Exhibit 10.1

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

dated as of

December 23, 2011

among

STEWART & STEVENSON LLC,
STEWART & STEVENSON DISTRIBUTOR HOLDINGS LLC,
STEWART & STEVENSON POWER PRODUCTS LLC,
STEWART & STEVENSON PETROLEUM SERVICES LLC,
STEWART & STEVENSON FUNDING CORP.,
STEWART & STEVENSON MATERIAL HANDLING LLC,

STEWART & STEVENSON MANUFACTURING TECHNOLOGIES LLC,

EMDSI - HUNT POWER, L.L.C.,
as US Borrowers,

STEWART & STEVENSON CANADA INC.,

as a Canadian Borrower,

The Lenders Party Hereto,

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent and US Collateral Agent

JPMORGAN CHASE BANK, N.A., TORONTO BRANCH,
as Canadian Administrative Agent and as Canadian Collateral Agent

and

JPMORGAN CHASE BANK, N.A.,
as Export-Related Lender

J.P. MORGAN SECURITIES LLC,

as Sole Bookrunner and Sole Lead Arranger

CHASE BUSINESS CREDIT

TABLE OF CONTENTS

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LIST OF DEFINED TERMS

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THIRD AMENDED AND RESTATED CREDIT AGREEMENT

THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 23, 2011 (as it may be amended or modified from time to time, this “Agreement”), among STEWART & STEVENSON LLC, a Delaware limited liability company (the “Company”), STEWART & STEVENSON DISTRIBUTOR HOLDINGS LLC, a Delaware limited liability company (“SSDH”), STEWART & STEVENSON POWER PRODUCTS LLC, a Delaware limited liability company (“SSPP”), STEWART & STEVENSON PETROLEUM SERVICES LLC, a Delaware limited liability company (“SSPS”), STEWART & STEVENSON FUNDING CORP., a Delaware corporation (“SSC”), STEWART & STEVENSON MATERIAL HANDLING LLC, a Delaware limited liability company formerly known as S&S Agent LLC (“SSMH”), STEWART & STEVENSON MANUFACTURING TECHNOLOGIES LLC, a Delaware limited liability company (“SSMT”), EMDSI-HUNT POWER, L.L.C., a Delaware limited liability company (“EMDSI”), each as a US Borrower (as herein defined), STEWART & STEVENSON CANADA INC., a New Brunswick corporation (“SS Canada”), as a Canadian Borrower (as herein defined) (the US Borrowers and the Canadian Borrowers are together referred to herein as the “Borrowers” and each individually, a “Borrower”), the Lenders party hereto, JPMORGAN CHASE BANK, N.A., as the Administrative Agent and as the US Collateral Agent, JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as the Canadian Administrative Agent and as the Canadian Collateral Agent, and JPMORGAN CHASE BANK, N.A., as the Export-Related Lender.

RECITALS:

WHEREAS, the Company, SSDH, SSPP, SSPS, SSC, SSMH, SSMT, EMDSI and SS Canada (collectively, the “Existing Borrowers”), the Administrative Agent, the US Collateral Agent and the lenders party thereto are parties to that certain Second Amended and Restated Credit Agreement dated as of February 13, 2007 (as heretofore amended, the “Existing Credit Agreement”), pursuant to which JPMorgan Chase Bank, N.A. and certain other lenders party thereto extended certain financing to the Existing Borrowers in accordance with the terms and conditions set forth therein; and

WHEREAS, the Borrowers have requested that the Existing Credit Agreement be amended and restated in its entirety in the form of this Agreement.

AGREEMENTS:

In consideration of the mutual covenants and agreements herein contained, the Borrowers, the Agents, the Issuing Bank and the Lenders agree that, subject to the satisfaction of each condition precedent contained in Section 4.1 hereof, the satisfaction of which shall be evidenced by the execution and delivery by the Borrowers and the Administrative Agent of the Certificate of Effectiveness (as herein defined), the Existing Credit Agreement shall be amended and restated as of the Effective Date (as herein defined) in its entirety in the form of this Agreement.  It is the intention of the Borrowers, the Lenders, the Issuing Bank and the Agents that this Agreement supersede and replace the Existing Credit Agreement in its entirety; provided, that, (a) such amendment and restatement shall operate to renew, amend and modify the rights and obligations of the parties under the Existing Credit Agreement, as provided herein,

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but shall not effect a novation thereof, (b) unless otherwise provided for herein and evidenced by a separate written agreement, amendment or release, no other Loan Document, as defined in, and executed and/or delivered pursuant to the terms of, the Existing Credit Agreement (collectively, the “Existing Loan Documents”) shall be amended, terminated or released in any respect and all of such other Existing Loan Documents shall remain in full force and effect except that the Borrowers and the Lenders agree that by executing this Agreement the definition of “Credit Agreement” contained in such Existing Loan Documents shall be amended to refer to this Agreement as it may hereafter be amended, modified, renewed or extended in accordance with the terms hereof in place of the Existing Credit Agreement, and (c) the Liens securing the Secured Obligations under and as defined in the Existing Credit Agreement and granted pursuant to the Existing Loan Documents and the liabilities and obligations of the US Borrowers shall not be extinguished, but shall be carried forward, and such Liens shall secure such Secured Obligations, in each case, as renewed, amended, restated and modified hereby.

Upon delivery of the Certificate of Effectiveness, (a) each US Lender who holds US Revolving Loans in an aggregate amount less than its Applicable Percentage (after giving effect to this amendment and restatement) of all US Revolving Loans shall advance new US Revolving Loans which shall be disbursed to the Administrative Agent and used to repay US Revolving Loans outstanding to each US Lender who holds US Revolving Loans in an aggregate amount greater than its Applicable Percentage of all US Revolving Loans, (b) each Canadian Lender who holds Canadian Revolving Loans in an aggregate amount less than its Applicable Percentage (after giving effect to this amendment and restatement) of all Canadian Revolving Loans shall advance new Canadian Revolving Loans which shall be disbursed to the Canadian Administrative Agent and used to repay Canadian Revolving Loans outstanding to each Canadian Lender who holds Canadian Revolving Loans in an aggregate amount greater than its Applicable Percentage of all Canadian Revolving Loans, (c) each Lender’s participation in each Letter of Credit shall be automatically adjusted to equal its Applicable Percentage (after giving effect to this amendment and restatement), and (d) such other adjustments shall be made as the Administrative Agent or the Canadian Administrative Agent, as applicable, shall specify so that each Lender’s US Credit Exposure and Canadian Credit Exposure equal its Applicable Percentage (after giving effect to this amendment and restatement) of the Aggregate US Credit Exposure and the Aggregate Canadian Credit Exposure, respectively.  The loans and/or adjustments described in this paragraph are referred to herein as the “True-Up Loans”.

The parties hereto further agree as follows:

ARTICLE I
DEFINITIONS

Section 1.1            Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:

“ABR”, when used in reference to (a) any Loan or Borrowing to any US Borrower, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate, and (b) any Dollar Denominated Loan to any Canadian Borrower, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the US Base Rate (Canada).

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“Acceptance Fee” means a fee payable in C$ by the Canadian Borrowers to a Canadian Lender with respect to the acceptance or purchase of a B/A by such Canadian Lender, calculated on the face amount of such B/A at a rate per annum equal to the Applicable Rate with respect to B/A Loans on the basis of the number of days in the applicable Contract Period (inclusive of the first day and exclusive of the last day) and a year of 365 days (or 366 days in a leap year) (it being agreed that the Applicable Rate in respect of a B/A Equivalent Note is equivalent to the Applicable Rate otherwise applicable to the B/A Borrowing which has been replaced by the making of such B/A Equivalent Note pursuant to Section 2.14(g)).

“Account” has the meaning assigned to such term in the applicable UCC.

“Account Debtor” means any Person obligated on an Account.

“Acquisition” means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which any Loan Party (a) acquires any going business or all or substantially all of the assets of any Person, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the Equity Interests in a Person which has ordinary voting power for the election of directors or other similar management personnel of a Person (other than Equity Interests having such power only by reason of the happening of a contingency) or a majority of the outstanding Equity Interests in a Person.

“Activation Period” means any period commencing on the date that Availability is less than the greater of (i) $25,000,000 and (ii) 10% of the US Revolving Commitments at any time, and, in each case, continuing until the date that both (x) Availability exceeds the greater of (1) $25,000,000 and (2) 10% of the US Revolving Commitments at such time for ninety (90) consecutive calendar days and (y) no Default or Event of Default then exists or has existed during such ninety (90) consecutive calendar day period.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders hereunder and its successors and assigns in such capacity.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Agents” means the Administrative Agent, the Canadian Administrative Agent, the US Collateral Agent and the Canadian Collateral Agent together, and “Agent” means any one of such Agents individually.

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“Aggregate Canadian Credit Exposure” means, at any time, the sum of all of the Canadian Lenders’ Canadian Credit Exposure.

“Aggregate US Credit Exposure” means, at any time, the sum of all of the US Lenders’ US Credit Exposure.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate for a one month interest period appearing on the Reuters Screen LIBOR01 Page (or on any successor or substitute page) on such day plus 1%; provided that, for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing on the Reuters Screen LIBOR01 Page (or on any successor or substitute page) at approximately 11:00 a.m. London time on such day (without any rounding).  Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

“Ansary Related Parties” means Mr. Hushang Ansary, his family members or Persons in which all Equity Interests in such Persons are owned or otherwise Controlled solely by Hushang Ansary and/or members of his family.

“Applicable Percentage” means (a) with respect to any US Lender, (i) with respect to US Revolving Loans, LC Exposure, Swingline Loans or US Overadvances, a percentage equal to a fraction the numerator of which is such US Lender’s US Revolving Commitment and the denominator of which is the aggregate US Revolving Commitments of all US Revolving Lenders (if the US Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon such US Revolving Lender’s share of the aggregate US Revolving Exposures at that time), and (ii) with respect to US Protective Advances or with respect to the Aggregate US Credit Exposure, a percentage based upon its share of the Aggregate US Credit Exposure and the unused US Commitments, and (b) with respect to any Canadian Lender, (i) with respect to Canadian Revolving Loans or Canadian Overadvances, a percentage equal to a fraction the numerator of which is such Canadian Lender’s Canadian Revolving Commitment and the denominator of which is the aggregate Canadian Revolving Commitments of all Canadian Lenders (if the Canadian Revolving Commitments have been terminated or expired, the Applicable Percentages shall be determined based upon such Canadian Lender’s share of the aggregate Canadian Revolving Exposures at that time), and (ii) with respect to Canadian Protective Advances or Aggregate Canadian Credit Exposure, a percentage based on its share of the Aggregate Canadian Credit Exposure and the unused Canadian Commitments; provided that, in accordance with Section 2.27, so long as any Lender shall be a Defaulting Lender, such Defaulting Lender’s US Revolving Commitment and Canadian Revolving Commitment, as applicable, shall be disregarded in the calculations under clauses (a) and (b) above, respectively.

