CREDIT AND SECURITY AGREEMENT

Security Agreement

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NATIONAL CITY BUSINESS CREDIT, INC | NATIONAL CITY BANK | STONERIDGE, INC

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Title: CREDIT AND SECURITY AGREEMENT
Governing Law: Ohio Date: 11/8/2007
Industry: Auto and Truck Parts Law Firm: Baker Hostetler;Burns Levinson Sector: Consumer Cyclical

CREDIT AND SECURITY
AGREEMENT, Parties: national city business credit inc , national city bank , stoneridge inc

Exhibit 10.1

[EXECUTION COPY]

CREDIT AND SECURITY
AGREEMENT

NATIONAL CITY BUSINESS CREDIT, INC.
(AS LENDER AND AGENT)

and

NATIONAL CITY BANK
(AS ISSUER)

and

SUCH OTHER LENDERS WHICH ARE NOW OR HEREAFTER A PARTY HERETO

and

STONERIDGE, INC.,
(AS BORROWER),

SUCH OTHER BORROWERS WHICH ARE NOW OR HEREAFTER A PARTY HERETO

and

SUCH GUARANTORS WHICH ARE NOW OR HEREAFTER A PARTY HERETO

and

NATIONAL CITY BANK
(AS LEAD ARRANGER AND BOOK RUNNER)

Dated as of November 2, 2007

TABLE OF CONTENTS



I. DEFINITIONS AND CONSTRUCTION			1
1.1 Accounting Terms			1
1.2 Uniform Commercial Code Terms			1
1.3 General Terms			2
1.4 Certain Matters of Construction			35
1.5 Currency Equivalents			36
1.6 Addition of Borrowers			37
1.7 Joinder Amendments			37
1.8 Liability of Borrowers			37
1.9 Agreement Regarding Permitted Secured Indebtedness and Liens			37
1.10 Time References			39

II. ADVANCES; PAYMENTS			39
2.1 Revolving Advances to Borrowers			39
2.2 Requests For Revolving Advances			40
2.3 Interest Elections; Conversions of Advances			42
2.4 Disbursement of Proceeds of Advances			43
2.5 Repayment of Advances			43
2.6 Increase in Revolving Commitments			44
2.7 Voluntary and Mandatory Prepayments; Reduction of Commitments			45
2.8 Statement of Account			47
2.9 Letters of Credit			48
2.10 Funding of Advances by Lenders; Sharing of Payments; Settlement			50
2.11 Defaulting Lender			51
2.12 Funding by Lending Installations			52
2.13 Use of Proceeds			53

III. INTEREST; FEES; YIELD PROTECTION			53
3.1 Interest			53
3.2 Applicable Margins			53
3.3 Default Rate			54
3.4 Letter of Credit Fees			54
3.5 Unused Facility Fees			54
3.6 Computation of Interest and Fees			55
3.7 Maximum Charges			55
3.8 Increased Costs			55
3.9 Non-Ascertainable Libor Rate; Unavailable Deposits			56
3.10 Libor Rate Loan Losses			56
3.11 Capital Adequacy			57
3.12 Illegality			57
3.13 Taxes ; Withholding ; Tax Indemnification			58

IV. COLLATERAL: GENERAL TERMS			60
4.1 Security Interest in the Collateral			60
4.2 Perfection of Security Interest			61
4.3 Disposition of Collateral			61
4.4 Preservation of Collateral			61
4.5 Ownership of Collateral			62
4.6 Defense of Agent’s and Lenders’ Interests			62
4.7 Books and Records			62


4.8 Financial Disclosure			63
4.9 Compliance with Laws			63
4.10 Inspection of Premises			63
4.11 Insurance			64
4.12 Failure to Pay Insurance			65
4.13 Payment of Leasehold Obligations			65
4.14 Receivables; Investments, Cash Management			65
4.15 Maintenance of Equipment			69
4.16 Exculpation of Liability			69
4.17 Environmental Matters			70
4.18 Financing Statements			71
4.19 Material Recovery Event			71
4.20 Partial Release of Liens			72

V. REPRESENTATIONS AND WARRANTIES			72
5.1 Authority			72
5.2 Formation and Qualification/Subsidiaries			72
5.3 Officers, Directors, Shareholders, Capitalization			73
5.4 Survival of Representations and Warranties			73
5.5 FEINs/Tax Returns			73
5.6 Financial Statements			73
5.7 Corporate Names			74
5.8 O.S.H.A. and Environmental Compliance			74
5.9 Solvency; No Litigation, Violation of Laws			75
5.10 ERISA Compliance			75
5.11 Patents, Trademarks, Copyrights and Licenses			76
5.12 Licenses and Permits			76
5.13 No Burdensome Restrictions			77
5.14 No Default Under Indenture			77
5.15 No Labor Disputes			77
5.16 Margin Regulations			77
5.17 Investment Company Act			77
5.18 Disclosure			77
5.19 Hedging Contracts			78
5.20 Conflicting Agreements			78
5.21 Application of Certain Laws and Regulations; Bulk Sales			78
5.22 Business and Property			78
5.23 Locations			78
5.24 [Reserved.]			79
5.25 Disclosure of Material Business Agreements			79
5.26 Anti-Terrorism Laws			79

VI. AFFIRMATIVE COVENANTS			80
6.1 Taxes			80
6.2 Conduct of Business and Maintenance of Existence and Assets			80
6.3 Violations			80
6.4 Fixed Charge Coverage Ratio			80
6.5 Execution of Supplemental Instruments			81
6.6 Standards of Financial Statements			81

VII. NEGATIVE COVENANTS			81
7.1 Merger, Consolidation, Acquisition and Sale of Assets			81
7.2 Creation of Liens			85
7.3 Guarantees			85


7.4 Investments			86
7.5 Extensions of Credit			86
7.6 Capital Expenditures			86
7.7 Dividends and Distributions; Grants			87
7.8 Indebtedness			87
7.9 Nature of Business			88
7.10 Transactions with Affiliates			88
7.11 Leases			88
7.12 Subsidiaries			88
7.13 Fiscal Year and Accounting Changes			88
7.14 Pledge of Credit			88
7.15 Amendment of Organizational Documents			89
7.16 Compliance with ERISA			89
7.17 Repayment or Prepayment of Indebtedness			89
7.18 Bailee Documents of Title			89
7.19 Modification of Material Business Agreements			90
7.20 Modification of Indenture			90
7.21 Anti-Terrorism Laws			90

VIII. CONDITIONS PRECEDENT			90
8.1 Conditions to Initial Advances			90
8.2 Conditions to Each Advance			95
8.3 Conditions to Initial Advances Based on Eligibility of Inventory and Receivables of UK Borrowers			95

IX. NOTICE AND DISCLOSURE REQUIREMENTS			96
9.1 Disclosure of Material Matters			96
9.2 Schedules; Collateral Reporting Information; Borrowing Base Certificate			96
9.3 Environmental Reports			97
9.4 Litigation			97
9.5 Material Occurrences			97
9.6 Government Receivables			98
9.7 Annual Financial Statements			98
9.8 Quarterly Financial Statements			98
9.9 Securities Filings			98
9.10 Additional Information			99
9.11 Projected Operating Budget			99
9.12 Notice of Suits, Adverse Events			99
9.13 ERISA Notices and Requests			99
9.14 Notices Regarding Public Note Documents			100
9.15 Additional Documents			100

X. EVENTS OF DEFAULT			101
10.1 Payment of Obligations			101
10.2 Misrepresentations			101
10.3 Failure to Furnish Information			101
10.4 Liens Against Assets			101
10.5 Breach of Covenants			101
10.6 Judgment			102
10.7 Insolvency and Related Proceedings			102
10.8 Cessation of Operations			102
10.9 Material Adverse Effect			102
10.10 Loss of Priority Lien			102

iii


10.11 Breach of Material Agreements			102
10.12 Cross Default; Cross Acceleration			103
10.13 Default Under Indenture			103
10.14 Termination of Guaranty			103
10.15 Change of Control			103
10.16 Invalidity of Credit Agreement			103
10.17 Loss of Material Intellectual Property			103
10.18 Forfeiture of Assets			104
10.19 Business Interruption			104
10.20 ERISA Events			104

XI. LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT			104
11.1 Rights and Remedies			104
11.2 [Reserved]			105
11.3 Setoff			105
11.4 Letter of Credit Collateral Account			105
11.5 Appointment of Receiver			105
11.6 Rights and Remedies not Exclusive; Non-Waiver			106
11.7 Allocation of Payments After Event of Default			106

XII. EFFECTIVE DATE; TERMINATION			107
12.1 Effective Date			107
12.2 Termination			107

XIII. AGENCY PROVISIONS			108
13.1 Appointment			108
13.2 Nature of Duties			108
13.3 Lack of Reliance on Agent and Resignation			109
13.4 Certain Rights of Agent			109
13.5 Reliance			109
13.6 Notice of Default			110
13.7 Posting to an Approved Electronic Platform			110
13.8 Indemnification of Agent and Issuer			111
13.9 Agent in its Individual Capacity			111
13.10 Delivery of Documents			111
13.11 No Reliance on Agent’s Customer Identification Program			111
13.12 Agent May File Proofs of Claim			111
13.13 Collateral and Guaranty Matters			112
13.14 No Independent Action			113

XIV. BORROWING AGENCY; BORROWERS AND OTHER LOAN PARTIES JOINTLY AND SEVERALLY LIABLE			113
14.1 Borrowing Agency Provisions			113
14.2 Cross-Obligations of Loan Parties			113
14.3 Rights of Subrogation			115

XV. MISCELLANEOUS			116
15.1 Governing Law			116
15.2 Entire Understanding			116
15.3 Amendments			116
15.4 Special and Protective Agent Advances			117
15.5 Transfers and Assignments; Replacement of Certain Lenders			118
15.6 Application of Payments			121
15.7 Indemnity			121


15.8 Notice			121
15.9 Notice by Approved Electronic Communications			123
15.10 Survival			123
15.11 Severability			124
15.12 Expenses			124
15.13 Injunctive Relief			124
15.14 Consequential Damages			124
15.15 Captions			124
15.16 Counterparts; Telecopied Signatures			124
15.17 Construction			125
15.18 Confidentiality			125
15.19 No Sharing of Information Without Consent			125
15.20 USA Patriot Act			125
15.21 Publicity			126
15.22 Judgment Currency			126
15.23 Waiver of Jury Trial and Submission to Non-Exclusive Jurisdiction			126

LIST OF SCHEDULES AND EXHIBITS


All Schedules to the Credit and Security Agreement:

