Exhibit 10.3

 

 

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT

 

DATED AS OF SEPTEMBER 10, 2008

(TO BE EFFECTIVE ON THE EFFECTIVE DATE)

 

AMONG

 

ACTUANT RECEIVABLES CORPORATION, AS SELLER,

 

ACTUANT CORPORATION, AS INITIAL SERVICER,

 

AND

 

WACHOVIA BANK, NATIONAL ASSOCIATION, AS PURCHASER AND AGENT

 

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TABLE OF CONTENTS

 

          PAGE

ARTICLE I. PURCHASE ARRANGEMENTS

     1

SECTION 1.1

   PURCHASE FACILITY      1

SECTION 1.2

   INCREMENTAL PURCHASES      2

SECTION 1.3

   DECREASES      2

SECTION 1.4

   DEEMED COLLECTIONS; PURCHASE LIMIT      2

SECTION 1.5

   PAYMENT REQUIREMENTS AND COMPUTATIONS      3

ARTICLE II. PAYMENTS AND COLLECTIONS

     3

SECTION 2.1

   PAYMENTS OF RECOURSE OBLIGATIONS      3

SECTION 2.2

   COLLECTIONS PRIOR TO THE FACILITY TERMINATION DATE; REPAYMENT OF CERTAIN
DEMAND ADVANCES      4

SECTION 2.3

   REPAYMENT OF DEMAND ADVANCES ON THE FACILITY TERMINATION DATE; COLLECTIONS   
  5

SECTION 2.4

   PAYMENT RECISSION      5

SECTION 2.5

   CLEAN UP CALL      5

ARTICLE III. [RESERVED]

     6

ARTICLE IV. FUNDINGS

     6

SECTION 4.1

   FUNDINGS      6

SECTION 4.2

   YIELD PAYMENTS      6

SECTION 4.3

   SELECTION AND CONTINUATION OF INTEREST PERIODS      6

SECTION 4.4

   YIELD RATES      6

SECTION 4.5

   SUSPENSION OF THE LIBO RATE OR LMIR      7

SECTION 4.6

   DEFAULT RATE      7

ARTICLE V. REPRESENTATIONS AND WARRANTIES

     7

SECTION 5.1

   REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES      7

(a)

   Organization; Powers      7

(b)

   Authorization      7

(c)

   No Conflict      8

(d)

   Governmental Approvals      8

(e)

   Litigation      8

(f)

   Enforceability      8

(g)

   Accuracy of Information      8

(h)

   Use of Proceeds      9

(i)

   Good Title      9

(j)

   Perfection      9

(k)

   Places of Business and Locations of Records      9

(l)

   Collections      9

(m)

   Material Adverse Effect      9

(n)

   Names    10

(o)

   Ownership of Seller    10

(p)

   Not an Investment Company    10

(q)

   Compliance with Law    10

(r)

   Compliance with Credit and Collection Policy    10

(s)

   Payments to Applicable Originator    10

(t)

   Enforceability of Contracts    10

(u)

   Eligible Receivables    11

(v)

   Purchase Limit and Maximum Receivable Interests    11

(w)

   Accounting    11

ARTICLE VI. CONDITIONS OF PURCHASES

   11

SECTION 6.1

   CONDITIONS PRECEDENT TO INITIAL INCREMENTAL PURCHASE    11

SECTION 6.2

   CONDITIONS PRECEDENT TO ALL PURCHASES AND REINVESTMENTS    11

ARTICLE VII. COVENANTS

   12

SECTION 7.1

   AFFIRMATIVE COVENANTS OF THE SELLER PARTIES    12

 