“Applicable Rate” means, for any day, with respect to any ABR Loan, Eurodollar Loan, B/A Loan or Canadian Prime Rate Loan, as the case may be, the applicable rate per annum set forth below under the caption “ABR Spread”, “Eurodollar Spread”, “B/A Spread” or “Canadian Prime Rate Spread”, as the case may be, based upon the Borrowers’ Average Excess Availability as of the most recent determination date, provided that until the first calendar

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day of the month following the date of delivery to the Administrative Agent, pursuant to Section 5.1, of the Company’s consolidated financial information and related compliance certificate for the Company’s fiscal quarter ending January 31, 2012 the “Applicable Rate” shall be the applicable rate per annum set forth below in Category 3:

The rates per annum set forth in the pricing grid above will each decrease by 0.25% to the extent the Borrowers’ Leverage Ratio for any reporting period is less than 2.0 to 1, which decrease shall be effective only during the period described below.  For purposes of clarity, the rates per annum in respect of each category set forth in the pricing grid above shall never be reduced by more than 0.25% at any point during the term of this Agreement.

For purposes of the foregoing and subject to the foregoing proviso, (a) the Applicable Rate shall be determined as of the end of each fiscal quarter of the Borrowers upon the Administrative Agent’s receipt of such consolidated financial statements and related compliance certificate based upon the Borrowers’ Average Excess Availability for the preceding fiscal quarter and Leverage Ratio determined for the period of four consecutive fiscal quarters ending on the last day of the preceding fiscal quarter and (b) each change in the Applicable Rate resulting from a change in the Borrowers’ Average Excess Availability or Leverage Ratio shall be effective during the period commencing on and including the first calendar day of the month following the date of delivery to the Administrative Agent of such consolidated financial statements and related compliance certificate and ending on the date immediately preceding the effective date of the next such change; provided that to the extent the pricing grid has been decreased by 0.25% pursuant to the foregoing paragraph, the rates per annum will be re-set as set forth in the pricing grid above at the option of the Administrative Agent or at the request of the Required Lenders if the Borrowers fail to deliver the annual or quarterly consolidated financial statements or related compliance certificate required to be delivered by them pursuant to Section 5.1 during the period from the expiration of the time for delivery thereof until the first calendar day of the month following the date of delivery of such consolidated financial statements and related compliance certificate.

Without limitation of any other provision of this Agreement or any other remedy available to the Agents or the Lenders under any of the Loan Documents, to the extent that any financial statements or compliance certificate delivered by the Borrowers pursuant to Section 5.1 shall be incorrect in any manner in respect any period (an “Applicable Period”) and the Company or any other Loan Party shall deliver to the Administrative Agent and/or the Lenders corrected financial statements for such Applicable Period, the Administrative Agent may recalculate the Leverage Ratio for such Applicable Period based upon such corrected financial

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statements, and, if such recalculation results in a Leverage Ratio that would have caused the Applicable Rate for such Applicable Period to have been higher than under the prior calculations, then upon written notice thereof to the applicable Borrower Representative, the Loans shall bear interest based upon such recalculated Applicable Rate for such Applicable Period retroactively from the date of delivery of the erroneous financial statements in question.

“Appraised Value” means (a) with respect to the Eligible Mortgaged Real Property, the fair market value of the Eligible Mortgaged Real Property reflected in an MAI appraisal of such Real Property and (b) with respect to the Eligible Equipment, the net orderly liquidation value of the Eligible Equipment in an appraisal of such equipment, in each case in form and substance and prepared by an appraiser acceptable to the Administrative Agent and the Canadian Administrative Agent, as applicable.

“Approved Fund” has the meaning assigned to such term in Section 9.4.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.4), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

“Available Canadian Revolving Commitment” means, with respect to each Canadian Lender at any time, the Canadian Revolving Commitment of such Canadian Lender then in effect minus the Canadian Revolving Exposure of such Canadian Lender at such time.

“Available US Revolving Commitment” means, with respect to each US Revolving Lender at any time, the US Revolving Commitment of such US Revolving Lender then in effect minus the US Revolving Exposure of such US Revolving Lender at such time.

“Availability” means, at any time, the sum of the US Availability and the Canadian Availability.

“Availability Block” has the meaning assigned to such term in Section 2.26.

“Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.

“Average Excess Availability” means, for any period the average daily Availability determined for such period based on the excess Availability during such period as determined by the Administrative Agent.

“B/A” means a non-interest bearing bill of exchange denominated in C$, drawn by the Canadian Borrowers and accepted by a Canadian Lender in accordance with this Agreement, and includes a “depository note” within the meaning of the Depository Bills and Notes Act (Canada) and a bill of exchange within the meaning of the Bills of Exchange Act (Canada).

“B/A Cover” means an amount equal to the aggregate amount of all outstanding B/A Loans, which amount when required by this Agreement (a) shall be paid to the Canadian Administrative Agent, in immediately available funds, and collaterally assigned as security for

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Canadian Secured Obligations pursuant to the Loan Documents, and (b) shall be retained by the Canadian Administrative Agent and applied to repay the principal of each B/A Loan upon the maturity thereof until all such B/A Loans and all other Canadian Secured Obligations have been fully satisfied.

“B/A Equivalent Note “ has the meaning assigned such term in Section 2.14(g).

“B/A Loan” means a Borrowing represented by B/As.

“Banking Services” means each and any of the following bank services provided to any Loan Party by any Lender or any of its Affiliates:  (a) commercial credit cards, purchase cards and products related to commercial credit and purchase cards, (b) stored value cards and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).

“Banking Services Obligations” of the Loan Parties means any and all obligations of the Loan Parties, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

“Banking Services Reserves” means all Reserves which the Administrative Agent from time to time establishes in its Permitted Discretion for Banking Services then provided or outstanding.

“Bankruptcy Event” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business, appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality), to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

“Base Value” means, with respect to certain categories of Eligible Inventory, the lower of (a) cost (determined on a first in first out basis in accordance with GAAP and excluding any component of cost consisting of intercompany profit with respect to such Eligible Inventory acquired from an Affiliate), or (b) market value.

“Board” means the Board of Governors of the Federal Reserve System of the United States of America.

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“Borrower” or “Borrowers” has the meanings set forth in the initial paragraph hereof and shall include any other Person who becomes a Borrower under this Agreement and their successors and assigns.

“Borrower Representatives” means the Borrower Representative Canada (as defined in Section 11.1) and the Borrower Representative US (as defined in Section 11.1) together, and “Borrower Representative” means any one of such representatives of the Borrowers individually.

“Borrowing” means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans or B/A Loans, as to which a single Interest Period or Contract Period (as applicable) is in effect, (b) a Swingline Loan, (c) a US Protective Advance, (d) a US Overadvance, (e) a Canadian Protective Advance, and (f) a Canadian Overadvance.

“Borrowing Base Reserves” means any and all reserves which the Administrative Agent deems necessary, in its Permitted Discretion, to establish with respect to the US Borrowing Base and/or the Canadian Borrowing Base and which will be deducted in the calculation thereof, as applicable.  Such Borrowing Base Reserves include, without limitation, Banking Services Reserves, Dilution Reserves at any time that the Dilution Ratio is greater than 5%, reserves for slow moving Inventory, the Export-Related Reserve (with respect to the US Borrowing Base only), reserves for contingent liabilities of any Loan Party, reserves for uninsured losses of any Loan Party, reserves for uninsured, underinsured, un-indemnified or under-indemnified liabilities or potential liabilities with respect to any litigation with respect to the Collateral or any Loan Party, and, with respect to the Canadian Borrowing Base only, reserves for statutory claims, deemed trusts or inventory subject to rights of suppliers under Section 81.1 of the Bankruptcy and Insolvency Act (Canada), and the Canadian Priority Claims Reserve; provided, that Borrowing Base Reserves shall not include any reserves specifically described under the definition of “Commitment Reserves”.

“Borrowing Request” means a request by a Borrower Representative for a Borrowing in accordance with Section 2.2 and Section 2.3.

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, (a) when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market, and (b) when used in connection with Canadian Revolving Loans, including B/A Loans, or the determination of the Dollar Equivalent of any amount denominated in C$. “Business Day” shall also exclude any other day on which banks are required or authorized to close in Toronto, Ontario, Canada.

“C$” means the lawful money of Canada.

“C$ Denominated Loan” means Canadian Revolving Loans which are denominated in C$.

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“Canadian Administrative Agent” mean JPMorgan Chase Bank, N.A., Toronto Branch, in its capacity as administrative agent for the Canadian Lenders hereunder and its successors and assigns in such capacity.

“Canadian Administrative Agent Overline” has the meaning assigned such term in Section 2.10(j).

“Canadian Availability” means, at any time, an amount equal to (a) the lesser of the total Canadian Revolving Commitments and the Canadian Borrowing Base minus (b) the Canadian Commitment Reserves minus (c) the aggregate Canadian Revolving Exposure of all Canadian Lenders (calculated, with respect to any Defaulting Lender, as if such Defaulting Lender had funded its Applicable Percentage of all outstanding Canadian Loans if applicable).

“Canadian Borrower” or “Canadian Borrowers” means (a) SS Canada as of the Effective Date, (b) each of the Borrowers’ Canadian Subsidiaries that becomes a Borrower under this Agreement pursuant to Section 5.14 and (c) each of their successors and assigns.

“Canadian Borrowing Base” means, at any time, the sum of (a) 85% of the Canadian Borrowers’ Eligible Accounts at such time, plus (b) the lesser of (i) the Canadian Inventory Limit, and (ii) the sum of the following:

(1)           the lesser of (A) 65% of the Base Value of the Canadian Borrowers’ Eligible Inventory consisting of primary finished goods of the Canadian Borrowers’ Manufacturing Division, and (B) the sum of (x) the Inventory Advance Percentage of the Canadian Borrowers’ Eligible Inventory consisting of primary finished goods of the Canadian Borrowers’ Manufacturing Division, plus (y) the book value of the Canadian Borrowers’ Eligible Inventory consisting of primary finished goods of the Canadian Borrowers’ Manufacturing Division purchased after the date of the Inventory appraisal used to determine the Inventory Advance Percentage minus (z) the book value of the Canadian Borrowers’ Eligible Inventory consisting of primary finished goods of the Canadian Borrowers’ Manufacturing Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

(2)           the lesser of (A) 65% of the Base Value of the Canadian Borrowers’ Eligible Inventory consisting of engine and transmission units of the Canadian Borrowers’ Distribution Division, and (B) the sum of (x) the Inventory Advance Percentage of the Canadian Borrowers’ Eligible Inventory consisting of engine and transmission units of the Canadian Borrowers’ Distribution Division, plus (y) the book value of the Canadian Borrowers’ Eligible Inventory consisting of engine and transmission units of the Canadian Borrowers’ Distribution Division purchased after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the Canadian Borrowers’ Eligible Inventory consisting of engine and transmission units of the Canadian Borrowers’ Distribution Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

(3)           the lesser of (A) the Canadian Parts Inventory Limit, and (B) the sum of the following:

