AMENDMENT
NO. 2
TO CREDIT AND SECURITY
AGREEMENT
This Amendment
No. 2 to Amended and Restated Credit and Security Agreement
(this “ Amendment ”), dated as of
November 2, 2007, is made by and among STONERIDGE, INC.
, an Ohio corporation (the “ Parent ”),
STONERIDGE ELECTRONICS, INC. , a Texas corporation (“
Electronics ”), STONERIDGE CONTROL DEVICES,
INC. , a Massachusetts corporation (“ Controls
”), STONERIDGE-POLLAK LIMITED , an English corporation
(the “ English Borrower ”), STONERIDGE
ELECTRONICS LIMITED. , a Scottish corporation (the “
Scottish Borrower ” and together with the English
Borrower, the “ UK Borrowers ”), STONERIDGE
FAR EAST LLC , a Delaware limited liability company (“
Far East ”), as Guarantors, various financial
institutions which are a party hereto, NATIONAL CITY BANK ,
a national banking association (“ National City Bank
”), as Lead Arranger and the Issuer (as hereinafter defined),
and NATIONAL CITY BUSINESS CREDIT, INC ., an Ohio
corporation (“ NCBC ”), as administrative agent
and collateral agent (the “Agent” ).
WITNESSETH:
WHEREAS , the Borrowers (as hereinafter defined) have
been extended certain financial accommodations pursuant to that
certain Credit and Security Agreement, dated as of November 2,
2007, among the Borrowers, various financial institutions (the
“ Lenders ”), National City Bank, as Lead
Arranger and LC Issuer and NCBC, as Agent, as amended by that
certain Amendment No. 1 to Credit and Security Agreement (as
so amended, and as further amended, supplemented or otherwise
modified from time to time, the “ Credit Agreement
”);
WHEREAS , the Borrowers have sold certain account
receivables owing from General Motors Corporation, a Delaware
corporation or Chrysler LLC, a Delaware limited liability company,
to GM Supplier Receivables LLC, a Delaware limited liability
company (“GM SPV”), and Chrysler Receivables SPV LLC, a
Delaware limited liability company (“Chrysler SPV”),
respectively, in connection with the United States Department of
the Treasury Auto Supplier Program;
WHEREAS , the Borrowers have requested modification of
the Credit Agreement to include certain obligations owing from GM
SPV or Chrysler SPV to the Borrowers to be included in the
borrowing base under the Credit Agreement; and
WHEREAS , the parties hereto desire to amend
certain provisions of the Credit Agreement as
outlined herein;
NOW THEREFORE , in consideration of the mutual promises and
agreements contained herein and other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, each of the parties hereto hereby agrees as
follows:
Section 1
.
DEFINED TERMS.
Each defined term used herein and not otherwise
defined herein shall have the meaning ascribed to such term in the
Credit Agreement, as amended by this Amendment.
Section
2
AMENDMENT TO THE CREDIT AGREEMENT
The Credit Agreement is hereby amended as
follows:
2.1
Addition of Certain Defined Terms. Section 1.3
(Definitions) of the Credit Agreement is hereby amended to add the
following definition in proper alphabetical order:
“ Eligible Domestic Payment
Intangibles ” shall mean, with respect to each Domestic
Borrower, each Payment Intangible of such Borrower which the Agent,
in the exercise of its Permitted Discretion, shall deem to be an
Eligible Domestic Payment Intangible, based on such considerations
as the Agent may from time to time deem appropriate in its
Permitted Discretion. No Payment Intangible of such
Borrower shall be an Eligible Payment Intangible if:
(a) such
Payment Intangible is not owing from either GM SPV or Chrysler SPV,
as the case may be, with respect to the purchase of a Supplier
Program Receivable under the GM Supplier Purchase Agreements or the
Chrysler Supplier Purchase Agreements, as applicable, pursuant to
the Supplier Program;
(b) payment
with respect to any such Payment Intangible is not being deposited
in or otherwise directed to a “Designated Account” (as
defined under the GM Supplier Purchase Agreements or the Chrysler
Supplier Purchase Agreements, as the case may be) which is a
Collection Account or a Cash Concentration Account);
(c) such
Payment Intangible is not subject to the Agent’s enforceable
first priority perfected security interest or is subject to any
other Lien except the Liens in favor of the Agent, on behalf of
itself and the Lenders and other Permitted Encumbrances (subject to
reserves for such other Permitted Encumbrances established by the
Agent in accordance with the terms of this Agreement);
(d) such
Payment Intangible is due and unpaid more than seven days after its
original due date under the applicable GM Supplier Purchase
Agreement or Chrysler Supplier Purchase Agreement;
(e) fifty
percent (50%) or more of the aggregate Payment Intangibles owing
from GM SPV or Chrysler SPV to a Domestic Borrower are not deemed
Eligible Domestic Payment Intangibles hereunder;
(f) any
covenant, representation or warranty contained in this Agreement
with respect to such Payment Intangible has been
breached;
(g) GM
SPV or Chrysler SPV, as the case may be, shall: (i) apply for,
suffer, or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property or call a
meeting of its creditors, (ii) admit in writing its inability, or
be generally unable, to pay its debts as they become due or cease
operations of its present business, (iii) make a general assignment
for the benefit of creditors, (iv) commence a voluntary case under
any state or federal bankruptcy laws (as now or hereafter in
effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a
petition seeking to take advantage of any other law providing for
the relief of debtors, (vii) acquiesce to, or fail to have
dismissed, any petition which is filed against it in any
involuntary case under such bankruptcy laws, or (viii) take any
action for the purpose of effecting any of the
foregoing;
(h) the
Agent believes, in the exercise of its Permitted Discretion, that
collection of such Payment Intangible is insecure or that such
Payment Intangible may not be paid by reason of GM SPV’s or
Chrysler SPV’s financial inability to pay;
(i) such
Payment Intangible, together with the aggregate of all Payment
Intangibles owing from GM SPV or Chrysler SPV, as the case may be,
exceeds twenty percent (20%) of the aggregate amount of all Payment
Intangibles and Receivables of the Borrowers; provided however,
that only that portion of the Payment Intangibles of such GM SPV or
Chrysler SPV, as the case may be, exceeding twenty percent (20%)
shall be excluded from Eligible Domestic Payment Intangibles on
account of this clause (i);
(j) such
Payment Intangible is subject to any offset, deduction, defense,
dispute, or counterclaim (but only to the extent of such
Borrower’s obligations to GM SPV or Chrysler SPV, as the case
may be, from time to time) or such Payment Intangible is contingent
in any respect or for any reason;
(k) such
Borrower has made any agreement with GM SPV or Chrysler SPV, as
applicable, with respect to such Payment Intangible for any
discount, allowance or other deduction from the amount owing on
such Payment Intangible, except for discounts or allowances made in
accordance with the applicable the ordinary course of business for
prompt payment, all of which discounts or allowances are reflected
in the calculation of the face value of each respective invoice or
similar document related thereto;
(l) any
return, rejection or repossession of the merchandise sold has
occurred or the rendition of services has been disputed;
(m) such
Payment Intangible is not evidenced by an invoice or other
documentary evidence satisfactory to the Agent, in its Permitted
Discretion;
(n) such
Payment Intangible is not payable to such Borrower;
(o) such
Payment Intangible is not otherwise satisfactory to the Agent as
determined in the exercise of its Permitted Discretion.
2.2
Amendment of Definition of “Eligible Domestic
Receivables”. The definition of
“Eligible Domestic Receivables”
