain Indenture to be dated as of May 6, 2009, between SMP and HSBC Bank
USA, N.A., as trustee, and any documents, agreements or instruments executed in
connection therewith, each as amended, restated, supplemented or otherwise
modified from time to time.

     

    “2009 Indenture Maturity
Reserve” means a reserve which (i) during the period October 15, 2010
through November 14, 2010 equals one-sixth of the aggregate amount of the
debentures issued under the 2009 Indenture, (ii) during the period November 15,
2010 through December 14, 2010 equals one-third of the aggregate amount of the
debentures issued under the 2009 Indenture, (iii) during the period December 15,
2010 through January 14, 2011 equals one-half of the aggregate amount of the
debentures issued under the 2009 Indenture, (iv) during the period January 15,
2011 through February 14, 2011 equals two-thirds of the aggregate amount of the
debentures issued under the 2009 Indenture, (v) during the period February 15,
2011 through March 14, 2011 equals five-sixths of the aggregate amount of the
debentures issued under the 2009 Indenture, and (vi) on and after March 15, 2011
equals one hundred percent (100%) of the aggregate amount of the debentures
issued under the 2009 Indenture, in each case less the aggregate face amount of
any debentures issued under the 2009 Indenture which may be repurchased or
redeemed as provided herein, but in no event may the amount of the 2009
Indenture Maturity Reserve be less than zero ($0).

     

    “2009 Subordinated
Debt” means the Subordinated Debt issued pursuant to the 2009
Indenture.

     

    “2010 GE Capital Fee
Letter” shall have the meaning given to such term in Section
1.9(a).

     

    “Account Debtor” means
any Person who may become obligated to any Credit Party under, with respect to,
or on account of, an Account, Chattel Paper or General Intangibles (including a
payment intangible).

     

    “Accounting Changes”
has the meaning ascribed thereto in Annex G.

    
      
         

      

      
        Annex A - 1

        
          

        

      

      
         

      

    

    “Accounts” means all
“accounts,” as such term is defined in the Code, now owned or hereafter acquired
by any Credit Party, including (a) all accounts receivable, other receivables,
book debts and other forms of obligations (other than forms of obligations
evidenced by Chattel Paper or Instruments) (including any such obligations that
may be characterized as an account or contract right under the Code), (b) all of
each Credit Party’s rights in, to and under all purchase orders or receipts for
goods or services, (c) all of each Credit Party’s rights to any goods
represented by any of the foregoing (including unpaid sellers’ rights of
rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods), (d) all rights to payment due to any
Credit Party for property sold, leased, licensed, assigned or otherwise disposed
of, for a policy of insurance issued or to be issued, for a secondary obligation
incurred or to be incurred, for energy provided or to be provided, for the use
or hire of a vessel under a charter or other contract, arising out of the use of
a credit card or charge card, or for services rendered or to be rendered by such
Credit Party or in connection with any other transaction (whether or not yet
earned by performance on the part of such Credit Party), (e) all health care
insurance receivables and (f) all collateral security of any kind, given by any
Account Debtor or any other Person with respect to any of the
foregoing.

     

    “Additional SI Amortizing
Availability” means as to each item of Eligible Equipment purchased by SI
after the Closing Date, (i) 85% of the Net Orderly Liquidation Value of such
Eligible Equipment less (ii) one-twenty fourth (and, after exercise of the
Reloading Accordion option, one-twentieth) of the amount determined under clause
(i) for each full Fiscal Quarter occurring after the purchase of such Eligible
Equipment.

     

    “Additional SMP Amortizing
Availability” means (i) as to any Eligible Real Estate purchased by SMP
after the Closing Date fifty percent (50%) of the Fair Market Value of such
Eligible Real Estate and as to Eligible Equipment purchased by SMP after the
Closing Date 85% of the Net Orderly Liquidation Value of such Eligible Equipment
less (ii) one-twenty fourth (and, after exercise of the Reloading Accordion
option, one-twentieth) of the amount determined under clause (i) for each full
Fiscal Quarter occurring after the purchase of such Eligible Real Estate or
Eligible Equipment, as the case may be.

     

    “Additional SMP Canada
Amortizing Availability” means (i) up to the lesser of (x) $750,000 or
(y) the sum of (a) as to SMP Canada Eligible Real Estate purchased by SMP Canada
after the Closing Date, fifty percent (50%) of the Fair Market Value of such SMP
Canada Eligible Real Estate and (b) as to SMP Canada Eligible Equipment
purchased by SMP Canada after the Closing Date, 85% of the Net Orderly
Liquidation Value of such SMP Canada Eligible Equipment as set forth in the most
recent appraisal prepared by an independent appraisal firm acceptable to Agent
(Agent agrees that Michael Fox International shall be deemed an acceptable
appraiser with respect to SMP Canada’s machinery and equipment); provided,
however, that Borrowing Availability arising solely under this clause (i)(y)
shall not exceed 50% of the total SMP Canada’s Borrowing Availability less (ii)
one-twenty fourth (and, after exercise of the Reloading Accordion option,
one-twentieth) of the amount determined under clause (i) for each full Fiscal
Quarter occurring after the purchase of such SMP Canada Eligible Real Estate or
SMP Canada Eligible Equipment, as the case may be.

     

    “Advance” means any
Revolving Credit Advance.

    
      
         

      

      
        Annex A - 2

        
          

        

      

      
         

      

    

    “Affiliate” means,
with respect to any Person, (a) each Person that, directly or indirectly, owns
or controls, whether beneficially, or as a trustee, guardian or other fiduciary,
5% or more of the Stock having ordinary voting power in the election of
directors of such Person, (b) each Person that controls, is controlled by or is
under common control with such Person, (c) each of such Person’s officers,
directors, joint venturers and partners and (d) in the case of Borrowers, the
immediate family members, spouses and lineal descendants of individuals who are
Affiliates of any Borrower.  For the purposes of this definition,
“control” of a Person shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of its management or policies, whether
through the ownership of voting securities, by contract or otherwise; provided,
however, that the term “Affiliate” shall specifically exclude Agent and each
Lender.

     

    “Agent” means GE
Capital in its capacity as Agent for Lenders or its successor appointed pursuant
to Section 9.7.

     

    “Aggregate Amortizing
Availability” means the sum of SI Amortizing Availability and SMP
Amortizing Availability, subject to the limitation in Section
1.1(a)(iv).

     

    “Aggregate Borrowing
Availability” means as of any date of determination the lesser of (a) the
sum of (i) the Maximum Amount and (ii) $10,000,000 and (b) the sum of (i) the
Aggregate Borrowing Base and (ii) the SMP Canada Borrowing Base, in the case of
clauses (a) and (b) above, less the sum of (x) the aggregate Revolving Loans
then outstanding and (y) the aggregate advances of the Term Loan then
outstanding; provided that an Overadvance in accordance with Section 1.1(a)(iii)
hereunder or under the Canadian Credit Agreement may cause the Revolving Loan or
the Term Loan, as applicable to exceed the Aggregate Borrowing Base or the SMP
Canada Borrowing Base, as applicable, by the amount of any such permitted
Overadvance.  Aggregate Borrowing Availability shall be determined (x)
with trade payables being paid consistent with past practices, with expenses and
liabilities being paid in the ordinary course of business, without acceleration
of sales and without deterioration of working capital and (y) less the 2009
Indenture Maturity Reserve.

     

    “Aggregate Borrowing
Base” means as of any date of determination, an amount equal to (i) the
sum of the SMP Borrowing Base and the SI Borrowing Base; less (ii) any Reserves
except to the extent already deducted therefrom.

     

    “Agreement” means the
Second Amended and Restated Credit Agreement by and among Borrowers, the other
Credit Parties party thereto, GE Capital, as Agent and Lender and the other
Lenders from time to time party thereto, as the same may be amended,
supplemented, restated or otherwise modified from time to time.

     

    “Anti-Terrorism Laws”
shall mean any applicable laws relating to terrorism or money laundering,
including Executive Order No. 13224, the USA PATRIOT Act, the applicable laws
comprising or implementing the Bank Secrecy Act, and the applicable laws
administered by the United States Treasury Department’s Office of Foreign Asset
Control (as any of the foregoing applicable laws may from time to time be
amended, renewed, extended, or replaced).

     

    “Appendices” has the
meaning ascribed to it in the recitals to the Agreement.

     

    “Applicable L/C Fee
Margin” means the fee payable by Borrowers in respect of Lenders’
incurrence of Letter of Credit Obligations pursuant to Section 1.9(d), which fee
is determined by reference to 1.5(a).

    
      
         

      

      
        Annex A - 3

        
          

        

      

      
         

      

    

     

    “Applicable Margins”
means collectively the Applicable Unused Line Fee Margin, the Applicable
Revolver Index Margin, the Applicable Revolver LIBOR Margin and the Applicable
L/C Fee Margin.

     

    “Applicable Revolver Index
Margin” means the per annum interest rate margin from time to time in
effect and payable in addition to the Index Rate applicable to the Revolving
Loan, as determined by reference to Section 1.5(a).

     

    “Applicable Revolver LIBOR
Margin” means the per annum interest rate from time to time in effect and
payable in addition to the LIBOR Rate applicable to the Revolving Loan, as
determined by reference to Section 1.5(a).

     

    “Applicable Unused Line Fee
Margin” means the per annum fee, from time to time in effect, payable in
respect of Borrowers’ non-use of committed funds pursuant to Section 1.9(b)(ii),
which fee is determined by reference to Section 1.5(a).

     

    “Asbestos Claims”
means claims seeking to impose liability on SMP in connection with any alleged
exposure to asbestos.

     

    “Assignment Agreement”
has the meaning ascribed to it in Section 9.1(a).

     

    “Auto Supplier
Accounts” means the Accounts sold by any Borrower in connection with an
Auto Supplier Program to a special purpose vehicle that is an Affiliate of an
Account Debtor.

     

    “Auto Supplier
Program” means a program, pursuant to which a Borrower sells Auto
Supplier Accounts at a discount to a special purpose vehicle that is an
Affiliate of an Account Debtor, which program is (w) established by the United
States Department of the Treasury to support suppliers to the United States
automobile industry, (x) administered by a financial institution acceptable to
Agent in its sole discretion, and (y) on terms and conditions satisfactory in
all respects to Agent in its sole discretion.

     

    “Bank Product
Agreement” means, collectively, any of the following financial
accommodations or similar agreement entered into by any Borrower or any of its
Subsidiaries under which the counterparty of such agreement is (or at the time
such agreement was entered into, was) a Lender or an Affiliate of a Lender: (a)
credit cards, (b) credit card processing services, (c) debit cards, (d) purchase
cards, or (e) cash management, including controlled disbursement accounts or
services and Automated Clearing House processing of electronic funds transfers
through the direct Federal Reserve Fedline system.

     

    “Bankruptcy Code”
means the provisions of Title 11 of the United States Code, 11
U.S.C.  §§101 et seq.

     

    “Blocked Accounts” has
the meaning ascribed to it in Annex C.

     

    “Borrower
Representative” means SMP in its capacity as Borrower Representative
pursuant to the provisions of Section 1.1(d).

     

    “Borrower Revolver
Increase” has the meaning ascribed to it in Section
1.18(a).

    
      
         

      

      
        Annex A - 4

        
          

        

      

      
         

      

    

     

    “Borrowers” and
“Borrower” have the respective meanings ascribed thereto in the preamble to the
Agreement.

     

    “Borrowing
Availability” means as of any date of determination (a) as to all
Borrowers, the lesser of (i) the Maximum Amount and (ii) the Aggregate Borrowing
Base, in each case, less the aggregate
Revolving Credit Advances then outstanding, or (b) as to an individual Borrower,
the lesser of (i) the Maximum Amount less the Revolving
Loan outstanding to all other Borrowers and (ii) that Borrower’s separate
Borrowing Base, less the Revolving
Credit Advances outstanding to that Borrower; provided that an
Overadvance in accordance with Section 1.1(a)(iii)
may cause the Revolving Loan to exceed the Aggregate Borrowing Base or a
Borrower’s separate Borrowing Base by the amount of such permitted
Overadvance.  Borrowing Availability for purposes of clauses (a) and
(b) shall be determined (x) with trade payables being paid consistent with past
practices, with expenses and liabilities being paid in the ordinary course of
business, without acceleration of sales and without deterioration of working
capital and (y) less the 2009 Indenture Maturity Reserve.

     

    “Borrowing Base” means
as the context may require, the SMP Borrowing Base, and the SI Borrowing Base or
any such Borrowing Base.  Notwithstanding anything contained herein to
the contrary, for purposes of determining any Borrowing Base, (a) the value of
Eligible Inventory acquired by any Credit Party from any other Credit Party
shall be the lower of cost (determined on a first-in, first-out basis) or market
of either the selling Credit Party or the purchasing Credit Party, whichever is
lower and (b) the Net Orderly Liquidation Value of any Eligible Equipment or
Eligible Inventory and the Fair Market Value of any Eligible Real Estate may be
adjusted by Agent from time to time to reflect the results of the most recent
appraisal thereof.

     

    “Borrowing Base
Certificate” means a certificate to be executed and delivered from time
to time by each Borrower in the form attached to the Agreement as Exhibit
4.1(b).

     

    “BSA” means Blue
Streak America, Inc., a Florida corporation.

     

    “BSE” means Blue
Streak Electronics Inc., a Canadian corporation.

     

    “BSE Deferred Payment”
means the deferred payments payable to SMP and SMP Canada following the closing
of the BSE Sale pursuant to Schedule I to the BSE Inventory Purchase
Agreement.

     

    “BSE Final Purchase
Price” means the purchase price of the BSE Sale as set forth on Schedule
I to the BSE Inventory Purchase Agreement.

     

    “BSE Inventory Purchase
Agreement” means that certain Inventory Purchase Agreement by and among
SMP and SMP Canada, as sellers, and BSE and BSA, as purchasers, pursuant to
which SMP and SMP Canada shall sell certain inventory to BSE and BSA, which
agreement shall in final form conform in all material respects to the terms and
conditions of the draft agreement dated November 14, 2008.

    
      
         

      

      
        Annex A - 5

        
          

        

      

      
         

      

    

    “BSE Sale” means the
sale by SMP and SMP Canada of certain Inventory, shares and related assets for
the BSE Final Purchase Price pursuant to the BSE Inventory Purchase Agreement,
the BSE Stock Purchase Agreement, that certain Stock Purchase Agreement
(Israeli) by and between Autotech Inc., an Israeli corporation and SMP, that
certain Stock Purchase Agreement (UK) by and between SMP Canada and BSE, that
certain Termination Agreement by and among Tadir, Inc., Autotech Inc., BSE, BSA,
SMP Canada, SMP and Standard Motor Products Holdings Ltd., a corporation
incorporated under the laws of England and Wales, and that certain Trademark
License Agreement by and between SMP, as licensor and BSE and BSA, as licensees,
in each case such agreement shall in final form conform in all material respects
to the terms and conditions of the related draft agreement dated November 14,
2008.

     

    “BSE Stock Purchase
Agreement” means that certain Stock Purchase Agreement with Promissory
Note by and among SMP and SMP Canada, as sellers, and Tadir Inc., a Canadian
corporation, as purchaser, pursuant to which SMP and SMP Canada shall sell their
interests in the shares of BSE to Tadir Inc, which agreement shall in final form
conform in all material respects to the terms and conditions of the draft
agreement dated November 14, 2008.

     

    “Business Day” means
any day that is not a Saturday, a Sunday or a day on which banks are required or
permitted to be closed in the State New York and in reference to LIBOR Loans
shall mean any such day that is also a LIBOR Business Day.

     

    “Canadian Agent” shall
mean GE Canada Finance Holding Company, a Nova Scotia unlimited liability
company.

     

    “Canadian Guaranty”
shall mean that certain Guaranty dated December 29, 2005, executed by Borrowers
in favor of Canadian Agent in respect of the Obligations (as defined in the
Canadian Loan Agreement).

     

    “Canadian Lenders”
shall mean the Lenders as such term is defined in Canadian Loan
Agreement.

     

    “Canadian Loan
Agreement” shall mean the Credit Agreement (as amended, restated,
supplemented or otherwise modified from time to time), dated as of December 29,
2005 among SMP Canada, Canadian Agent, as lender, and as agent for the secured
parties, and the other lenders signatory thereto from time to time.

     

    “Capital Expenditures”
means, with respect to any Person, all expenditures (by the expenditure of cash
or the incurrence of Indebtedness) by such Person during any measuring period
for any fixed assets or improvements or for replacements, substitutions or
additions thereto that have a useful life of more than one year and that are
required to be capitalized under GAAP.

     

    “Capital Lease” means,
with respect to any Person, any lease of any property (whether real, personal or
mixed) by such Person as lessee that, in accordance with GAAP, would be required
to be classified and accounted for as a capital lease on a balance sheet of such
Person.

     

    “Capital Lease
Obligation” means, with respect to any Capital Lease of any Person, the
amount of the obligation of the lessee thereunder that, in accordance with GAAP,
would appear on a balance sheet of such lessee in respect of such Capital
Lease.

    
      
         

      

      
        Annex A - 6

        
          

        

      

      
         

      

    

     

    “Cash Collateral
Account” has the meaning ascribed to it Annex B.

     

    “Cash Equivalents” has
the meaning ascribed to it in Annex B.

     

    “Cash Management
Systems” has the meaning ascribed to it in Section 1.8.

     

    “Change of Control”
means any of the following: (a) any person or group of persons (within the
meaning of the Securities Exchange Act of 1934,) other than the Existing
Stockholder Group shall have acquired beneficial ownership (within the meaning
of Rule 13d-3 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934,) of 30% or more of the issued and outstanding
shares of capital Stock of SMP having the right to vote for the election of
directors of SMP under ordinary circumstances; (b) during any period of twelve
consecutive calendar months, individuals who at the beginning of such period
constituted the board of directors of SMP (together with any new directors whose
election by the board of directors of SMP or whose nomination for election by
the Stockholders of SMP was 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 other than death or disability to constitute a
majority of the directors then in office; or (c) SMP ceases to own and control
all of the economic and voting rights associated with all of the outstanding
capital Stock of any of its Subsidiaries other than as set forth on Disclosure
Schedule (3.8).