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(I)            the lesser of (A) 65% of the Base Value of the Canadian Borrowers’ Eligible Inventory consisting of active parts of the Canadian Borrowers’ Distribution Division, and (B) the sum of (x) the Inventory Advance Percentage of the Canadian Borrowers’ Eligible Inventory consisting of active parts of the Canadian Borrowers’ Distribution Division, plus (y) the book value of the Canadian Borrowers’ Eligible Inventory consisting of active parts of the Canadian Borrowers’ Distribution Division purchased after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the Canadian Borrowers’ Eligible Inventory consisting of active parts of the Canadian Borrowers’ Distribution Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

(II)           the lesser of (A) 65% of the Base Value of the Canadian Borrowers’ Eligible Inventory consisting of parts of the Canadian Borrowers’ Manufacturing Division, and (B) the sum of (x) the Inventory Advance Percentage of the Canadian Borrowers’ Eligible Inventory consisting of parts of the Canadian Borrowers’ Manufacturing Division, plus (y) the book value of the Canadian Borrowers’ Eligible Inventory consisting of parts of the Canadian Borrowers’ Manufacturing Division purchased after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the Canadian Borrowers’ Eligible Inventory consisting of parts of the Canadian Borrowers’ Manufacturing Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

(4)           the lesser of (A) 65% of the Base Value of the Canadian Borrowers’ Eligible Inventory consisting of custom built work-in-process of the Canadian Borrowers’ Distribution Division, and (B) the sum of (x) the Inventory Advance Percentage of the Canadian Borrowers’ Eligible Inventory consisting of custom built work-in-process of the Canadian Borrowers’ Distribution Division, plus (y) the book value of the Canadian Borrowers’ Eligible Inventory consisting of custom built work-in-process of the Canadian Borrowers’ Distribution Division purchased or manufactured after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the Canadian Borrowers’ Eligible Inventory consisting of custom built work-in-process of the Canadian Borrowers’ Distribution Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

(5)           the lesser of (A) 65% of the Base Value of the Canadian Borrowers’ Eligible Inventory consisting of identifiable work-in-process of the Canadian Borrowers’ Manufacturing Division, and (B) the sum of (x) the Inventory Advance Percentage of the Canadian Borrowers’ Eligible Inventory consisting of identifiable work-in-process of the Canadian Borrowers’ Manufacturing Division, plus (y) the book value of the Canadian Borrowers’ Eligible Inventory consisting of identifiable work-in-process of the Canadian Borrowers’ Manufacturing Division purchased or manufactured after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, minus (z) the book value of the Canadian Borrowers’ Eligible Inventory consisting of identifiable work-in-process of the Canadian Borrowers’ Manufacturing Division sold, retired or otherwise disposed of and depreciated after the date of the Inventory appraisal used to determine the Inventory Advance Percentage, plus

(6)           the Canadian Fixed Asset Component, minus

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(7)           Borrowing Base Reserves (applicable to the Canadian Borrowing Base as determined by the Administrative Agent in its Permitted Discretion).

The Administrative Agent may, in its Permitted Discretion, reduce the advance rates set forth above, or reduce one or more of the other elements used in computing the Canadian Borrowing Base, with any such changes to be effective three (3) days after delivery of notice thereof to the Borrower Representative Canada and the Canadian Lenders.  The Canadian Borrowing Base at any time shall be determined by reference to the most recent Canadian Borrowing Base Certificate delivered to the Administrative Agent pursuant to Section 5.1(g) subject to (i) the right of the Administrative Agent to redetermine any component of the Canadian Borrowing Base or the calculation thereof if and to the extent the Administrative Agent believes, in its Permitted Discretion, such component or calculation to be incorrect (any such redetermination made in its Permitted Discretion and absent manifest error shall be conclusive and binding on the Canadian Borrowers) and provided that the Administrative Agent gives the Canadian Borrowers contemporaneous notice of such redetermination, and (ii) immediate adjustment as a result of (A) the establishment or release of Borrowing Base Reserves, (B) reductions in the Canadian Fixed Asset Component by the amount of the Canadian Fixed Asset Amortization Amount applicable to the Canadian Fixed Asset Component, (C) reduction in advance rates provided for herein, (D) subject to the three (3) day period set forth above, changes in eligibility criteria or standards imposed by the Administrative Agent and (E) the occurrence of a Permitted Fixed Asset Disposition (as applicable).

“Canadian Borrowing Base Certificate” means a certificate, signed and certified as accurate and complete by a Financial Officer of the Borrower Representative Canada, in substantially the form of Exhibit D or another form which is acceptable to the Administrative Agent in its sole discretion.

“Canadian Collateral Agent” means JPMorgan Chase Bank, N.A., Toronto Branch, in its capacity as collateral agent for the Canadian Lenders, and its successors and assigns in such capacity.

“Canadian Commitment” means, with respect to each Canadian Lender, the sum of such Canadian Lender’s Canadian Revolving Commitment, together with the commitment of such Canadian Lender to acquire participations in Canadian Protective Advances hereunder.  The initial amount of each Canadian Lender’s Canadian Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such Canadian Lender shall have assumed its Canadian Commitment, as applicable.

“Canadian Controlled Disbursement Account” means the accounts of any of the Canadian Borrowers (and any replacements therefor) maintained with the Canadian Administrative Agent as a zero balance, cash management account pursuant to and under any agreement between any of the Canadian Borrowers and the Canadian Administrative Agent, as modified and amended from time to time, and through which all disbursements of the Canadian Borrowers, any Loan Party and any designated Subsidiary of any Canadian Borrower are made and settled on a daily basis with no uninvested balance remaining overnight.

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“Canadian Credit Exposure” means, as to any Canadian Lender at any time, the sum of (a) such Canadian Lender’s Canadian Revolving Exposure at such time, plus (b) an amount equal to its Applicable Percentage, if any, of the aggregate principal amount of Canadian Protective Advances outstanding at such time.

“Canadian Employee Funding Liability Reserve” means all such amounts which, under the provisions of any Plan, agreement relating thereto or applicable law, (i) are required to be paid as contributions to a Plan by any Canadian Loan Party and (ii) have not been made when and at such times as required pursuant to the terms of any such Plan, agreement relating thereto or applicable law including any and all fines, penalties and assessments relating thereto.

“Canadian Fixed Asset Amortization Amount” means the monthly amortization amount, which shall be calculated and established by the Canadian Administrative Agent upon the Canadian Administrative Agent’s establishment of the Canadian Fixed Asset Component and shall be in an amount equal to 1/120th of the initial Canadian Fixed Asset Component established by the Canadian Administrative Agent after the Effective Date.  The Canadian Administrative Agent, in its Permitted Discretion, reserves the right to decrease the Canadian Fixed Asset Amortization Amount (a) upon the consummation of dispositions of Eligible Equipment or Eligible Mortgaged Real Property owned by any Canadian Borrower and (b) at such time as any equipment or Real Property which was previously Eligible Equipment or Eligible Mortgaged Real Property (as applicable) ceases to be Eligible Equipment or Eligible Mortgaged Real Property hereunder, by the applicable percentage of the Appraised Value of the Property so disposed of or the equipment or Real Property which has ceased to be Eligible Equipment or Eligible Mortgaged Real Property hereunder, as applicable; provided, that any such reduction shall be in connection with a corresponding reduction of the Canadian Fixed Asset Component.

“Canadian Fixed Asset Component” means an amount established by the Canadian Administrative Agent prior to March 31, 2012 upon its receipt of (a) an appraisal and environmental reports of the Canadian Borrowers’ Fixed Asset Collateral and all other Collateral Documents and other documents related to the Canadian Borrowers’ Fixed Asset Collateral that are required to be  delivered to the Canadian Collateral Agent pursuant to Section 5.14, in form and substance reasonably satisfactory to the Canadian Administrative Agent and (b) the Canadian Fixed Asset Component Limit Notice, which amount shall be equal to the lesser of (i) the Canadian Fixed Asset Component Limit and (ii) seventy-five percent (75%) of the Appraised Value of the Canadian Borrowers’ Fixed Asset Collateral allocated to the Canadian Fixed Asset Component.  For purposes of clarity, the Canadian Fixed Asset Component shall be $0 as of the Effective Date. The Canadian Fixed Asset Component shall be reduced by (x) the Canadian Fixed Asset Amortization Amount applicable to the Canadian Fixed Asset Component on the first day of each month commencing on the first day of the first full month following the establishment of the Canadian Fixed Asset Amortization Amount and continuing on the first day of each month thereafter throughout the term of this Agreement and (y) the percentage of the Appraised Value of any Fixed Asset Collateral allocated to the Canadian Fixed Asset Component which (1) is the subject of a casualty event (including, without limitation, damage, destruction or condemnation) or a Permitted Fixed Asset Disposition, or (2) is no longer Eligible Equipment or Eligible Mortgaged Real Property (as applicable) less in each case the portion of such amount that has already been reduced from the Canadian Fixed Asset Component as a

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result of prior Canadian Fixed Asset Amortization Amount reductions, in each case such amounts being determined by the Canadian Administrative Agent in its sole discretion.

“Canadian Fixed Asset Component Limit” means the amount of the Fixed Asset Component Limit which a Borrower Representative designates in writing (the “Canadian Fixed Asset Component Limit Notice”) as the “Canadian Fixed Asset Component Limit” on or prior to March 31, 2012; provided, that, in no event shall (a) the Canadian Fixed Asset Component Limit exceed $15,000,000 in the aggregate or (b) the sum of the Canadian Fixed Asset Component Limit and the US Fixed Asset Component Limit exceed the Fixed Asset Component Limit.

“Canadian Fixed Asset Component Limit Notice” has the meaning assigned to such term in the definition of “Canadian Fixed Asset Component Limit”.

“Canadian Funding Account” has the meaning assigned to such term in Section 4.1(h).

“Canadian Inventory Limit” means the amount of the Inventory Limit which the Borrower Representative Canada designates as the “Canadian Inventory Limit” on the Canadian Borrowing Base Certificate from which the Canadian Borrowing Base is being calculated; provided, that, in no event shall the sum of the Canadian Inventory Limit and the US Inventory Limit in effect at any time ever exceed the Inventory Limit.

“Canadian Lender” means, as of any date of determination, a Lender with a Canadian Revolving Commitment or, if the Canadian Revolving Commitments have terminated or expired, a Lender with Canadian Revolving Exposure.

“Canadian Loan Parties” means, (a) the Canadian Borrowers, and (b) each of the Canadian Borrowers’ Canadian Subsidiaries or any other Person which is formed or organized under the federal laws of Canada or under the laws of any province or territory in Canada and who becomes a party to this Agreement pursuant to a Joinder Agreement and their successors and assigns.

“Canadian Loans” means the Canadian Revolving Loans, the Canadian Overadvances and the Canadian Protective Advances, collectively.

“Canadian Overadvance” has the meaning assigned to such term in Section 2.5(d).

“Canadian Parts Inventory Limit” shall mean the amount of the Parts Inventory Limit which the Borrower Representative Canada designates as the “Canadian Parts Inventory Limit” on the Canadian Borrowing Base Certificate from which the Canadian Borrowing Base is being calculated; provided, that, in no event shall the sum of the Canadian Parts Inventory Limit and the US Parts Inventory Limit in effect at any time ever exceed the Parts Inventory Limit.