	Schedule 2.9	Existing Letters of Credit
	Schedule 4.1	Commercial Tort Claims
	Schedule 4.14(c)	Chief Executive Offices
	Schedule 4.14(g)	Lockboxes; Bank Accounts
	Schedule 4.14(j)	Securities Accounts
	Schedule 5.2	Incorporation/Organization/Qualification
	Schedule 5.3	Officers, Directors, Shareholders, Capitalization
	Schedule 5.5	FEINS/Tax Returns
	Schedule 5.7	Corporate Names
	Schedule 5.8	O.S.H.A. and Environmental Compliance
	Schedule 5.9(b)	Litigation
	Schedule 5.10	ERISA Plans
	Schedule 5.11	Patents, Trademarks, Copyrights and Licenses
	Schedule 5.15	Labor Contracts
	Schedule 5.22	Business Activities
	Schedule 5.23	Locations
	Schedule 5.25	Material Business Agreements
	Schedule 7.1	Sale of Assets
	Schedule 7.2	Permitted Encumbrances
	Schedule 7.3	Permitted Guarantees
	Schedule 7.4	Permitted Investments
	Schedule 7.5	Extensions of Credit
	Schedule 7.8	Permitted Indebtedness

All Exhibits to the Credit and Security Agreement:

	Exhibit A	Closing Agenda
	Exhibit B	Form of Revolving Note
	Exhibit C	Form of Revolving Advance Request for Libor Rate Loans
	Exhibit D	Form of Borrowing Base Certificate
	Exhibit E	Form of Compliance Certificate
	Exhibit F	Form of Financial Condition Certificate
	Exhibit G-1	Form of Landlord Waiver
	Exhibit G-2	Form of Processor/Bailee Waiver
	Exhibit G-3	Form of Mortgagee Waiver
	Exhibit G-4	Form of Consignee Waiver
	Exhibit H	Projections
	Exhibit I	Form of Assignment and Assumption
	Exhibit J	Form of Borrower Joinder Agreement
	Exhibit K	Form of Guarantor Joinder Agreement

CREDIT AND SECURITY AGREEMENT

This CREDIT AND SECURITY AGREEMENT (this “ Agreement ”), is dated as of November , 2007, 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 ”) and such other Persons as are from time to time parties hereto as Borrowers, STONERIDGE FAR EAST LLC , a Delaware limited liability company (“ Far East ”), and such other Persons as are from time to time parties hereto, as Guarantors, the financial institutions which are now or which hereafter become a party to this Agreement (the “Lenders” ), 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” ).

IN CONSIDERATION of the mutual covenants and undertakings herein contained, the receipt and sufficiency of which are hereby acknowledged, the Loan Parties (as hereinafter defined), the Lenders, the Issuer and the Agent hereby agree as follows:

I. DEFINITIONS AND CONSTRUCTION .

1.1 Accounting Terms .

As used in this Agreement and the Other Loan Documents, accounting terms not defined in Section 1.3 or elsewhere in this Agreement and accounting terms partly defined in Section 1.3 to the extent not defined shall have the respective meanings given to them under GAAP; provided , however , to the extent accounting terms not defined or only partly defined herein are used for the purposes of determining compliance with financial covenants in this Agreement, such accounting terms shall be defined or partly defined in accordance with GAAP. All financial computations to be made under this Agreement shall, unless otherwise specifically provided herein, be made in accordance with GAAP applied on a basis consistent in all material respects with the financial statements delivered to the Agent and the Lenders on or prior to the Closing Date.

1.2 Uniform Commercial Code Terms .

To the extent used in this Agreement and the Other Loan Documents, terms defined in the Uniform Commercial Code shall have the meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined) ascribed to such terms in the Uniform Commercial Code. Such terms shall include: “Account”, “Account Debtor”, “Certificated Security”, “Chattel Paper”, “Commercial Tort Claim”, “Commodities Account”, “Deposit Account”, “Document”, “Equipment”, “Farm Products”, “Financial Asset”, “Fixture”, “General Intangible”, “Instrument”, “Inventory”, “Investment Property”, “Lease”, “Lessor”, “Letter-of-Credit Rights”, “money”, “Payment Intangibles”, “Proceeds”, “Product”, “Record”, “Secured Party”, “Securities Account”, “Securities Intermediary”, “Security”, “Security Entitlement”, “Security Interest” and “Supporting Obligation”. To the extent the definition of any category or type of Collateral is expanded by any amendment, modification or revision to the Uniform Commercial Code, such expanded definition will apply automatically as of the date of such amendment, modification or revision.

1.3 General Terms .

As used in this Agreement or any Other Loan Document, the following terms shall have the meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined) set forth below:

“ Acquired Entity ” shall mean any Person acquired pursuant to a Permitted Acquisition or proposed to be acquired pursuant to a Proposed Acquisition, as applicable.

“ Activation Notice ” shall mean a notice in writing from the Agent to the Borrowing Agent that either (i) an Event of Default has occurred and is continuing or (ii) the Undrawn Availability is less than Twenty-Five Million Dollars ($25,000,000).

“ Administrative Questionnaire ” shall mean an Administrative Questionnaire in a form supplied by the Agent to the Lenders and each assignee thereof.

“ Advances ” shall mean the Revolving Advances.

“ Advance Rates ” shall have the meaning set forth in Section 2.1(a).

“ Affiliate ” shall mean, with respect to a specified Person, any other Person: (a) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with such specified Person, (b) which beneficially owns or holds with power to vote ten percent (10%) or more of any class of the voting stock of such specified Person, (c) ten percent (10%) or more of the voting stock of which other Person is beneficially owned or held by such specified Person, or (d) who is an executive officer or director of such specified Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“ Agent ” shall have the meaning set forth in the preamble.

“ Agent’s Fee Letter ” shall mean the Agent’s fee letter dated as of July 13, 2007, between Parent and the Agent.

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

“ Agreement ” shall have the meaning set forth in the preamble.

“ Alternate Base Rate ” shall mean, for any period, a fluctuating interest rate per annum equal from time to time to the higher of: (a) the rate of interest which is established from time to time by National City Bank at its principal office in Cleveland, Ohio as its “prime rate” or “base rate” in effect, such rate to be adjusted automatically, without notice, as of the opening of business on the effective date of any change in such rate (it being acknowledged that: (i) such rate is not necessarily the lowest rate of interest then available from National City Bank on fluctuating rate loans and (ii) such rate may be established by National City Bank by public announcement or otherwise) and (b) the Federal Funds Effective Rate in effect on such day plus 0.50%.

“ Alternate Base Rate Loan ” shall mean any Advance, in Dollars, during any period in which such Advance bears interest based upon the Alternate Base Rate.

“ Alternative Currency ” shall mean and include any lawful currency other than Dollars which (i) is readily and freely transferable and convertible into Dollars and (ii) is acceptable to the Lenders and the Issuer.

“ Alternative Currency Sublimit ” shall mean Fifty Million Dollars ($50,000,000) (determined at the equivalent amount in Dollars for each Borrowing denominated in Alternative Currency).

“ Anti-Terrorism Laws ” shall mean any laws relating to terrorism or money laundering, including Executive Order No. 13224, the USA Patriot Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by the United States Treasury Department’s Office of Foreign Asset Control.

“ Applicable Base Rate Margin ” shall be determined pursuant to Section 3.2.

“ Applicable Letter of Credit Fee Percentage ” shall be determined pursuant to Section 3.2.

“ Applicable Libor Rate Margin ” shall be determined pursuant to Section 3.2.

“ Applicable Period ” shall have the meaning set forth in Section 3.2.

“ Applicable Unused Facility Fee Percentage ” shall be determined pursuant to Section 3.2.

“Approved Electronic Communication” shall mean each notice, demand, communication, information, document and other material transmitted, posted or otherwise made or communicated by e-mail, E-Fax, the StuckyNet System, any Approved Electronic Platform or any other equivalent electronic service, whether owned, operated or hosted the Agent, any Lender, any of their Affiliates or any other Person, that any party is obligated to, or otherwise chooses to, provide to the Agent pursuant to this Agreement or any Other Loan Document, including any financial statement, financial and other report, notice, request, certificate and other information material; provided that Approved Electronic Communications shall not include any notice, demand, communication, information, document or other material that the Agent specifically instructs a Person to deliver in physical form.

“ Approved Electronic Platform ” shall have the meaning specified in Section 13.7.

“ Approved Fund ” shall mean any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“ Approved Securities Intermediary ” shall mean a Securities Intermediary approved by the Agent in its Permitted Discretion and with respect to which the Borrowing Agent has delivered to the Agent an executed Securities Account Control Agreement.

“ Assignment and Assumption ” shall mean an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 15.3), and accepted by the Agent, in substantially the form of Exhibit I or any other form approved by the Agent.

“ Assignment of Claims Act ” shall mean the Assignment of Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.).

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

“ Bank Services ” shall mean each and any bank service provided to any Loan Party by the Agent, any Lender or any direct or indirect Subsidiary or Affiliate of the Agent or any Lender, including the following: (a) commercial credit cards, (b) stored value cards, and (c) cash management or treasury administration services (including controlled disbursement, automatic clearinghouse transactions, electronic funds transfers, returned items, overdrafts and interstate depositary network services).

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

“ Blocked Person ” shall have the meaning assigned to such term in Section 5.26(b).

“ Borrower ” and “ Borrowers ” shall mean the Persons executing this Agreement as a Borrower and each other Person added to this Agreement as a Borrower through a Borrower Joinder Agreement.

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

“Borrowing” shall mean a Revolving Borrowing.

“ Borrowing Agent ” shall mean the Parent.

“ Borrowing Base Certificate ” shall mean a certificate duly executed by an officer (or other Person duly designated by the Board of Directors of the Borrowing Agent) of the Borrowing Agent appropriately and separately completed by the Domestic Borrowers and the UK Borrowers, as applicable, and in substantially the form of Exhibit D hereto.

“Business Day” shall mean (i) for all purposes other than as covered by clause (ii) below, any day excluding Saturday, Sunday and any day which is, in the city in which the Payment Office is located, a legal holiday or a day on which banking institutions are authorized by law or other governmental actions to close and (ii) with respect to all notices and determinations in connection with, and payments of principal and interest on, Libor Rate Loans, any day which is a Business Day described in clause (i) and which is also a day for trading by and between banks in Dollar deposits or Alternative Currency in the interbank Eurocurrency market.

“ Capital Expenditures ” shall mean any expenditure made or liability incurred which is, determined in accordance with GAAP, treated as a capital expenditure and not as an expense item for the year in which it was made or incurred, as the case may be, excluding (to the extent otherwise included) expenditures made with respect to repair or replacement of property necessitated by a Material Recovery Event for which the Borrowing Agent has notified the Agent of the applicable Loan Party’s intent to invest the proceeds of such Material Recovery Event and is otherwise in compliance with Section 4.19.

“ Capitalized Leases ” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

“ Cash Concentration Account ” shall mean any of those certain commercial deposit accounts maintained at National City Bank, in the name of the Agent, (a) which shall be maintained by the Agent with National City Bank pursuant to a Cash Concentration Account Agreement, without liability by the Agent or National City Bank to pay interest thereon, (b) the funds within which shall be the sole and exclusive property of the Agent for the pro rata benefit of the Secured Creditors and (c) from which accounts the Agent shall have the irrevocable and exclusive right to withdraw funds.