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SECTION 7.2

   NEGATIVE COVENANTS OF THE SELLER PARTIES    19

ARTICLE VIII. ADMINISTRATION AND COLLECTION

   21

SECTION 8.1

   DESIGNATION OF SERVICER    21

SECTION 8.2

   DUTIES OF SERVICER    21

SECTION 8.3

   COLLECTION NOTICES.    23

SECTION 8.4

   RESPONSIBILITIES OF SELLER    23

SECTION 8.5

   MONTHLY REPORTS    23

SECTION 8.6

   SERVICING FEE    23

ARTICLE IX. AMORTIZATION EVENTS

   24

SECTION 9.1

   AMORTIZATION EVENTS    24

SECTION 9.2

   REMEDIES    26

ARTICLE X. INDEMNIFICATION

   26

SECTION 10.1

   INDEMNITIES BY THE SELLER PARTIES    27

SECTION 10.2

   INCREASED COST AND REDUCED RETURN    29

SECTION 10.3

   EXPENSES    29

ARTICLE XI. THE AGENT

   29

SECTION 11.1

   AUTHORIZATION AND ACTION    29

ARTICLE XII. ASSIGNMENTS AND PARTICIPATIONS

   30

SECTION 12.1

   ASSIGNMENTS AND PARTICIPATIONS BY PURCHASER    30

SECTION 12.2

   PROHIBITION ON ASSIGNMENTS BY SELLER PARTIES    30

ARTICLE XIII. MISCELLANEOUS

   30

SECTION 13.1

   WAIVERS AND AMENDMENTS    30

SECTION 13.2

   NOTICES    31

SECTION 13.3

   PROTECTION OF AGENT’S SECURITY INTEREST    31

SECTION 13.4

   CONFIDENTIALITY    32

SECTION 13.5

   [INTENTIONALLY DELETED]    32

SECTION 13.6

   LIMITATION OF LIABILITY    32

SECTION 13.7

   CHOICE OF LAW    32

SECTION 13.8

   CONSENT TO JURISDICTION    33

SECTION 13.9

   WAIVER OF JURY TRIAL    33

SECTION 13.10

           INTEGRATION; BINDING EFFECT; SURVIVAL OF TERMS    33

SECTION 13.11

           COUNTERPARTS; SEVERABILITY; SECTION REFERENCES    34

SECTION 13.12

           CHARACTERIZATION    34

SECTION 13.13

           TRANSACTIONS ON THE EFFECTIVE DATE    35

SECTION 13.14

           TERMINATION    35 EXHIBITS AND SCHEDULES

Exhibit I

   Definitions    38

Exhibit II

   Form of Purchase Notice    54

Exhibit III

   Places of Business of the Seller Parties; Locations of Records; Federal
Employer Identification Numbers    56

Exhibit IV

   Names of Collection Banks; Collection Accounts    57

Exhibit V

   Form of Compliance Certificate    58

Exhibit VII

   Credit and Collection Policies    62

Exhibit VIII

   Form of Monthly Report    63

 

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Exhibit IX

   Form of Performance Undertaking    66

Schedule A

   Closing Documents    67

 

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AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT

THIS AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, dated as of
September 10, 2008 (to be effective on the Effective Date (as such term is
defined in Exhibit I hereto)) is entered into by and among:

(a) Actuant Receivables Corporation, a Nevada corporation (“Seller”),

(b) Actuant Corporation, a Wisconsin corporation (“Parent”), as initial
Servicer, and

(c) Wachovia Bank, National Association, individually as purchaser (“Purchaser”)
and as agent for Purchaser and its assigns under the Transaction Documents
(together with its successors and assigns in such capacity, the “Agent”).

Unless defined elsewhere herein, capitalized terms used in this Agreement shall
have the meanings assigned to such terms in Exhibit I.

PRELIMINARY STATEMENTS

Seller desires to transfer and assign Receivable Interests from time to time.

Purchaser shall purchase Receivable Interests from Seller from time to time.

Wachovia Bank, National Association has been requested and is willing to act as
Agent on behalf of itself as Purchaser and its assigns in accordance with the
terms hereof.

This Agreement amends and restates in its entirety that certain Receivables
Purchase Agreement (the “Existing Agreement”) dated as of May 30, 2001 among the
parties hereto, as amended from time to time. All “Aggregate Unpaids” (as
defined in the Existing Agreement) outstanding on the Effective Date shall, to
the extent not paid on the Effective Date, be deemed to be Aggregate Unpaids
outstanding hereunder.

ARTICLE I.

PURCHASE ARRANGEMENTS

Section 1.1 Purchase Facility.

(a) Upon the terms and subject to the conditions of this Agreement (including,
without limitation, Article VI), from time to time from and after the Effective
Date, but prior to the Facility Termination Date, Seller may request that
Purchaser purchase from Seller undivided ownership interests in the Receivables
and the associated Related Security and Collections, and Purchaser shall make
such Purchase; provided that no Purchase shall be made by Purchaser if, after
giving effect thereto, either (i) the Aggregate Invested Amount would exceed the
Purchase Limit, or (ii) the aggregate of the Receivable Interests would exceed
100%. Seller will pay Yield on the Receivable Interests at the Alternate Base
Rate, the LIBO Rate or LIMR, selected in accordance with Article IV hereof.

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(b) Seller may, upon at least 10 Business Days’ notice to the Agent, terminate
in whole or reduce in part, the unused portion of the Purchase Limit; provided
that each partial reduction of the Purchase Limit shall be in an amount equal to
$2,000,000 (or a larger integral multiple of $1,000,000 if in excess thereof).