“Canadian Pension Plan” means any pension benefit plan within the meaning of the Employment Pension Plans Act (Alberta) in respect of which any Canadian Loan Party makes or has made contributions in respect of its employees.

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“Canadian Prime Rate” means on any day, the annual rate of interest (rounded upwards, if necessary, to the nearest 1/16 of 1%) equal to the greater of: (a) the annual rate of interest announced from time to time by Chase Canada as its prime rate in effect at its principal office in Toronto, Ontario, Canada on such day being the reference rate used for determining interest rates on C$ denominated commercial loans to its customers in Canada, and (b) the one month annual rate of interest equal to the sum of (i) the CDOR Rate in effect on such day and (ii) 1.0%.

“Canadian Prime Rate Loans” means C$ Denominated Loans which bear interest at a rate based upon the Canadian Prime Rate.

“Canadian Priority Claims Reserve” means, as of the last day of each month, the aggregate amount of all claims against the Canadian Borrowers on such date, which if asserted could have priority over the Canadian Secured Obligations pursuant to applicable Canadian federal, provincial or territorial laws and shall include, without limitation, claims with respect to accrued salaries and wages, accrued vacation payable, Revenue Canada employment taxes, goods and services taxes, and provincial sales taxes.

“Canadian Protective Advance” has the meaning assigned to such term in Section 2.4(b).

“Canadian Revolving Commitment” means, with respect to each Canadian Lender, the commitment, if any, of such Canadian Lender to make Canadian Revolving Loans and to acquire participations in Canadian Overadvances hereunder, expressed as an amount representing the maximum possible aggregate amount of such Canadian Lender’s Canadian Revolving Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.9, (b) reduced or increased from time to time pursuant to assignments by or to such Canadian Lender pursuant to Section 9.4, and (c) increased from time to time pursuant to Section 2.24.  The initial amount of each Canadian Lender’s Canadian Revolving Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such Canadian Lender shall have assumed its Canadian Revolving Commitment, as applicable.  The initial aggregate amount of the Canadian Lenders’ Canadian Revolving Commitments is $25,000,000.

“Canadian Revolving Exposure” means, with respect to any Canadian Lender at any time, the sum of (a) the outstanding principal amount of such Canadian Lender’s Canadian Revolving Loans at such time, plus (b) an amount equal to its Applicable Percentage of the aggregate principal amount of Canadian Overadvances outstanding at such time.

“Canadian Revolving Loan” means a Loan to the Canadian Borrowers made pursuant to Section 2.1 in either Dollars or C$.

“Canadian Secured Obligations” means (a) all Obligations owing by the Canadian Loan Parties, (b) all Banking Services Obligations owing by the Canadian Loan Parties and (c) Swap Obligations owing by the Canadian Loan Parties to one or more Canadian Lenders or their respective Affiliates; provided that at or prior to the time that any transaction relating to a Swap Obligation is executed, the Canadian Lender party thereto (other than Chase Canada) shall have

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delivered written notice to the Administrative Agent that such a transaction has been entered into and that it constitutes a Canadian Secured Obligation entitled to the benefits of the Collateral Documents.

“Canadian Security Agreement” means that certain Amended and Restated Canadian Pledge and Security Agreement, dated as of the date hereof, between the Canadian Loan Parties and the Canadian Collateral Agent, for the benefit of itself, the Canadian Administrative Agent, the Canadian Lenders and the Other Secured Parties, as the same may be amended, restated or otherwise modified from time to time, and (b) any other pledge or security agreement entered into after the date of this Agreement by any Canadian Loan Party (as required by this Agreement or any other Loan Document) in favor of the Canadian Collateral Agent for the ratable benefit of the Canadian Administrative Agent, the Canadian Lenders and the Other Secured Parties to secure the Canadian Secured Obligations, as the same may be amended, restated, or otherwise modified from time to time.

“Canadian Settlement Date” means the date, weekly, and more frequently, at the discretion of the Canadian Administrative Agent, upon the occurrence of an Event of Default or a continuing decline or increase of the Canadian Revolving Loans, that the Canadian Administrative Agent and the Canadian Lenders shall settle amongst themselves so that (a) the Canadian Administrative Agent shall not have, as the agent for the Canadian Lenders, any money at risk, and (b) on such Canadian Settlement Date the Canadian Lenders shall have their Applicable Percentage of the Aggregate Canadian Revolving Exposure; provided, that, each Canadian Settlement Date for a Canadian Lender shall be a Business Day on which such Canadian Lender and its bank are open for business, as applicable; provided, further, each Canadian Lender shall have at least one Business Day’s notice of a Canadian Settlement Date and the amount owed by such Canadian Lender on that date.

“Canadian Subsidiary” means any Subsidiary of any Borrower that is formed or organized under the federal laws of Canada or under the laws of any province or territory thereof.

“Capital Expenditures” means, with respect to any Person, without duplication, any expenditure or commitment to expend money by such Person for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of such Person and its Subsidiaries prepared in accordance with GAAP.

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

“CDOR Rate” means on any date, the annual rate of interest which is the rate based on an average rate applicable to bankers’ acceptances for a term of thirty (30) days appearing on the “Reuters Screen CDOR Page” (as defined in the International Swaps and Derivatives Association, Inc. definitions, as modified and amended from time to time) at approximately

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10:00 a.m. (Toronto, Ontario Canada time), on such date, or if such date is not a Business Day, then on the immediately preceding Business Day, provided, that, if such rate does not appear on the Reuters Screen CDOR Page as contemplated, then the CDOR Rate on any date shall be calculated as the rate for the term referred to above applicable to bankers’ acceptances quoted by Chase Canada as of 10:00 a.m. (Toronto, Ontario, Canada time) on such date or, if such date is not a Business Day, then on the immediately preceding Business Day.

“Certificate of Effectiveness” means a Certificate of Effectiveness in the form of Exhibit J attached hereto to be executed by the Borrowers and the Administrative Agent upon the satisfaction (or waiver in accordance with Section 9.2) of each of the conditions precedent contained in Section 4.1 hereof.

“Change in Control” means (a) (i) prior to the completion of a Qualified Public Offering, Ansary Related Parties shall cease to own, free and clear of all Liens or other encumbrances, Equity Interests in the Company possessing at least 50.01% of the total voting power of the Equity Interests in the Company entitled to vote on a fully diluted basis and (ii) after the completion of a Qualified Public Offering, any Unrelated Person or Unrelated Persons, acting together, which would constitute a Group together with Affiliates and Related Persons thereof (in each case also constituting Unrelated Persons) shall at any time either (1) Beneficially Own more than 35% of the aggregate voting power of the Equity Interests in the Company entitled to vote on a fully diluted basis and such percentage owned is greater than the percentage of the aggregate voting power of the Equity Interests in the Company entitled to vote on a fully diluted basis then owned by Ansary Related Parties, or (2) succeed in having a sufficient number of its or their nominees elected to the board of directors/managers of the Company such that such nominees, when added to any existing director remaining on such governing body of the Company after such election who is an Affiliate or Related Person of such Person or Group, shall constitute a majority of the governing body of the Company; (b) the Company shall cease to own, directly or indirectly, free and clear of all Liens or other encumbrances (other than Liens created pursuant to a Loan Document) 100% of the outstanding Equity Interests in each Loan Party (other than the Company); (c) occupation of a majority of the seats (other than vacant seats) on the board of directors/managers of the Company by Persons who were neither (i) nominated by the board of directors/managers of the Company nor (ii) appointed by directors/managers so nominated; (d) the acquisition of direct or indirect Control of any Loan Party by any Person or group other than Ansary Related Parties; or (e) so long as any of the Senior Notes are outstanding, any “Change of Control”, “Fundamental Change” or other similar term described in the Senior Notes Indenture.  As used herein (1) “Beneficially Own” means “beneficially own” as defined in Rule 13d-3 and 13d-5 of the Securities Exchange Act of 1934, as amended, or any successor provision thereto; (2) “Group” means a “group” for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended; (3) “Unrelated Person” means at any time any Person other than Ansary Related Parties and the Company; and (4) “Related Person” of any Person means any other Person owning (A) 10% or more of the outstanding Equity Interests of such Person or (B) 10% or more of the voting power of the Equity Interests in such Person entitled to vote on a fully diluted basis.

“Change in Law” means (a) the adoption of any law, rule, regulation or treaty (including any rules or regulations issued under or implementing any existing law) after the date of this Agreement, (b) any change in any law, rule, regulation or treaty or in the interpretation or

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application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.16(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder, issued in connection therewith or in implementation thereof, and (ii) all requests, rules, guidelines and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.

“Chase” means JPMorgan Chase Bank, N.A., a national banking association, in its individual capacity, and its successors.

“Chase Canada” means JPMorgan Chase Bank, N.A., Toronto Branch, in its individual capacity and not as the Canadian Administrative Agent or Canadian Collateral Agent.

“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are US Revolving Loans, Canadian Revolving Loans, Swingline Loans, US Protective Advances, Canadian Protective Advances, US Overadvances or Canadian Overadvances.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Collateral” means any and all property owned, leased or operated by a Person covered by the Collateral Documents and any and all other property of any Loan Party, now existing or hereafter acquired, that may at any time be or become subject to a security interest or Lien in favor of either the US Collateral Agent or the Canadian Collateral Agent, on behalf of the Agents, the Lenders, the Export-Related Lender and the Other Secured Parties to secure all or a portion of the Secured Obligations, as applicable.

“Collateral Access Agreement” has the meaning assigned to such term in the Security Agreements.

“Collateral Documents” means, collectively, the Security Agreements, the Mortgages and any other documents granting a Lien upon the Collateral as security for payment of the Secured Obligations.

“Collection Accounts” has the meaning assigned to such term in the Security Agreements.

“Commitment” means any US Commitment or Canadian Commitment and “Commitments” means all such Commitments collectively.

“Commitment Fee Rate” means the applicable rate per annum set forth below under the caption “Commitment Fee Rate” on the average daily unused portion of the US Revolving

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Commitments and, without duplication, the Canadian Revolving Commitment payable monthly in arrears to the Administrative Agent for the account of the Lenders (including the Administrative Agent and the Canadian Administrative Agent), as applicable, commencing on the first day of the first fiscal quarter following the Effective Date, provided that until the first calendar day of the month following the date of delivery to the Administrative Agent, pursuant to Section 5.1, of the Company’s consolidated financial information and related compliance certificate for the Company’s fiscal quarter ending January 31, 2012, the “Commitment Fee Rate” shall be the applicable rate per annum set forth below in Category 1:

For purposes of the foregoing and subject to the foregoing proviso, (a) the Commitment Fee Rate shall be determined as of the end of each fiscal quarter of the Borrowers upon receipt of the Company’s annual or quarterly consolidated financial statements and related compliance certificate delivered pursuant to Section 5.1 based upon the average daily unused portion of the Commitments for such preceding fiscal quarter as determined by the Administrative Agent and (b) each change in the Commitment Fee Rate resulting from a change in the amount of the Commitments utilized shall be effective during the period commencing on and including the first calendar day of the month following the date of delivery to the Administrative Agent of such consolidated financial statements and  related compliance certificate and ending on the date immediately preceding the effective date of the next such change.