“ Cash Concentration Account Agreement ” shall have the meaning set forth in Section 4.14(h).

“ Cash Equivalents ” shall mean (a) obligations issued or guaranteed by the United States or any agency thereof, (b) commercial paper with maturities of not more than one hundred and eighty (180) days and a published rating of not less than A-1 by Standard & Poor’s or P-1 by Moody’s Investors Services, Inc. (or the equivalent rating), (c) Dollar denominated time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that (i) (A) is a Lender or (B) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia, and is a member of the Federal Reserve System, (ii) issues (or the parent of which issues) commercial paper rated as described in clause (b) above and (iii) has combined capital and surplus of at least Five Hundred Thousand Dollars ($500,000), in each case with maturities of not more than one hundred and eighty (180) days from the date of acquisition thereof, (d) repurchase agreements maturing within one hundred and eighty (180) days from the date of issuance thereof entered into with a commercial bank of the type described in clause (c) above, (e) U.S. money market funds (i) rated AAA by Standard & Poor’s, Inc. or with an equivalent rating from Moody’s Investors Service, Inc., or (ii) that invest solely in obligations issued or guaranteed by the United States or an agency thereof, or (f) short-term marketable securities.

“ CERCLA ” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601 et seq.

“ Change of Control ” shall mean and include any of the following:

(a) during any period of two consecutive calendar years, individuals who at the beginning of such period constituted the Parent’s Board of Directors (together with any new directors whose (x) election by the Parent’s Board of Directors or (y) nomination for election by the Parent’s shareholders was (prior to the date of the proxy or consent solicitation relating to such nomination) approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved), cease for any reason to constitute a majority of the directors then in office;

(b) any person or group (as such term is defined in section 13(d)(3) of the 1934 Act), other than the Parent, any trustee or other fiduciary holding securities under an employee benefit plan of the Parent or any members of the Current Holder Group, acquires, directly or indirectly, beneficial ownership (within the meaning of Rule 13d-3 and 13d-5 of the 1934 Act) of 50% or more, on a fully diluted basis, of the economic or voting interest in the Parent’s capital stock;

(c) the shareholders of the Parent approve a merger or consolidation of the Parent with any other Person, other than a merger or consolidation which would result in the voting securities of the Parent outstanding immediately prior thereto continuing to

represent (either by remaining outstanding or by being converted or exchanged for voting securities of the surviving or resulting entity) more than 75% of the combined voting power of the voting securities of the Parent or such surviving or resulting entity outstanding after such merger or consolidation;

(d) the shareholders of the Parent approve a plan of complete liquidation of the Parent or an agreement or agreements for the sale or disposition by the Parent of all or substantially all of the Parent’s assets;

(e) any “change in control” or any similar term as defined in (a) the Public Note Documents or (b) any of the indentures, credit agreements or other instruments governing any Indebtedness of the Parent or any of its Subsidiaries with an outstanding principal amount, or providing for commitments to lend in an outstanding principal amount, of at least Ten Million Dollars ($10,000,000) (or the equivalent amount in any other currency); or

(f) any merger or consolidation of or with the Parent in which the Parent is not the surviving party or sale of all or substantially all of the property or assets of any of the Parent or any first-tier Subsidiary of the Parent.

As used in this definition, the term “Current Holder Group” shall mean (i) members of the Draime family, (ii) those other persons who are officers or directors of the Parent at the Closing Date, (iii) the spouses, heirs, legatees, descendants and blood relatives to the third degree of consanguinity of any such person, (iv) the executors and administrators of the estate of any such person, and any court appointed guardian of any such person, and (v) any trust, family partnership or similar investment entity for the benefit of any such person referred to in the foregoing clauses (i), (ii) or (iii) or any other persons (including for charitable purposes), so long as one or more members of the Current Holder Group has the exclusive or a joint right to control the voting and disposition of securities held by such trust, family partnership or other investment entity.

“ Charges ” shall mean all taxes, charges, fees, imposts, levies or other assessments, including all net income, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation and property taxes, custom duties, fees, assessments, liens, claims and charges, together with any interest and any penalties, additions to tax or additional amounts, imposed by any taxing or other similar Governmental Body, domestic or foreign (including the Pension Benefit Guaranty Corporation or any environmental agency or superfund), upon the Collateral, any Loan Party or any of its Subsidiaries.

“ CIP Regulations ” shall have the meaning set forth in Section 13.11.

“ Closing Agenda ” shall mean the closing agenda attached hereto as Exhibit A .

“ Closing Date ” shall mean November 2, 2007.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder.

“ Collateral ” shall mean and include, with respect to a Person granting a security interest in existing or hereafter acquired assets or property to the Agent pursuant to this Agreement or any Other Loan Document to secure the Obligations, such Person’s:

(a) Accounts;

(b) Inventory;

(d) General Intangibles, Payment Intangibles and Intellectual Property;

(e) Investment Property and Security Entitlements other than equity interests in any Subsidiaries or joint ventures;

(f) Deposit Accounts, Securities Accounts, and all cash, checks, and other property held therein or credited thereto, and any and all monies credited by or due from any financial institution or any other depository to the extent relating to any of the foregoing or following items;

(g) rights as a consignor, a consignee, an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in transit, setoff, detinue, replevin, reclamation and repurchase;

(h) Instruments, Letter of Credit Rights, Supporting Obligations, Documents, Documents of Title, policies and certificates of insurance (other than with respect to insurance covering Specified Fixed Assets), choses in action and Chattel Paper;

(i) Commercial Tort Claims, to the extent described on Schedule 4.1 and all future Commercial Tort Claims in which a security interest is granted to the Agent pursuant to Section 4.1;

(j) accessions to, substitutions for, and all replacements, Products and Proceeds of the herein above-referenced property including proceeds of insurance policies insuring such property, and proceeds of any insurance, indemnity, warranty or guaranty other than with respect to insurance covering Specified Fixed Assets;

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

(l) to the extent not otherwise included above, all other tangible and intangible personal property of such Person other than Specified Fixed Asset Collateral;

in each case, other than Excluded Property of such Person, provided , however, that, if and when the prohibition which prevents the granting by such Person to the Agent of a security interest in such Excluded Property is removed or otherwise terminated, the Agent shall, to the extent permitted by applicable law, be deemed to have, and at all times from and after the date hereof to have had, a security interest in and pledge of such Excluded Property.

“ Collection Account ” shall have the meaning set forth in Section 4.14(g).

“Commitment” shall mean, with respect to any Lender, such Lender’s Revolving Commitment.

“ Compliance Certificate ” shall mean the certificate executed by the any officer of the Borrowing Agent authorized by the Board of Directors of the Borrowing Agent to so

execute on the basis of and in connection with the financial statements delivered pursuant to Section 9.7 or 9.8 substantially in the form of Exhibit E and otherwise satisfactory to the Agent.

“ Consents ” shall mean all filings and all licenses, permits, consents, approvals, authorizations, qualifications and orders of Governmental Bodies and other third parties, domestic or foreign, necessary to carry on any Person’s business, including any Consents required under all applicable federal, state or other applicable law.

“ Consolidated EBITDA ” shall mean, for any period, Consolidated Net Income for such period plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) Consolidated Interest Expense for such period, (ii) consolidated income tax expense for such period, (iii) all amounts attributable to depreciation and amortization for such period and (iv) any non-cash charges (other than the write-down of current assets) for such period (provided that to the extent that all or any portion of the income of any person is excluded from Consolidated Net Income pursuant to the definition thereof for all or any portion of such period any amounts set forth in the preceding clauses (i) through (iv) that are attributable to such person shall not be included for purposes of this definition for such period or portion thereof), and minus (b) without duplication (i) all cash payments made during such period on account of reserves, restructuring charges and other non-recurring non-cash charges added to Consolidated Net Income pursuant to clause (a)(iv) above in a previous period and (ii) to the extent included in determining such Consolidated Net Income, any non-cash extraordinary gains and all non-recurring non-cash items of income for such period, all determined on a consolidated basis in accordance with GAAP; provided that for purposes of calculating Consolidated EBITDA for any period (A) the Consolidated EBITDA of any Acquired Entity acquired by Parent or any Subsidiary of Parent pursuant to a Permitted Acquisition during such period shall be included on a pro forma basis for such period (assuming the consummation of such acquisition and the incurrence or assumption of any Indebtedness in connection therewith occurred as of the first day of such period) and (B) the Consolidated EBITDA of any person or line of business sold or otherwise disposed of by Parent or any Subsidiary of any Loan Party during such period shall be excluded for such period (assuming the consummation of such sale or other disposition and the repayment of any Indebtedness in connection therewith occurred as of the first day of such period).

“ Consolidated Equity ” shall mean, with respect to any date, the net equity of the Parent and its Subsidiaries as of such date determined on a consolidated basis in accordance with GAAP.

“ Consolidated Fixed Charges ” shall mean, with respect to any fiscal period, the sum of: (a) Consolidated Interest Expense paid in cash of the Parent and its Subsidiaries determined on a consolidated basis with respect to such period and (b) scheduled principal payments on the Advances and other Indebtedness of the Parent and its Subsidiaries determined on a consolidated basis with respect to such period.

“ Consolidated Interest Expense ” shall mean, for any period, the sum of (a) the interest expense (including imputed interest expense in respect of Capital Lease Obligations and Synthetic Lease Obligations) of the Parent and its Subsidiaries for such period (including all commissions, discounts and other fees and charges owed by the Borrower and the Subsidiaries with respect to letters of credit and bankers’ acceptance financing), net of interest income, in each case determined on a consolidated basis in accordance with GAAP, plus (b) any interest accrued during such period in respect of Indebtedness of the Parent or any Subsidiary that is required to be capitalized rather than included in consolidated interest expense for such period in accordance with GAAP. For purposes of the foregoing, interest expense shall be determined after giving effect to any net payments made or received by the Parent or any Subsidiary with respect to interest rate Hedging Contracts.

“ Consolidated Net Income ” shall mean, for any period, the net income or loss of the Parent and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.

“ Controlled Group ” shall mean all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with any Person, are treated as a single employer under Section 414 of the Code.

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

“ Customs ” shall have the meaning set forth in Section 2.9(j).

“ Deemed Credit Request ” shall have the meaning set forth in Section 2.2(d).

“ Default ” shall mean an event which, with the giving of notice or passage of time or both, would constitute an Event of Default.

“ Default Rate ” shall have the meaning set forth in Section 3.3.

“ Defaulting Lender ” shall have the meaning set forth in Section 2.11.

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

“ Dollar ” and the sign “ $ ” shall mean lawful money of the United States of America.

“ Domestic Borrower ” and “ Domestic Borrowers ” shall mean the Parent, Controls and Electronics, and each other Domestic Subsidiary of the Parent added to this Agreement as a Borrower through a Borrower Joinder Agreement.