     

    “Charges” means all
federal, state, county, city, municipal, local, foreign or other governmental
taxes (including taxes owed to the PBGC at the time due and payable), levies,
assessments, charges, liens, claims or encumbrances upon or relating to (a) the
Collateral, (b) the Obligations, (c) the employees, payroll, income or gross
receipts of any Credit Party, (d) any Credit Party’s ownership or use of any
properties or other assets, or (e) any other aspect of any Credit Party’s
business.

     

    “Chattel Paper” means
any “chattel paper,” as such term is defined in the Code, including electronic
chattel paper, now owned or hereafter acquired by any Credit Party.

     

    “Closing Date” means
November 10, 2010.

     

    “Closing Checklist”
means the schedule, including all appendices, exhibits or schedules thereto,
listing certain documents and information to be delivered in connection with the
Agreement, the other Loan Documents and the transactions contemplated
thereunder, substantially in the form attached hereto as Annex D.

     

    “Code” means the
Uniform Commercial Code as the same may, from time to time, be enacted and in
effect in the State of New York; provided, that to the extent that the Code is
used to define any term herein or in any Loan Document and such term is defined
differently in different Articles or Divisions of the Code, the definition of
such term contained in Article or Division 9 shall govern; provided, further,
that in the event that, by reason of mandatory provisions of law, any or all of
the attachment, perfection or priority of, or remedies with respect to, Agent’s
or any Lender’s Lien on any Collateral is governed by the Uniform Commercial
Code as enacted and in effect in a jurisdiction other than the State of New
York, the term “Code” shall mean the Uniform Commercial Code as enacted and in
effect in such other jurisdiction solely for purposes of the provisions thereof
relating to such attachment, perfection, priority or remedies and for purposes
of definitions related to such provisions.

    
      
         

      

      
        Annex A - 7

        
          

        

      

      
         

      

    

     

    “Collateral” means the
property covered by the Security Agreement, the Mortgages and the other
Collateral Documents and any other property, real or personal, tangible or
intangible, now existing or hereafter acquired, that may at any time be or
become subject to a security interest or Lien in favor of Agent, on behalf of
itself and Lenders, to secure the Obligations.

     

    “Collateral Documents”
means the Security Agreement, the Pledge Agreements, the Guaranties, the
Mortgages, the Intellectual Property Security Agreement, and all similar
agreements entered into guaranteeing payment of, or granting a Lien upon
property as security for payment of, the Obligations.

     

    “Collateral Reports”
means the reports with respect to the Collateral referred to in Annex
F.

     

    “Collection Account”
means that certain account of Agent, account number 502-328-54 in the name of
Agent at DeutscheBank Trust Company Americas in New York, New York ABA
No.  021 001 033, or such other account as may be specified in writing
by Agent as the “Collection Account.”

     

    “Commitment” means (i)
as to any Lender, the aggregate commitment of such Lender to make Revolving
Credit Advances or incur Letter of Credit Obligations as set forth on Annex J to
the Agreement or in the most recent Assignment Agreement executed by such Lender
and (ii) as to all Lenders, the aggregate commitment of all Lenders to make
Revolving Credit Advances or incur Letter of Credit Obligations, which aggregate
commitment shall be One Hundred Ninety Million Dollars ($190,000,000) as such
amount may be adjusted, if at all, from time to time in accordance with the
Agreement including, without limitation, Section 1.18 hereof.

     

    “Commitment Termination
Date” means the earliest of (a) March 20, 2014, (b) the date of
termination of Lenders’ obligations to make Advances and to incur Letter of
Credit Obligations or permit existing Loans to remain outstanding pursuant to
Section 8.2(b), and (c) the date of indefeasible prepayment in full by Borrowers
of the Loans and the cancellation and return (or stand-by guarantee) of all
Letters of Credit or the cash collateralization of all Letter of Credit
Obligations pursuant to Annex B, and the permanent reduction of all Commitments
to zero dollars ($0).

     

    “Compliance
Certificate” has the meaning ascribed to it in Annex E.

     

    “Concentration
Account” has the meaning ascribed to it in Annex C.

     

    “Contracts” means all
“contracts,” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party, in any event, including all contracts,
undertakings, or agreements (other than rights evidenced by Chattel Paper,
Documents or Instruments) in or under which any Credit Party may now or
hereafter have any right, title or interest, including any agreement relating to
the terms of payment or the terms of performance of any
Account.

    
      
         

      

      
        Annex A - 8

        
          

        

      

      
         

      

    

     

    “Control Letter” means
a letter agreement between Agent and (i) the issuer of uncertificated securities
with respect to uncertificated securities in the name of any Credit Party, (ii)
a securities intermediary with respect to securities, whether certificated or
uncertificated, securities entitlements and other financial assets held in a
securities account in the name of any Credit Party, (iii) a futures commission
merchant or clearing house, as applicable, with respect to commodity accounts
and commodity contracts held by any Credit Party, whereby, among other things,
the issuer, securities intermediary or futures commission merchant disclaims any
security interest in the applicable financial assets, acknowledges the Lien of
Agent, on behalf of itself and Lenders, on such financial assets, and agrees to
follow the instructions or entitlement orders of Agent without further consent
by the affected Credit Party.

     

     “Copyright License”
means any and all rights now owned or hereafter acquired by any Credit Party
under any written agreement granting any right to use any Copyright or Copyright
registration.

     

    “Copyright Security
Agreements” means the Copyright Security Agreements made in favor of
Agent, on behalf of itself and Lenders, by each applicable Credit Party, as
amended, modified or supplemented from time to time.

     

    “Copyrights” means all
of the following now owned or hereafter adopted or acquired by any Credit Party:
(a) all copyrights and General Intangibles of like nature (whether registered or
unregistered), all registrations and recordings thereof, and all applications in
connection therewith, including all registrations, recordings and applications
in the United States Copyright Office or in any similar office or agency of the
United States, any state or territory thereof, or any other country or any
political subdivision thereof, and (b) all reissues, extensions or renewals
thereof.

     

    “Cores NOLV Rate”
means the rate set forth as the Net Orderly Liquidation Value rate of Eligible
Inventory consisting of cores in the most recent appraisal prepared by an
independent appraisal firm acceptable to Agent.

     

    “Credit Parties” means
each Borrower and, except with respect to Section 1 of the Credit Agreement, SMP
Canada.

     

    “Customer Drafts”
means the negotiable drafts issued by an Account Debtor in connection with a
Customer Program.

     

    “Customer Program”
means a program established between an Account Debtor and a financial
institution reasonably acceptable to Agent, pursuant to which such Account
Debtor consolidates multiple invoices from a supplier into a single large
payment and issues a negotiable draft to a Credit Party which draft is purchased
from the Credit Party by such financial institution for an agreed upon purchase
price.

     

    “Default” means any
event that, with the passage of time or notice or both, would, unless cured or
waived, become an Event of Default.

     

    “Default Rate” has the
meaning ascribed to it in Section 1.5(c).

    
      
         

      

      
        Annex A - 9

        
          

        

      

      
         

      

    

     

    “Deposit Accounts”
means all “deposit accounts” as such term is defined in the Code, now or
hereafter held in the name of any Credit Party including, without limitation,
all checking accounts.

     

    “Disbursement
Accounts” has the meaning ascribed to it in Annex C.

     

    “Disclosure Schedules”
means the Schedules prepared by Borrowers and denominated as Disclosure
Schedules (1.4) through (6.7) in the Index to the Agreement.

     

    “Documents” means all
“documents,” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party, wherever located.

     

    “Dollars” or “$” means
lawful currency of the United States of America and, solely for purposes of
Section 1.6, of Canada.

     

    “Draft Monetization”
shall mean the sale of Customer Drafts more than ten (10) days prior to the
maturity date of such drafts to an acceptable financial institution with whom
Agent has entered into a satisfactory intercreditor agreement regarding the
payment of the purchase price for the Customer Drafts being sold to such
financial institution.

    
      
         

      

      
        Annex A - 10

        
          

        

      

      
         

      

    

    “EBITDA” means, with
respect to any Person for any fiscal period, without duplication, an amount
equal to (a) consolidated net income of such Person for such period determined
in accordance with GAAP, minus (b) the sum of
(i) income tax credits, (ii) gain from extraordinary items for such period,
(iii) any aggregate net gain (but not any aggregate net loss) during such period
arising from the sale, exchange or other disposition of capital assets by such
Person (including any fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets and all
securities); provided, that, in connection
with any gain realized upon the sale of the Building and related land in Long
Island City, NY, EBITDA shall not be reduced by that portion of the gain
realized upon such sale which is equal to the cash taxes paid by SMP due to such
gain, and (iv) any other non-operating, non-cash gains that have been added in
determining consolidated net income, in each case to the extent included in the
calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication, plus (c) the sum of
(i) any provision for income taxes, (ii) Interest Expense, (iii) loss from
extraordinary items for such period, (iv) the amount of non-cash charges
(including depreciation and amortization) for such period, (v) amortized debt
discount for such period, and (vi) the amount of any deduction to consolidated
net income as the result of any grant to any members of the management of such
Person of any Stock, in each case to the extent included in the calculation of
consolidated net income of such Person for such period in accordance with GAAP,
but without duplication.  For purposes of this definition, the
following items shall be subtracted from (or with respect to any deficit in item
(1) below, added back to) the calculation of consolidated net income of a Person
for purposes of calculating EBITDA: (1) the income (or deficit) of any other
Person accrued prior to the date it became a Subsidiary of, or was merged or
consolidated into, such Person or any of such Person’s Subsidiaries; (2) the
undistributed earnings of any Subsidiary of such Person to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any contractual obligation or
requirement of law applicable to such Subsidiary; (3) any restoration to income
of any reserve established for specific non-recurring items, except to the
extent that provision for such reserve was made out of income accrued during
such period; (4) any write-up of any asset; (5) any net gain from the collection
of the proceeds of life insurance policies; (6) any net gain arising from the
acquisition of any securities, or the extinguishment, under GAAP, of any
Indebtedness, of such Person; (7) in the case of a successor to such Person by
consolidation or merger or as a transferee of its assets, any earnings of such
successor prior to such consolidation, merger or transfer of assets; and (8) any
deferred credit representing the excess of equity in any Subsidiary of such
Person at the date of acquisition of such Subsidiary over the cost to such
Person of the investment in such Subsidiary.  For purposes of this
definition, and without duplication of amounts added back pursuant to clause
(c)(iii) of the first sentence of this definition, the following items shall be
added back to consolidated net income of a Person for purposes of calculating
EBITDA: (1) one-time charges incurred by SMP in connection with the
consolidation of its manufacturing facilities in Long Island City, New York, (2)
one-time charges incurred by SI in connection with the consolidation of all
manufacturing facilities, (3) one-time charges incurred by SMP in connection
with relocating its facilities from Reno, Nevada to Disputanta, Virginia, (4)
one-time charges incurred by SMP in connection with relocating its facilities
from Grapevine, Texas and Edwardsville, Kansas to Reynosa, Mexico, (5) one-time
charges incurred by SMP in connection with relocating its facilities from
Corona, California to Tijuana, Mexico, (6) one-time charges incurred by SMP in
connection with certain contemplated asset acquisitions and divestitures, but
with respect to all of the above one-time charges, such items shall only be
added back to the consolidated net income of a Person for purposes of
calculating EBITDA for any fiscal period in 2007, 2008, and 2009, respectively,
to the extent that the aggregate amount of such one-time charges do not exceed
$11,000,000, $8,000,000 and $4,000,000 for 2007, 2008, and 2009, respectively
(and, thus, such charges in excess of such amounts shall not be added back to
consolidated net income for purposes of calculating EBITDA) and (7)(a) in 2010
in connection with relocation activities, including, but not limited to, (i) the
relocation of manufacturing facilities from Hong Kong to the United States and
(ii) the relocation of manufacturing facilities from California to Texas and/or
Mexico, in an aggregate amount not to exceed $5,000,000 and (b) in any year
thereafter in connection with any other relocation activities in an aggregate
amount not to exceed $2,000,000 per annum; provided, that, to the extent such
one-time charges in any fiscal year are less than the thresholds set forth in
clauses 7(a) and 7(b) above, such unused charges may be carried forward and
added back to consolidated net income of a Person for purposes of calculating
EBITDA only in the immediately succeeding fiscal year (in addition to the
applicable amount for each fiscal year set forth in clause 7(b)
above).

     

    “Eligible Accounts”
has the meaning ascribed to it in Section 1.6.

     

    “Eligible Equipment”
means, as to any Borrower, Equipment which is subject to a first priority Lien
in favor of Agent, for its benefit and for the ratable benefit of Lenders, and
which is appraised by an appraiser satisfactory to Agent.

     

    “Eligible Inventory”
has the meaning ascribed to it in Section 1.7.

    
      
         

      

      
        Annex A - 11

        
          

        

      

      
         

      

    

    “Eligible Real Estate”
means as to any Borrower, real estate with respect to which Agent shall have
received (a) Mortgages covering all of such real estate together with (i) title
insurance policies, current as-built surveys, zoning letters and certificates of
occupancy, in each case reasonably satisfactory in form and substance to Agent,
(ii) evidence that counterparts of the Mortgages have been recorded in all
places to the extent necessary or desirable, in the judgment of Agent, to create
a valid and enforceable first priority Lien (subject to Permitted Encumbrances)
on such real estate in favor of Agent for the benefit of itself and Lenders (or
in favor of such other trustee as may be required or desired under local law);
and (iii) an opinion of counsel in each state in which any such real estate is
located in form and substance and from counsel reasonably satisfactory to Agent,
(b) Phase I Environmental Site Assessment Reports, consistent with American
Society for Testing and Materials (ASTM) Standard E 1527-00 and applicable state
requirements, on all of such real estate, dated no more than 6 months prior to
the date of purchase of such real estate, prepared by environmental engineers
reasonably satisfactory to Agent, all in form and substance reasonably
satisfactory to Agent, in its sole discretion and Agent shall have further
received (i) such environmental review and audit reports, including Phase II
reports, with respect to such real estate as Agent may request, and Agent shall
be satisfied in its sole discretion, with the contents of all such environmental
reports, and (ii) letters executed by the environmental firms preparing such
environmental reports, in form and substance reasonably satisfactory to Agent,
authorizing Agent and Lenders to rely on such reports, and (c) appraisals of
such real estate which shall be in form and substance, and prepared by
appraisers, reasonably satisfactory to Agent.  Notwithstanding the
foregoing to the contrary, “Eligible Real Estate” shall not include any Excluded
Real Property that is subject to a sale leaseback agreement pursuant to Section
6.12.

     

    “Environmental Laws”
means all applicable federal, state, local and foreign laws, statutes,
ordinances, codes, rules, standards and regulations, now or hereafter in effect,
and any legally binding applicable judicial or administrative interpretation
thereof, including any applicable judicial or administrative order, consent
decree, order or judgment, imposing liability or standards of conduct for or
relating to the regulation and protection of (i) human health or safety from
exposure to Hazardous Material or (ii) the environment and natural resources
(including ambient air, surface water, groundwater, wetlands, land surface or
subsurface strata, wildlife, aquatic species and
vegetation).  Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. §§
9601 et seq.) (“CERCLA”); the Hazardous Materials Transportation Authorization
Act of 1994 (49 U.S.C. §§ 5101 et seq.); the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. §§ 136 et seq.); the Solid Waste Disposal Act (42
U.S.C. §§ 6901 et seq.); the Toxic Substance Control Act (15 U.S.C. §§ 2601 et
seq.); the Clean Air Act (42 U.S.C. §§ 7401 et seq.); the Federal Water
Pollution Control Act (33 U.S.C. §§ 1251 et seq.); the Occupational Safety and
Health Act (29 U.S.C. §§ 651 et seq.); and the Safe Drinking Water Act (42
U.S.C. §§ 300(f) et seq.), and any and all regulations promulgated thereunder,
and all analogous state, local and foreign counterparts or equivalents and any
transfer of ownership notification or approval statutes.

     

    “Environmental
Liabilities” means, with respect to any Person, all liabilities,
obligations, responsibilities, response, remedial and removal costs,
investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.

    
      
         

      

      
        Annex A - 12

        
          

        

      

      
         

      

    

     

    “Environmental
Permits” means all permits, licenses, authorizations, certificates,
approvals or registrations required by any Governmental Authority under any
Environmental Laws.

     

    “Equipment” means all
“equipment,” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party, wherever located and, in any event, including all
such Credit Party’s machinery and equipment, including processing equipment,
conveyors, machine tools, data processing and computer equipment, including
embedded software and peripheral equipment and all engineering, processing and
manufacturing equipment, office machinery, furniture, materials handling
equipment, tools, attachments, accessories, automotive equipment, trailers,
trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other
equipment of every kind and nature, trade fixtures and fixtures not forming a
part of real property, together with all additions and accessions thereto,
replacements therefor, all parts therefor, all substitutes for any of the
foregoing, fuel therefor, and all manuals, drawings, instructions, warranties
and rights with respect thereto, and all products and proceeds thereof and
condemnation awards and insurance proceeds with respect thereto.

     

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

     

    “ERISA Affiliate”
means, with respect to any Credit Party, any trade or business (whether or not
incorporated) that, together with such Credit Party, are treated as a single
employer within the meaning of Sections 414(b), (c), (m) or (o) of the
IRC.

     

    “ERISA Event” means,
with respect to any Credit Party or any ERISA Affiliate, (a) with respect to a
Title IV Plan, any event described in Section 4043(c) of ERISA for which notice
to the PBGC has not been waived; (b) the withdrawal of any Credit Party or ERISA
Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (c) the complete or partial withdrawal of any Credit Party or any ERISA
Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to
terminate a Title IV Plan in a distress termination described in Section 4041(c)
of ERISA or the treatment of a plan amendment as a termination under Section
4041 of ERISA; (e) the institution of proceedings to terminate a Title IV Plan
or Multiemployer Plan by the PBGC; (f) with respect to a Title IV Plan, the
existence of an “accumulated funding deficiency” (as defined in Section 412 of
the IRC or Section 302 of ERISA whether or not waived, or the failure to make by
its due date a required installment under Section 412(m) of the IRC or the
failure to make any required contribution to a Multiemployer Plan; (g) the
filing pursuant to Section 412(d) of the IRC or Section 303(d) of ERISA of an
application for the waiver of the minimum funding standard with respect to a
Title IV Plan; (h) the making of any amendment to any Title IV Plan which could
result in the imposition of a lien or the posting of a bond or other security;
(i) with respect to a Title IV Plan or event described in Section 4062(e) of
ERISA, (j) any other event or condition that might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan
or for the imposition of liability under Section 4069 or 4212(c) of ERISA; (k)
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA; or (l) the loss of a Qualified Plan’s qualification or tax exempt
status; or (m) the termination of a Plan described in Section 4064 of
ERISA.