“Commitment Increase Agreement” means a Commitment Increase Agreement entered into by a Lender in accordance with Section 2.24 and accepted by the Administrative Agent or the Canadian Administrative Agent, as applicable, in the form of Exhibit G, or any other form approved by the Administrative Agent or the Canadian Administrative Agent, as applicable.

“Commitment Increase Notice” has the meaning assigned to such term in Section 2.24 hereof.

“Commitment Reserves” means any and all reserves which the Administrative Agent deems necessary, in its Permitted Discretion, to establish with respect to the maximum amount available for borrowing under the Revolving Commitments.  Such Commitment Reserves include, without limitation, reserves for accrued and unpaid interest on the Obligations, reserves for Swap Obligations, the Special Vendor Payable Reserve, the Rent Reserve, reserves for other charges at consignee, warehouse and bailee locations, reserves for customs and shipping charges for inventory in transit and reserves for taxes, fees, assessments, and other governmental charges, and the Canadian Employee Funding Liability Reserve; provided, that Commitment Reserves shall not include any reserves (a) specifically described under the definition of “Borrowing Base Reserves” or (b) for scheduled payments of amounts then owing under the Senior Notes to the extent the Availability Block is then in effect.

“Commitment Schedule” means the Schedule attached hereto identified as such.

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“Company” has the meaning assigned to such term in the initial paragraph hereof.

“Contract Period” means the term of a B/A and related B/A Loan selected by the Canadian Borrowers in accordance with Section 2.8 or Section 2.14 commencing on the date of the Borrowing or such B/A Loan or any rollover date, as applicable, of such B/A (which shall be a Business Day) and expiring on a Business Day which shall be either one month, two months, three months, or with the consent of the Canadian Lenders, six months later; provided, that, no Contract Period shall extend beyond the Maturity Date.  Notwithstanding the foregoing, whenever the last day of any Contract Period would otherwise occur on a day which is not a Business Day, the last day of such Contract Period shall occur on the next succeeding Business Day and such extension of time shall in such case be included in computing the Acceptance Fee in respect of the relevant B/A.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

“Controlled Disbursement Accounts” means the Canadian Disbursement Account and the US Disbursement Account together, and “Controlled Disbursement Account” means any one of such accounts individually.

“Credit Exposure” means, at any time, the sum of the US Credit Exposure and the Canadian Credit Exposure.

“Current Financials” means, as of any day, the financial statements and other related information for any applicable period most recently required to be delivered to the Administrative Agent pursuant to Section 5.1(a), Section 5.1(b) and Section 5.1(c).

“Dated Assets” has the meaning assigned to such term in Section 2.23(e) hereof.

“Dated Liabilities” has the meaning assigned to such term in Section 2.23(e) hereof.

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Defaulting Lender” means any Lender, that has (a) failed, within two (2) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Loan Party any other amount required to be paid by it hereunder; (b) has notified any Borrower or any Loan Party in writing, or has made a public statement, to the effect that it does not intend or expect to comply with any of its funding obligations under this Agreement or generally under other agreements in which it commits to extend credit, (c) has failed, within three (3) Business Days after request by a Loan Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this

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clause (c) upon such Loan Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

“Detroit Diesel” means Detroit Diesel Corporation, MTU Detroit Diesel, Inc., MTU Friedrichshafen GmbH, MTU DDC International GmbH, DDC MTU Americas Company L.L.C., DaimlerChrysler AG, DaimlerChrysler Off-Highway Holding GmbH and their Affiliates.

“Deutz” means Deutz Corporation and its Affiliates.

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

“Dilution Ratio” means, at any date, the amount (expressed as a percentage) equal to (a) the aggregate amount of the applicable Dilution Factors for the twelve (12) most recently ended fiscal months divided by (b) total gross sales for the twelve (12) most recently ended fiscal months.

“Dilution Reserve” means, at any date, the applicable Dilution Ratio multiplied by the Eligible Accounts on such date.

“Disclosed Matters” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.6.

“Discount Proceeds” means for any B/A, an amount (rounded to the nearest whole C$ cent, and with one-half of one C$ cent being rounded upwards) calculated on the applicable date of the Borrowing of which such B/A is a part or any rollover date for such Borrowing by multiplying:  (a) the face amount of the B/A; by (b) the quotient of one divided by the sum of one plus the product of:  (1) the Discount Rate (expressed as a decimal) applicable to such B/A, and (2) a fraction, the numerator of which is the Contract Period of the B/A and the denominator of which is 365 (or 366 in a leap year), with such quotient being rounded up or down to the fifth decimal place, and .000005 being rounded up.

“Discount Rate” means, with respect to a B/A for a particular Contract Period being purchased by a Lender on any day, (a) for any lender which is a Schedule I chartered bank under the Bank Act (Canada), the CDOR Rate on such day for such Contract Period; and (b) for any other lender, the lesser of (i) the CDOR Rate on such day for such Contract Period, plus 0.10%, and (ii) the percentage discount rate quoted by such Lender as the percentage discount rate at which such Lender would, in accordance with its normal practices, at or about 10:00 a.m., Toronto, Ontario Canada time, on such date, be prepared to purchase bankers’ acceptances having a face amount and term comparable to the face amount and term of such B/A.

“Distribution Division” means the operating divisions of the Borrowers (formerly known as the power products division) engaged in the sale and rental of various industrial equipment; sale of components, replacement parts, accessories and other materials supplied by independent manufacturers; provision of in-shop and on-site repair services for industrial,

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transportation, marine, construction, power generation and material handling equipment; and fabrication, marketing and packaging of engine-driven equipment.

“Document” has the meaning assigned to such term in the US Security Agreement.

“Dollar Denominated Loans” means US Revolving Loans and any Canadian Revolving Loans which are denominated in Dollars.

“Dollar Equivalent” means, on any date of determination, with respect to any amount expressed in C$, the amount of Dollars that may be purchased with such amount of C$ at the Spot Exchange Rate on such date.

“Dollars” or “$” (without further designation) refers to lawful money of the United States of America.

“EBITDA” means, for any period, Net Income for such period plus (a) without duplication and to the extent deducted in determining Net Income for such period, the sum of (i) Interest Expense for such period, (ii) income tax expense for such period net of tax refunds, (iii) all amounts attributable to depreciation and amortization expense for such period, (iv) any extraordinary non-cash charges for such period, (v) any other non-cash charges for such period and (vi) fees and expenses incurred in connection with a Permitted Acquisition and payable to unrelated third parties during such period; provided that the aggregate amount of such fees and expenses added to EBITDA for all periods pursuant to this clause (vii) shall not exceed $7,500,000, minus (b) without duplication and to the extent included in Net Income, any extraordinary gains and any non-cash items of income for such period, all calculated for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP but excluding from such calculation any results of operations of each Excluded Subsidiary.  For purposes of determining EBITDA for any period, if the Borrowers make one or more Permitted Acquisitions during such period for aggregate consideration in excess of $15,000,000, EBITDA will be determined on a pro forma basis (determined in a manner acceptable to the Administrative Agent in its Permitted Discretion) giving effect to such Permitted Acquisition(s) as if it/they had occurred on the first day of such period.

“Effective Date” means the date on which the conditions specified in Section 4.1 are satisfied (or waived in accordance with Section 9.2).

“Eligible Accounts” means, at any time, the Accounts of the Borrowers which the Administrative Agent determines in its Permitted Discretion are eligible as the basis for the extension of Revolving Loans, Swingline Loans and the issuance of Letters of Credit hereunder.  Without limiting the Administrative Agent’s discretion provided herein, Eligible Accounts shall not include any Account:

(a)           which is not subject to a first priority perfected security interest in favor of the US Collateral Agent or the Canadian Collateral Agent, as applicable (subject to Permitted Senior Encumbrances);

(b)           which is subject to any Lien other than (i) a Lien in favor of the US Collateral Agent or the Canadian Collateral Agent, as applicable, and (ii) Permitted Senior Encumbrances

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and other Permitted Encumbrances which other Permitted Encumbrances do not have priority over the Lien in favor of the US Collateral Agent or the Canadian Collateral Agent, as applicable;

(c)           which is unpaid more than 90 days after the date of the original invoice therefor or more than 60 days after the original due date, or which has been written off the books of a Borrower or otherwise designated as uncollectible;

(d)           which is owing by an Account Debtor for which more than 50% of the Accounts owing from such Account Debtor and its Affiliates are otherwise ineligible hereunder;

(e)           which is owing by an Account Debtor other than any Account Debtor whose securities are rated BBB or better by S&P or Baa3 or better by Moody’s to the extent the aggregate amount of Accounts owing from such Account Debtor and its Affiliates to the Borrowers exceeds 15% of the aggregate Eligible Accounts (to the extent of such excess);

(f)            with respect to which any covenant, representation, or warranty contained in this Agreement or in any Security Agreement has been breached or is not true;

(g)           which (i) does not arise from the sale of goods or performance of services in the ordinary course of business, (ii) is not evidenced by an invoice or other documentation satisfactory to the Administrative Agent which has been sent to the Account Debtor, (iii) represents a progress billing, (iv) is contingent upon a Borrower’s completion of any further performance, (v) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any other repurchase or return basis or (vi) relates to payments of interest;

(h)           for which the goods giving rise to such Account have not been shipped to the Account Debtor or for which the services giving rise to such Account have not been performed by a Borrower or if such Account was invoiced more than once (except to the extent such invoice was not redated as of a date later than the original invoice date and such account is not otherwise compromised);

(i)            with respect to which any check or other instrument of payment has been returned uncollected for any reason;

(j)            which is owed by an Account Debtor which has (i) applied for, suffered, or consented to the appointment of any receiver, custodian, trustee, or liquidator of its assets, (ii) has had possession of all or a material part of its property taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had filed against it, any request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or voluntary or involuntary case under any state or federal bankruptcy laws, (iv) has admitted in writing its inability, or is generally unable, to pay its debts as they become due, (v) become insolvent, or (vi) ceased operation of its business;

(k)           which is owed by any Account Debtor which has sold all or a substantially all of its assets;

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(l)            which is owed by an Account Debtor which (i) does not maintain its chief executive office in the U.S. or Canada or (ii) is not organized under applicable law of the U.S., any state of the U.S., Canada, or any province of Canada unless, in either case, such Account is either (1) backed by a letter of credit acceptable to the Administrative Agent which is in the possession of, has been assigned to and is directly drawable by the US Collateral Agent or the Canadian Collateral Agent (as applicable), or (2) for such Accounts in an aggregate amount up to $12,500,000 (or such greater amount as may be determined from time to time by the Administrative Agent in its sole and absolute discretion), backed by credit insurance on terms and issued by a provider acceptable to the Administrative Agent;