“ Domestic Collateral ” shall mean the respective Collateral of each of the Domestic Obligors.

“ Domestic Obligor ” shall mean, singularly or collectively, as the context may require, each Domestic Borrower and each Guarantor which is a Domestic Subsidiary of a Domestic Borrower.

“ Domestic Subsidiary ” shall mean any direct or indirect Subsidiary of a Person that is organized under the laws of the United States, any state thereof or the District of Columbia (other than an indirect Subsidiary of a Person which is a direct or indirect Subsidiary of another Subsidiary which is not organized under such laws).

“E-Fax” shall mean any system used to receive or transmit faxes electronically.

“E-Signature” shall mean the process of attaching to or logically associating with an Approved Electronic Communication an electronic symbol, encryption, digital signature or process (including the name or an abbreviation of the name of the party transmitting the Approved Electronic Communication) with the intent to sign, authenticate or accept such Approved Electronic Communication.

“ Eligible Assignee ” shall mean any of the following Persons: (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Agent, (ii) in the case of any assignment of a commitment to make Revolving Advances hereunder, the Issuer, and (iii) unless an Event of Default has occurred and is continuing, the Borrowing Agent (each such approval not to be unreasonably withheld or delayed); provided , however, that, notwithstanding the foregoing, “Eligible Assignee” shall not include any Loan Party or any Loan Party’s Affiliates or Subsidiaries and; provided , further , that, notwithstanding the foregoing, a Person shall only be an “Eligible Assignee” if (i) such Person shall have complied with the requirements of Section 3.13 regarding delivery of Withholding Certificates and (ii) the assignment to or participation of such Person shall not constitute a “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code).

“ Eligible Domestic Inventory ” shall mean, with respect to each Domestic Borrower, Inventory of such Borrower which the Agent, in the exercise of its Permitted Discretion, shall deem to be Eligible Domestic Inventory, based on such considerations as the Agent may from time to time deem appropriate in its Permitted Discretion. No Inventory of such Borrower shall be Eligible Domestic Inventory if such Inventory:

(a) is excess, obsolete, unsalable, shopworn, unmerchantable or unfit for sale, or is slow-moving (other than with respect to replacement parts constituting finished goods held for sale to customers in the ordinary course of the business),

(b) is not subject to an enforceable perfected, first priority security interest in favor of the Agent,

(c) is not owned by such Borrower free and clear of all Liens and rights of any other Person (including the rights of a purchaser that has made progress payments and the rights of a surety that has issued a bond to assure such Borrower’s performance with respect to that Inventory), except the Liens in favor of the Agent, on behalf of itself and the Lenders, and other Permitted Encumbrances (subject to reserves for such other Permitted Encumbrances established by the Agent in accordance with the terms of this Agreement);

(d) is work-in-process or any other Inventory which is not raw material or finished goods held for resale;

(e) except for Inventory which is described pursuant to subclauses (i) or (ii) of clause (f) below and which is otherwise Eligible Domestic Inventory hereunder, is: (i) not located in the United States or Mexico, and, if located in Mexico, not located on premises with respect to which a Person in charge or control of such premises has taken constructive possession acting as a depository of the Inventory on the premises for the benefit of the Agent for purposes of perfecting a pledge of such Inventory satisfactory to the Agent, in its Permitted Discretion, or (ii) not located on premises owned by such Borrower and disclosed on Schedule 5.23 unless such Inventory is described in subclauses (iii) or (iv) of this clause (e), or (iii) located on premises leased by such Borrower, unless such location is disclosed on Schedule 5.23 (or such other location appearing on any subsequent amendments to Schedule 5.23 consented to by the Agent in accordance with Section 15.3) and (A) a landlord waiver substantially in the form of Exhibit G-1 (or such other form reasonably satisfactory to the Agent) has been received by the Agent or (B) reserves reasonably satisfactory to the Agent have been established by the Agent with respect thereto, or (iv) stored with a warehouseman, processor or other bailee by such Borrower, unless such location is disclosed on Schedule 5.23 (or such other location appearing on any subsequent amendments to Schedule 5.23 consented to by the Agent in accordance with Section 15.3) and (A) a bailee waiver substantially in the form of Exhibit G-2 (or such other form reasonably satisfactory to the Agent) has been received by the Agent or (B) reserves reasonably satisfactory to the Agent have been established by the Agent with respect thereto, or

(v) located at a location owned by such Borrower that is subject to a mortgage in favor of a Person other than the Agent unless such location is disclosed on Schedule 5.23 (or such other location appearing on any subsequent amendments to Schedule 5.23 consented to by the Agent in accordance with Section 15.3) and (A) a mortgagee waiver substantially in the form of Exhibit G-3 (or such other form reasonably satisfactory to the Agent) has been received by the Agent or (B) reserves reasonably satisfactory to the Agent have been established by the Agent with respect thereto;

(f) is in transit, unless such Inventory is otherwise Eligible Domestic Inventory and is: (i) in transit from a domestic location owned by such Borrower or a domestic location otherwise identified on Schedule 5.23 (or such other location appearing on any subsequent amendments to Schedule 5.23 consented to by the Agent in accordance with Section 15.3) to another domestic location identified on Schedule 5.23 (or such other location appearing on any subsequent amendments to Schedule 5.23 consented to by the Agent in accordance with Section 15.3) or (ii) Inventory for which title has passed to such Borrower, which is insured to the full value thereof and with respect to which (A) all negotiable bills of lading shall be properly endorsed and in the Agent’s possession, (B) all non-negotiable bills of lading shall be issued in the Agent’s name, in each case, free and clear of all Liens except those in favor of the Agent and (C) the value of which, to the extent in transit on water, does not exceed Ten Million Dollars ($10,000,000);

(g) is: (i) evidenced by a negotiable document of title, unless such Document has been delivered to the Agent with all necessary endorsements, free and clear of all Liens except those in favor of the Agent or (ii) subject to a non-negotiable warehouse receipt or other non-negotiable document of title unless such non-negotiable Document is issued to or for the account of the Agent and such Document is delivered to the Agent;

(h) is placed on consignment (or is being held pursuant to a consignment agreement);

(i) consists of goods which have been returned by the customer, excluding goods returned for reprocessing in the ordinary course of business;

(j) consists of display items or packing or shipping materials, manufacturing supplies or replacement parts (other than replacement parts constituting finished goods held for sale to customers in the ordinary course of business);

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

(l) breaches any of the representations or warranties pertaining to Inventory of such Borrower set forth in this Agreement or in any of the Other Loan Documents;

(m) consists of any costs associated with “freight-in” charges;

(n) consists of any gross profit mark-up in connection with the sale and distribution thereof to any division of such Borrower or to any Affiliate of such Borrower;

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

(p) is not covered by casualty insurance reasonably acceptable to the Agent as required by the terms of this Agreement;

(q) was produced in violation of the Fair Labor Standards Act and subject to the “hot goods” provision contained in Title 29 U.S.C. Section 215(a)(1);

(r) failed to conform in all material respects to all standards imposed by any Governmental Body, division or department thereof which has regulatory authority over such Inventory or the use or sale thereof;

(s) contains or bears any Intellectual Property rights licensed to such Borrower by any Person unless the Agent is reasonably satisfied that it may sell or otherwise dispose of such Inventory without (i) infringing the rights of such licensor, (ii) violating any contract with such licensor, or (iii) incurring any liability with respect to payment of royalties other than royalties incurred pursuant to sale of such Inventory under the current licensing agreement relating thereto; or

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

“ Eligible Domestic Receivables ” shall mean, with respect to each Domestic Borrower, each Receivable of such Borrower which the Agent, in the exercise of its Permitted Discretion, shall deem to be an Eligible Domestic Receivable, based on such considerations as the Agent may from time to time deem appropriate in its Permitted Discretion. No Receivable of such Borrower shall be an Eligible Domestic Receivable if:

(a) such Receivable is not subject to the Agent’s enforceable first priority perfected security interest or is subject to any other Lien except the Liens in favor of the Agent, on behalf of itself and the Lenders and other Permitted Encumbrances (subject to reserves for such other Permitted Encumbrances established by the Agent in accordance with the terms of this Agreement);

(b) such Receivable arises out of a sale made by such Borrower to an Affiliate of such Borrower or to a Person controlled by an Affiliate of such Borrower;

(c) such Receivable is due and unpaid more than ninety (90) days after its original due date or is due more than one hundred fifty (150) days after the original invoice date;

(d) fifty percent (50%) or more of the aggregate Receivables owing from the applicable Account Debtor to a Domestic Borrower or a UK Borrower are not deemed Eligible Domestic Receivables or Eligible UK Receivables, as the case may be, hereunder;

(e) such Receivable does not arise in the ordinary course of such Borrower’s business;

(f) any covenant, representation or warranty contained in this Agreement with respect to such Receivable has been breached;

(g) other than with respect to (i) Receivables owing from Delphi Corp. in an aggregate amount not to exceed Three Million Dollars ($3,000,000) at any time with respect to all of the Borrowers collectively, and (ii) Receivables owing from any other Account Debtor which is a debtor-in-possession deemed acceptable to the Agent, in its Permitted Discretion, the Account Debtor with respect to such Receivable shall: (A) apply for, suffer, or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or call a meeting of its creditors, (B) admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business, (C) make a general assignment for the benefit of creditors, (D) commence a

voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (E) be adjudicated a bankrupt or insolvent, (F) file a petition seeking to take advantage of any other law providing for the relief of debtors, (G) acquiesce to, or fail to have dismissed, any petition which is filed against it in any involuntary case under such bankruptcy laws, or (H) take any action for the purpose of effecting any of the foregoing;

(h) the sale giving rise to such Receivable is to an Account Debtor domiciled outside the United States unless (i) such Receivable is owed by an Account Debtor domiciled in Canada or the United Kingdom and the Agent has an enforceable first priority perfected Lien in such Receivable satisfactory to the Agent in its Permitted Discretion or (ii) such Receivable is guaranteed by a letter of credit, guaranty or acceptance terms, in each case acceptable to the Agent in its Permitted Discretion;

(i) the sale giving rise to such Receivable is to an Account Debtor on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment or any other repurchase or return basis;

(j) the sale giving rise to such Receivable is to an Account Debtor on a cash on delivery (i.e. COD) basis or the Account Debtor with respect to such Receivable is an employee of any Loan Party or any Subsidiary thereof;

(k) the Agent believes, in the exercise of its Permitted Discretion, that collection of such Receivable is insecure or that such Receivable may not be paid by reason of the applicable Account Debtor’s financial inability to pay;

(l) the Account Debtor with respect to such Receivable is the United States or any state, or any department, agency or instrumentality of any of them, unless such Borrower: (i) has assigned its right to payment of such Receivable to the Agent pursuant to the Assignment of Claims Act or has otherwise complied with other applicable state or local statutes or ordinances and (ii) has taken all steps reasonably necessary to protect the Agent’s interest in such Collateral under the Assignment of Claims Act or other applicable state or local statutes or ordinances;