    
      
         

      

      
        Annex A - 13

        
          

        

      

      
         

      

    

     

    “ESOP” means a Plan
that is intended to satisfy the requirements of Section 4975(e)(7) of the
IRC.

     

    “Event of Default” has
the meaning ascribed to it in Section 8.1.

     

    “Excess Formula
Availability” means the average daily difference, for any period of
determination, between (a) the sum of (i) the Aggregate Borrowing Base and (ii)
the SMP Canada Borrowing Base and (b) the sum of (i) the total outstanding
balance of Revolving Loans and (ii) the total outstanding balance of the Term
Loan (in the case of each of subclause (a)(i) and (a)(ii) with trade payables
being paid consistent with past practices, expenses and liabilities being paid
in the ordinary course of business, without acceleration of sales and without
deterioration of working capital).  For purposes of determining
“Excess Formula Availability” under Section 1.5(a)(ii), the 2009 Indenture
Maturity Reserve shall be deemed to be $0.

     

    “Exchange Offer” means
SMP’s Offer to Exchange 15% Convertible Subordinated Debentures due 2011 for up
to $20,000,000 in Aggregate Principal Amount of 6-3/4% Subordinated Debentures
due 2009.

     

    “Excluded Real
Property” means the Real Estate located in Disputanta, Virginia;
Greenville, South Carolina; Edwardsville, Kansas; Independence, Kansas; and
Mishawaka, Indiana.

     

    “Existing Stockholder
Group” means Arthur S.  Sills, Lawrence I.  Sills,
Peter Sills, the Sills Family Foundation, Marilyn F.  Cragin, Arthur
D.  Davis, Susan F.  Davis and the various Fife family
trusts for which any of the foregoing are trustees.

     

    “Fair Labor Standards
Act” means the Fair Labor Standards Act, 29 U.S.C.  §201 et
seq.

     

    “Fair Market Value”
means the fair market value of the asset being valued based upon an appraisal,
in form and substance satisfactory to Agent, by an appraiser satisfactory to
Agent.

     

    “Federal Funds Rate”
means, for any day, a floating rate equal to the weighted average of the rates
on overnight Federal funds transactions among members of the Federal Reserve
System, as determined by Agent in its sole discretion, which determination shall
be final, binding and conclusive (absent manifest error).

     

    “Federal Reserve
Board” means the Board of Governors of the Federal Reserve
System.

     

    “Fees” means any and
all fees payable to Agent or any Lender pursuant to the Agreement or any of the
other Loan Documents.

     

    “Financial Covenants”
means the financial covenants set forth in Annex G.

    
      
         

      

      
        Annex A - 14

        
          

        

      

      
         

      

    

     

    “Financial Statements”
means the consolidated and consolidating income statements, statements of cash
flows and balance sheets of Borrowers delivered in accordance with Section 3.4
and Annex E.

     

    “Finished Goods NOLV
Rate” means the rate set forth as the Net Orderly Liquidation Value rate
of Eligible Inventory consisting of finished goods in the most recent appraisal
prepared by an independent appraisal firm acceptable to Agent.

     

    “Fiscal Month” means
any of the monthly accounting periods of Borrowers.

     

    “Fiscal Quarter” means
any of the quarterly accounting periods of Borrowers, ending on or about the
last day of March, June, September and December of each year.

     

    “Fiscal Year” means
any of the annual accounting periods of Borrowers ending on or about December 31
of each year.

     

    “Fixed Charges” means
with respect to any Person for any fiscal period (a) the aggregate of all
Interest Expense paid or accrued during such period, plus (b) scheduled payments
of principal with respect to Indebtedness during such period, plus (c) Capital
Expenditures during such period, plus (d) dividends paid during such period,
plus (e) net cash taxes paid against tax refunds received during such period,
plus (f) amounts paid in accordance with Section 6.14(e)(ii) and (iii), plus (g)
cash settlement amounts in excess of $3,000,000 associated with the discontinued
operations of Borrowers’ EIS Brake division and Industrial and Automotive
Associates, Inc.  Notwithstanding anything herein to the contrary,
Fixed Charges specifically exclude payments made in connection with repayments
and/or redemptions on the applicable scheduled maturity date of the 2009
Subordinated Debt under the 2009 Indenture.

     

    “Fixed Charge Coverage
Ratio” means, with respect to any Person for any fiscal period, the ratio
of EBITDA to Fixed Charges.

     

    “Fixtures” means all
“fixtures” as such term is defined in the Code, now owned or hereafter acquired
by any Credit Party.

     

    “Funded Debt” means,
with respect to any Person, without duplication, all Indebtedness for borrowed
money evidenced by notes, bonds, debentures, or similar evidences of
Indebtedness that by its terms matures more than one year from, or is directly
or indirectly renewable or extendible at such Person’s option under a revolving
credit or similar agreement obligating the lender or lenders to extend credit
over a period of more than one year from the date of creation thereof, and
specifically including Capital Lease Obligations, current maturities of long
term debt, revolving credit and short term debt extendible beyond one year at
the option of the debtor, and also including, in the case of Borrowers, the
Obligations and, without duplication, Guaranteed Indebtedness consisting of
guaranties of Funded Debt of other Persons.

     

    “GAAP” means generally
accepted accounting principles in the United States of America consistently
applied, as such term is further defined in Annex G to the
Agreement.

     

    “GE Capital” means
General Electric Capital Corporation, a Delaware corporation.

    
      
         

      

      
        Annex A - 15

        
          

        

      

      
         

      

    

     

    “General Intangibles”
means all “general intangibles,” as such term is defined in the Code, now owned
or hereafter acquired by any Credit Party, including all right, title and
interest that such Credit Party may now or hereafter have in or under any
Contract, all payment intangibles, customer lists, Licenses, Copyrights,
Trademarks, Patents, and all applications therefor and reissues, extensions or
renewals thereof, rights in Intellectual Property, interests in partnerships,
joint ventures and other business associations, licenses, permits, copyrights,
trade secrets, proprietary or confidential information, inventions (whether or
not patented or patentable), technical information, procedures, designs,
knowledge, know how, software, data bases, data, skill, expertise, experience,
processes, models, drawings, materials and records, goodwill (including the
goodwill associated with any Trademark or Trademark License), all rights and
claims in or under insurance policies (including insurance for fire, damage,
loss and casualty, whether covering personal property, real property, tangible
rights or intangible rights, all liability, life, key man and business
interruption insurance, and all unearned premiums), choses in action, rights to
receive tax refunds and other payments, rights to receive dividends,
distributions, cash, Instruments and other property in respect of or in exchange
for pledged Stock and Investment Property, rights of indemnification, all books
and records, correspondence, credit files, invoices and other papers, including
without limitation all tapes, cards, computer runs and other papers and
documents in the possession or under the control of such Credit Party or any
computer bureau or service company from time to time acting for such Credit
Party.

     

    “Goods” means all
“goods” as defined in the Code, now owned or hereafter acquired by any
Credit Party, wherever located, including embedded software to the extent
included in “goods” as defined in the Code, manufactured homes, standing timber
that is cut and removed for sale and unborn young of animals.

     

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

     

    “Guaranteed
Indebtedness” means as to any Person, any obligation of such Person
guaranteeing, providing comfort or otherwise supporting any Indebtedness, lease,
dividend, or other obligation (“primary obligation”) of any other Person (the
“primary obligor”) in any manner, including any obligation or arrangement of
such Person to (a) purchase or repurchase any such primary obligation, (b)
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency or any balance sheet
condition of the primary obligor, (c) purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, (d) protect the beneficiary of such arrangement from loss (other
than product warranties given in the ordinary course of business) or (e)
indemnify the owner of such primary obligation against loss in respect
thereof.  The amount of any Guaranteed Indebtedness at any time shall
be deemed to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect
thereof.

    
      
         

      

      
        Annex A - 16

        
          

        

      

      
         

      

    

     

    “Guaranties” means,
collectively, each Subsidiary Guaranty, the Canadian Guaranty and any other
guaranty executed by any Guarantor in favor of Agent and Lenders in respect of
the Obligations.

     

    “Guarantors” means
each Subsidiary of each Borrower, and each other Person, if any, that executes a
guaranty or other similar agreement in favor of Agent, for itself and the
ratable benefit of Lenders, in connection with the transactions contemplated by
the Agreement and the other Loan Documents.

     

    “Hazardous Material”
means any substance, material or waste that is regulated by, or forms the basis
of liability now or hereafter under, any Environmental Laws, including any
material or substance that is (a) defined as a “solid waste,” “hazardous waste,”
“hazardous material,” “hazardous substance,” “extremely hazardous waste,”
“restricted hazardous waste,” “pollutant,” “contaminant,” “hazardous
constituent,” “special waste,” “toxic substance” or other similar term or phrase
under any Environmental Laws, or (b) petroleum or any fraction or by product
thereof, asbestos, polychlorinated biphenyls (PCB’s), or any radioactive
substance.

     

    “Indebtedness” means,
with respect to any Person, without duplication, (a) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property payment
for which is deferred 6 months or more, but excluding obligations to trade
creditors incurred in the ordinary course of business that are unsecured and not
overdue by more than 6 months unless being contested in good faith, (b) all
reimbursement and other obligations with respect to letters of credit, bankers’
acceptances and surety bonds, whether or not matured, (c) all obligations
evidenced by notes, bonds, debentures or similar instruments, (d) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (e)
all Capital Lease Obligations and the present value (discounted at the Index
Rate as in effect on the Closing Date) of future rental payments under all
synthetic leases, (f) all obligations of such Person under commodity purchase or
option agreements or other commodity price hedging arrangements, in each case
whether contingent or matured, (g) all obligations of such Person under any
foreign exchange contract, currency swap agreement, interest rate swap, cap or
collar agreement or other similar agreement or arrangement designed to alter the
risks of that Person arising from fluctuations in currency values or interest
rates, in each case whether contingent or matured, (h) all Indebtedness referred
to above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or in
property or other assets (including accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness, and (i) the Obligations.

     

    “Indemnified
Liabilities” has the meaning ascribed to it in Section 1.13.

     

    “Indemnified Person”
has the meaning ascribed to in Section 1.13.

    
      
         

      

      
        Annex A - 17

        
          

        

      

      
         

      

    

    “Index Rate” means,
for any day, a floating rate equal to the highest rate of the following three
rates set forth in clauses (i), (ii) and (iii): (i) the rate publicly quoted
from time to time by The Wall Street Journal as the “prime rate” (or, if The
Wall Street Journal ceases quoting a prime rate, the rate publicly quoted from
time to time as the “prime rate” by another national publication selected by
Agent in its sole discretion), (ii) the Federal Funds Rate plus 50 basis points
per annum and (iii) the sum of (A) the LIBOR Rate for a three month LIBOR Period
determined on the second full LIBOR Business Day next preceding the first day of
such LIBOR Period plus (B) the excess of the Applicable Revolver LIBOR Margin
over the Applicable Revolver Index Margin.  Each change in any
interest rate provided for in the Agreement based upon the Index Rate shall take
effect at the time of such change in the Index Rate.

     

    “Index Rate Loan”
means a Loan or portion thereof bearing interest by reference to the Index
Rate.

     

    “Instruments” means
all “instruments,” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party, wherever located, and, in any event, including all
certificates of deposit, and all promissory notes and other evidences of
indebtedness, other than instruments that constitute, or are a part of a group
of writings that constitute, Chattel Paper.

     

    “Intellectual
Property” means any and all Licenses, Patents, Copyrights, Trademarks,
and the goodwill associated with such Trademarks.

     

    “Intellectual Property
Security Agreement” means, collectively, the Trademark Security
Agreements, the Patent Security Agreements and the Copyright Security
Agreements.

     

    “Intercompany Notes”
has the meaning ascribed to it in Section 6.3.

     

    “Interest Expense”
means, with respect to any Person for any fiscal period, interest expense
(whether cash or non-cash) of such Person determined in accordance with GAAP for
the relevant period ended on such date, including, interest expense with respect
to any Funded Debt of such Person and interest expense for the relevant period
that has been capitalized on the balance sheet of such Person.

     

    “Interest Payment
Date” means (a) as to any Index Rate Loan, the first Business Day of each
month to occur while such Loan is outstanding, and (b) as to any LIBOR Loan, the
last day of the applicable LIBOR Period; provided, that in the
case of any LIBOR Period greater than three months in duration, interest shall
be payable at three-month intervals and on the last day of such LIBOR Period;
provided, further that, in
addition to the foregoing, each of (x) the date upon which all of the
Commitments have been terminated and the Loans have been paid in full and (y)
the Commitment Termination Date shall be deemed to be an “Interest Payment Date”
with respect to any interest that has accrued under the Agreement.

     

    “Inventory” means all
“inventory,” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party, wherever located, and in any event including
inventory, merchandise, goods and other personal property that are held by or on
behalf of any Credit Party for sale or lease or are furnished or are to be
furnished under a contract of service, or that constitute raw materials, work in
process, finished goods, returned goods, or materials or supplies of any kind,
nature or description used or consumed or to be used or consumed in such Credit
Party’s business or in the processing, production, packaging, promotion,
delivery or shipping of the same, including other supplies and embedded
software.

    
      
         

      

      
        Annex A - 18

        
          

        

      

      
         

      

    

     

    “Investment Property”
means all “investment property” as such term is defined in the Code now owned or
hereafter acquired by any Credit Party, wherever located, including (i) all
securities, whether certificated or uncertificated, including stocks, bonds,
interests in limited liability companies, partnership interests, treasuries,
certificates of deposit, and mutual fund shares; (ii) all securities
entitlements of any Credit Party, including the rights of any Credit Party to
any securities account and the financial assets held by a securities
intermediary in such securities account and any free credit balance or other
money owing by any securities intermediary with respect to that account; (iii)
all securities accounts of any Credit Party; (iv) all commodity contracts of any
Credit Party; and (v) all commodity accounts held by any Credit
Party.

     

    “IRC” means the
Internal Revenue Code of 1986 and all regulations promulgated
thereunder.

     

    “IRS” means the
Internal Revenue Service.

     

    “L/C Issuer” has the
meaning ascribed to it in Annex B.

     

    “L/C Sublimit” has the
meaning ascribed to it in Annex B.

     

    “Lenders” means GE
Capital, the other Lenders named on the signature pages of the Agreement, and,
if any such Lender shall decide to assign all or any portion of the Obligations,
such term shall include any assignee of such Lender.

     

    “Letter of Credit Fee”
has the meaning ascribed to it in Annex B.

     

    “Letter of Credit
Obligations” means all outstanding obligations incurred by Agent and
Lenders at the request of Borrower Representative, whether direct or indirect,
contingent or otherwise, due or not due, in connection with the issuance of
Letters of Credit by Agent or another L/C Issuer or the purchase of a
participation as set forth in Annex B with respect to any Letter of
Credit.  The amount of such Letter of Credit Obligations shall equal
the maximum amount that may be payable at such time or at any time thereafter by
Agent or Lenders thereupon or pursuant thereto

     

    “Letter of Credit
Rights” means letter of credit rights as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, including rights to
payment or performance under a letter of credit, whether or not such Credit
Party, as beneficiary, has demanded or is entitled to demand payment or
performance.

     

    “Letters of Credit”
means documentary or standby letters of credit issued for the account of any
Borrower by any L/C Issuer.  The term does not include any Swap
Related L/C.

     

    “LIBOR Business Day”
means a Business Day on which banks in the City of London are generally open for
interbank or foreign exchange transactions.

     

    “LIBOR Loan” means a
Loan or any portion thereof bearing interest by reference to the LIBOR
Rate.

    
      
         

      

      
        Annex A - 19

        
          

        

      

      
         

      

    

     

    “LIBOR Period” means,
with respect to any LIBOR Loan, each period commencing on a LIBOR Business Day
selected by Borrower Representative pursuant to the Agreement and ending one,
two, three, six or twelve months thereafter, as selected by Borrower
Representative’s irrevocable notice to Agent as set forth in Section 1.5(e);
provided, that the foregoing provision relating to LIBOR Periods is subject to
the following:

     

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

     

    (b)           any
LIBOR Period that would otherwise extend beyond the Commitment Termination Date
shall end on the immediately preceding LIBOR Business Day;

     

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

     

    (d)           Borrower
Representative shall select LIBOR Periods so as not to require a payment or
prepayment of any LIBOR Loan during a LIBOR Period for such Loan;
and

     

    (e)           Borrower
Representative shall select LIBOR Periods so that there shall be no more than
ten (10) separate LIBOR Loans in existence at any one time.

     

    “LIBOR Rate” means for
each LIBOR Period, a rate of interest determined by Agent equal to the offered
rate for deposits in United States Dollars for the applicable LIBOR Period that
appears on Reuters Screen LIBOR01 Page as of 11:00 a.m. (London, England time),
on the second full LIBOR Business Day next preceding the first day of such LIBOR
Period (or if no such offered rate exists, such rate will be the rate of
interest determined from such other reporting service or other information as
shall be mutually acceptable to Agent and Borrowers); provided that at no time
shall the LIBOR Rate be less than the LIBOR Rate for a three month LIBOR Period
determined on the second full LIBOR Business Day next preceding the first day of
such LIBOR Period.

     

    “License” means any
Copyright License, Patent License, Trademark License or other license of rights
or interests now held or hereafter acquired by any Credit Party.

     

    “Lien” means any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, lien, charge, claim, security interest, easement or encumbrance, or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any lease or title retention agreement,
any financing lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
perfecting a security interest under the Code or comparable law of any
jurisdiction).

     

    “Litigation” has the
meaning ascribed to it in Section 3.13.

    
      
         

      

      
        Annex A - 20

        
          

        

      

      
         

      

    

     

    “Loan Account” has the
meaning ascribed to it in Section 1.12.