Section 1.2 Incremental Purchases. Seller shall provide the Agent with at least
two (2) Business Days’ prior written notice in a form set forth as Exhibit II
hereto of each Incremental Purchase (each, a “Purchase Notice”). Each Purchase
Notice shall be subject to Section 6.2 hereof and, except as set forth below,
shall be irrevocable and shall specify the requested Purchase Price (which shall
not be less than $1,000,000 or a larger integral multiple of $100,000) and the
Purchase Date (which, in the case of any Incremental Purchase after the initial
Purchase hereunder, shall only be on a Settlement Date). On each Purchase Date,
upon satisfaction of the applicable conditions precedent set forth in Article
VI, Purchaser shall deposit to the Facility Account, in immediately available
funds, no later than 2:00 p.m. (New York time), an amount equal to the requested
Purchase Price.

Section 1.3 Decreases. Seller shall provide the Agent with prior written notice
in conformity with the Required Notice Period (a “Reduction Notice”) of any
proposed reduction of Aggregate Invested Amount. Such Reduction Notice shall
designate (i) the date (the “Proposed Reduction Date”) upon which any such
reduction of Aggregate Invested Amount shall occur (which date shall give effect
to the applicable Required Notice Period), and (ii) the amount of Aggregate
Invested Amount to be reduced which shall be applied ratably to all Receivable
Interests in accordance with the respective Invested Amounts thereof (the
“Aggregate Reduction”). Only one (1) Reduction Notice shall be outstanding at
any time.

Section 1.4 Deemed Collections; Purchase Limit.

(a) If on any day:

(i) the Outstanding Balance of any Receivable is reduced or cancelled as a
result of any defective or rejected goods or services, any Contractual Dilution
or other cash discount or adjustment by any Originator or any Affiliate thereof,
or as a result of any governmental or regulatory action, or

(ii) the Outstanding Balance of any Receivable is reduced or canceled as a
result of a setoff in respect of any claim by the Obligor thereof (whether such
claim arises out of the same or a related or an unrelated transaction), or

(iii) the Outstanding Balance of any Receivable is reduced on account of the
obligation of any Originator or any Affiliate thereof to pay to the related
Obligor any rebate or refund, or

(iv) the Outstanding Balance of any Receivable is less than the amount included
in calculating the Net Pool Balance for purposes of any Monthly Report (for any
reason other than receipt of Collections or such Receivable becoming a Defaulted
Receivable), or

(v) any of the representations or warranties of Seller set forth in
Section 5.1(g), (i), (j), (r), (s), (t) or (u) were not true when made with
respect to any Receivable,

 

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then, on such day, Seller shall be deemed to have received a Collection of such
Receivable (A) in the case of clauses (i)-(iv) above, in the amount of such
reduction or cancellation or the difference between the actual Outstanding
Balance and the amount included in calculating such Net Pool Balance, as
applicable; and (B) in the case of clause (v) above, in the amount of the
Outstanding Balance of such Receivable and, not later than 2 Business Days
thereafter shall pay to the Agent’s Account the amount of any such Collection
deemed to have been received in the same manner as actual cash collections are
distributed under the terms of this Agreement.

(b) Seller shall ensure that the Aggregate Invested Amount at no time exceeds
the Purchase Limit. If at any time the Aggregate Invested Amount exceeds the
Purchase Limit, Seller shall pay to the Agent immediately an amount to be
applied to reduce the Aggregate Invested Amount (as allocated by the Agent),
such that after giving effect to such payment the Aggregate Invested Amount is
less than or equal to the Purchase Limit.

(c) Seller shall also ensure that the Receivable Interests shall at no time
exceed in the aggregate 100%. If the aggregate of the Receivable Interests
exceeds 100%, Seller shall pay to the Agent on or before the next succeeding
Settlement Date (or, if such excess is discovered on a Settlement Date, on such
Settlement Date) an amount to be applied to reduce the Aggregate Invested Amount
(as allocated by the Agent), such that after giving effect to such payment the
aggregate of the Receivable Interests equals or is less than 100%.

Section 1.5 Payment Requirements and Computations. All amounts to be paid or
deposited by any Seller Party pursuant to any provision of this Agreement shall
be paid or deposited in accordance with the terms hereof no later than 12:00
noon (New York time) on the day when due in immediately available funds, and if
not received before 12:00 noon (New York time) shall be deemed to be received on
the next succeeding Business Day. If such amounts are payable to the Agent for
the account of Purchaser, they shall be paid to the Agent’s Account, for the
account of Purchaser until otherwise notified by the Agent. All computations of
Yield, per annum fees hereunder and per annum fees under the Fee Letter shall be
made on the basis of a year of 360 days for the actual number of days elapsed.
If any amount hereunder shall be payable on a day which is not a Business Day,
such amount shall be payable on the next succeeding Business Day.