(m) the goods giving rise to such Receivable have not been shipped to or at the direction of the applicable Account Debtor or the services giving rise to such Receivable have not been performed by such Borrower or the Receivable otherwise does not represent a final sale;

(n) such Receivable, together with the aggregate Receivables of (i) the Account Debtor other than Navistar International Inc. with respect to Receivables owing to the Borrowers exceeds twenty percent (20%) of the aggregate amount of all Receivables of the Borrowers, and (ii) Navistar International Inc. with respect to Receivables owing the Borrowers exceeds thirty-five percent (35%) of the aggregate amount of all Receivables of the Borrowers; provided however, in each case, that only that portion of the Receivables of such Account Debtor exceeding such applicable percentage shall be excluded from Eligible Domestic Receivables on account of this clause (n);

(o) such Receivable is subject to any offset, deduction, defense, dispute, or counterclaim, or is owed by an Account Debtor that is also a creditor or supplier of such Borrower (but only to the extent of such Borrower’s obligations to such Account Debtor from time to time) or such Receivable is contingent in any respect or for any reason;

course of business for prompt payment, all of which discounts or allowances are reflected in the calculation of the face value of each respective invoice related thereto;

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

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

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

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

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

“ Eligible UK Inventory ” shall mean, with respect to each UK Borrower, Inventory of such Borrower which the Agent, in the exercise of its Permitted Discretion, shall deem to be Eligible UK Inventory, based on such considerations as the Agent may from time to time deem appropriate in its Permitted Discretion. No Inventory of such Borrower shall be Eligible UK Inventory if such Inventory:

(b) is not subject to an enforceable perfected, first priority security interest in favor of the Agent other than certain prior claims arising under the laws of the United Kingdom with respect to which reserves have been taken in amounts satisfactory to the Agent, in its Permitted Discretion;

(d) is work-in-process or any other Inventory which is not raw material or finished goods held for resale;

(e) except for Inventory which is described pursuant to subclauses (i) or (ii) of clause (f) below and which is otherwise Eligible UK Inventory hereunder, is: (i) not located in England or Scotland, or (ii) not located on premises owned by such Borrower and disclosed on Schedule 5.23 unless such Inventory is described in subclauses (iii) or (iv) of this clause (e), or (iii) located on premises leased by such Borrower, unless such location is disclosed on Schedule 5.23 (or such other location appearing on any subsequent amendments to Schedule 5.23 consented to by the Agent in accordance with Section 15.3) and (A) a landlord waiver substantially in the form of Exhibit G-1 (or such other form reasonably satisfactory to the

Agent) has been received by the Agent or (B) reserves reasonably satisfactory to the Agent have been established by the Agent with respect thereto, or (iv) stored with a warehouseman, processor or other bailee by such Borrower, unless such location is disclosed on Schedule 5.23 (or such other location appearing on any subsequent amendments to Schedule 5.23 consented to by the Agent in accordance with Section 15.3) and (A) a bailee waiver or form of attornment substantially in the form of Exhibit G-2 (or such other form reasonably satisfactory to the Agent) has been received by the Agent or (B) reserves reasonably satisfactory to the Agent have been established by the Agent with respect thereto, or (v) located at a location owned by such Borrower that is subject to a mortgage in favor of a Person other than the Agent unless such location is disclosed on Schedule 5.23 (or such other location appearing on any subsequent amendments to Schedule 5.23 consented to by the Agent in accordance with Section 15.3) and (A) a mortgagee waiver substantially in the form of Exhibit G-3 (or such other form reasonably satisfactory to the Agent) has been received by the Agent or (B) reserves reasonably satisfactory to the Agent have been established by the Agent with respect thereto;

(f) is in transit, unless such Inventory is otherwise Eligible UK Inventory and is: (i) in transit from a location in England or Scotland owned by such Borrower or a location in England or Scotland otherwise identified on Schedule 5.23 (or such other location appearing on any subsequent amendments to Schedule 5.23 consented to by the Agent in accordance with Section 15.3) to another location in England or Scotland identified on Schedule 5.23 (or such other location appearing on any subsequent amendments to Schedule 5.23 consented to by the Agent in accordance with Section 15.3) or (ii) Inventory for which title has passed to such Borrower, which is insured to the full value thereof and with respect to which (A) all negotiable bills of lading shall be properly endorsed and in the Agent’s possession, (B) all non-negotiable bills of lading shall be issued in the Agent’s name, in each case, free and clear of all Liens except those in favor of the Agent and (C) the value of which, to the extent in transit on water, does not exceed Ten Million Dollars ($10,000,000);

(h) is placed on consignment (or is being held pursuant to a consignment agreement);

(i) consists of goods which have been returned by the customer, excluding goods returned for reprocessing in the ordinary course of business;

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

(l) breaches any of the representations or warranties pertaining to Inventory of such Borrower set forth in this Agreement or in any of the Other Loan Documents;

(m) consists of any costs associated with “freight-in” charges;

(n) consists of any gross profit mark-up in connection with the sale and distribution thereof to any division of such Borrower or to any Affiliate of such Borrower;

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

(p) is not covered by casualty insurance as required by terms of this Agreement reasonably acceptable to the Agent;

(q) failed to conform in all material respects to all standards imposed by any Governmental Body, division or department thereof which has regulatory authority over such Inventory or the use or sale thereof;

(r) contains or bears any Intellectual Property rights licensed to such Borrower by any Person unless the Agent is reasonably satisfied that it may sell or otherwise dispose of such Inventory without (i) infringing the rights of such licensor, (ii) violating any contract with such licensor, or (iii) incurring any liability with respect to payment of royalties other than royalties incurred pursuant to sale of such Inventory under the current licensing agreement relating thereto; or

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

“ Eligible UK Receivables ” shall mean, with respect to each UK Borrower, each Receivable of such Borrower which the Agent, in the exercise of its Permitted Discretion, shall deem to be an Eligible UK Receivable, based on such considerations as the Agent may from time to time deem appropriate in its Permitted Discretion. No Receivable of such Borrower shall be an Eligible Receivable if:

(a) such Receivable is not subject to the Agent’s enforceable first priority perfected security interest (other than certain prior claims arising under the laws of the United Kingdom with respect to which reserves have been taken in amounts satisfactory to the Agent, in its Permitted Discretion) or is subject to any other Lien other than Permitted Encumbrances 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) (such Permitted Encumbrances to be subject to reserves established by the Agent in accordance with the terms of this Agreement);

(b) such Receivable arises out of a sale made by such Borrower to an Affiliate of such Borrower or to a Person controlled by an Affiliate of such Borrower;

(c) such Receivable is due and unpaid more than ninety (90) days after its original due date or is due more than one hundred fifty (150) days after the original invoice date;

(e) such Receivable does not arise in the ordinary course of such Borrower’s business;

(f) any covenant, representation or warranty contained in this Agreement with respect to such Receivable has been breached;

(g) other than with respect to (i) Receivables owing from Delphi Corp. in an aggregate amount not to exceed Five Hundred Thousand Dollars ($500,000) at any time with respect to all of the Borrowers collectively, and (ii) Receivables owing from any other Account

Debtor which is a debtor-in-possession deemed acceptable to the Agent, in its Permitted Discretion, the Account Debtor with respect to such Receivable shall: (A) apply for, suffer, or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or call a meeting of its creditors, (B) admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business, (C) make a general assignment for the benefit of creditors, (D) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (E) be adjudicated a bankrupt or insolvent, (F) file a petition seeking to take advantage of any other law providing for the relief of debtors, (G) acquiesce to, or fail to have dismissed, any petition which is filed against it in any involuntary case under such bankruptcy laws, or (H) take any action for the purpose of effecting any of the foregoing;

(h) the sale giving rise to such Receivable is to an Account Debtor domiciled outside the United States or the United Kingdom unless (i) with respect to account debtors domiciled in countries that are members of the European Union, the Agent has obtained an enforceable, first priority perfected Lien in such Receivable (subject to the exceptions set forth in clause (a) above): (A) in the case of a receivable owing to the English Borrower, under English law due to the fact that English law governs the terms and conditions applicable to such sale; or (B) in the case of a receivable owing to the Scottish Borrower, under Scots law due to the fact that Scots law governs the terms and conditions applicable to such sale; and, in either case, the Agent is satisfied that the judgment of an English or Scottish court, as applicable, will be enforced against such Account Debtor by the courts in the member state of the European Union in which such Account Debtor is domiciled or (ii) such Receivable is guaranteed by a letter of credit, guaranty or acceptance terms, in each case acceptable to the Agent in its Permitted Discretion;

(i) the sale giving rise to such Receivable is to an Account Debtor on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment or any other repurchase or return basis;

(l) the Account Debtor with respect to such Receivable is the United States, the United Kingdom, Canada, or any state, province, any department, agency or instrumentality of any of them, or any other Governmental Body or (if the Account Debtor is the United Kingdom, or any department, agency or instrumentality of the United Kingdom) is subject to crown set-off, unless such Borrower: (i) has assigned its right to payment of such Receivable to the Agent pursuant to the Assignment of Claims Act or has otherwise complied with other applicable state or local statutes or ordinances of any such Governmental Entity and (ii) has taken all steps reasonably necessary to protect the Agent’s interest in such Collateral under the Assignment of Claims Act or other applicable state or local statutes or ordinances of any such Governmental Entity;

(m) the goods giving rise to such Receivable have not been shipped to the applicable Account Debtor or the services giving rise to such Receivable have not been performed by such Borrower or the Receivable otherwise does not represent a final sale;

(n) such Receivable, together with the aggregate Receivables of (i) the Account Debtor other than Navistar International Inc. with respect to Receivables owing to the Borrowers exceeds twenty percent (20%) of the aggregate amount of all Receivables of the Borrowers, and (ii) Navistar International Inc. with respect to Receivables owing the Borrowers exceeds thirty-five percent (35%) of the aggregate amount of all Receivables of the Borrowers; provided however , in each case, that only that portion of the Receivables of such Account Debtor exceeding such applicable percentage shall be excluded from Eligible Domestic Receivables on account of this clause (n);

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

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

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

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

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

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

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

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

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

“ Eurocurrency Reserve Percentage ” shall mean, for any Interest Period in respect of any Libor Rate Loan, as of any date of determination, the aggregate of the then stated

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

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

“ Excluded Property ” shall mean:

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

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

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

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

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

“ Facility Termination Date ” shall mean November 1, 2011, or such later date fixed in accordance with Section 1.9(b) or earlier if pursuant to the terms of this Agreement, as applicable, the obligations of the Lenders to make Revolving Advances are terminated or if the obligation of the Borrowers to repay the Advances is accelerated.

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

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

“ Foreign Borrower ” shall mean each UK Borrower and any other Foreign Subsidiary of the Parent added to this Agreement as a Borrower through a Borrower Joinder Agreement.