     

    “Loan Documents” means
the Agreement, the Notes, the Collateral Documents, the Master Standby
Agreement, the Master Documentary Agreement, the Rate Protection Agreement, the
2010 GE Capital Fee Letter and all other agreements, instruments, documents and
certificates identified in the Closing Checklist executed and delivered to, or
in favor of, Agent or any Lenders and including all other pledges, powers of
attorney, consents, assignments, contracts, notices, and all other written
matter whether heretofore, now or hereafter executed by or on behalf of any
Credit Party, or any employee of any Credit Party, and delivered to Agent or any
Lender in connection with the Agreement or the transactions contemplated
thereby.  Any reference in the Agreement or any other Loan Document to
a Loan Document shall include all appendices, exhibits or schedules thereto, and
all amendments, restatements, supplements or other modifications thereto, and
shall refer to the Agreement or such Loan Document as the same may be in effect
at any and all times such reference becomes operative.

     

    “Loans” means the
Revolving Loan.

     

    “Lock Boxes” has the
meaning ascribed to it in Annex C.

     

    “Margin Stock” has the
meaning ascribed to in Section 3.10.

     

    “Master Documentary
Agreement” means the Master Agreement for Documentary Letters of Credit
dated as of February 7, 2003 among Borrowers, as Applicant(s), and GE
Capital.

     

    “Master Standby
Agreement” means the Master Agreement for Standby Letters of Credit dated
as of February 7, 2003 among Borrowers, as Applicant(s), and GE Capital, as
issuer.

     

    “Material Adverse
Effect” means a material adverse effect on (a) the business, assets,
operations or financial or other condition of any Credit Party or the Credit
Parties considered as a whole, (b) any Borrower’s ability to pay any of the
Loans or any of the other Obligations in accordance with the terms of the
Agreement, (c) the Collateral or Agent’s Liens, on behalf of itself and Lenders,
on the Collateral or the priority of such Liens, or (d) Agent’s or any Lender’s
rights and remedies under the Agreement and the other Loan
Documents.  Without limiting the generality of the foregoing, any
event or occurrence adverse to one or more Credit Parties which results or could
reasonably be expected to result in costs, damages, liabilities, expenditures or
net loss of revenues, individually or in the aggregate, to any Credit Party in
any 20-day period in excess of $40,000,000 shall constitute a Material Adverse
Effect.

     

    “Maximum Amount”
means, as of any date of determination, an amount equal to the Commitment of all
Lenders as of that date.

     

    “Mortgaged Properties”
has the meaning assigned to it in Annex D.

     

    “Mortgages” means each
of the mortgages, deeds of trust, leasehold mortgages, leasehold deeds of trust,
collateral assignments of leases or other real estate security documents
delivered by any Credit Party to Agent on behalf of itself and Lenders with
respect to the Mortgaged Properties, as amended, modified or supplemented from
time to time, all in form and substance reasonably satisfactory to
Agent.

    
      
         

      

      
        Annex A - 21

        
          

        

      

      
         

      

    

     

    “Multiemployer Plan”
means a “multiemployer plan” as defined in Sections 3(37) or 4001(a)(3) of
ERISA, and to which any Credit Party or ERISA Affiliate is making, is obligated
to make or has made or been obligated to make, contributions on behalf of
participants who are or were employed by any of them.

     

    “Net Orderly Liquidation
Value” means the orderly liquidation value of the asset being valued
based upon an appraisal, in form and substance satisfactory to Agent, by an
appraiser satisfactory to Agent.

     

    “Net Worth” means,
with respect to any Person as of any date of determination, the book value of
the assets of such Person, minus the sum of (a) reserves applicable thereto, and
(b) all of such Person’s liabilities on a consolidated basis (including accrued
and deferred income taxes), all as determined in accordance with
GAAP.

     

    “Non-Funding Lender”
has the meaning ascribed to it in Section 9.9(a)(ii).

     

    “Notes” means the
Revolving Notes.

     

    “Notice of
Conversion/Continuation” has the meaning ascribed to it in Section
1.5(d).

     

    “Notice of Revolving Credit
Advance” has the meaning ascribed to it in Section 1.1(a).

     

    “Obligations” means
all loans, advances, debts, liabilities and obligations for the performance of
covenants, tasks or duties or for payment of monetary amounts (whether or not
such performance is then required or contingent, or such amounts are liquidated
or determinable) owing by any Credit Party to Agent or any Lender, and all
covenants and duties regarding such amounts, of any kind or nature, present or
future, whether or not evidenced by any note, agreement or other instrument,
arising under the Agreement or any of the other Loan Documents or pursuant to
any cash management services provided by any Lender to any Credit
Party.  This term includes all principal, interest (including all
interest that accrues after the commencement of any case or proceeding by or
against any Credit Party in bankruptcy, whether or not allowed in such case or
proceeding), Fees, Charges, Swap Related Reimbursement Obligations, any
obligations under any Rate Protection Agreement, expenses, attorneys’ fees and
any other sum chargeable to any Credit Party under the Agreement or any of the
other Loan Documents.

     

    “Original Closing
Date” means March 20, 2007.

     

    “Original Credit
Agreement” means the Second Amended and Restated Credit Agreement dated
as of March 20, 2007 by and among Borrowers, the other Credit Parties party
thereto, GE Capital as Agent and Lender and the other Original Lenders party
thereto, as same was amended, supplemented or otherwise modified prior to the
Closing Date.

     

    “Original Lenders”
means the Lenders who were Lenders under the Original Credit
Agreement.

    
      
         

      

      
        Annex A - 22

        
          

        

      

      
         

      

    

     

    “Overadvance” has the
meaning ascribed to it in Section 1.1(a)(iii).

     

    “Patent License” means
rights under any written agreement now owned or hereafter acquired by any Credit
Party granting any right with respect to any invention on which a Patent is in
existence.

     

    “Patent Security
Agreements” means the Patent Security Agreements made in favor of Agent,
on behalf of itself and Lenders, by each applicable Credit Party, as amended,
modified or supplemented from time to time.

     

    “Patents” means all of
the following in which any Credit Party now holds or hereafter acquires any
interest: (a) all letters patent of the United States or of any other country,
all registrations and recordings thereof, and all applications for letters
patent of the United States or of any other country, including registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any State, or any other
country, and (b) all reissues, continuations, continuations in part or
extensions thereof.

     

    “PBGC” means the
Pension Benefit Guaranty Corporation.

     

    “Pension Plan” means a
Plan described in Section 3(2) of ERISA.

     

    “Permitted
Acquisition” has the meaning ascribed to it in Section 6.1.

     

    “Permitted
Encumbrances” means the following encumbrances: (a) Liens for taxes or
assessments or other governmental Charges not yet due and payable or which are
being contested in accordance with Section 5.2(b); (b) pledges or deposits of
money securing statutory obligations under workmen’s compensation, unemployment
insurance, social security or public liability laws or similar legislation
(excluding Liens under ERISA); (c) pledges or deposits of money securing bids,
tenders, contracts (other than contracts for the payment of money) or leases to
which any Credit Party is a party as lessee made in the ordinary course of
business; (d) inchoate and unperfected workers’, mechanics’ or similar liens
arising in the ordinary course of business, so long as such Liens attach only to
Equipment, Fixtures and/or Real Estate; (e) carriers’, warehousemen’s,
suppliers’ or other similar possessory liens arising in the ordinary course of
business and securing liabilities in an outstanding aggregate amount not in
excess of $500,000 at any time, so long as such Liens attach only to Inventory;
(f) deposits securing, or in lieu of, surety, appeal or customs bonds in
proceedings to which any Credit Party is a party; (g) any attachment or judgment
lien not constituting an Event of Default under Section 8.1(j); (h) zoning
restrictions, easements, licenses, or other restrictions on the use of any Real
Estate or other minor irregularities in title (including leasehold title)
thereto, so long as the same do not materially impair the use, value, or
marketability of such Real Estate; (i) presently existing or hereafter created
Liens in favor of Agent, on behalf of Lenders; (j) Liens expressly permitted
under clauses (b) and (c) of Section 6.7 of the Agreement; (k) liens on SMP’s
publicly-held stock which is held in trust for SMP’s ESOP and (l) the Capital
Leases of up to $13,000,000 in the aggregate.

    
      
         

      

      
        Annex A - 23

        
          

        

      

      
         

      

    

    “Permitted Overnight
Investments” means investments in a money market fund which invests in
(a) marketable direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof; (b) investments
in commercial paper maturing within six months from the date of acquisition
thereof and having, at such date of acquisition, a rating of at least “P2” or
the equivalent thereof from S&P or of at least “A2” or the equivalent
thereof from Moody’s; (c) investments in certificates of deposit, banker’s
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits of not
less than $250,000,000; and (d) repurchase agreements with a term of not more
than 90 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c)
above.

     

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

     

    “Plan” means, at any
time, an “employee benefit plan”, as defined in Section 3(3) of ERISA, that any
Credit Party or ERISA Affiliate maintains, contributes to or has an obligation
to contribute to or has maintained, contributed to or had an obligation to
contribute to at any time within the past 7 years on behalf of participants who
are or were employed by any Credit Party or ERISA Affiliate.

     

    “Pledge Agreements”
means, collectively, the SMP Pledge Agreement and any pledge agreements entered
into after the Closing Date by any Credit Party (as required by the Agreement or
any other Loan Document), as amended, modified or supplemented from time to
time.

     

    “Pledged Cash” means
cash, which may at any time be pledged by SI in favor of Agent, pursuant to
documentation satisfactory to Agent, which cash is or shall be on deposit at
Banco Popular, or any other bank reasonably acceptable to Agent, in the form of
a time deposit.

     

    “Pledged Securities”
means marketable securities, which may at any time be pledged by SI in favor of
Agent, pursuant to documentation satisfactory to Agent.

     

    “Proceeds” means
“proceeds,” as such term is defined in the Code, including (a) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to any Credit
Party from time to time with respect to any of the Collateral, (b) any and all
payments (in any form whatsoever) made or due and payable to any Credit Party
from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
Governmental Authority (or any Person acting under color of governmental
authority), (c) any claim of any Credit Party against third parties (i) for
past, present or future infringement of any Patent or Patent License, or (ii)
for past, present or future infringement or dilution of any Copyright, Copyright
License, Trademark or Trademark License, or for injury to the goodwill
associated with any Trademark or Trademark License, (d) any recoveries by any
Credit Party against third parties with respect to any litigation or dispute
concerning any of the Collateral including claims arising out of the loss or
nonconformity of, interference with the use of, defects in, or infringement of
rights in, or damage to, Collateral, (e) all amounts collected on, or
distributed on account of, other Collateral, including dividends, interest,
distributions and Instruments with respect to Investment Property and pledged
Stock, and (f) any and all other amounts, rights to payment or other property
acquired upon the sale, lease, license, exchange or other disposition of
Collateral and all rights arising out of Collateral or
otherwise.

    
      
         

      

      
        Annex A - 24

        
          

        

      

      
         

      

    

     

    “Projections” means
Borrowers’ forecasted consolidated and consolidating: (a) balance sheets; (b)
profit and loss statements; (c) cash flow statements; and (d) capitalization
statements, all prepared on a Subsidiary by Subsidiary or division-by-division
basis, if applicable, and otherwise consistent with the historical Financial
Statements of the Borrowers, together with appropriate supporting details and a
statement of underlying assumptions.

     

    “Pro Rata Share” means
with respect to all matters relating to any Lender, (a) with respect to the
Revolving Loan, the percentage obtained by dividing (i) the Commitment of that
Lender by (ii) the aggregate Commitments of all Lenders, and (b) with respect to
all Revolving Loans on and after the Commitment Termination Date, the percentage
obtained by dividing (i) the aggregate outstanding principal balance of the
Revolving Loans held by that Lender, by (ii) the outstanding principal balance
of the Revolving Loans held by all Lenders.

     

    “Qualified Plan” means
a Pension Plan that is intended to be tax qualified under Section 401(a) of the
IRC.

     

    “Qualified Assignee”
means (a) any Lender, any Affiliate of any Lender or any entity (whether a
corporation, partnership, trust or otherwise) that is engaged in making,
purchasing, holding or otherwise investing in bank loans and similar extensions
of credit in the ordinary course of its business and is administered or managed
by a Lender or an Affiliate of such Lender and, with respect to any Lender that
is an investment fund that invests in commercial loans, any other investment
fund that invests in commercial loans and that is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment advisor,
and (b) any commercial bank, savings and loan association or savings bank or any
other entity which is an “accredited investor” (as defined in Regulation D under
the Securities Act of 1933) which extends credit or buys loans as one of its
businesses, including insurance companies, mutual funds, lease financing
companies and commercial finance companies, in each case, which has a rating of
BBB or higher from S&P and a rating of Baa2 or higher from Moody’s at the
date that it becomes a Lender and which, through its applicable lending office,
is capable of lending to Borrowers without the imposition of any withholding or
similar taxes; provided that no Person proposed to become a Lender after the
Closing Date and determined by Agent to be acting in the capacity of a vulture
fund or distressed debt purchaser shall be a Qualified Assignee, and no Person
or Affiliate of such Person that holds Subordinated Debt or Stock issued by any
Credit Party shall be a Qualified Assignee.

    
      
         

      

      
        Annex A - 25

        
          

        

      

      
         

      

    

    “Rate Protection
Agreement” means, collectively, (a) any interest rate swap, cap, collar,
credit, commodity, floor, forward foreign exchange transaction, currency swap,
cross currency rate swap, currency option, or similar agreement entered into by
any Borrower or any of its Subsidiaries under which the counterparty of such
agreement is (or at the time such agreement was entered into, was) a Lender or
an Affiliate of a Lender, (b) any Bank Product Agreement entered into by any
Borrower or any of its Subsidiaries under which the counterparty of such
agreement is (or at the time such agreement was entered into, was) a Lender or
an Affiliate of a Lender, or (c) any lease for personal property entered into by
any Borrower or any of its Subsidiaries with Agent or any Lender or an Affiliate
of any Lender.  For the avoidance of doubt, “Rate Protection
Agreement” shall not include any interest rate swap, cap, collar, credit,
commodity, floor, forward foreign exchange transaction, currency swap, cross
currency rate swap, currency option, or similar agreement arranged by GE Capital
and supported by a  Swap Related L/C.

     

    “Rate Protection
Obligations” means Obligations which arise under any Rate Protection
Agreement.

     

    “Raw Materials NOLV
Rate” means the rate set forth as the Net Orderly Liquidation Value rate
of Eligible Inventory consisting of raw materials in the most recent appraisal
prepared by an independent appraisal firm acceptable to Agent.

     

    “Real Estate” has the
meaning ascribed to it in Section 3.6.

     

    “Real Estate Reserve”
means, as of the date of determination by Agent an amount equal to 50% of the
appraised value of any Eligible Real Estate that does not have a corresponding
Environmental Site Assessment Report, consistent with American Society for
Testing and Materials (ASTM) Standard E 1527-00 and applicable state or
provincial requirements, prepared by environmental engineers reasonably
satisfactory to Agent, in form and substance reasonably satisfactory to Agent in
its sole discretion; provided such Real Estate Reserves shall be implemented or
withdrawn in Agent’s sole discretion.

     

    “Receivables Advance
Rate” means at any time, a rate equal to the product of (a) 85% and (b)
the rate set forth as the Finished Goods NOLV Rate.

     

    “Release” means any
release, threatened release, spill, emission, leaking, pumping, pouring,
emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Material in the indoor or outdoor
environment, including the movement of Hazardous Material through or in the air,
soil, surface water, ground water or property.

     

    “Reloading Accordion”
means, at Borrower Representative’s option, an increase in the Aggregate
Amortization Availability pursuant to Section 1.1(b).

     

    “Reloading Appraisal”
means an appraisal obtained in connection with the exercise of the Reloading
Accordion, which appraisal (i) shall have been prepared by an independent
appraisal firm acceptable to Agent in its sole discretion, (ii) shall set forth
(x) the appraised Fair Market Value of the Eligible Real Estate of Borrowers and
SMP Canada as of such appraisal date and (y) the Net Orderly Liquidation Value
of the Eligible Equipment of Borrowers and SMP Canada as of such appraisal
date.

    
      
         

      

      
        Annex A - 26

        
          

        

      

      
         

      

    

     

    “Requisite Lenders”
means Lenders having (a) 66-2/3% of the Commitments of all Lenders, or (b) if
the Commitments have been terminated, 66-2/3% of the aggregate outstanding
amount of the Revolving Loan.

     

    “Reserves” means (a)
reserves established by Agent from time to time against Eligible Inventory
pursuant to Section 5.9, (b)
reserves established pursuant to Section 5.4(c), (c)
INTENTIONALLY OMITTED, (d) the 2009 Indenture Maturity Reserve, (e) the Real
Estate Reserve established by Agent from time to time and (f) such other
reserves (including, without limitation, reserves for Rate Protection
Agreements) against Eligible Accounts, Eligible Inventory or Borrowing
Availability of any Borrower that Agent may, in its reasonable credit judgment,
establish from time to time.  Without limiting the generality of the
foregoing, Reserves established to ensure the payment of accrued Interest
Expenses or Indebtedness shall be deemed to be a reasonable exercise of Agent’s
credit judgment.

     

    “Restricted Payment”
means, with respect to any Credit Party (a) the declaration or payment of any
dividend or the incurrence of any liability to make any other payment or
distribution of cash or other property or assets in respect of Stock; (b) any
payment on account of the purchase, redemption, defeasance, sinking fund or
other retirement of such Credit Party’s Stock or any other payment or
distribution made in respect thereof, either directly or indirectly; (c) any
payment or prepayment of principal of, premium, if any, or interest, fees or
other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with
respect to, any Subordinated Debt; (d) any payment made to redeem, purchase,
repurchase or retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire Stock of such Credit Party now or hereafter
outstanding; (e) any payment of a claim for the rescission of the purchase or
sale of, or for material damages arising from the purchase or sale of, any
shares of such Credit Party’s Stock or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for
damages or rescission; (f) any loan, contribution, or other transfer of funds or
other property to any Stockholder of such Credit Party who has filed Form 13-G
other (i) than payment of compensation in the ordinary course of business to
Stockholders who have filled a Form 13-G and who are employees of or consultants
to such Person and (ii) payment of trade payables incurred in the ordinary
course of such Credit Party’s business; and (g) any payment of management fees
(or other fees of a similar nature) by such Credit Party to any Stockholder of
such Credit Party or its Affiliates.

     

    “Retiree Welfare Plan”
means, at any time, a welfare plan (within the meaning of Section 3(1) of ERISA)
that provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant’s termination of employment,
other than continuation coverage provided pursuant to Section 4980B of the IRC
or other similar state law and at the sole expense of the participant or the
beneficiary of the participant.