ARTICLE II.

PAYMENTS AND COLLECTIONS

Section 2.1 Payments of Recourse Obligations. Seller hereby promises to pay the
following (collectively, the “Recourse Obligations”):

(a) all amounts due and owing under Section 1.3 or 1.4 on the dates specified
therein;

(b) the fees set forth in the Fee Letter on the dates specified therein;

 

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(c) all accrued and unpaid Yield on the Receivable Interests accruing Yield at
the Alternate Base Rate or the Default Rate on each Settlement Date applicable
thereto;

(d) all accrued and unpaid Yield on the Receivable Interests accruing Yield at
the LIBO Rate or LMIR, as applicable, on the last day of each Interest Period
applicable thereto; and

(f) all Broken Funding Costs and Indemnified Amounts upon demand.

Section 2.2 Collections Prior to the Facility Termination Date; Repayment of
Certain Demand Advances.

(a) Prior to the Facility Termination Date, any Deemed Collections received by
the Servicer and Purchaser’s Portion of any Collections received by the Servicer
shall be set aside and held in trust by the Servicer for the payment of any
accrued and unpaid Aggregate Unpaids or for a Reinvestment as provided in this
Section 2.2. If at any time any Collections are received by the Servicer prior
to the Facility Termination Date, Seller hereby requests and Purchaser hereby
agrees to make, simultaneously with such receipt, a reinvestment (each, a
“Reinvestment”) with Purchaser’s Portion of the balance of each and every
Collection received by the Servicer such that after giving effect to such
Reinvestment, the Invested Amount of such Receivable Interest immediately after
such receipt and corresponding Reinvestment shall be equal to the amount of
Invested Amount immediately prior to such receipt.

(b) On each Settlement Date prior to the Facility Termination Date, the Servicer
shall remit to the Agent’s Account the amounts set aside during the preceding
Settlement Period that have not been subject to a Reinvestment and (after
deduction of its Servicing Fee) apply such amounts (if not previously paid in
accordance with Section 2.1) to the Aggregate Unpaids in the order specified:

first, ratably to the payment of all accrued and unpaid Yield and Broken Funding
Costs (if any) that are then due and owing,

second, ratably to the payment of all accrued and unpaid fees under the Fee
Letter (if any) that are then due and owing,

third, if required under Section 1.3 or 1.4, to the ratable reduction of
Aggregate Invested Amount,

fourth, for the ratable payment of all other unpaid Recourse Obligations, if
any, that are then due and owing, and

fifth, the balance, if any, to Seller or otherwise in accordance with Seller’s
instructions.

(c) If the Collections are insufficient to pay the Servicing Fee and the
Aggregate Unpaids specified above on any Settlement Date, Seller shall make
demand upon Parent for repayment of any outstanding Demand Advances in an
aggregate amount equal to the lesser of (i) the amount of such shortfall in
Collections, and (ii) the aggregate outstanding principal balance of the Demand
Advances, together with all accrued and unpaid interest thereon, and Parent
hereby agrees to pay such amount to the Agent’s Account on such Settlement Date.

 

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Section 2.3 Repayment of Demand Advances on the Facility Termination Date;
Collections.

(a) On the Facility Termination Date, Parent hereby agrees to repay the
aggregate outstanding principal balance of all Demand Advances, together with
all accrued and unpaid interest thereon, to the Agent’s Account, without demand
or notice of any kind, all of which are hereby expressly waived by Parent.

(b) On the Facility Termination Date and on each day thereafter, the Servicer
shall set aside and hold in trust, for the Secured Parties, all Collections
received on each such day. On and after the Facility Termination Date, the
Servicer shall, on each Settlement Date and on each other Business Day specified
by the Agent (after deduction of any accrued and unpaid Servicing Fee as of such
date): (i) remit to the Agent’s Account the amounts set aside pursuant to the
preceding two sentences, and (ii) apply such amounts to reduce the Aggregate
Unpaids as follows:

first, to the reimbursement of the Agent’s costs of collection and enforcement
of this Agreement,

second, ratably to the payment of all accrued and unpaid Yield and Broken
Funding Costs,

third, ratably to the payment of all accrued and unpaid fees under the Fee
Letter,

fourth, to the ratable reduction of Aggregate Invested Amount,

fifth, for the ratable payment of all other Aggregate Unpaids, and

sixth, after the Final Payout Date, to Seller.