(m)          which is owed in any currency other than (i) with respect to US Borrowers, Dollars, and (ii) with respect to Canadian Borrowers, Dollars or C$;

(n)           which is owed by (i) the government (or any department, agency, public corporation, or instrumentality thereof) of any country other than the U.S. or Canada unless such Account is backed by a letter of credit acceptable to the Administrative Agent and which is in the possession of the US Collateral Agent or the Canadian Collateral Agent (as applicable), or (ii) the government of the U.S. or Canada, or any department, agency, public corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), or the Financial Administration Act (Canada) or similar provincial or territorial legislation or municipal ordinance of similar purpose, and any other steps necessary to perfect the Lien of the US Collateral Agent or Canadian Collateral Agent (as applicable) in such Account have been complied with to the US Collateral Agent’s or Canadian Collateral Agent’s (as applicable) satisfaction;

(o)           which is owed by any Affiliate, employee, officer, director, agent or stockholder of any Loan Party;

(p)           which, for any Account Debtor, exceeds a credit limit determined by the Administrative Agent, to the extent of such excess;

(q)           which is owed by an Account Debtor or any Affiliate of such Account Debtor to which any Loan Party is indebted, but, subject to clause (y) of this definition, only to the extent of such indebtedness or is subject to any security, deposit, progress payment, retainage or other similar advance made by or for the benefit of an Account Debtor, in each case to the extent thereof;

(r)            which is subject to any counterclaim, deduction, defense, setoff or dispute but only to the extent of any such counterclaim, deduction, defense, setoff or dispute;

(s)           which is evidenced by any promissory note, chattel paper, or instrument, except for Accounts arising out of the rental of equipment in the ordinary course of business and which are evidenced by chattel paper;

(t)            which is owed by an Account Debtor located in any jurisdiction which requires filing of a “Notice of Business Activities Report” or other similar report in order to permit a Borrower to seek judicial enforcement in such jurisdiction of payment of such Account, unless such Borrower has filed such report or qualified to do business in such jurisdiction;

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(u)           with respect to which any Borrower has made any agreement with the Account Debtor for any reduction thereof, other than discounts and adjustments given in the ordinary course of business, or any Account which was partially paid and such Borrower created a new receivable for the unpaid portion of such Account;

(v)           which does not comply in all material respects with the requirements of all applicable laws and regulations, whether federal, state, provincial or local, including without limitation the Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board;

(w)          which is for goods that have been sold under a purchase order or pursuant to the terms of a contract or other agreement or understanding (written or oral) that indicates or purports that any Person other than the Borrowers have or have had an ownership interest in such goods, or which indicates any party other than a Borrower as payee or remittance party;

(x)            which the Administrative Agent determines in its Permitted Discretion may not be paid by reason of the Account Debtor’s inability to pay or which the Administrative Agent otherwise determines in its Permitted Discretion is unacceptable for any reason whatsoever;

(y)           which is owed by any vendor or supplier to any Loan Party; or

(z)            which is an Export-Related Accounts Receivable.

In the event that an Account which was previously an Eligible Account ceases to be an Eligible Account hereunder, the Borrowers or a Borrower Representative shall notify the Administrative Agent thereof on and at the time of submission of the next US Borrowing Base Certificate, Export-Related Borrowing Base Certificate or Canadian Borrowing Base Certificate (as applicable).  In determining the amount of an Eligible Account (which shall be the Dollar Equivalent at such time of any amount denominated in C$), the face amount of an Account shall be reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that the Borrowers may be obligated to rebate to an Account Debtor pursuant to the terms of any agreement or understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect of such Account but not yet applied by the Borrowers to reduce the amount of such Account.  Standards of eligibility may be changed from time to time solely by the Administrative Agent in the exercise of its Permitted Discretion, with any such changes which are more restrictive to be effective three (3) days after delivery of notice thereof to the Borrowers and the Lenders.

“Eligible Equipment” means the equipment owned by a Borrower and meeting each of the following requirements:

(a)           such Borrower has good title to such equipment;

(b)           such Borrower has the right to subject such equipment to a Lien in favor of the US Collateral Agent; such equipment is subject to a first priority perfected Lien in favor of the US Collateral Agent subject to Permitted Senior Encumbrances and is free and clear of all other

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Liens of any nature whatsoever (except for Permitted Senior Encumbrances and other Permitted Encumbrances which other Permitted Encumbrances do not have priority over the Lien in favor of the US Collateral Agent);

(c)           the full purchase price for such equipment has been paid by such Borrower;

(d)           such equipment is located on premises (i) owned by a US Borrower, which premises are subject to a first priority perfected Lien in favor of the US Collateral Agent, or (ii) leased by such Borrower where (x) the lessor has delivered to the US Collateral Agent a Collateral Access Agreement or (y) a Rent Reserve with respect to such facility has been established by the Administrative Agent in its Permitted Discretion;

(e)           such equipment is in good working order and condition (ordinary wear and tear excepted) and is used or held for use by such Borrower in the ordinary course of business of such Borrower;

(f)            such equipment is not subject to any agreement which restricts the ability of such Borrower to use, sell, transport or dispose of such equipment or which restricts the US Collateral Agent’s ability to take possession of, sell or otherwise dispose of such equipment;

(g)           such equipment does not constitute “fixtures” under the applicable laws of the jurisdiction in which such equipment is located; and

(h)           with respect to which any covenant, representation, or warranty contained in this Agreement or any Security Agreement has been breached or is not true and which does not conform to all standards imposed by any Governmental Authority.

“Eligible Inventory” means, at any time, the Inventory of the Borrowers which the Administrative Agent determines in its Permitted Discretion is eligible as the basis for the extension of Revolving Loans, Swingline Loans and the issuance of Letters of Credit hereunder.  Without limiting the Administrative Agent’s discretion provided herein, Eligible Inventory shall not include any Inventory:

(a)           which is not subject to a first priority perfected Lien in favor of the US Collateral Agent or the Canadian Collateral Agent (as applicable) subject in each case to Permitted Senior Encumbrances;

(b)           which is subject to any Lien other than (i) a Lien in favor of the US Collateral Agent or the Canadian Collateral Agent and (ii) Permitted Senior Encumbrances and other Permitted Encumbrances which other Permitted Encumbrances do not have priority over the Lien in favor of the US Collateral Agent or the Canadian Collateral Agent (as applicable);

(c)           which is, in the Administrative Agent’s opinion, obsolete, unmerchantable, defective, used, unfit for sale, not salable at prices approximating at least the cost of such Inventory in the ordinary course of business or unacceptable due to age, type, category and/or quantity;

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(d)           with respect to which any covenant, representation, or warranty contained in this Agreement or any Security Agreement has been breached or is not true and which does not conform to all standards imposed by any Governmental Authority;

(e)           in which any Person other than a Borrower shall (i) have any direct or indirect ownership, interest or title to such Inventory or (ii) be indicated on any purchase order or invoice with respect to such Inventory as having or purporting to have an interest therein;

(f)            which is not finished goods or which constitutes work-in-process (other than work-in-process inventory expressly included in the definition of the term US Borrowing Base or Canadian Borrowing Base, as applicable), raw materials, inactive, spare or, except as expressly included in the definition of the term US Borrowing Base or Canadian Borrowing Base (as applicable), replacement parts, subassemblies, packaging and shipping material, manufacturing supplies, samples, prototypes, displays or display items, bill-and-hold goods, goods that are returned or marked for return, repossessed goods, defective or damaged goods, goods held on consignment, or goods which are not of a type held for sale in the ordinary course of business;

(g)           which is not located in the U.S. or in Canada or which is in transit with a common carrier from vendors and suppliers;

(h)           which is located in any location leased by a Borrower unless (i) the lessor has delivered to the US Collateral Agent or the Canadian Collateral Agent (as applicable) a Collateral Access Agreement or (ii) a Rent Reserve with respect to such facility has been established by the Administrative Agent in its Permitted Discretion;

(i)            which is located in any third party warehouse or is in the possession of a bailee (other than a third party processor) and is not evidenced by a Document, unless (i) such warehouseman or bailee has delivered to the US Collateral Agent or the Canadian Collateral Agent (as applicable) a Collateral Access Agreement and such other documentation as the US Collateral Agent or the Canadian Collateral Agent (as applicable) may require or (ii) an appropriate Reserve has been established by the Administrative Agent in its Permitted Discretion;

(j)            which is being processed offsite at a third party location or outside processor, or is in-transit to or from said third party location or outside processor;

(k)           which is a discontinued product or component thereof;

(l)            which is the subject of a consignment by a Borrower as consignor;

(m)          which is perishable;

(n)           which contains or bears any intellectual property rights licensed to a Borrower unless the US Collateral Agent or the Canadian Collateral Agent (as applicable) is 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;

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(o)           which is not reflected in a current perpetual inventory report of the Borrowers;

(p)           with respect to Inventory consisting of rental equipment or rolling stock, which (x) is not in good working order and condition (ordinary wear and tear excepted), or (y) is subject to any agreement (other than a short term rental agreement entered into in the ordinary course of the Borrowers’ business) which restricts the ability of the Borrowers to use, sell, transport or dispose of such equipment or which restricts the US Collateral Agent’s or the Canadian Collateral Agent’s (as applicable) ability to take possession of, sell or otherwise dispose of such equipment;

(q)           which is subject to repossession under the Bankruptcy and Insolvency Act (Canada) except to the extent that the applicable vendor has entered into an agreement with the Canadian Collateral Agent waiving its right to repossession, which agreement shall be acceptable to the Administrative Agent;

(r)            which the Administrative Agent otherwise determines in its Permitted Discretion is unacceptable for any reason whatsoever; or

(s)           which is Export-Related Inventory.

In the event that Inventory which was previously Eligible Inventory ceases to be Eligible Inventory hereunder, the Borrowers or a Borrower Representative shall notify the Administrative Agent thereof on and at the time of submission of the next US Borrowing Base Certificate, Export-Related Borrowing Base Certificate or Canadian Borrowing Base Certificate.  Standards of eligibility may change from time to time solely by the Administrative Agent in the exercise of its Permitted Discretion, with any such changes which are more restrictive to be effective three (3) days after delivery of notice thereof to a Borrower Representative and the Lenders.

“Eligible Mortgaged Real Property” means the Real Property owned by a Borrower described on Schedule 3.5, and the Real Property owned by a Borrower that is described by the Borrowers to the Administrative Agent or the Canadian Administrative Agent, as the case may be, on or prior to March 31, 2012 and upon the Administrative Agent’s and the Canadian Administrative Agent’s receipt of such information Schedule 3.5 shall be deemed to be amended to include such Real Property, in each case for which each of the following statements is accurate and complete (and each Borrower by including such Real Property in the Fixed Asset Component of the US Borrowing Base or the Canadian Borrowing Base (as applicable) shall be deemed to represent and warrant to the Agents, the Issuing Bank and each Lender the accuracy and completeness of such statements):

(a)           such Borrower holds good and marketable title to the Real Property;

(b)           the Real Property is subject to a first priority perfected security interest in favor of the US Collateral Agent or the Canadian Collateral Agent (as applicable), subject in each case to Permitted Senior Encumbrances, securing the Secured Obligations; and

(c)           the Real Property is not subject to any Lien, except for Permitted Encumbrances and Liens in favor of the US Collateral Agent or the Canadian Collateral Agent (as applicable) securing the Secured Obligations.