     

    “Revolving Credit
Advance” has the meaning ascribed to it in Section
1.1(a)(i).

     

    “Revolving Loan”
means, at any time, the sum of (i) the aggregate amount of Revolving Credit
Advances outstanding to Borrowers plus (ii) the aggregate Letter of Credit
Obligations incurred on behalf of Borrowers.  Unless the context
otherwise requires, references to the outstanding principal balance of the
Revolving Loan shall include the outstanding balance of Letter of Credit
Obligations.

    
      
         

      

      
        Annex A - 27

        
          

        

      

      
         

      

    

     

    “Revolving Note” has
the meaning ascribed to it in Section 1.1(a)(ii).

     

    “Security Agreement”
means the Security Agreement dated April 27, 2001 herewith entered into by and
among Agent, on behalf of itself and Lenders, and each Credit Party that is a
signatory thereto, as amended, supplemented or modified from time to
time.

     

    “SI” means Stanric,
Inc., a Delaware corporation.

     

    “SI Amortizing
Availability” means (A) $0 less $0 per Fiscal Quarter commencing with the
Fiscal Quarter ending March 31, 2011, plus (B) the Additional SI Amortizing
Availability, minus (C) an amount equal to (i) 85% of the Net Orderly
Liquidation Value of any Eligible Equipment, as of the Closing Date or the date
it is purchased by SI, which is the basis of SI Amortizing Availability, and
which is subject to a loss, sale, destruction or other disposition, less (ii)
the product of one-twenty fourth of the amount determined under the preceding
clause (i) and the number of full Fiscal Quarters that have occurred since the
Closing Date or the purchase of such Eligible Equipment to the date of such
loss, sale, destruction or other disposition, as the case may
be.  Notwithstanding the foregoing, in the event that the Reloading
Accordion option is exercised by the Borrower Representative, (a) clause (A) of
the definition of “SI Amortizing Availability” shall mean the sum of (i) 50% of
the Fair Market Value of the Eligible Real Estate of SI as set forth on the
Reloading Appraisal, plus (ii) 85% of the Net Orderly Liquidation Value of the
Eligible Equipment of SI as set forth on the Reloading Appraisal, minus (iii)
one-twentieth of the sum of subclauses (i) and (ii) of this sentence commencing
with the Fiscal Quarter ending immediately following the effective date of the
Reloading Accordion and (b) subclause (C)(ii) of the definition of “SI
Amortizing Availability” shall mean the product of one-twentieth of the amount
determined under subclause (C)(i) and the number of full Fiscal Quarters that
have occurred since the effective date of the Reloading Accordion or the
purchase of such Eligible Real Estate or Eligible Equipment to the date of such
loss, sale, destruction or other disposition, as the case may be.

     

    “SI Borrowing Base”
means, as of any date of termination by Agent, from time to time, an amount
equal to the sum, at such time of:

     

    (a)           up
to an amount equal to the product of the Receivables Advance Rate multiplied by
the book value of SI’s Eligible Accounts; and

     

    (b)           up
to the lesser of (i) 60% of the book value of SI’s Eligible Inventory valued at
the lower of cost (determined on a first in, first out basis) or market; or (ii)
85% times the sum of (x) the product of the Finished Goods NOLV Rate times SI’s
Eligible Inventory consisting of finished goods, (y) the product of the Raw
Materials NOLV Rate times SI’s Eligible Inventory consisting of raw materials,
and (z) the product of the Cores NOLV Rate times SI’s Eligible Inventory
consisting of cores, with the value of the components of Eligible Inventory
valued at the lower of cost (determined on a first-in, first-out basis) or
market; and

    
      
         

      

      
        Annex A - 28

        
          

        

      

      
         

      

    

    (c)           with
respect to documentary Letters of Credit opened solely for the purposes of
purchasing Eligible Inventory and having an expiry date of 90 days or less from
the date of issuance, a percentage equal to the inventory advance rate in effect
at the time of issuance of any such Letter of Credit multiplied by the cost of
the goods constituting Eligible Inventory being purchased under such documentary
Letters of Credit (so long as such Eligible Inventory is (i) fully insured, (ii)
is subject to a first priority security interest in and lien upon such goods in
favor of Agent and (iii) is evidenced or deliverable pursuant to documents,
notices, instruments, statements and bills of lading that have been delivered to
Agent or an agent acting on its behalf); and

     

    (d)           SI
Amortizing Availability; less

     

    (e)           Letter
of Credit Obligations incurred on behalf of SI,

     

    in each
case less any Reserves established by Agent at such time in its reasonable
credit judgment.

     

    “SMP” means Standard
Motor Products, Inc., a New York corporation.

     

    “SMP Amortizing
Availability” means (A) $8,027,000 less $892,000 per Fiscal Quarter
commencing with the Fiscal Quarter ending March 31, 2011, plus (B) the
Additional SMP Amortizing Availability, minus (C) an amount equal to (i) 50% of
the Fair Market Value of any Eligible Real Estate as of the Closing Date or the
date it is purchased by SMP or 85% of the Net Orderly Liquidation Value of any
Eligible Equipment as of the Closing Date or the date it is purchased by SMP,
which is the basis of SMP Amortizing Availability, and which is subject to a
loss, sale, destruction or other disposition, less (ii) the product of
one-twenty fourth of the amount determined under the preceding clause (i) and
the number of full Fiscal Quarters that have occurred since the Closing Date or
the purchase of such Eligible Real Estate or Eligible Equipment to the date of
such loss, sale, destruction or other disposition, as the case may be.
Notwithstanding the foregoing, in the event that the Reloading Accordion option
is exercised by the Borrower Representative, (a) clause (A) of the definition of
“SMP Amortizing Availability” shall mean the sum of (i) 50% of the Fair Market
Value of the Eligible Real Estate of SMP as set forth on the Reloading
Appraisal, plus (ii) 85% of the Net Orderly Liquidation Value of the Eligible
Equipment of SMP as set forth on the Reloading Appraisal, minus (iii)
one-twentieth of the sum of subclauses (i) and (ii) of this sentence commencing
with the Fiscal Quarter ending immediately following the effective date of the
Reloading Accordion and (b) subclause (C)(ii) of the definition of “SMP
Amortizing Availability” shall mean the product of one-twentieth of the amount
determined under subclause (C)(i) and the number of full Fiscal Quarters that
have occurred since the effective date of the Reloading Accordion or the
purchase of such Eligible Real Estate or Eligible Equipment to the date of such
loss, sale, destruction or other disposition, as the case may be.

     

    “SMP Borrowing Base”
means, as of any date of determination by Agent, from time to time, an amount
equal to the sum at such time of:

     

    (a)           up
to an amount equal to the product of the Receivables Advance Rate multiplied by
the book value of SMP ‘s Eligible Accounts; and

    
      
         

      

      
        Annex A - 29

        
          

        

      

      
         

      

    

    (b)           up
to the lesser of (i) 60% of the book value of SMP’s Eligible Inventory valued at
the lower of cost (determined on a first in, first out basis) or market; or (ii)
85% times the sum of (x) the product of the Finished Goods NOLV Rate times SMP’s
Eligible Inventory consisting of finished goods, (y) the product of the Raw
Materials NOLV Rate times SMP’s Eligible Inventory consisting of raw materials,
and (z) the product of the Cores NOLV Rate times SMP’s Eligible Inventory
consisting of cores, with the value of the components of Eligible Inventory
valued at the lower of cost (determined on a first-in, first-out basis) or
market; and

     

    (c)           with
respect to documentary Letters of Credit opened solely for the purposes of
purchasing Eligible Inventory and having an expiry date of 90 days or less from
the date of issuance, a percentage equal to the inventory advance rate in effect
at the time of issuance of any such Letter of Credit multiplied by the cost of
the goods constituting Eligible Inventory being purchased under such documentary
Letters of Credit (so long as such Eligible Inventory is (i) fully insured, (ii)
is subject to a first priority security interest in and lien upon such goods in
favor of Agent and (iii) is evidenced or deliverable pursuant to documents,
notices, instruments, statements and bills of lading that have been delivered to
Agent or an agent acting on its behalf); and

     

    (d)           SMP
Amortizing Availability; less

     

    (e)           Letter
of Credit Obligations incurred on behalf of SMP,

     

    in each
case less any Reserves established by Agent at such time in its reasonable
credit judgment.

     

    “SMP Canada” means SMP
Motor Products Ltd., a corporation amalgamated under the laws of
Canada.

     

    “SMP Canada Amortizing
Availability” means (A) $291,000 less $32,000 per Fiscal Quarter
commencing with the Fiscal Quarter ending March 31, 2011, plus (B) the
Additional SMP Canada Amortizing Availability, minus (C) an amount equal to (i)
50% of the Fair Market Value of any SMP Canada Eligible Real Estate as of the
Closing Date or the date it is purchased by SMP Canada or 85% of the Net Orderly
Liquidation Value of any SMP Canada Eligible Equipment as of the Closing Date or
the date it is purchased by SMP Canada, which is the basis of SMP Canada
Amortizing Availability, and which is subject to a loss, sale, destruction or
other disposition, less (ii) the product of one-twenty fourth of the amount
determined under the preceding clause (i) and the number of full Fiscal Quarters
that have occurred since the Closing Date or the purchase of such SMP Canada
Eligible Real Estate or SMP Canada Eligible Equipment to the date of such loss,
sale, destruction or other disposition, as the case may be.  In no
event, at any time, shall the amount included in SMP Canada Amortizing
Availability based upon the Fair Market Value of Eligible Real Estate exceed 50%
of such SMP Canada Amortizing Availability. Notwithstanding the foregoing, in
the event that the Reloading Accordion option is exercised by the Borrower
Representative, (a) clause (A) of the definition of “SMP Canada Amortizing
Availability” shall mean the sum of (i) 50% of the Fair Market Value of the SMP
Canada Eligible Real Estate as set forth on the Reloading Appraisal, plus (ii)
85% of the Net Orderly Liquidation Value of the SMP Canada Eligible Equipment as
set forth on the Reloading Appraisal, minus (iii) one-twentieth of the sum of
subclauses (i) and (ii) of this sentence commencing with the Fiscal Quarter
ending immediately following the effective date of the Reloading Accordion and
(b) subclause (C)(ii) of the definition of “SMP Canada Amortizing Availability”
shall mean the product of one-twentieth of the amount determined under the
subclause (C)(i) and the number of full Fiscal Quarters that have occurred since
the effective date of the Reloading Appraisal or the purchase of such SMP Canada
Eligible Real Estate or SMP Canada Eligible Equipment to the date of such loss,
sale, destruction or other disposition, as the case may be

    
      
         

      

      
        Annex A - 30

        
          

        

      

      
         

      

    

     

    “SMP Canada Borrowing
Base” means, as of any date of determination by Agent, from time to time,
an amount equal to the sum, at such time of:

     

    (a)           up
to an amount equal to the product of the Receivables Advance Rate multiplied by
the book value of SMP Canada’s Eligible Accounts; and

     

    (b)           up
to the lesser of (i) 60% of the book value of SMP Canada’s Eligible Inventory
valued at the lower of cost (determined on a first-in, first-out basis) or
market or (ii) 85% times the sum of (x) the product of the Finished Goods NOLV
Rate times SMP Canada’s Eligible Inventory consisting of finished goods, (y) the
product of the Raw Materials NOLV Rate times SMP Canada’s Eligible Inventory
consisting of raw materials, and (z) the product of the Cores NOLV Rate times
SMP Canada’s Eligible Inventory consisting of cores, with the value of the
components of Eligible Inventory valued at the lower of cost (determined on a
first-in, first-out basis) or market and Agent agrees that Hilco Real Estate,
LLC shall be deemed an acceptable appraiser with respect to SMP Canada’s
Inventory; and

     

    (c)           SMP
Canada Amortizing Availability; less

     

    in each
case less any Reserves (as defined in the Canadian Loan Agreement) established
by Agent at such time in its reasonable credit judgment (including without
limitation, a Real Estate Reserve, reserves established with respect to Liens
created by applicable law (in contrast with Liens voluntarily granted) which
rank or are capable of ranking prior or pari passu with Canadian Agent’s
security interests (or interests similar thereto under applicable law) against
all or part of the Collateral (as defined in the Canadian Loan Agreement),
including for amounts owing for employee source deductions, goods and services
taxes, sales taxes, harmonized sales taxes, municipal taxes, workers’
compensation, Quebec corporate taxes, pension fund obligations and overdue
rents).

     

    “SMP Canada Eligible
Equipment” means, as to SMP Canada, Equipment (as defined in the Canadian
Loan Agreement) which is subject to a first priority Lien in favor of Canadian
Agent, for its benefit and for the ratable benefit of Canadian Lenders, and
which is appraised by an appraiser satisfactory to Agent.

    
      
         

      

      
        Annex A - 31

        
          

        

      

      
         

      

    

    “SMP Canada Eligible Real
Estate” means as to SMP Canada, real estate with respect to which
Canadian Agent shall have received (a) mortgages covering all of such real
estate together with (i) title insurance policies, current as-built surveys,
zoning letters and certificates of occupancy, in each case reasonably
satisfactory in form and substance to Agent, (ii) evidence that counterparts of
the Mortgages have been recorded in all places to the extent necessary or
desirable, in the judgment of Canadian Agent, to create a valid and enforceable
first priority Lien (subject to Permitted Encumbrances, as defined in the
Canadian Loan Agreement) on such real estate in favor of Canadian Agent for the
benefit of itself and Lenders (or in favor of such other trustee as may be
required or desired under local law); and (iii) an opinion of counsel in each
jurisdiction in which any such real estate is located in form and substance and
from counsel reasonably satisfactory to Agent, (b) an Environmental Site
Assessment Report, prepared by environmental engineers reasonably acceptable to
Agent, and in form and substance reasonably acceptable to Agent, and Agent shall
have further received (x) such environmental review and audit reports, including
Phase II reports, with respect to such real estate as Agent may request, and
Agent shall be satisfied in its sole discretion, with the contents of all such
environmental reports, and (y) letters executed by the environmental firms
preparing such environmental reports, in form and substance reasonably
satisfactory to Agent, authorizing Agent and Lenders to rely on such reports,
and (c) appraisals of such real estate which shall be in form and substance, and
prepared by appraisers, reasonably acceptable to Agent.

     

    “SMP Canada’s Eligible
Accounts” shall mean all of the Accounts owned by SMP Canada that meet
the eligibility criteria set forth in Section 1.6 of the Canadian Loan
Agreement.

     

    “SMP Canada’s Eligible
Inventory” shall mean all of the Inventory owned by SMP Canada that meets
the eligibility criteria set forth in Section 1.7 of the Canadian Loan
Agreement.

     

    “SMP Europe” means
Standard Motor Products Europe Limited.

     

    “SMP HK” means
Standard Motor Products (Hong Kong) Limited, a Hong Kong
Corporation.

     

    “SMP LLC” means SMP
Real Estate LLC, a Delaware limited liability company.

     

    “SMP Pledge Agreement”
means the Pledge Agreement dated April 27, 2001 executed by SMP in favor of
Agent, on behalf of itself and Lenders, pledging all Stock of its Subsidiaries
(except with respect to foreign Subsidiaries other than a “check the box”
subsidiary, 51% of the capital stock shall be pledged), if any, and all
Intercompany Notes owing to or held by it, as amended, modified or supplemented
from time to time.

     

    “Software” means all
“software” as such term is defined in the Code, now owned or hereafter acquired
by any Credit Party, other than software embedded in any category of goods,
including all computer programs and all supporting information provided in
connection, with a transaction related to any program.

     

    “Solvent” means, with
respect to any Person on a particular date, that on such date (a) the fair value
of the property of such Person is greater than the total amount of liabilities,
including contingent liabilities, of such Person; (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured; (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability to
pay as such debts and liabilities mature; and (d) such Person is not engaged in
a business or transaction, and is not about to engage in a business or
transaction, for which such Person’s property would constitute an unreasonably
small capital.  The amount of contingent liabilities (such as
litigation, guaranties and pension plan liabilities) at any time shall be
computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can be reasonably be expected
to become an actual or matured liability.

    
      
         

      

      
        Annex A - 32

        
          

        

      

      
         

      

    

     

    “Stock” means all
shares, options, warrants, general or limited partnership interests, membership
interests or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity whether
voting or nonvoting, including common stock, preferred stock or any other
“equity security” (as such term is defined in Rule 3a11 1 of the General Rules
and Regulations promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934).

     

    “Stockholder” means,
with respect to any Person, each holder of Stock of such Person.

     

    “Subordinated Debt”
means the Indebtedness of SMP evidenced by the Subordinated Debt Documents and
any other Indebtedness of any Credit Party subordinated to the Obligations in a
manner and form satisfactory to Agent and Lenders in their sole discretion, as
to right and time of payment and as to any other rights and remedies
thereunder.

     

    “Subordinated Debt
Documents” means the 2009 Indenture.

     

    “Subsidiary” means,
with respect to any Person, (a) any corporation of which an aggregate of more
than 50% of the outstanding Stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether,
at the time, Stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time, directly or indirectly, owned legally or beneficially by such Person
or one or more Subsidiaries of such Person, or with respect to which any such
Person has the right to vote or designate the vote of 50% or more of such Stock
whether by proxy, agreement, operation of law or otherwise, and (b) any
partnership or limited liability company in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than 50% or
of which any such Person is a general partner or may exercise the powers of a
general partner.  Unless the context otherwise requires, each
reference to a Subsidiary shall be a reference to a Subsidiary of a
Borrower.

     

    “Subsidiary Guaranty”
means the Subsidiary Guaranty dated April 27, 2001 executed by each domestic
Subsidiary of each Borrower, each in favor of Agent, on behalf of itself and
Lenders, as amended, modified or supplemented from time to time.

     

    “Supermajority
Lenders” means Lenders having (a) 80% or more of the Commitments of all
Lenders, or (b) if the Commitments have been terminated, 80% or more of the
aggregate outstanding amount of the Revolving Loan and Letter of Credit
Obligations.

     

    “Supporting
Obligations” means all supporting obligations as such term is defined in
the Code, including letters of credit and guaranties issued in support of
Accounts, Chattel Paper, Documents, General Intangibles, Instruments or
Investment Property.