“ Foreign Borrower Sublimit ” shall mean an amount equal to Thirty Million Dollars ($30,000,000) (determined in an equivalent amount in Dollars for each Loan denominated in Alternative Currency).

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

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

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

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

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

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

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

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

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

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

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

“ Incentive Pricing Effective Date ” shall be each December 1, March 1, June 1 and September 1, commencing with December 1, 2007.

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

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

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

“ Indenture ” shall mean that certain Indenture, dated as of May 1, 2002, among Parent, as Issuer, Electronics and Controls, as guarantors thereunder, and Fifth Third Bank, as Trustee pursuant to which the Public Notes were issued, as the same may be from time to time

amended, restated or otherwise modified in accordance with the provisions hereof, and includes any successor thereto in connection with a Permitted Public Notes Refinancing.

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

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

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

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

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

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

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

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

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

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

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

“ Issuer ” shall mean, with respect to any Letter of Credit, the issuer of such Letter of Credit and shall be, with respect to any Letter of Credit hereunder, National City Bank, or each other Lender (or Affiliate of a Lender) that is requested by the Agent to act as an Issuer, and each of their successors and assigns (and which may be replaced at the sole discretion of the Agent).

“ Joinder Amendment ” shall have the meaning set forth in Section 1.7.

“ Lead Arranger ” shall mean National City Bank.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“ Material Adverse Effect ” shall mean a material adverse effect on (a) the financial condition, results of operations or business of any Loan Party, (b) the financial condition, results of operations or business of the Loan Parties and their respective Subsidiaries,

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

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

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

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

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

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

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

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

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

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

“ NCBC ” shall have the meaning set forth in the preamble.

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

“ Net Proceeds ” shall mean: (a) the cash proceeds (including cash proceeds subsequently received in respect of non-cash consideration initially received) from any sale, lease, transfer, dissolution or other disposition of assets of a Loan Party to a Person (other than collections in respect of Receivables) received by such Loan Party, including cash payments in

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

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

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

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

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

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

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

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

“ Other Loan Documents ” shall mean the Notes, the Security Questionnaires, the Letters of Credit, any Blocked Account Agreement, any Guaranty, any IP Security Agreement, the Mexican Security Documents, the UK Security Documents, any Waiver, any Compliance Certificate, the Agent’s Fee Letter, the Post-Closing Waiver Letter, any Hedging Contract executed by any Qualified Counterparty and any other note, mortgage, deed of trust, security

agreement, pledge, guaranty, insurance assignment or other lien instrument, fee letter, reimbursement agreement, environmental or other indemnity agreement, financial statement, audit report, environmental audit, notice, credit request, cash management agreement, officer’s certificate or other writing of any kind which is now or hereafter required to be delivered by or on behalf of any Loan Party to the Agent, the Issuer or any Lender (or any of their respective Affiliates) in connection with this Agreement.

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

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

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

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

“ Payment Office ” shall mean initially 1965 East Sixth Street, 4th Floor, Cleveland, Ohio 44114; thereafter, such other office of the Agent, if any, which it may designate by notice to the Borrowing Agent and to each Lender to be the Payment Office.

“ PBGC ” shall mean the Pension Benefit Guaranty Corporation.

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

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

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

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

“ Permitted Encumbrances ” shall mean (a) Liens in favor of the Agent for the benefit of the Secured Creditors; (b) Liens for taxes, assessments or other governmental charges that (i) are not delinquent or (ii) which are being contested in good faith by appropriate proceedings which stay the enforcement of any Lien and with respect to which proper reserves have been taken in accordance with GAAP; provided , however that such Liens shall have no effect on the priority of the Liens in favor of the Agent (and the existence of such Liens shall not violate Section 6.1); (c) deposits or pledges of cash to secure obligations under worker’s compensation, social security or similar laws, or under unemployment insurance or general liability or product liability insurance; (d) deposits or pledges of cash to secure bids, tenders, contracts (other than contracts for the payment of money), leases, statutory obligations, performance bonds, surety and appeal bonds and other obligations of like nature arising in the ordinary course of business; (e) mechanics’, workers’, materialmens’, warehousemens’, common carriers’, landlords’ or other like Liens arising in the ordinary course of business with respect to obligations which are not due or which are being contested in good faith by a Loan Party or its Subsidiaries; (f) Liens (including Liens in connection with capital leases) placed upon equipment and real estate assets acquired to secure a portion of the purchase price thereof; provided that (x) any such Lien shall not encumber any other property of a Loan Party or any Subsidiary thereof (other than insurance and other proceeds of such equipment and real estate) and (y) the aggregate amount of Indebtedness secured by such Liens incurred as a result of such purchases during any

fiscal year shall not exceed the amount provided for in Section 7.6; (g) zoning restrictions, easements, encroachments, rights of way, restrictions, leases, licenses, restrictive covenants and other similar title exceptions affecting Real Property, none of which materially impairs the use of such Real Property or the value thereof, and none of which is violated in any material respect by existing or supporting structures or land use; (h) attachment and judgment Liens which do not constitute an Event of Default under Section 10.6; (i) any Lien existing on any property or asset prior to the acquisition thereof by the Parent or any Subsidiary of the Parent; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition, (ii) such Lien does not apply to Receivables or Inventory, (iii) such Lien does not apply to any other property or assets of the Borrower or any Subsidiary and (iv) such Lien does not (A) materially interfere with the use, occupancy and operation of any Real Property, (B) materially reduce the fair market value of such Real Property but for such Lien or (C) result in any material increase in the cost of operating, occupying or owning or leasing such Real Property; and (j) the Liens listed on Schedule 7.2 to this Agreement so long as the principal amount secured thereby is not hereafter increased, and no additional assets become subject to such Liens.

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

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

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

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

respectively, as if such financial covenant were applicable notwithstanding the fact that Undrawn Availability may be in excess of Twenty Million Dollars ($20,000,000);

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

“ Permitted Public Notes Refinancing ” shall mean a replacement or refinancing of the Public Notes in existence on the date hereof, provided that such replacement or refinancing (i) does not provide for an interest rate in excess of the rate applicable to the Public Notes on the date hereof, (ii) does not increase the aggregate principal amount thereof or reduce the average weighted life to maturity thereof, (iii) is not secured by any Lien, and (iv) contains covenants and events of default which are no more onerous than those contained in the Indenture as in existence on the date hereof.

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

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

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

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

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

“ Public Note Documents ” shall mean the Indenture, the Public Notes and each other document executed in connection therewith, and, in the case of a Permitted Public Notes Refinancing, the documents related thereto.

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

“ Public Notes ” shall mean the Parent’s 11-1/2% Senior Notes due 2012 issued on May 1, 2002 pursuant to the Indenture, including any notes issued in exchange therefor pursuant to the Registration Rights Agreement, and includes any Indebtedness issued in connection with a Permitted Public Notes Refinancing.

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

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

“ Receivable ” shall mean an Account.

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

“ Registration Rights Agreement ” shall mean that certain Registration Rights Agreement dated as of April 25, 2002 by and among Parent, Electronics, Controls and the initial purchasers of the Public Notes.

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

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

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

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

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

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

“ Revolving Domestic Advances ” shall mean the Revolving Advances made to any of the Borrowers other than the UK Borrowers.

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

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

“ Revolving UK Advances ” shall mean the Revolving Advances made to either of the UK Borrowers.

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

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

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

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

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

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

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

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

(a) Specified Fixed Assets;

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

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

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

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

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

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

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

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

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

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

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

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

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

“ UK Assets ” shall mean the respective assets of each of the UK Borrowers.

“ UK Borrower Sublimit ” shall mean an amount equal to Thirty Million Dollars ($30,000,000) (determined in an equivalent amount in Dollars for each Loan denominated in Alternative Currency).

“ UK Collateral ” shall mean the respective Collateral of each of the UK Borrowers.

“ UK Collateralized Loan Amount ” shall mean, as of any date of determination and to the extent that the conditions set forth in Section 8.3, have been satisfied, the amount equal to the lesser of (i) the UK Formula Amount, or (ii) the sum of the aggregate Revolving UK Advances outstanding plus the Letter of Credit UK Exposure.

“ UK Formula Amount ” shall mean, as of any date of determination, the following:

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

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

(iii) such reserves as the Agent may deem proper and necessary with respect to the Eligible UK Receivables and the Eligible UK Inventory from time to time in the exercise of its Permitted Discretion, including, without limitation, reserves relating to the Enterprise Act 2002.

“ ÚK Security Documents ” shall mean the Mortgage Debenture executed by the English Borrower in favor of the Agent, the Notice to Account Bank in respect of the Collection Account of the English Borrower executed by the English Borrower in favor of the Agent, the Acknowledgement of the Notice of Account Bank executed by the account bank with respect to the Notice of Account Debtor of the Collection Account of the English Borrower, the Mortgage Debenture executed by the Scottish Borrower in favor of the Agent, the Notice to Account Bank in respect of the Collection Account of the Scottish Borrower executed by the Scottish Borrower in favor of the Agent, the Acknowledgement of the Notice of Account Bank executed by the account bank with respect to the Notice of Account Debtor of the Collection Account of the

Scottish Borrower, and any other note, mortgage, deed of trust, security agreement, pledge, guaranty, insurance assignment or other lien instrument, reimbursement agreement, indemnity agreement, audit report, environmental audit, officer’s certificate or other writing of any kind which is now or hereafter required to be delivered by or on behalf of any UK Borrower to the Agent, the Issuer or any Lender (or any of their respective Affiliates) in connection with this Agreement or any other Loan Document or the liens granted by the UK Borrowers in connection with this Agreement or any other Loan Document.

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

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

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

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

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

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

“ Withholding Certificate ” shall mean, with respect to (i) a Domestic Borrower, a Form W-9; a Form W-8BEN; a Form W-8ECI; a Form W-8IMY and the related statements and certifications as required under Section 1.1441-1(e)(2) or (3) of the Income Tax Regulations; a statement described in Section 1.871-14(c)(2)(v) of the Income Tax Regulations; or any other certificates under the Code or Income Tax Regulations that certify or establish the status of a payee or beneficial owner as a U.S. or foreign person, (ii) a Foreign Borrower, a Form “Claim on Behalf of a United States Domestic Corporation to Relief from United Kingdom Income Tax on Interest and Royalties Arising in the United Kingdom” or any successor forms.