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“EMDSI” has the meaning set forth in the initial paragraph hereof.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with any Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30 day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by any Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by any Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by any Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

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“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

“Event of Default” has the meaning assigned to such term in Article VII.

“Excluded Subsidiary” means any Subsidiary of the Company which is not a Loan Party.  The Excluded Subsidiaries on the date hereof are Stewart & Stevenson Truck Holdings LLC, Stewart & Stevenson de Venezuela, S.A., Transmissiones y Embragues, S.A., Stewart & Stevenson de las Americas Colombia Ltda. and Stewart & Stevenson Hong Kong Limited.

“Excluded Taxes” means, with respect to any Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrowers hereunder, (a) income or franchise taxes imposed on or measured by net income of any Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrowers (i)(A) by the United States of America, or by any jurisdiction under the laws of which such recipient is organized or in which its principal office is located or (B) that are Other Connection Taxes, or (ii) in the case of any Lender, in which its applicable lending office is located; (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which such recipient is located; (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrowers under Section 2.20(b)), any withholding tax that (i) is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrowers with respect to such withholding Taxes pursuant to Section 2.18(a), or (ii) is attributable to such Foreign Lender’s failure or inability to comply with Section 2.18(f); and (d) U.S. federal withholding taxes imposed under FATCA. Notwithstanding the foregoing, “Excluded Taxes” shall not include withholding taxes attributable to any amount payable by a US Loan Party pursuant to the Guarantee, a Security Agreement or any other Loan Document in respect of the Obligations of a Canadian Loan Party.

“Ex-Im Bank” means The Export-Import Bank of the United States and its successors and assigns.

“Existing Borrowers” has the meaning given such term in the recitals hereto.

“Existing Credit Agreement” has the meaning given such term in the recitals hereto.

“Export-Related Accounts Receivable” has the meaning assigned to such term in the US Security Agreement.

“Export-Related Borrowing Base” has the meaning given to such term in the Export-Related Loan Agreement.

“Export-Related Borrowing Base Certificate” means a certificate, signed and certified as accurate and complete by a Financial Officer of the Borrower Representative US, in form and substance acceptable to the Administrative Agent in its Permitted Discretion.

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“Export-Related Collection Account” has the meaning assigned to such term in the US Security Agreement.

“Export-Related Financing Documents” shall mean the “Financing Documents” as defined in the Export-Related Loan Agreement, each to be in form and substance satisfactory to Administrative Agent in its Permitted Discretion.

“Export-Related General Intangibles” has the meaning assigned to such term in the US Security Agreement.

“Export-Related Inventory” has the meaning assigned to such term in the US Security Agreement.

“Export-Related Lender” means JPMorgan Chase Bank, N.A. as the lender under the Export-Related Loan Agreement, and its successors and assigns in such capacity.

“Export-Related Loan Agreement” means that certain Fast Track Export Loan Agreement dated as of October 31, 2010 by and among the US Borrowers and the Export-Related Lender, as the same may be amended, restated, or otherwise modified from time to time.

“Export-Related Obligations” shall mean all “Borrowers’ Obligations” as defined in the Export-Related Loan Agreement.

“Export-Related Priority Collateral” means the Export-Related Accounts Receivable, the Export-Related General Intangibles and the Export-Related Inventory and Proceeds of the same.

“Export-Related Reserve” means a Borrowing Base Reserve which, at any time, shall be in an amount equal to ten percent (10%) of the Export-Related Obligations then outstanding.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any regulations or official interpretations thereof.

“Fee Letter” means one or more letter agreements regarding fees, executed by Chase and/or certain of its Affiliates and accepted and agreed to by the Company as the same have been or may hereafter be amended from time to time.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three (3) Federal funds brokers of recognized standing selected by it.

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“FEMA” means the Federal Emergency Management Agency, a component of the U.S. Department of Homeland Security that administers the National Flood Insurance Program.

“Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of a Borrower.  Unless otherwise specified, all references to a Financial Officer herein means a Financial Officer of all Borrowers.

“Fixed Asset Collateral” means Collateral constituting (a) the Eligible Mortgaged Real Property described in Schedule 3.5, and the Eligible Mortgaged Real Property that is identified by the Borrowers to the Administrative Agent or the Canadian Administrative Agent, as the case may be, on or prior to March 31, 2012 and upon the Administrative Agent or the Canadian Administrative Agent’s receipt of such information Schedule 3.5 shall be deemed to be amended to include such Real Property, in each case, together with any fixtures thereon, and (b) Eligible Equipment, in each case owned by a US Borrower or a Canadian Borrower.

“Fixed Asset Component Limit” means $50,000,000.

“Fixed Charges” means, with reference to any period, without duplication, cash Interest Expense (including the interest component of Capital Lease Obligations), plus scheduled principal payments on Indebtedness made during such period (including the principal component of Capital Lease Obligations but which shall exclude mandatory prepayments made pursuant to Section 2.11(d)), plus dividends or distributions paid in cash during such period (other than dividends or distributions paid from a Borrower or Subsidiary of a Borrower to a Borrower), all calculated for the Borrowers and their Subsidiaries on a consolidated basis.

“Fixed Charge Coverage Ratio” means, with reference to any period, the ratio of the following calculated for such period:  (a) EBITDA minus Non-Financed Capital Expenditures minus income tax expenses paid in cash to (b) Fixed Charges, all calculated for the Borrowers and their Subsidiaries other than any Excluded Subsidiary on a consolidated basis in accordance with GAAP.

“Foreign Lender” means, in respect of a Borrower, any Agent, any Lender or the Issuing Bank or other recipient of any payment hereunder by or on account of such Borrower that is organized under the laws of a jurisdiction other than that in which such Borrower is resident for tax purposes.  For purposes of this definition, (a) the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction and (b) Canada and each province and territory thereof shall be deemed to constitute a single jurisdiction.

“GAAP” means generally accepted accounting principles in the United States of America.

“Governmental Authority” means the government of the United States of America or Canada, any other nation or any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

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“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

“Guaranteed Obligations” has the meaning assigned to such term in Section 10.1.

“Hazardous Materials” means all explosive or radioactive substances or wastes, petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“Hyster” means the Hyster Company, Hyster Credit Company and their Affiliates.

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding accounts payable incurred in the ordinary course of business and not more than ninety (90) days overdue), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all reimbursement or similar obligations including interest thereon, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all reimbursement or similar obligations including interest thereon, contingent or otherwise, of such Person in respect of bankers’ acceptances, (k) obligations under any liquidated earn-out and (l) any other Off-Balance Sheet Liability.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

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“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) Other Taxes.

“Indemnitee” has the meaning assigned to such term in Section 9.3(b).

“Interest Election Request” means a request by a Borrower Representative to convert or continue a Borrowing in accordance with Section 2.8.

“Interest Expense” means, with reference to any period, total cash interest expense (including that attributable to Capital Lease Obligations) of the Borrowers and their Subsidiaries for such period with respect to all outstanding Indebtedness of the Borrowers and their Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under Swap Agreements in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP), calculated on a consolidated basis for the Borrowers and their Subsidiaries for such period in accordance with GAAP.

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline Loan) and any Canadian Prime Rate Loan, the first day of each calendar month in arrears in respect of the previous calendar month, upon any prepayment due to acceleration and the Maturity Date (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period, upon any prepayment due to acceleration and the Maturity Date, and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid and the Maturity Date.

“Interest Period” means with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as a Borrower Representative may elect; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“Inventory” has the meaning assigned to such term in the Security Agreements.

“Inventory Advance Percentage” means, with respect to a particular category of the Borrowers’ Eligible Inventory, the percentage calculated by dividing (a) 85% (or, in the case of

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the US Borrowers’ Eligible Inventory consisting of rental equipment (other than rolling stock), 90%) of the Net Orderly Liquidation Value of such Inventory as determined pursuant to the most recent Inventory appraisal conducted by the Administrative Agent pursuant to Section 5.12 hereof by (b) the book value of such Inventory as of such appraisal date.

“Inventory Limit” shall mean $150,000,000 (subject to an upward adjustment on a dollar for dollar basis not to exceed $200,000,000 upon any increase in the Revolving Commitments pursuant to Section 2.24 hereof).

“IRS” means the United States Internal Revenue Service.

“Issuing Bank” means Chase, in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.6(i).  The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

“Joinder Agreement” has the meaning assigned to such term in Section 5.14.

“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of Credit.

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all Letters of Credit outstanding at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the US Borrowers at such time.  The LC Exposure of any US Revolving Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

“LC Collateral Account” has the meaning assigned to such term in Section 2.6(j).

“LC Shortfall Amount” means an amount equal to the difference of (x) the amount of LC Exposure at such time, less (y) the amount on deposit in the LC Collateral Account at such time which is free and clear of all rights and claims of third parties.

“Lender Priority Collateral” means all US Borrowers’ Collateral other than the Export-Related Priority Collateral.

“Lender Update” means the Confidential Information Memorandum dated November 2011 and the Management Presentation dated November 16, 2011, in each case relating to the Borrowers and the Transactions.

“Lenders” means the Persons listed on the Commitment Schedule and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.  Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender, but does not include the Export-Related Lender.

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“Letter of Credit” means any letter of credit issued pursuant to the Existing Credit Agreement or this Agreement.

“Leverage Ratio” means, on any date, the ratio of (a) Total Indebtedness on such date to (b) EBITDA for the period of four consecutive fiscal quarters ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter most recently ended prior to such date).

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate (rounded upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.  Notwithstanding the above, to the extent that “LIBO Rate” or “Adjusted LIBO Rate” is used in connection with an ABR Borrowing, such rate shall be determined as modified by the definition of Alternate Base Rate.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“Loan Documents” means this Agreement, any promissory notes issued pursuant to this Agreement, any Letter of Credit applications, the Collateral Documents and all other agreements, instruments, documents and certificates identified in Section 4.1 executed and delivered to, or in favor of, any Agent or any Lenders and including all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, and delivered to any Agent or any Lender in connection with this Agreement or the transactions contemplated thereby.  Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

“Loan Guarantor” means each Loan Party.

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“Loan Guaranty” means Article X of this Agreement.

“Loan Parties” means the US Loan Parties and the Canadian Loan Parties.

“Loans” means the loans and advances made by the Lenders pursuant to this Agreement, including Swingline Loans, Overadvances and Protective Advances.

“Manufacturing Division” means the operating divisions of the Borrowers (formerly known as the engineered products division) engaged in the design, manufacturing, service and sale of equipment for coiled tubing, acidizing, fracturing, pumping (including nitrogen pumping equipment), railcar movers, seismic equipment systems, silicon controlled rectifiers and switchgear equipment.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations, prospects or condition, financial or otherwise, of the Loan Parties taken as a whole, (b) the ability of any Loan Party to perform any of its obligations under the Loan Documents to which it is a party, (c) the Collateral, or the US Collateral Agent’s or the Canadian Collateral Agent’s (as applicable) Liens (on behalf of itself, the other Agents, the Lenders, the Export-Related Lender and the Other Secured Parties) on the Collateral or the priority of such Liens, or (d) the rights of or benefits available to the Agents, the Issuing Bank, the Lenders or the Export-Related Lender thereunder.