    
      
         

      

      
        Annex A - 33

        
          

        

      

      
         

      

    

    “Swap Related L/C”
means a letter of credit or other credit enhancement provided by GE Capital to
the extent supporting the payment obligations by any Borrower under an interest
rate protection or hedging agreement or transaction (including, but not limited
to, interest rate swaps, caps, collars, floors and similar transactions)
designed to protect or manage exposure to the fluctuations in the interest rates
applicable to any of the Loans, and which agreement or transaction any Borrower
entered into as a result of a specific referral pursuant to which GE Capital, GE
Corporate Financial Services, Inc.  or any other Affiliate of GE
Capital had arranged for such Borrower to enter into such agreement or
transaction.  The term includes a Swap Related L/C as it may be
increased from time to time fully to support such Borrower’s payment obligations
under any and all such interest rate protection or hedging agreements or
transactions.

     

    “Swap Related Reimbursement
Obligation” has the meaning ascribed to it in Section 1.2A.

     

    “Tangible Net Worth”
means, with respect to any Person at any date, the Net Worth of such Person at
such date, excluding, however, from the determination of the total assets at
such date, (a) all goodwill, capitalized organizational expenses, capitalized
research and development expenses, trademarks, trade names, copyrights, patents,
patent applications, licenses and rights in any thereof, and other intangible
items, (b) all unamortized debt discount and expense, (c) treasury Stock, and
(d) any write-up in the book value of any asset resulting from a revaluation
thereof.

     

    “Target” has the
meaning ascribed to it in Section 6.1.

     

    “Taxes” means taxes,
levies, imposts, deductions, Charges or withholdings, and all liabilities with
respect thereto, excluding taxes imposed on or measured by the net income of
Agent or a Lender by the jurisdictions under the laws of which Agent and Lenders
are organized or conduct business or any political subdivision
thereof.

     

    “Term Loan” shall have
the meaning set forth in Section 1.1(a) of the Canadian Loan
Agreement.

     

    “Termination Date”
means the date on which (a) the Loans have been indefeasibly repaid in full, (b)
all other Obligations under the Agreement and the other Loan Documents have been
completely discharged (c) all Letter of Credit Obligations have been cash
collateralized, canceled or backed by standby letters of credit in accordance
with Annex B, and (d) none of Borrowers shall have any further right to borrow
any monies under the Agreement.

     

    “Title IV Plan” means
a Pension Plan (other than a Multiemployer Plan), that is subject to Title IV of
ERISA or Section 412 of the IRC, and that any Credit Party or ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.

     

    “Trademark License”
means rights under any written agreement now owned or hereafter acquired by any
Credit Party granting any right to use any Trademark.

     

    “Trademark Security
Agreements” means the Trademark Security Agreements made in favor of
Agent, on behalf of Lenders, by each applicable Credit Party, as amended,
modified or supplemented from time to time.

    
      
         

      

      
        Annex A - 34

        
          

        

      

      
         

      

    

     

    “Trademarks” means all
of the following now owned or hereafter existing or adopted or acquired by any
Credit Party: (a) all trademarks, trade names, corporate names, business names,
trade styles, service marks, logos, other source or business identifiers, prints
and labels on which any of the foregoing have appeared or appear, designs and
general intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any state or territory thereof, or any other country or any
political subdivision thereof; (b) all reissues, extensions or renewals thereof;
and (c) all goodwill associated with or symbolized by any of the
foregoing.

     

    “Trading with the Enemy
Act” shall mean the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any
enabling legislation or executive order relating thereto.

     

    “Unfunded Pension
Liability” means, at any time, the aggregate amount, if any, of the sum
of (a) the amount by which the present value of all accrued benefits under each
Title IV Plan exceeds the fair market value of all assets of such Title IV Plan
allocable to such benefits in accordance with Title IV of ERISA, all determined
as of the most recent valuation date for each such Title IV Plan using the
actuarial assumptions for funding purposes in effect under such Title IV Plan,
and (b) for a period of 5 years following a transaction which might reasonably
be expected to be covered by Section 4069 of ERISA, the liabilities (whether or
not accrued) that could be avoided by any Credit Party or any ERISA Affiliate as
a result of such transaction.

     

    “Uniform Commercial Code
jurisdiction” means any jurisdiction that had adopted all or
substantially all of article 9 as contained in the 2000 Official Text of the
Uniform Commercial Code, as recommended by the National Conference of
Commissioners on Uniform State Laws and the American Law Institute, together
with any subsequent amendments or modification to the Official
Text.

     

    “Welfare Plan” means a
Plan described in Section 3(i) of ERISA.

     

    Rules of
construction with respect to accounting terms used in the Agreement or the other
Loan Documents shall be as set forth in Annex G.  All other undefined
terms contained in any of the Loan Documents shall, unless the context indicates
otherwise, have the meanings provided for by the Code as in effect in the State
of New York to the extent the same are used or defined
therein.  Unless otherwise specified, references in the Agreement or
any of the Appendices to a Section, subsection or clause refer to such Section,
subsection or clause as contained in the Agreement.  The words
“herein,” “hereof” and “hereunder” and other words of similar import refer to
the Agreement as a whole, including all Annexes, Exhibits and Schedules, as the
same may from time to time be amended, restated, modified or supplemented, and
not to any particular section, subsection or clause contained in the Agreement
or any such Annex, Exhibit or Schedule.

    
      
         

      

      
        Annex A - 35

        
          

        

      

      
         

      

    

    Wherever
from the context it appears appropriate, each term stated in either the singular
or plural shall include the singular and the plural, and pronouns stated in the
masculine, feminine or neuter gender shall include the masculine, feminine and
neuter genders.  The words “including”, “includes” and “include” shall
be deemed to be followed by the words “without limitation”; the word “or” is not
exclusive; references to Persons include their respective successors and assigns
(to the extent and only to the extent permitted by the Loan Documents) or, in
the case of governmental Persons, Persons succeeding to the relevant functions
of such Persons; and all references to statutes and related regulations shall
include any amendments of the same and any successor statutes and
regulations.  Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Credit Party, such words are
intended to signify that such Credit Party has actual knowledge or awareness of
a particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.

    
      
         

      

      
        Annex A - 36

        
          

        

      

      
         

      

    

    ANNEX B (Section 1.2)

     

    to

     

    CREDIT AGREEMENT

     

    LETTERS OF CREDIT

     

    (a)           Issuance.  Subject
to the terms and conditions of the Agreement, Agent and Lenders agree to incur,
from time to time prior to the Commitment Termination Date, upon the request of
Borrower Representative on behalf of the applicable Borrower and for such
Borrower’s account, Letter of Credit Obligations by causing Letters of Credit to
be issued by GE Capital or a Subsidiary thereof or a bank or other legally
authorized Person selected by Agent or by Borrower Representative and acceptable
to Agent in its sole discretion (each, an “L/C Issuer”) for such Borrower’s
account and guaranteed by Agent; provided, that if the L/C Issuer is a Lender,
then such Letters of Credit shall not be guaranteed by Agent but rather each
Lender shall, subject to the terms and conditions hereinafter set forth,
purchase (or be deemed to have purchased) risk participations in all such
Letters of Credit issued with the written consent of Agent, as more fully
described in paragraph (b)(ii) below.  The aggregate amount of all
such Letter of Credit Obligations shall not at any time exceed the lesser of (i)
Fifteen Million Dollars ($15,000,000) (the “L/C Sublimit”), (ii) the Maximum
Amount less the aggregate outstanding principal balance of the Revolving Credit
Advances, and (iii) the Aggregate Borrowing Base (adjusted as if no Letters of
Credit are outstanding) less the aggregate outstanding principal balance of the
Revolving Credit Advances. Furthermore, the aggregate amount of any Letter of
Credit Obligations incurred on behalf of any Borrower shall not at any time
exceed such Borrower’s separate Borrowing Base less the aggregate principal
balance of the Revolving Credit Advances to such Borrower. No such Letter of
Credit shall have an expiry date that is more than one year following the date
of issuance thereof, unless otherwise determined by the Agent, in its sole
discretion (including with respect to customary evergreen provisions), and
neither Agent nor Lenders shall be under any obligation to incur Letter of
Credit Obligations in respect of, or purchase risk participations in, any Letter
of Credit having an expiry date that is later than the Commitment Termination
Date.

     

    (b)           (i)           Advances Automatic;
Participations.  In the event that Agent or any Lender shall
make any payment on or pursuant to any Letter of Credit Obligation, such payment
shall then be deemed automatically to constitute a Revolving Credit Advance to
the applicable Borrower under Section 1.1(a) of the Agreement regardless of
whether a Default or Event of Default has occurred and is continuing and
notwithstanding any Borrower’s failure to satisfy the conditions precedent set
forth in Section 2, and each Lender shall be obligated to pay its Pro Rata Share
thereof in accordance with the Agreement.  The failure of any Lender
to make available to Agent for Agent’s own account its Pro Rata Share of any
such Revolving Credit Advance or payment by Agent under or in respect of a
Letter of Credit shall not relieve any other Lender of its obligation hereunder
to make available to Agent its Pro Rata Share thereof, but no Lender shall be
responsible for the failure of any other Lender to make available such other
Lender’s Pro Rata Share of any such payment.

    
      
         

      

      
        Annex B -
1

        
          

        

      

      
         

      

    

     

    (ii)           If
it shall be illegal or unlawful for any Borrower to incur Revolving Credit
Advances as contemplated by paragraph (b)(i) above because of an Event of
Default described in Sections 8.1(h) or (i) or otherwise or if it shall be
illegal or unlawful for any Lender to be deemed to have assumed a ratable share
of the reimbursement obligations owed to an L/C Issuer, or if the L/C Issuer is
a Lender, then (A) immediately and without further action whatsoever, each
Lender shall be deemed to have irrevocably and unconditionally purchased from
Agent (or such L/C Issuer, as the case may be) an undivided interest and
participation equal to such Lender’s Pro Rata Share (based on the Commitments)
of the Letter of Credit Obligations in respect of all Letters of Credit then
outstanding and (B) thereafter, immediately upon issuance of any Letter of
Credit, each Lender shall be deemed to have irrevocably and unconditionally
purchased from Agent (or such L/C Issuer, as the case may be) an undivided
interest and participation in such Lender’s Pro Rata Share (based on the
Commitments) of the Letter of Credit Obligations with respect to such Letter of
Credit on the date of such issuance.  Each Lender shall fund its
participation in all payments or disbursements made under the Letters of Credit
in the same manner as provided in the Agreement with respect to Revolving Credit
Advances.

     

    (c)          Cash
Collateral.

     

    (i)     
      If Borrowers are required to provide cash
collateral for any Letter of Credit Obligations pursuant to the Agreement,
including Section 8.2 of the Agreement, prior to the Commitment Termination
Date, each Borrower will pay to Agent for the ratable benefit of itself and
Lenders cash or cash equivalents acceptable to Agent (“Cash Equivalents”) in an
amount equal to 105% of the maximum amount then available to be drawn under each
applicable Letter of Credit outstanding for the benefit of such
Borrower.  Such funds or Cash Equivalents shall be held by Agent in a
cash collateral account (the “Cash Collateral Account”) maintained at a bank or
financial institution acceptable to Agent.  The Cash Collateral
Account shall be in the name of the applicable Borrower and shall be pledged to,
and subject to the control of, Agent, for the benefit of Agent and Lenders, in a
manner satisfactory to Agent.  Each Borrower hereby pledges and grants
to Agent, on behalf of itself and Lenders, a security interest in all such funds
and Cash Equivalents held in the Cash Collateral Account from time to time and
all proceeds thereof, as security for the payment of all amounts due in respect
of the Letter of Credit Obligations and other Obligations, whether or not then
due.  The Agreement, including this Annex B, shall constitute a
security agreement under applicable law.

     

    (ii)           If
any Letter of Credit Obligations, whether or not then due and payable, shall for
any reason be outstanding on the Commitment Termination Date, Borrowers shall
either (A) provide cash collateral therefor in the manner described above, or
(B) cause all such Letters of Credit and guaranties thereof, if any, to be
canceled and returned, or (C) deliver a stand-by letter (or letters) of credit
in guaranty of such Letter of Credit Obligations, which stand-by letter (or
letters) of credit shall be of like tenor and duration (plus thirty (30)
additional days) as, and in an amount equal to 105% of, the aggregate maximum
amount then available to be drawn under, the Letters of Credit to which such
outstanding Letter of Credit Obligations relate and shall be issued by a Person,
and shall be subject to such terms and conditions, as are be satisfactory to
Agent in its sole discretion.

    
      
         

      

      
        Annex B -
2

        
          

        

      

      
         

      

    

     

    (iii)          From
time to time after funds are deposited in the Cash Collateral Account by any
Borrower, whether before or after the Commitment Termination Date, Agent may
apply such funds or Cash Equivalents then held in the Cash Collateral Account to
the payment of any amounts, and in such order as Agent may elect, as shall be or
shall become due and payable by such Borrower to Agent and Lenders with respect
to such Letter of Credit Obligations of such Borrower and, upon the satisfaction
in full of all Letter of Credit Obligations of such Borrower, to any other
Obligations of any Borrower then due and payable.

     

    (iv)          No
Borrower nor any Person claiming on behalf of or through any Borrower shall have
any right to withdraw any of the funds or Cash Equivalents held in the Cash
Collateral Account, except that upon the termination of all Letter of Credit
Obligations and the payment of all amounts payable by Borrowers to Agent and
Lenders in respect thereof, any funds remaining in the Cash Collateral Account
shall be applied to other Obligations then due and owing and upon payment in
full of such Obligations, any remaining amount shall be paid to Borrowers or as
otherwise required by law.  Interest earned on deposits in the Cash
Collateral Account shall be for the account of Agent.

     

    (d)          Fees and
Expenses.  Borrowers agree to pay to Agent for the benefit of
Lenders, as compensation to such Lenders for Letter of Credit Obligations
incurred hereunder, (i) all costs and expenses incurred by Agent or any Lender
on account of such Letter of Credit Obligations, and (ii) for each month during
which any Letter of Credit Obligation shall remain outstanding, a fee (the
“Letter of Credit
Fee”) in an amount equal to the Applicable L/C Fee Margin multiplied by
the maximum amount available from time to time to be drawn under the applicable
Letter of Credit.  Such fee shall be paid to Agent for the benefit of
the Lenders in arrears, on the first day of each month and on the Commitment
Termination Date.  In addition, Borrowers shall pay to any L/C Issuer,
on demand, such fees (including all per annum fees), charges and expenses of
such L/C Issuer in respect of the issuance, negotiation, acceptance, amendment,
transfer and payment of such Letter of Credit or otherwise payable pursuant to
the application and related documentation under which such Letter of Credit is
issued.

     

    (e)          Request for Incurrence of
Letter of Credit Obligations.  Borrower Representative shall
give Agent at least two (2) Business Days’ prior written notice requesting the
incurrence of any Letter of Credit Obligation.  The notice shall be
accompanied by the form of the Letter of Credit (which shall be acceptable to
the L/C Issuer) and a completed Application for Standby Letter of Credit or
Application and Agreement for Documentary Letter of Credit or Application for
Documentary Letter of Credit, as applicable, in the form of Exhibit B-1, or B-2
or B-3 attached hereto.  Notwithstanding anything contained herein to
the contrary, Letter of Credit applications by Borrower Representative and
approvals by Agent and the L/C Issuer may be made and transmitted pursuant to
electronic codes and security measures mutually agreed upon and established by
and among Borrower Representative, Agent and the L/C Issuer.

     

    (f)           Obligation
Absolute.  The obligation of Borrowers to reimburse Agent and
Lenders for payments made with respect to any Letter of Credit Obligation shall
be absolute, unconditional and irrevocable, without necessity of presentment,
demand, protest or other formalities, and the obligations of each Lender to make
payments to Agent with respect to Letters of Credit shall be unconditional and
irrevocable.  Such obligations of Borrowers and Lenders shall be paid
strictly in accordance with the terms hereof under all circumstances including
the following:

    
      
         

      

      
        Annex B -
3

        
          

        

      

      
         

      

    

     

    (i)
           any lack of
validity or enforceability of any Letter of Credit or the Agreement or the other
Loan Documents or any other agreement;

     

    (ii)           the
existence of any claim, setoff, defense or other right that any Borrower or any
of their respective Affiliates or any Lender may at any time have against a
beneficiary or any transferee of any Letter of Credit (or any Persons or
entities for whom any such transferee may be acting), Agent, any Lender, or any
other Person, whether in connection with the Agreement, the Letter of Credit,
the transactions contemplated herein or therein or any unrelated transaction
(including any underlying transaction between any Borrower or any of their
respective Affiliates and the beneficiary for which the Letter of Credit was
procured);

     

    (iii)          any
draft, demand, certificate or any other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;

     

    (iv)          payment
by Agent (except as otherwise expressly provided in paragraph (g)(ii)(C) below)
or any L/C Issuer under any Letter of Credit or guaranty thereof against
presentation of a demand, draft or certificate or other document that does not
comply with the terms of such Letter of Credit or such guaranty;

     

    (v)           any
other circumstance or event whatsoever, that is similar to any of the foregoing;
or

     

    (vi)          the
fact that a Default or an Event of Default has occurred and is
continuing.

     

    (g)          Indemnification; Nature of
Lenders’ Duties.

     

    (i)   
        In addition to amounts payable
as elsewhere provided in the Agreement, Borrowers hereby agree to pay and to
protect, indemnify, and save harmless Agent and each Lender from and against any
and all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys’ fees and allocated costs of internal
counsel) that Agent or any Lender may incur or be subject to as a consequence,
direct or indirect, of (A) the issuance of any Letter of Credit or guaranty
thereof, or (B) the failure of Agent or any Lender seeking indemnification or of
any L/C Issuer to honor a demand for payment under any Letter of Credit or
guaranty thereof as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority, in each case other than to the extent solely as a result
of the gross negligence or willful misconduct of Agent or such Lender (as
finally determined by a court of competent jurisdiction).