1.4 Certain Matters of Construction.

For the purpose of computing periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”. Unless the context otherwise requires, (a) any definition of or reference to any agreement, instrument or Other Loan Document herein shall be construed as referring to such agreement, instrument, or Other Loan Document as from time to time amended,

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

1.5 Currency Equivalents.

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

1.6 Addition of Borrowers .

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

1.7 Joinder Amendments.

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

1.8 Liability of Borrowers.

The parties intend that this Agreement shall in all circumstances be interpreted to provide that (i) each Foreign Borrower is liable only for the Advances made to such Foreign Borrower, interest on such outstanding Advances, such Foreign Borrower’s guaranty pursuant to Section 2.9 of reimbursement obligations owing to the Issuer by its Foreign Subsidiaries, and its pro rata share of otherwise unallocated general fees, reimbursements and charges hereunder and under any Other Loan Documents, except that each UK Borrower is liable for all of the foregoing amounts with respect to the other UK Borrower, (ii) the Collateral owned by each Foreign Borrower shall secure only those Obligations described in clause (i) of this Section 1.8, except that the Collateral owned by each UK Borrower shall secure those Obligations of the other UK Borrower, and (iii) Net Proceeds or other moneys paid to Agent by a Foreign Borrower or otherwise in respect of any assets of a Foreign Borrower (whether or not Collateral) shall not be applied to the payment or prepayment of any Obligations other than the Obligations described in clause (i) of this Section 1.8. The parties likewise intend that this Agreement shall in all circumstances be interpreted to provide, unless otherwise expressly stated to the contrary, that each Domestic Borrower and each Domestic Subsidiary which is a Guarantor is liable for all Obligations of all the Borrowers.

1.9 Agreement Regarding Permitted Secured Indebtedness and Liens.

(a) Notwithstanding any provision of this Agreement or any Other Loan Document to the contrary with respect to restrictions on Indebtedness, Liens, and prepayment of Indebtedness, but subject to Section 15.3, the Loan Parties may incur certain Indebtedness in an amount not to exceed Two Hundred Million Dollars ($200,000,000), in the aggregate (the

“Permitted Secured Indebtedness”), grant Liens securing the Permitted Secured Indebtedness and certain Hedging Obligations, and prepay the Public Notes with the proceeds of the Permitted Secured Indebtedness so long as: (i) all Permitted Secured Indebtedness is issued by the Parent and, to the extent requested by the holders thereof, guaranteed by the other Loan Parties; (ii) the proceeds of the Permitted Secured Indebtedness are promptly used to refinance all of the outstanding Indebtedness owing with respect to the Public Notes and to pay all costs and expenses relating to such refinancing, with any excess of proceeds of Permitted Secured Indebtedness to be used for general corporate purposes; (iii) the Permitted Secured Indebtedness and such Hedging Obligations are on terms and conditions satisfactory to the Required Lenders; (iv) the Liens securing the Permitted Secured Indebtedness and such Hedging Obligations are (A) first priority Liens with respect to Specified Fixed Asset Collateral which secures the Permitted Secured Indebtedness, and (B) not secured by any Collateral unless (y) such Liens are subordinate to the Liens of the Agent with respect to the Collateral on terms satisfactory to the Required Lenders and (z) the Agent is granted a subordinate Lien with respect to all Specified Fixed Asset Collateral which secures the Permitted Secured Indebtedness on terms satisfactory to the Required Lenders; (v) the Permitted Secured Indebtedness, such Hedging Obligations and Liens relating to the Permitted Secured Indebtedness and such Hedging Obligations are subject to an inter-creditor agreement satisfactory to the Required Lenders; and (vi) no Event of Default exists or would otherwise occur as a result of incurring the Permitted Secured Indebtedness or such Hedging Obligations, granting such Liens, or refinancing the Public Notes.. In addition, the Agent and the Required Lenders agree that, pursuant to such inter-creditor agreement in form and substance satisfactory to the Required Lenders, the Agent and the Required Lenders will agree to subordinate the Agent’s interest in and rights to Net Proceeds of all assets and all Collateral other than ABL Collateral. “ABL Collateral” shall mean all Collateral consisting of: (i) Accounts, (ii) Inventory, (iii) Chattel Paper; (iv) Investment Property and Security Entitlements consisting of Cash Equivalents; (v) Deposit Accounts, Securities Accounts, and all cash, checks, and other property held therein or credited thereto other than identifiable proceeds of Specified Fixed Asset Collateral and any Collateral other than Accounts, Inventory, Chattel Paper and such Investment Property and Security Entitlements, and (vi) solely to the extent evidencing, governing, securing or otherwise related to the items referred to in the preceding clauses (i) through (v), all Instruments, Letter of Credit Rights, Supporting Obligations, Documents, Commercial Tort Claims, General Intangibles (other than Intellectual Property, so long as Agent continues to have an unrestricted license to use such Intellectual Property in accordance with Section 11.1) and Payment Intangibles, (vii) accessions to, substitutions for, and all replacements, Products and Proceeds of the foregoing property including proceeds of insurance policies insuring such property, and proceeds of any insurance, indemnity, warranty or guaranty with respect to such property and (viii) books, records, and other property (including credit files, programs, printouts, computer software, and disks, magnetic tape and other magnetic media, and other materials and records) pertaining to any of such forgoing property. In addition, the Loan Parties shall be permitted to otherwise prepay Indebtedness with respect to the Public Notes in accordance with Section 7.17

(b) All of the parties to this Agreement will enter into amendments to this Agreement and the Other Loan Documents as are deemed necessary by the Required Lenders to reflect the transactions related to the Permitted Secured Indebtedness and to include additional financial performance covenants and other covenants consistent with and similar to but no more restrictive than those additional financial performance covenants and other covenants contained in the documentation evidencing the Permitted Secured Indebtedness. In addition, if (i) the Parent has issued Permitted Secured Indebtedness and prepaid or redeemed all of the outstanding Public Notes, and (ii) no Event of Default has occurred and is continuing, then, at the request of the Borrowing Agent, the Facility Termination Date shall be extended to the date designated by the Borrowing Agent which is not later than the earlier of: (A) five years after the Closing Date, and (B) 180 days prior to the final maturity of the Permitted Secured Indebtedness.

1.10 Time References.

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

II. ADVANCES; PAYMENTS.

2.1 Revolving Advances to Borrowers.

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

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

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

(iii) the UK Collateralized Loan Amount, minus

(iv) the aggregate Letter of Credit Domestic Exposure, minus

(v) such reserves as the Agent may deem proper and necessary (other than reserves with respect to the UK Eligible Receivables and the UK Eligible Inventory) from time to time in the exercise of its Permitted Discretion.

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

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

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

2.2 Requests For Revolving Advances.

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

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

(ii) the amount of the proposed Borrowing;

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

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

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

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

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

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

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

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

(f) If the Agent has not provided the confirmation referred to in clause (e) above, the Agent shall promptly notify the Borrowing Agent and each Lender, whereupon the Borrowing Agent shall, by notice to the Agent not later than the third Business Day before the requested date of such Borrowing, withdraw the Revolving Advance Request relating to such requested Borrowing. If the Borrowing Agent does so withdraw such Revolving Advance Request, the Borrowing requested in such Revolving Advance Request shall not occur and the Agent shall promptly so notify each Lender. If the Borrowing Agent does not so withdraw such

Revolving Advance Request, the Agent shall promptly so notify each Lender and such Revolving Advance Request shall be deemed to be a Revolving Advance Request which requests a Revolving Borrowing comprised of Libor Rate Loans in an aggregate amount in Dollars equivalent, on the date the Agent so notifies each Lender, to the amount of the originally requested Revolving Borrowing in the Alternative Currency; and in such notice by the Agent to each Lender the Agent shall state such aggregate equivalent amount of such Revolving Borrowing in Dollars and such Lender’s ratable portion of such Borrowing.

2.3 Interest Elections; Conversions of Advances.

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

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

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

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

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

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

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

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

2.4 Disbursement of Proceeds of Advances.

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

2.5 Repayment of Advances.

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

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

(c) Any payment by an Account Debtor with respect to a Receivable which is evidenced by a check, note, draft or any other similar item of payment may not be immediately collectible. In calculating outstanding Revolving Advances and Undrawn Availability, the Agent agrees that any such item of payment will be deemed to have been received by the Agent and will be provisionally credited (even though not evidenced by collected funds) to the Loan Account by the Agent on the Business Day on which the Agent has actual possession of such item of payment for deposit to any of the Cash Concentration Accounts. With respect to such calculation of outstanding Revolving Advances and Undrawn Availability, the Agent also agrees that any payment from an Account Debtor consisting of a federal wire transfer pursuant to the

United States Treasury Fedwire Deposit System, an automatic clearing house credit or other similar payment mechanism will be deemed to have been received by the Agent and will be credited to the Loan Account by the Agent on the Business Day on which the Agent has received such payment prior to 11:00 a.m. in immediately available funds for deposit to any of the Cash Concentration Accounts. In consideration of the Agent’s agreement for provisional crediting of items of payment, each Borrower agrees that, in calculating interest and other charges on the Obligations, all payments from Account Debtors will be treated as having been credited to the Loan Account on the Business Day immediately following the Business Day on which such payments are deemed to have been received by the Agent pursuant to this Section 2.5(c), other than payments in the form of federal wire transfers pursuant to the United States Treasury Fedwire Deposit System and automatic clearing house credits will be treated as having been credited to the Loan Account on the Business Day on which such payments are deemed to have been received by the Agent pursuant to this Section 2.5(c).

(d) The Agent shall not be required to credit the Loan Account for the amount of any item of payment or other payment which is unsatisfactory to the Agent in the exercise of its Permitted Discretion. All credits (other than federal wire transfers) shall be provisional, subject to verification and final settlement. The Agent may charge the Loan Account for the amount of any item of payment or other payment which is returned to the Agent unpaid or otherwise not collected. Each Borrower agrees that any information and data reported to the Borrowers pursuant to any service which is received prior to final posting and confirmation is subject to correction and is not to be construed as final posting information. The Agent and the Lenders shall have no liability for the content of such preliminary service related information.