“Material Indebtedness” means Indebtedness (other than the Loans, the B/As and Letters of Credit), obligations in respect of the Export-Related Loan Agreement or obligations in respect of one or more Swap Agreements, of any one or more of the Borrowers and their Subsidiaries in an aggregate principal amount exceeding $10,000,000.  For purposes of determining Material Indebtedness, the “obligations” of any Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that such Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

“Maturity Date” means the earliest of (a) December 23, 2016, (b) the Senior Notes Trigger Date if either of the following conditions are not satisfied by such date: (i) such Senior Notes are not repaid, repurchased, or defeased in full, or refinanced or extended to have a scheduled maturity date at least ninety (90) days after December 23, 2016 or (ii) the sum of (x) the Availability Block and (y) the principal amount of the Senior Notes subject to the Noteholder Agreement, each as established in accordance with the terms and conditions set forth in Section 2.26 is not less than the principal amount of the Senior Notes then outstanding and (c) any date on which the Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof.

“Maximum Liability” has the meaning assigned to such term in Section 10.11.

“Moody’s” means Moody’s Investors Service, Inc.

“Mortgages” means any mortgage, deed of trust or other agreement which conveys or evidences a Lien in favor of the US Collateral Agent or the Canadian Collateral Agent to secure

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the Canadian Secured Obligations or the US Secured Obligations (as applicable) on Real Property of a Loan Party, including any amendment, modification or supplement thereto.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Net Income” means, for any period, the consolidated net income (or loss) of the Borrowers and their Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary of a Borrower or is merged into or consolidated with a Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary of a Borrower) in which a Borrower or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by a Borrower or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary of any Borrower (other than another Borrower or a Loan Guarantor) to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary.

“Net Orderly Liquidation Value” means, with respect to Inventory, including, without limitation, Eligible Inventory consisting of rental equipment, of any Person, the orderly liquidation value thereof as determined in a manner acceptable to the Administrative Agent by an appraiser acceptable to the Administrative Agent, net of all costs of liquidation thereof.

“Net Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received, (ii) in the case of a casualty, insurance proceeds and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made as a result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event and (iii) the amount of all taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by a Financial Officer).

“New Lender” has the meaning assigned to such term in Section 2.24.

“New Lender Agreement” means a New Lender Agreement entered into by a New Lender in accordance with Section 2.24 and accepted by the Administrative Agent in the form of Exhibit H, or any other form approved by the Administrative Agent.

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“Non-Consenting Lender” has the meaning assigned to such term in Section 9.2(d).

“Non-Financed Capital Expenditures” means Capital Expenditures made by any Loan Party which are not financed pursuant to the incurrence of Indebtedness, the issuance of Equity Interests or receipt of an equity contribution, a Capitalized Lease Obligation or a Loan.

“Non-Paying Guarantor” has the meaning assigned to such term in Section 10.12.

“Non-U.S. Lender” means a Lender that is not a U.S. Person.

“Noteholder Agreement” has the meaning assigned to such term in Section 2.26.

“Notice of Business Activities Report” has the meaning assigned to such term in the definition of “Eligible Accounts”.

“Obligated Party” has the meaning assigned to such term in Section 10.3.

“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Loan Parties to the Lenders or to any Lender, the Agents, the Issuing Bank or any indemnified party arising under the Loan Documents.

“OFAC” has the meaning assigned to such term in Section 3.26.

“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or obligation under any so-called “synthetic lease” transaction entered into by such Person, or (c) any indebtedness, liability or obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheets of such Person (other than operating leases and Capital Lease Obligations).

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection arising from such Recipient having executed, delivered, enforced, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to, or enforced, any Loan Document, or sold or assigned an interest in any Loan Document).

“Other Secured Parties” means all of the Lenders and the Affiliates of the Lenders to whom Banking Service Obligations and/or Swap Obligations are owed.

“Other Taxes” means any present or future stamp, court, documentary, intangible, recording, filing or similar excise or property Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, or from the registration, receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment under Section 2.20(b)).

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“Overadvances” means collectively the US Overadvances and the Canadian Overadvances.

“Participant” has the meaning set forth in Section 9.4.

“Participant Register” has the meaning assigned to such term in Section 9.4(c).

“Participation Agreement” means a participation agreement entered into by the Export-Related Lender and a US Lender, as a participant, in the form of Exhibit L or any other form approved by the Export-Related Lender and the applicable US Lender.

“Parts Inventory Limit” means $50,000,000.

“Paying Guarantor” has the meaning assigned to such term in Section 10.12.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“Perfection Certificate” means that certain Perfection Certificate dated January 25, 2006, executed by each Borrower and addressed to the US Collateral Agent.

“Perfection Certificate Update” means a Certificate from a Responsible Officer of the Borrowers in the form of Exhibit I hereto to be delivered to the US Collateral Agent and the Canadian Collateral Agent monthly pursuant to Section 5.1(q) hereof and setting forth all changes that would be required to be made to the Perfection Certificate (as updated pursuant to any prior Perfection Certificate Updates) to cause the Perfection Certificate to be accurate and complete if reissued as of the last day of the month immediately preceding the month in which the Perfection Certificate Update is required to be delivered pursuant to Section 5.1(q) hereof.

“Permitted Acquisition” means any Acquisition by any Loan Party in a transaction that satisfies each of the following requirements:

(a)           such Acquisition is not a hostile or contested acquisition;

(b)           the business acquired in connection with such Acquisition is not engaged, directly or indirectly, in any line of business other than the businesses in which the Loan Parties are engaged on the date of this Agreement and any business activities that are substantially similar, related, or incidental thereto;

(c)           both before and after giving effect to such Acquisition and the Loans (if any) requested to be made in connection therewith, each of the representations and warranties in the Loan Documents is true and correct in all material respects (except (i) any such representation or warranty which relates to a specified prior date and (ii) to the extent the Administrative Agent and the Lenders have been notified in writing by the Loan Parties that any representation or warranty is not correct and the Required Lenders have explicitly waived in writing compliance with such representation or warranty) and no Default or Event of Default exists, will exist, or would result therefrom;

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(d)           as soon as available, but in any event adequately prior to such Acquisition in order to allow the Administrative Agent time to review the information provided to the Lenders under clause (ii) below, for Acquisitions with a purchase price greater than $5,000,000, the Borrowers shall provide, the Lenders (i) notice of such Acquisition and (ii) a copy of all business and financial information reasonably requested by the Administrative Agent including pro forma financial statements, statements of cash flow, and Availability projections;

(e)           if the Accounts and Inventory acquired in connection with such Acquisition are proposed to be included in the determination of the US Borrowing Base, the Export-Related Borrowing Base or the Canadian Borrowing Base, the Administrative Agent shall have conducted an audit and field examination of such Accounts and Inventory to its satisfaction, and all appropriate Lien filings and collateral documentation, including Collateral Access Agreements, have been duly completed, executed and delivered to the Administrative Agent;

(f)            [Intentionally Reserved.]

(g)           if such Acquisition is an acquisition of the Equity Interests of a Person, the Acquisition is structured so that the acquired Person shall become a wholly-owned Subsidiary of a Borrower and, to the extent required by Section 5.14, a Loan Party pursuant to the terms of this Agreement;

(h)           if such Acquisition is an acquisition of assets located primarily in the United States, the Acquisition is structured so that a Borrower shall acquire such assets;

(i)            if such Acquisition is an acquisition of Equity Interests, such Acquisition will not result in any violation of Regulation U;

(j)            no Loan Party shall, as a result of or in connection with any such Acquisition, assume or incur any direct or contingent liabilities (whether relating to environmental, tax, litigation, or other matters) that could have a Material Adverse Effect;

(k)           in connection with an Acquisition of the Equity Interests in any Person, all Liens on property of such Person shall be terminated unless permitted pursuant to Section 6.2(e), or the Administrative Agent in its sole discretion consents otherwise, and in connection with an Acquisition of the assets of any Person, all Liens on such assets shall be terminated;

(l)            the Fixed Charge Coverage Ratio for the Borrowers (after giving effect to such Acquisition) shall be greater than 1.25 to 1.00 for the most recently completed twelve month period assuming that for purposes of calculating the Fixed Charge Coverage Ratio for such period (calculated on a pro forma basis in a manner acceptable to the Administrative Agent) such Acquisition occurred on the first day of such applicable period;

(m)          Each Borrower shall certify (and provide the Administrative Agent with pro forma and projected calculations in form and substance reasonably satisfactory to the Administrative Agent), on its behalf and on behalf of the other Borrowers, to the Administrative Agent and the Lenders that, immediately after giving effect to the completion of such Acquisition and for next succeeding twelve month period, Availability will not be less than the greater of (i) $25,000,000 or (ii) 10% of the US Revolving Commitments at such time, in each

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case,  on a pro forma basis (calculated in a manner acceptable to the Administrative Agent and assuming all past due accounts payable of the Borrowers have been paid in full in cash and no accounts payable of the Borrowers are allowed to become past due during such twelve month period thereafter) which includes all consideration given in connection with such Acquisition, other than Equity Interests in the Company delivered to the seller(s) in such Acquisition, as having been paid in cash at the time of making such Acquisition; and

(n)           no Default or Event of Default exists or would result therefrom.

“Permitted Discretion” means a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.

“Permitted Encumbrances” means:

(a)           Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.4;

(b)           carriers’, warehousemen’s, landlords’, mechanics’, materialmen’s, vendors’, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 5.4;

(c)           (i) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations and (ii) pledges and deposits securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit, bank guarantees or similar instruments for the benefit of) insurance carriers providing property, casualty or liability insurance to any Loan Party;

(d)           deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

(e)           judgment liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;

(f)            easements, zoning restrictions, rights-of-way, restrictive covenants, encroachments, protrusions and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of any Borrower or any Subsidiary including without limitation any defects and encumbrances noted and disclosed in a mortgage’s title insurance policy issued in favor of and delivered to the US Collateral Agent or the Canadian Collateral Agent (as applicable) in connection with any Mortgage and any state of facts disclosed on any survey referenced in any such title policy and any replacement, extension or renewal of any such Lien; provided that such replacement, extension or renewal Lien shall not cover any property other than the property that was subject to such Lien prior to such replacement, extension or renewal; provided further that

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the Indebtedness and other obligations secured by such replacement, extension or renewal Lien are permitted by this Agreement;

(g)           any interest of a consignor in goods held by any Loan Party on consignment provided that such goods are held on consignment in the ordinary course of business and in compliance with this Agreement;

(h)           any leasehold interest or title of a lessor or sublessor under any leases or subleases entered into by any Loan Party in the ordinary course of business and in compliance with this Agreement;