    
      
         

      

      
        Annex B -
4

        
          

        

      

      
         

      

    

    (ii)           As
between Agent and any Lender and Borrowers, Borrowers assume all risks of the
acts and omissions of, or misuse of any Letter of Credit by beneficiaries, of
any Letter of Credit.  In furtherance and not in limitation of the
foregoing, to the fullest extent permitted by law, neither Agent nor any Lender
shall be responsible for: (A) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document issued by any party in connection
with the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, that may prove to be invalid or ineffective for any reason; (C) failure of
the beneficiary of any Letter of Credit to comply fully with conditions required
in order to demand payment under such Letter of Credit; provided, that in the
case of any payment by Agent under any Letter of Credit or guaranty thereof,
Agent shall be liable to the extent such payment was made solely as a result of
its gross negligence or willful misconduct (as finally determined by a court of
competent jurisdiction) in determining that the demand for payment under such
Letter of Credit or guaranty thereof complies on its face with any applicable
requirements for a demand for payment under such Letter of Credit or guaranty
thereof; (D) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they may be in cipher; (E) errors in interpretation of technical terms;
(F) any loss or delay in the transmission or otherwise of any document required
in order to make a payment under any Letter of Credit or guaranty thereof or of
the proceeds thereof; (G) the credit of the proceeds of any drawing under any
Letter of Credit or guaranty thereof; and (H) any consequences arising from
causes beyond the control of Agent or any Lender.  None of the above
shall affect, impair, or prevent the vesting of any of Agent’s or any Lender’s
rights or powers hereunder or under the Agreement.

     

    (iii)          Nothing
contained herein shall be deemed to limit or to expand any waivers, covenants or
indemnities made by Borrowers in favor of any L/C Issuer in any letter of credit
application, reimbursement agreement or similar document, instrument or
agreement between or among Borrowers and such L/C Issuer, including an
Application and Agreement For Documentary Letter of Credit, a Master Documentary
Agreement and a Master Standby Agreement entered into with
Agent.

    
      
         

      

      
        Annex B -
5

        
          

        

      

      
         

      

    

    ANNEX C (Section 1.8)

     

    to

     

    CREDIT AGREEMENT

     

    CASH MANAGEMENT SYSTEM

     

    Each
Borrower shall, and shall cause its Subsidiaries (other than SMP Canada) to,
establish and maintain the Cash Management Systems described below:

     

    (a)           On
or before the Closing Date and until the Termination Date, each Borrower shall
(i) establish lock boxes (“Lock Boxes”) or at Agent’s discretion, blocked
accounts (“Blocked Accounts”) at one or more of the banks set forth in
Disclosure Schedule (3.19), and shall request in writing and otherwise take such
reasonable steps to ensure that all Account Debtors forward payment directly to
such Lock Boxes, and (ii) deposit and cause its Subsidiaries to deposit or cause
to be deposited promptly, and in any event no later than the first Business Day
after the date of receipt thereof, all cash, checks, drafts or other similar
items of payment relating to or constituting payments made in respect of any and
all Collateral (whether or not otherwise delivered to a Lock Box) into one or
more Blocked Accounts in such Borrower’s name or any such Subsidiary’s name and
at a bank identified in Disclosure Schedule (3.19) (each, a “Relationship
Bank”).  On or before the Closing Date, Borrower Representative shall
have established a concentration account in its name (a “Concentration Account”)
at the bank that shall be designated as the Concentration Account bank in
Disclosure Schedule (3.19) (a “Concentration Account Bank”), which bank shall be
reasonably satisfactory to Agent.

     

    (b)           Each
Borrower may maintain, in its name, one or more accounts (each a “Disbursement
Account” and collectively, the “Disbursement Accounts”) at a bank reasonably
acceptable to Agent into which Agent shall, from time to time, deposit proceeds
of Revolving Credit Advances made to such Borrower pursuant to Section 1.1 for
use by such Borrower solely in accordance with the provisions of Section
1.4.

     

    (c)           On
or before the Closing Date (or such later date as Agent shall consent to in
writing), Concentration Account Bank, each bank where a Disbursement Account is
maintained and all other Relationship Banks, shall have entered into tri-party
blocked account agreements with Agent, for the benefit of itself and Lenders,
and the applicable Borrower and Subsidiaries thereof, as applicable, in form and
substance reasonably acceptable to Agent, which shall become operative on or
prior to the Closing Date.  Each such blocked account agreement shall
provide, among other things, that (i) all items of payment deposited in such
account and proceeds thereof deposited in the Concentration Account are held by
such bank as agent or bailee-in-possession for Agent, on behalf of itself and
Lenders, (ii) the bank executing such agreement has no rights of setoff or
recoupment or any other claim against such account, as the case may be, other
than for payment of its service fees and other charges directly related to the
administration of such account and for returned checks or other items of
payment, and (iii) (A) with respect to banks at which a Blocked Account is
maintained, such bank agrees to forward immediately all amounts in each Blocked
Account to the Concentration Account Bank and to commence the process of daily
sweeps from such Blocked Account into the Concentration Account and (B) with
respect to Concentration Account Bank, such bank agrees to immediately forward
all amounts received in the Concentration Account to the Collection Account
through daily sweeps from such Concentration Account into the Collection
Account.  No Borrower shall or shall cause or permit any Subsidiary
thereof to, accumulate or maintain cash in Disbursement Accounts or payroll
accounts as of any date of determination in excess of checks outstanding against
such accounts as of that date and amounts necessary to meet minimum balance
requirements.

    
      
         

      

      
        Annex C -
1

        
          

        

      

      
         

      

    

     

    (d)           So
long as no Default or Event of Default has occurred and is continuing, Borrowers
may amend Disclosure Schedule (3.19) to add or replace a Relationship Bank, Lock
Box or Blocked Account or to replace the Concentration Account or any
Disbursement Account; provided, that (i) Agent shall have consented in writing
in advance to the opening of such account or Lock Box with the relevant bank and
(ii) prior to the time of the opening of such account or Lock Box, the
applicable Borrower or its Subsidiaries, as applicable, and such bank shall have
executed and delivered to Agent a tri-party blocked account agreement, in form
and substance reasonably satisfactory to Agent; provided, further, that
Borrowers shall obtain the necessary tri-party blocked account agreement(s)
required pursuant to clause (ii) above with respect to each such
account.  Borrowers shall close any of their accounts (and establish
replacement accounts in accordance with the foregoing sentence) promptly and in
any event within thirty (30) days following notice from Agent that the
creditworthiness of any bank holding an account is no longer acceptable in
Agent’s reasonable judgment, or as promptly as practicable and in any event
within sixty (60) days following notice from Agent that the operating
performance, funds transfer or availability procedures or performance with
respect to accounts or Lock Boxes of the bank holding such accounts or Agent’s
liability under any tri-party blocked account agreement with such bank is no
longer acceptable in Agent’s reasonable judgment.

     

    (e)           The
Lock Boxes, Blocked Accounts, Disbursement Accounts and the Concentration
Account shall be cash collateral accounts, with all cash, checks and other
similar items of payment in such accounts securing payment of the Loans and all
other Obligations, and in which each Borrower and each Subsidiary thereof shall
have granted a Lien to Agent, on behalf of itself and Lenders, pursuant to the
Security Agreement.

     

    (f)     
      All amounts deposited in the Collection
Account shall be deemed received by Agent in accordance with Section 1.10 and
shall be applied (and allocated) by Agent in accordance with Section
1.11.  In no event shall any amount be so applied unless and until
such amount shall have been credited in immediately available funds to the
Collection Account.

     

    (g)           Each
Borrower shall and shall cause its Affiliates, officers, employees, agents,
directors or other Persons acting for or in concert with such Borrower (each a
“Related Person”) to (i) hold in trust for Agent, for the benefit of itself and
Lenders, all checks, cash and other items of payment received by such Borrower
or any such Related Person, and (ii) within one (1) Business Day after receipt
by such Borrower or any such Related Person of any checks, cash or other items
of payment, deposit the same into a Blocked Account of such
Borrower.  Each Borrower on behalf of itself and each Related Person
thereof acknowledges and agrees that all cash, checks or other items of payment
constituting proceeds of Collateral are part of the Collateral.  All
proceeds of the sale or other disposition of any Collateral, shall be deposited
directly into the applicable Blocked Accounts.

    
      
         

      

      
        Annex C -
2

        
          

        

      

      
         

      

    

    ANNEX D (Section 2.1(a))

     

    to

     

    CREDIT AGREEMENT

     

    CLOSING CHECKLIST

     

    In
addition to, and not in limitation of, the conditions described in Section 2.1
of the Agreement, pursuant to Section 2.1(a), the following items must be
received by Agent in form and substance satisfactory to Agent on or prior to the
Closing Date (each capitalized term used but not otherwise defined herein shall
have the meaning ascribed thereto in Annex A to the Agreement):

     

    A.          Appendices.  All
Appendices to the Agreement, in form and substance satisfactory to
Agent.

     

    B.           Notes.  Duly
executed originals of the Notes for each applicable Lender, dated the Closing
Date.

     

    C.           Blocked Account
Agreements.  Fully executed triparty agreements among Agent,
Borrowers and each Relationship Bank and Concentration Account Bank, in form and
substance satisfactory to Agent.

     

    D.           Insurance.  Satisfactory
evidence that the insurance policies required by Section 5.4 are in full force
and effect, together with appropriate evidence showing loss payable and/or
additional insured clauses or endorsements, as requested by Agent, in favor of
Agent, on behalf of Lenders.

     

    E.           Security Interests and Code
Filings.

     

    (a)           Evidence
satisfactory to Agent that Agent (for the benefit of itself and Lenders) has a
valid and perfected first priority security interest in the Collateral other
than Equipment subject to Capital Leases and set forth on Disclosure Schedule E,
including (i) such documents duly executed by each Credit Party (including
financing statements under the Code and other applicable documents under the
laws of any jurisdiction with respect to the perfection of Liens) as Agent may
request in order to perfect its security interests in the Collateral and (ii)
copies of Code search reports listing all effective financing statements that
name any Credit Party as debtor, together with copies of such financing
statements, none of which shall cover the Collateral.

     

    (b)           Evidence
satisfactory to Agent, including copies, of all UCC-1 and other financing
statements filed in favor of any Credit Party with respect to each location, if
any, at which Inventory may be consigned.

     

    (c)           Control
Letters from (i) all issuers of uncertificated securities and financial assets
held by each Borrower, (ii) all securities intermediaries with respect to all
securities accounts and securities entitlements of each Borrower, and (iii) all
futures commission agents and clearing houses with respect to all commodities
contracts and commodities accounts held by any Borrower.

    
      
         

      

      
        Annex D -
1

        
          

        

      

      
         

      

    

     

    F.           Borrowing Base
Certificate.  Duly executed originals of Borrowing Base
Certificate from each Borrower, dated the Closing Date, reflecting information
concerning Eligible Accounts, Eligible Inventory, Eligible Equipment and
Eligible Real Estate of such Borrower as of a date not more than 7 days prior to
the Closing Date.

     

    G.           Notice of Revolving Credit
Advance.  Duly executed originals of a Notice of Revolving
Credit Advance, dated the Closing Date, with respect to the Revolving Credit
Advance to be requested by Borrower Representative on the Closing
Date.

     

    H.           Letter of
Direction.  Duly executed originals of a letter of direction
from Borrower Representative addressed to Agent, on behalf of itself and
Lenders, with respect to the disbursement on the Closing Date of the proceeds of
the Revolving Credit Advance to be made on the Closing Date.

     

    I.     
      Charter and Good
Standing.  For each Credit Party, such Person’s (a) charter and
all amendments thereto, (b) good standing certificates (including verification
of tax status) in its state of incorporation and (c) good standing certificates
(including verification of tax status) and certificates of qualification to
conduct business in each jurisdiction where its ownership or lease of property
or the conduct of its business requires such qualification, each dated a recent
date prior to the Closing Date and certified by the applicable Secretary of
State or other authorized Governmental Authority.

     

    J.    
       Bylaws and
Resolutions.  For each Credit Party, (a) such Person’s bylaws,
together with all amendments thereto and (b) resolutions of such Person’s Board
of Directors and stockholders, approving and authorizing the execution, delivery
and performance of the Loan Documents to which such Person is a party and the
transactions to be consummated in connection therewith, each certified as of the
Closing Date by such Person’s corporate secretary or an assistant secretary as
being in full force and effect without any modification or
amendment.

     

    K.           Incumbency
Certificates.  For each Credit Party, signature and incumbency
certificates of the officers of each such Person executing any of the Loan
Documents, certified as of the Closing Date by such Person’s corporate secretary
or an assistant secretary as being true, accurate, correct and
complete.

     

    L.           Opinion of
Counsel.  Duly executed original opinion of [Carmine Broccole],
counsel for the Credit Parties dated the Closing Date, in form and substance
satisfactory to Agent and its counsel.

     

    M.          Waivers.  Agent,
on behalf of Lenders, shall have received landlord waivers and consents and
mortgagee agreements in form and substance reasonably satisfactory to Agent, in
each case as required pursuant to Section 5.9.

     

    N.           Subordination and
Intercreditor Agreements.  Agent and Lenders shall have
received any and all subordination and/or intercreditor agreements, all in form
and substance reasonably satisfactory to Agent, in its sole discretion, as Agent
shall have deemed necessary or appropriate with respect to any Indebtedness of
any Credit Party.

    
      
         

      

      
        Annex D -
2

        
          

        

      

      
         

      

    

     

    O.           Audited Financials;
Financial Condition.  Agent shall have received the Financial
Statements, Projections and other materials set forth in Section 3.4, certified
by Borrower Representative’s chief financial officer or treasurer, in each case
in form and substance reasonably satisfactory to Agent, and Agent shall be
satisfied, in its sole discretion, with all of the foregoing.  Agent
shall have further received a certificate of the chief executive officer and the
chief financial officer or treasurer of each Borrower, based on such
Projections, to the effect that (a) such Borrower will be Solvent upon the
consummation of the transactions contemplated herein; (b) the Projections are
based upon estimates and assumptions stated therein, all of which such Borrower
believes to be reasonable and fair in light of current conditions and current
facts known to such Borrower and, as of the Closing Date, reflect such
Borrower’s good faith and reasonable estimates of its future financial
performance and of the other information projected therein for the period set
forth therein; and (c) containing such other statements with respect to the
solvency of such Borrower and matters related thereto as Agent shall
request.

     

    P.           Other
Documents.  Such other certificates, documents and agreements
respecting any Credit Party as Agent may reasonably request.

    
      
         

      

      
        Annex D -
3

        
          

        

      

      
         

      

    

    ANNEX E (Section 4.1(a))

     

    to

     

    CREDIT AGREEMENT

     

    FINANCIAL STATEMENTS AND
PROJECTIONS—REPORTING

     

    Borrowers
shall deliver or cause to be delivered to Agent or to Agent and Lenders, as
indicated, the following:

     

    (a)           Monthly
Financials.  To Agent and Lenders, within thirty (30) days
after the end of each Fiscal Month (other than January), financial information
regarding Borrowers and their Subsidiaries, certified by the chief financial
officer or treasurer of Borrower Representative, consisting of consolidated and
consolidating (i) unaudited balance sheets as of the close of such Fiscal Month
and the related statements of income and cash flows for that portion of the
Fiscal Year ending as of the close of such Fiscal Month; (ii) unaudited
statements of income and cash flows for such Fiscal Month, setting forth in
comparative form the figures for the corresponding period in the prior year and
the figures contained in the Projections for such Fiscal Year, all prepared
(other than the Projections) in accordance with GAAP (subject to normal year-end
adjustments); (iii) a summary of the outstanding balance of all Intercompany
Notes as of the last day of that Fiscal Month; and (iv) a summary of the total
Net Sales as of the last day of that Fiscal Month for such Fiscal Month and for
the Fiscal Year to date.  Such financial information shall be
accompanied by the certification of the chief financial officer or treasurer of
Borrower Representative that (i) such financial information presents fairly in
accordance with GAAP (subject to normal year-end adjustments) the financial
position and results of operations of Borrowers and their Subsidiaries, on a
consolidated and consolidating basis, in each case as at the end of such Fiscal
Month and for that portion of the Fiscal Year then ended and (ii) any other
information presented is true, correct and complete in all material respects and
that there was no Default or Event of Default in existence as of such time or,
if a Default or Event of Default has occurred and is continuing, describing the
nature thereof and all efforts undertaken to cure such Default or Event of
Default.

     

    (b)           Quarterly
Financials.  To Agent and Lenders, within forty-five (45) days
after the end of each Fiscal Quarter, consolidated and consolidating financial
information regarding Borrowers and their Subsidiaries, certified by the chief
financial officer or treasurer of Borrower Representative, including (i)
unaudited balance sheets as of the close of such Fiscal Quarter and the related
statements of income and cash flow for that portion of the Fiscal Year ending as
of the close of such Fiscal Quarter and (ii) unaudited statements of income and
cash flows for such Fiscal Quarter, in each case setting forth in comparative
form the figures for the corresponding period in the prior year and the figures
contained in the Projections for such Fiscal Year, all prepared (other than the
Projections) in accordance with GAAP (subject to normal year-end
adjustments).  Such financial information shall be accompanied by (A)
a statement in reasonable detail (each, a “Compliance Certificate” showing the
calculations used in determining compliance with each of the Financial Covenants
that is tested on a quarterly basis and (B) the certification of the chief
financial officer or treasurer of Borrower Representative that (i) such
financial information presents fairly in accordance with GAAP (subject to normal
year-end adjustments) the financial position, results of operations and
statements of cash flows of Borrowers and their Subsidiaries, on both a
consolidated and consolidating basis, as at the end of such Fiscal Quarter and
for that portion of the Fiscal Year then ended and (ii) any other information
presented is true, correct and complete in all material respects and that there
was no Default or Event of Default in existence as of such time or, if a Default
or Event of Default has occurred and is continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of
Default.  In addition, Borrowers shall deliver to Agent and Lenders,
within forty-five (45) days after the end of each Fiscal Quarter, a management
discussion and to the extent not otherwise set forth on SMP’s Form 10Q, analysis
that includes a comparison to budget for that Fiscal Quarter and a comparison of
performance for that Fiscal Quarter to the corresponding period in the prior
year.

    
      
         

      

      
        Annex E -
1

        
          

        

      

      
         

      

    

     

    (c)           Operating
Plan.  To Agent and Lenders, as soon as available, but not
later than thirty (30) days after the end of each Fiscal Year, an annual
operating plan for Borrowers, on a consolidated and consolidating basis,
approved by the Board of Directors of Borrowers, for the following Fiscal Year,
which (i) includes a statement of all of the material assumptions on which such
plan is based, (ii) includes monthly balance sheets, income statements and
statements of cash flows for the following year and (iii) integrates sales,
gross profits, operating expenses, operating profit, cash flow projections and
Borrowing Availability projections, all prepared on the same basis and in
similar detail as that on which operating results are reported (and in the case
of cash flow projections, representing management’s good faith estimates of
future financial performance based on historical performance), and including
plans for personnel, Capital Expenditures and facilities.