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

2.6 Increase in Revolving Commitments.

(a) The Borrowing Agent may, by written notice to the Agent from time to time, request that the Revolving Commitments be increased by an amount not to exceed the Incremental Revolving Advance Amount at such time. Upon the approval of such request by the Agent (which approval shall be in the Agent’s Permitted Discretion), the Agent shall deliver a copy thereof to each Lender with a Revolving Commitment. Such notice shall set forth the amount of the requested increase in the aggregate Revolving Commitments (which shall be in minimum aggregate increments of $5,000,000 and a minimum aggregate amount of $10,000,000 or equal to the remaining Incremental Revolving Advance Amount) and the date on which such increase is requested to become effective (which shall be not less than ten (10) Business Days nor more than sixty (60) days after the date of such notice and which, in any event, must be on or prior to the termination of the Revolving Commitments in accordance with the terms of this Agreement), and shall offer each such Lender the opportunity to increase its Revolving Commitment by its Revolving Percentage of the proposed increased amount. Each such Lender shall, by notice to the Borrowing Agent and the Agent given not more than ten (10) Business Days after the date of the Agent’s notice, either agree to increase its Revolving Commitment by all or a portion of the offered amount (each such Lender so agreeing being an “Increasing Revolving Lender”) or decline to increase its Revolving Commitment (and any such Lender that does not deliver such a notice within such period of ten (10) Business Days shall be deemed to have declined to increase its Revolving Commitment), each Lender so declining or being deemed to have declined being a “Non-Increasing Revolving Lender”). In the event that, on the tenth

(10th) Business Day after the day the Agent has delivered a notice pursuant to the second sentence of this paragraph, the Increasing Revolving Lenders have agreed pursuant to the preceding sentence to increase their Revolving Commitments by an aggregate amount less than the increase in the aggregate Revolving Commitments requested by the Borrowing Agent, the Borrowing Agent may arrange for one or more banks or other entities (any such bank or other entity referred to in this clause being an “Augmenting Revolving Lender”), which may include any Lender, to extend Revolving Commitments or increase their existing Revolving Commitments in an aggregate amount equal to the unsubscribed amount; provided that each Augmenting Revolving Lender, if not already a Lender with a Revolving Commitment hereunder, shall be subject to the approval of the Agent (which approval shall be in the Agent’s Permitted Discretion) and the Borrowing Agent, and each Augmenting Revolving Lender shall execute all such documentation as the Agent shall reasonably specify to evidence its Revolving Commitment and/or its status as a Lender with a Revolving Commitment hereunder. Any increase in the aggregate Revolving Commitments may be made in an amount which is less than the increase requested by the Borrowing Agent if the Borrowing Agent is unable to arrange for, or chooses not to arrange for, Augmenting Revolving Lenders.

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

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

2.7 Voluntary and Mandatory Prepayments; Reduction of Commitments.

(a) Subject to the provisions of Section 3.10, at their option and upon three (3) Business Days’ prior written notice, the Borrowers may prepay the Advances in whole at any time or in part from time to time, without premium or penalty, but with accrued interest on the principal being prepaid to the date of such prepayment. The Borrowing Agent shall specify the date of prepayment of Advances which are Libor Rate Loans and the amount of such

prepayment. In the event that any prepayment of a Libor Rate Loan is made on a date other than the last Business Day of the then current Interest Period with respect thereto, the Borrowers shall indemnify the Agent and the Lenders therefor in accordance with Section 3.10.

(b) Subject to the provisions of Section 1.8, if, on any Business Day, the aggregate principal amount of Revolving Advances then outstanding exceeds the lesser of: (i) the Maximum Revolving Advance Amount minus the Letter of Credit Exposure or (ii) the Aggregate Formula Amount, the Borrowers shall on such day prepay to the Agent an amount sufficient to eliminate such excess, which amount shall be used to prepay Revolving Advances ratably in accordance with each Lender’s Revolving Percentage. If, on any Business Day, the aggregate outstanding principal amount of Revolving Advances denominated in Alternative Currency plus the Letter of Credit Exposure denominated in Alternative Currency exceeds the Alternative Currency Sublimit, the Borrowers shall on such day prepay to the Agent an amount sufficient to eliminate such excess, which amount shall be used to prepay Revolving Advances denominated in Alternative Currency ratably in accordance with each Lender’s Revolving Percentage . If, on any Business Day, the aggregate outstanding principal amount of Revolving Advances made to Foreign Borrowers plus the Letter of Credit Exposure attributable to the Foreign Borrowers exceeds the Foreign Borrower Sublimit, the Borrowers shall on such day prepay to the Agent an amount sufficient to eliminate such excess, which amount shall be used to prepay Revolving Advances to Foreign Borrowers ratably in accordance with each Lender’s Revolving Percentage. If, on any Business Day, (i) the sum of the aggregate outstanding principal amount of Revolving UK Advances plus the Letter of Credit UK Exposure exceeds (ii) the UK Borrower Sublimit, the Borrowers shall on such day prepay to the Agent an amount sufficient to eliminate such excess, which amount shall be used to prepay Revolving UK Advances ratably in accordance with each Lender’s Revolving Percentage.

(c) So long as any Revolving Advances are outstanding, the Borrowers shall pay to the Agent any Net Proceeds received by a Loan Party promptly upon receipt thereof and the Agent shall apply such Net Proceeds to the Obligations outstanding at the time of such receipt in such order as the Agent may determine; provided , however , that: (i) the Net Proceeds of any UK Assets and any other Net Proceeds attributable or relating to a UK Borrower shall not be applied to any Obligations other than the Obligations of the UK Borrowers described in clause (i) of Section 1.8, (ii) no such payment to the Agent of any Net Proceeds from the disposition of Specified Fixed Asset Collateral consisting of equity interests in any Subsidiaries or joint ventures or the assets of any Foreign Subsidiaries other than the UK Borrowers) pursuant to this Section 2.7 shall be required, (iii) no such payment to the Agent of any Net Proceeds from the disposition of, or from a Material Recovery Event with respect to, Specified Fixed Asset Collateral (other than Specified Fixed Asset Collateral consisting of equity interests in any Subsidiaries or joint ventures or the assets of any Foreign Subsidiaries other than the UK Borrowers) pursuant to this Section 2.7 shall be required so long as no Event of Default has occurred and is continuing, (iv) no such payment to the Agent of any Net Proceeds from the disposition of, or from a Material Recovery Event with respect to, Collateral pursuant to this Section 2.7 shall be required so long as no Activation Notice has been delivered to the Borrowing Agent, (v) nothing in this Section 2.7 or in the definition of “Net Proceeds” shall constitute authorization not otherwise permitted by this Agreement for any Loan Party to enter into any transaction that would generate Net Proceeds and (vi) no prepayment pursuant to this Section 2.7 shall be required with respect to any Net Proceeds of Collateral from a Material Recovery Event while such Net Proceeds are available for reinvestment as permitted by Section 4.19. For the avoidance of doubt, any cash proceeds from a casualty loss, compulsory transfer or non-appealable judgment not constituting Net Proceeds of Collateral from a Material Recovery Event by reason of being in an amount less than One Million Dollars ($1,000,000) from any individual event giving rise thereto, shall be applied by the Agent to principal Revolving Advances then outstanding in accordance with Section 4.14(h) only in the event that an Activation Notice has been delivered to the Borrowing Agent. In addition, to the extent any

portion of the Net Proceeds remains after the application of Net Proceeds to outstanding Revolving Advances as required under this Section 2.7(c), such remaining Net Proceeds shall be released to the Borrowing Agent.

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

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

2.8 Statement of Account.

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

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

2.9 Letters of Credit.

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

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

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

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

(e) Effective as of the date of its issuance of a Letter of Credit, the Issuer grants to each Lender, and each Lender acquires, an undivided participation in such Letter of Credit equal to such Lender’s Revolving Percentage of such Letter of Credit’s face amount.

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

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

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

(h) In connection with the issuance of any Letter of Credit, the Borrowers shall indemnify, save and hold the Agent, each Lender and each Issuer harmless from any loss, cost, expense or liability, including payments made by the Agent, any Lender or any Issuer and

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

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

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

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

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

(b) Notwithstanding anything to the contrary contained in Section 2.5(b) hereof, commencing with the first Business Day following the Closing Date, Revolving Advances shall be advanced by the Agent and each payment by the Borrowers on account of Revolving Advances shall be applied first to those Revolving Advances advanced by the Agent. On or before 1:00 p.m. on each Settlement Date commencing with the first Settlement Date following the Closing Date, the Agent and the Lenders shall make certain payments as follows: (i) if the aggregate amount of new Revolving Advances made by the Agent during the preceding Settlement Week (if any) exceeds the aggregate amount of repayments applied to outstanding Revolving Advances during such preceding Settlement Week, then each Lender shall provide the Agent with funds in an amount equal to its applicable Revolving Percentage of the difference between (x) such Revolving Advances and (y) such repayments and (ii) if the aggregate amount of repayments applied to outstanding Revolving Advances during such Settlement Week exceeds the aggregate amount of new Revolving Advances made during such Settlement Week, then the

Agent shall provide each Lender with funds in an amount equal to its applicable Revolving Percentage of the difference between (x) such repayments and (y) such Revolving Advances. Each Lender shall be entitled to earn interest applicable under this Agreement on outstanding Advances which it has funded. On each Settlement Date, the Agent shall submit to each Lender a settlement statement of the amount of outstanding Revolving Advances at the end of the Settlement Week immediately preceding such Settlement Date which shall disclose the net amount due to or due from such Lender on such Settlement Date. Such settlement statement of the Agent shall be presumed correct in the absence of manifest error.

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

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

2.11 Defaulting Lender.

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

Agent from a Lender described in clause (y), the Agent will promptly notify the Borrowing Agent of any such failure or of its receipt of any such notice from a Lender.

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

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

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

2.12 Funding by Lending Installations.

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

2.13 Use of Proceeds.

The Borrowers shall apply the proceeds of the Revolving Advances (i) to pay fees and expenses relating to the transaction contemplated by this Agreement, (ii) to pay all amounts owing under or with respect to that certain Credit Agreement, dated as of May 1, 2002, among Parent, the lending institutions that are signatories thereto, and National City Bank, as the administrative agent to such lenders, as amended and modified from time to time , (iii) to fund any Permitted Acquisitions and (iv) for general corporate purposes.

III. INTEREST; FEES; YIELD PROTECTION.

3.1 Interest.

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

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

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

3.2 Applicable Margins .

At the end of each fiscal quarter, the Agent shall determine the Undrawn Availability for such fiscal quarter based upon the average daily Undrawn Availability for each day of such fiscal quarter. From each Incentive Pricing Effective Date until the next Incentive Pricing Effective Date, the Applicable Base Rate Margin, the Applicable Libor Rate Margin, the Applicable Unused Facility Fee Percentage and the Applicable Letter of Credit Fee Percentage shall be determined by reference to the applicable Undrawn Availability on the grid below; provided , however , that Tier IV pricing shall apply through and including November 30, 2007.


								Applicable Letter			Applicable Unused
		Applicable Libor			Applicable Base			of Credit Fee			Facility Fee
Tier	Undrawn Availability	Rate Margin			Rate Margin			Percentage			Percentage
I	≤ $25,000,000		1.75	%		0.25	%		1.75	%		0.25	%
II	> $25,000,000 but ≤ $50,000,000		1.50	%		0	%		1.50	%		0.25	%


								Applicable Letter			Applicable Unused
		Applicable Libor			Applicable Base			of Credit Fee			Facility Fee
Tier	Undrawn Availability	Rate Margin			Rate Margin			Percentage			Percentage
III	> $50,000,000 but ≤ $70,000,000		1.25	%		0	%		1.25	%		0.25	%
IV	> $70,000,000		1.00	%		0	%		1.00	%		0.25	%

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

3.3 Default Rate.

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

3.4 Letter of Credit Fees.

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

3.5 Unused Facility Fees.

If, during any calendar month, the sum of (i) the average daily unpaid balance of the Revolving Advances for each day of such calendar month, plus (ii) the average daily outstanding face amount of Letters of Credit for each day of such calendar month, does not equal the Maximum Revolving Advance Amount, then the Borrowers shall pay to the Agent for the

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