     

    (d)           Annual Audited
Financials.  To Agent and Lenders, within ninety (90) days
after the end of each Fiscal Year, audited Financial Statements for Borrowers
and their Subsidiaries on a consolidated and (unaudited) consolidating basis,
consisting of balance sheets and statements of income and retained earnings and
cash flows, setting forth in comparative form in each case the figures for the
previous Fiscal Year, which Financial Statements shall be prepared in accordance
with GAAP and certified without qualification, by an independent certified
public accounting firm of national standing or otherwise acceptable to
Agent.  Such Financial Statements shall be accompanied by (i) a
statement prepared in reasonable detail showing the calculations used in
determining compliance with each of the Financial Covenants, (ii) a report from
such accounting firm to the effect that, in connection with their audit
examination, nothing has come to their attention to cause them to believe that a
Default or Event of Default has occurred (or specifying those Defaults and
Events of Default that they became aware of), it being understood that such
audit examination extended only to accounting matters and that no special
investigation was made with respect to the existence of Defaults or Events of
Default, (iii) the annual letters to such accountants in connection with their
audit examination detailing contingent liabilities and material litigation
matters, and (iv) the certification of the chief executive officer or chief
financial officer or treasurer of Borrowers that all such Financial Statements
present fairly in accordance with GAAP the financial position, results of
operations and statements of cash flows of Borrowers and their Subsidiaries on a
consolidated and consolidating basis, as at the end of such Fiscal Year and for
the period then ended, and that there was no Default or Event of Default in
existence as of such time or, if a Default or Event of Default has occurred and
is continuing, describing the nature thereof and all efforts undertaken to cure
such Default or Event of Default.

    
      
         

      

      
        Annex E -
2

        
          

        

      

      
         

      

    

     

    (e)           Management
Letters.  To Agent and Lenders, within five (5) Business Days
after receipt thereof by any Credit Party, copies of all management letters,
exception reports or similar letters or reports received by such Credit Party
from its independent certified public accountants.

     

    (f)           Default
Notices.  To Agent and Lenders, as soon as practicable, and in
any event within five (5) Business Days after an executive officer of any
Borrower has actual knowledge of the existence of any Default, Event of Default
or other event that has had a Material Adverse Effect, telephonic or telecopied
notice specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given telephonically,
shall be promptly confirmed in writing on the next Business Day.

     

    (g)           SEC Filings and Press
Releases.  To Agent and Lenders, promptly upon their becoming
available, copies of: (i) all Financial Statements, reports, notices and proxy
statements made publicly available by any Credit Party to its security holders;
(ii) all regular and periodic reports and all registration statements and
prospectuses, if any, filed by any Credit Party with any securities exchange or
with the Securities and Exchange Commission or any governmental or private
regulatory authority; including but not limited to all Form 8-Ks, quarterly
10-Q’s and annual 10-K statements and (iii) all press releases and other
statements made available by any Credit Party to the public concerning material
changes or developments in the business of any such Person.

     

    (h)           Subordinated Debt and Equity
Notices.  To Agent, as soon as practicable, copies of all
material written notices given or received by any Credit Party with respect to
any Subordinated Debt or Stock of such Person, and, within two (2) Business Days
after any Credit Party obtains knowledge of any matured or unmatured event of
default with respect to any Subordinated Debt, notice of such event of
default.

     

    (i)      
     Supplemental
Schedules.  To Agent, supplemental disclosures, if any,
required by Section 5.6.

     

    (j)       
    Litigation.  To
Agent in writing, promptly upon learning thereof, notice of any Litigation
commenced or threatened against any Credit Party that (i) seeks damages in
excess of $250,000, (ii) seeks injunctive relief, (iii) is asserted or
instituted against any Plan, its fiduciaries or its assets or against any Credit
Party or ERISA Affiliate in connection with any Plan which would reasonably be
expected to result in a liability to any Credit Party in excess of $250,000,
(iv) alleges criminal misconduct by any Credit Party, (v) alleges the violation
of any law regarding, or seeks remedies in connection with, any Environmental
Liabilities or (vi) involves any product recall.  To the Agent, at the
end of each month, a report of all Asbestos Claims commenced or disposed of
during such month.

     

    (k)           Insurance
Notices.  To Agent, disclosure of losses or casualties required
by Section 5.4.

     

    (l)        
   Lease Default
Notices.  To Agent, within 2 Business Days after receipt
thereof, copies of (i) any and all default notices received under or with
respect to any leased location or public warehouse where Collateral is located,
and (ii) such other notices or documents as Agent may reasonably request with
respect to such leased locations or public warehouses.

    
      
         

      

      
        Annex E -
3

        
          

        

      

      
         

      

    

     

    (m)          Lease
Amendments.  To Agent, within two (2) Business Days after
receipt thereof, copies of all material amendments to real estate leases specify
leases of particular concern.

     

    (n)           Rate Protection
Agreements.  To Agent, notice of intention to enter into any
Rate Protection Agreement, together with form of proposed Rate Protection
Agreement.

     

    (o)           Other
Documents.  To Agent and Lenders, such other financial and
other information respecting any Credit Party’s business or financial condition
as Agent or any Lender shall from time to time reasonably
request.

    
      
         

      

      
        Annex E -
4

        
          

        

      

      
         

      

    

    ANNEX F (Section 4.1(b))

     

    to

     

    CREDIT AGREEMENT

     

    COLLATERAL REPORTS

     

    Borrowers
shall deliver or cause to be delivered the following:

     

    (a)         To
Agent, upon its request, and in any event no less frequently than ten (10)
Business Days after the end of each Fiscal Month (together with a copy of all or
any part of the following reports requested by any Lender in writing after the
Closing Date), each of the following reports, each of which shall be prepared by
the applicable Borrower as of the last day of the immediately preceding Fiscal
Month or the date two (2) days prior to the date of any such
request:

     

    (i) 
          a Borrowing Base
Certificate with respect to each Borrower, in each case accompanied by such
supporting detail and documentation as shall be requested by Agent in its
reasonable discretion;

     

    (ii)           with
respect to each Borrower, a summary of Inventory by location and type with a
supporting perpetual Inventory report, in each case accompanied by such
supporting detail and documentation as shall be requested by Agent in its
reasonable discretion; and

     

    (iii)          with
respect to each Borrower, a monthly trial balance showing Accounts outstanding
aged from invoice date as follows: 1 to 30 days, 31 to 60 days, 61 to 90 days,
91 days to 180 days and 181 days or more, accompanied by such supporting detail
and documentation as shall be requested by Agent in its reasonable
discretion.

     

    (b)         To
Agent, on a weekly basis or at such more frequent intervals as Agent may request
from time to time (including, at Agent’s option, on a daily basis), if average
daily Borrowing Availability for all Borrowers for any 90 day period is less
than $30,000,000 (together with a copy of all or any part of such delivery
requested by any Lender in writing after the Closing Date), collateral reports
with respect to each Borrower, including all additions and reductions (cash and
non-cash) with respect to Accounts of such Borrower, in each case accompanied by
such supporting detail and documentation as shall be requested by Agent in its
reasonable discretion each of which shall be prepared by the applicable Borrower
as of the last day of the immediately preceding week or the date two (2) days
prior to the date of any such request;

     

    (c)         To
Agent, at the time of delivery of each of the monthly Financial Statements
delivered pursuant to Annex E:

     

    (i)   
        a reconciliation of the Accounts
trial balance of each Borrower to such Borrower’s most recent Borrowing Base
Certificate, general ledger and monthly Financial Statements delivered pursuant
to Annex E, in each case accompanied by such supporting detail and documentation
as shall be requested by Agent in its reasonable discretion;

    
      
         

      

      
        Annex F - 1

        
          

        

      

      
         

      

    

     

    (ii)           a
reconciliation of the perpetual inventory by location of each Borrower to such
Borrower’s most recent Borrowing Base Certificate, general ledger and monthly
Financial Statements delivered pursuant to Annex E, in each case accompanied by
such supporting detail and documentation as shall be requested by Agent in its
reasonable discretion;

     

    (iii)          an
aging of accounts payable and a reconciliation of that accounts payable aging to
each Borrower’s general ledger and monthly Financial Statements delivered
pursuant to Annex E, in each case accompanied by such supporting detail and
documentation as shall be requested by Agent in its reasonable
discretion;

     

    (iv)          a
reconciliation of the outstanding Loans as set forth in the monthly Loan Account
statement provided by Agent to each Borrower’s general ledger and monthly
Financial Statements delivered pursuant to Annex E, in each case accompanied by
such supporting detail and documentation as shall be requested by Agent in its
reasonable discretion;

     

    (d)         To
Agent, at the time of delivery of each of the quarterly or annual Financial
Statements delivered pursuant to Annex E, (i) a listing of government contracts
of each Borrower subject to the Federal Assignment of Claims Act of 1940; and
(ii) a list of any applications for the registration of any Patent, Trademark or
Copyright filed by any Credit Party with the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency in
the prior Fiscal Quarter;

     

    (e)         Each
Borrower, at its own expense, shall deliver to Agent the results of each
physical verification, if any, that such Borrower or any of its Subsidiaries may
in their discretion have made, or caused any other Person to have made on their
behalf, of all or any portion of their Inventory (and, if a Default or an Event
of Default has occurred and is continuing, each Borrower shall, upon the request
of Agent, conduct, and deliver the results of, such physical verifications as
Agent may require);

     

    (f)          Each
Borrower, at its own expense, shall deliver to Agent (i) an appraisal of its
inventory not less than once during each year and (ii) such other appraisals of
its assets as Agent may request, no more frequently than once a year and, in the
case of clause (i) and (ii) above, at any time after the occurrence and during
the continuance of a Default or an Event of Default, which appraisals shall be,
in each case, conducted by an appraiser, and in form and substance reasonably
satisfactory to Agent; and

     

    (g)         Such
other reports, statements and reconciliations with respect to the Borrowing
Base, Collateral or Obligations of any or all Credit Parties as Agent shall from
time to time request in its reasonable discretion, including, without
limitation, an annual actuarial study performed by an actuary acceptable to
Agent.

    
      
         

      

      
        Annex F - 2

        
          

        

      

      
         

      

    

    ANNEX G (Section 6.10)

     

    to

     

    CREDIT AGREEMENT

     

    FINANCIAL COVENANTS

     

    1.           Any
time the aggregate average daily Borrowing Availability as to all Borrowers in
the aggregate for any continuous thirty (30) day period is less than $30,000,000
or the aggregate daily Borrowing Availability for all Borrowers is $20,000,000
or less, Borrowers shall not breach or fail to comply with any of the following
financial covenants, with the Minimum Fixed Charge Coverage Ratio to be
measured, except as otherwise provided in paragraph (a) below, commencing with
the Fiscal Quarter immediately preceding the Fiscal Quarter in which the
foregoing Borrowing Availability threshold is violated and with each such
financial covenant being calculated in accordance with GAAP consistently
applied:

     

    (a)           Minimum Fixed Charge Cover
Ratio.  Borrowers and their Subsidiaries on a consolidated
basis shall have, at the end of each Fiscal Quarter, a Fixed Charge Coverage
Ratio of not less than 1.10 to 1.00.  The Fixed Charge Coverage Ratio
shall be measured for the 12-month period then ended, any provisions herein to
the contrary, on the last day of the Fiscal Quarter for which such determination
is being made.

     

    (b)           Maximum Capital
Expenditures.  Borrowers and their Subsidiaries on a
consolidated basis shall not make Capital Expenditures during any Fiscal Year
set forth below in excess of the amount set forth below; provided, however, that
twenty-five percent (25%) of the unused portion of such sum may be carried over
and expended in any subsequent Fiscal Year (for the avoidance of doubt, the
Borrowers’ carry over amount for the years 2007, 2008 and 2009 is $1,001,000,
$3,875,000 and $2,706,000, respectively; $7,582,000 in the
aggregate).

     

    
      
        
          
            
              	
                      Fiscal Year

                    	 	
                      Maximum Capital Expenditure

                    	 
	 
      	 	 	 
	
                      2010

                    	 	$	18,000,000	 
	 
      	 	 	 	 
	
                      2011

                    	 	$	18,000,000	 
	 
      	 	 	 	 
	
                      2012

                    	 	$	18,000,000	 
	 
      	 	 	 	 
	
                      2013

                    	 	$	18,000,000	 
	 
      	 	 	 	 
	
                      2014

                    	 	$	18,000,000	 

            

          

        

      

    

    
      
         

      

      
        Annex G - 1

        
          

        

      

      
         

      

    

    Unless
otherwise specifically provided herein, any accounting term used in the
Agreement shall have the meaning customarily given such term in accordance with
GAAP, and all financial computations hereunder shall be computed in accordance
with GAAP consistently applied.  That certain items or computations
are explicitly modified by the phrase “in accordance with GAAP” shall in no way
be construed to limit the foregoing.  If any “Accounting Changes” (as
defined below) occur and such changes result in a change in the calculation of
the financial covenants, standards or terms used in the Agreement or any other
Loan Document, then Borrowers, Agent and Lenders agree to enter into
negotiations in order to amend such provisions of the Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating Borrowers’ and their Subsidiaries’ financial condition
shall be the same after such Accounting Changes as if such Accounting Changes
had not been made; provided, however, that the agreement of Requisite Lenders to
any required amendments of such provisions shall be sufficient to bind all
Lenders.  “Accounting Changes” means (i) changes in accounting
principles required by the promulgation of any rule, regulation, pronouncement
or opinion by the Financial Accounting Standards Board of the American Institute
of Certified Public Accountants (or successor thereto or any agency with similar
functions), (ii) changes in accounting principles concurred in by any Borrower’s
certified public accountants; (iii) purchase accounting adjustments under A.P.B.
16 or 17 and EITF 88-16, and the application of the accounting principles set
forth in FASB 109, including the establishment of reserves pursuant thereto and
any subsequent reversal (in whole or in part) of such reserves; and (iv) the
reversal of any reserves established as a result of purchase accounting
adjustments.  All such adjustments resulting from expenditures made
subsequent to the Closing Date (including capitalization of costs and expenses
or payment of pre-Closing Date liabilities) shall be treated as expenses in the
period the expenditures are made and deducted as part of the calculation of
EBITDA in such period.  If Agent, Borrowers and Requisite Lenders
agree upon the required amendments, then after appropriate amendments have been
executed and the underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained in the Agreement or in any other
Loan Document shall, only to the extent of such Accounting Change, refer to
GAAP, consistently applied after giving effect to the implementation of such
Accounting Change.  If Agent, Borrowers and Requisite Lenders cannot
agree upon the required amendments within thirty (30) days following the date of
implementation of any Accounting Change, then all Financial Statements delivered
and all calculations of financial covenants and other standards and terms in
accordance with the Agreement and the other Loan Documents shall be prepared,
delivered and made without regard to the underlying Accounting
Change.  For purposes of Section 8.1, a breach of a Financial Covenant
contained in this Annex G shall be deemed to have occurred as of any date of
determination by Agent or as of the last day of any specified measurement
period, regardless of when the Financial Statements reflecting such breach are
delivered to Agent.

    
      
         

      

      
        Annex G - 2

        
          

        

      

      
         

      

    

    ANNEX H (Section 9.9(a))

     

    to

     

    CREDIT AGREEMENT

     

    WIRE TRANSFER INFORMATION

    

    
      
        	
                Name:

              	
                General
      Electric Capital Corporation

              
	 
      	 
      
	
                Bank:

              	
                DeutscheBank
      Trust Company Americas

              
	 
      	
                New
      York, New York

              
	 
      	 
      
	
                ABA
      #:

              	
                 

              
	 
      	 
      
	
                Account
      #:

              	
                 

              
	 
      	 
      
	
                Account
      Name:

              	
              
	 
      	 
      
	
                Reference:

              	
              

      

    

    
      
         

      

      
        Annex H - 1

        
          

        

      

      
         

      

    

    ANNEX I (Section 11.10)

     

    to

     

    CREDIT AGREEMENT

     

    NOTICE ADDRESSES

     

    

    (A)         If
to Agent or GE Capital, at

    

    General
Electric Capital Corporation

    10
Riverview Drive

    Danbury,
Connecticut 06810

    Attention:        Account
Manager - Standard Motor Products, Inc.

    Telephone:      (203)
749-6218

    

    with
copies to:

    

    Hahn
& Hessen LLP

    488
Madison Avenue

    New York,
New York 10022

    Attention:         Steven
J.  Seif, Esq.

    Facsimile:         (212)
478-7400

    Telephone:       
(212) 478-7200

    

    and

    

    General
Electric Capital Corporation

    201
Merrit Seven

    Norwalk,
Connecticut 06856

    Attention:         Corporate
Counsel - Commercial Finance

    Facsimile:         (203)
956-4001

    Telephone:        (203)
956-4370

    

    (B)          If
to any Borrower, to Borrower Representative, at

     

    Standard
Motor Products, Inc.

    37-18
Northern Boulevard

    Long
Island City, New York 11101

    Attention:          Robert
Martin

    Facsimile:          (718)
316-4276

    Telephone:         (718)
784-3284

    
      
         

      

      
        Annex I - 1

        
          

        

      

      
         

      

    

    ANNEX J (from Annex A - Commitments
definition)

     

    to

     

    CREDIT AGREEMENT

    

    
      	
              Commitments

            	
              Lenders

            
	 
      	 
      
	
              $62,573,182.46

            	
              GE
      Capital Corporation

            
	 
      	 
      
	
              $31,630,399.93

            	
              Bank
      of America, N.A.

            
	 
      	 
      
	
              $18,565,669.52

            	
              JPMorgan
      Chase Bank, N.A.

            
	 
      	 
      
	
              $13,726,235.74

            	
              HSBC
      Bank USA, National Association

            
	 
      	 
      
	
              $45,382,747.72

            	
              Wells
      Fargo Capital Finance, LLC*

            
	 
      	 
      
	
              $18,121,764.63

            	
              GE
      Business Financial Services, Inc.

            
	 
      	 
      

    

    
      
         

      

      
        Annex J - 1

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