Section 2.4 Payment Recission. Payment of any of the Aggregate Unpaids shall be
considered paid or applied hereunder to the extent that, at any time, all or any
portion of such payment or application is rescinded by application of law or
judicial authority, or must otherwise be returned or refunded for any reason.
Seller shall remain obligated for the amount of any payment or application so
rescinded, returned or refunded, and shall promptly pay to the Agent (for
application to the Person or Persons who suffered such recission, return or
refund) the full amount thereof, plus interest thereon at the Default Rate from
the date of any such recission, return or refunding.

Section 2.5 Clean Up Call. In addition to Seller’s rights pursuant to
Section 1.3, Seller shall have the right (after providing written notice to the
Agent in accordance with the Required Notice Period), at any time following the
reduction of the Aggregate Invested Amount to a level that is less than 10.0% of
the original Purchase Limit, to repurchase all, but not less than all, of the
then outstanding Receivable Interests. The purchase price in respect thereof
shall be an

 

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amount equal to the Aggregate Unpaids through the date of such repurchase,
payable in immediately available funds to the Agent’s Account. Such repurchase
shall be without representation, warranty or recourse of any kind by, on the
part of, or against Purchaser or the Agent.

ARTICLE III.

[RESERVED]

ARTICLE IV.

FUNDINGS

Section 4.1 Fundings. Prior to the occurrence of an Amortization Event, the
outstanding Invested Amount of each Receivable Interest shall accrue Yield for
each day during its Interest Period at the LIBO Rate, LMIR or the Alternate Base
Rate in accordance with the terms and conditions hereof. Until Seller gives the
required notice to the Agent of another Yield Rate in accordance with
Section 4.4, the initial Yield Rate for any Receivable Interest shall be the
Alternate Base Rate (unless the Default Rate is then applicable).

Section 4.2 Yield Payments. On the Settlement Date for each Receivable Interest,
Seller shall pay to the Agent (for the benefit of Purchaser) an aggregate amount
equal to the accrued and unpaid Yield thereon for the entire Interest Period of
each such Receivable Interest in accordance with Article II.

Section 4.3 Selection and Continuation of Interest Periods.

(a) With consultation from (and approval by) the Agent, Seller shall from time
to time request Interest Periods for the Receivable Interests, provided that
Seller shall always request Interest Periods such that at least one Interest
Period shall end on the date specified in clause (A) of the definition of
Settlement Date.

(b) Seller or the Agent, upon notice to and consent by the other received at
least three (3) Business Days prior to the end of an Interest Period (the
“Terminating Tranche”) for any Receivable Interest, may, effective on the last
day of the Terminating Tranche: (i) divide any such Receivable Interest into
multiple Receivable Interests, (ii) combine any such Receivable Interest with
one or more other Receivable Interests that have a Terminating Tranche ending on
the same day as such Terminating Tranche or (iii) combine any such Receivable
Interest with a new Receivable Interest to be purchased on the day such
Terminating Tranche ends.

Section 4.4 Yield Rates. Seller may select the LIBO Rate, LMIR (in each of the
foregoing cases, subject to Section 4.5 below) or the Alternate Base Rate for
each Receivable Interest. Seller shall by 12:00 noon (New York time): (i) at
least three (3) Business Days prior to the expiration of any Terminating Tranche
with respect to which the LIBO Rate or LMIR is being requested as a new Yield
Rate and (ii) at least one (1) Business Day prior to the expiration of any
Terminating Tranche with respect to which the Alternate Base Rate is being
requested as a new Yield Rate, give the Agent irrevocable notice of the new
Yield Rate for such Terminating Tranche. Until Seller gives notice to the Agent
of another Yield Rate, the initial Yield Rate for each Receivable Interest shall
be the Alternate Base Rate (unless the Default Rate is then applicable).

 

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Section 4.5 Suspension of the LIBO Rate or LMIR. If Purchaser notifies the Agent
that it has determined that funding any Receivable Interest at a LIBO Rate or
LMIR would violate any applicable law, rule, regulation, or directive of any
governmental or regulatory authority, whether or not having the force of law, or
that (i) deposits of a type and maturity appropriate to match-fund any
Receivable Interest at such LIBO Rate or LMIR are not available or (ii) such
LIBO Rate or LMIR does not accurately reflect the cost of acquiring or
maintaining a Receivable Interest at such LIBO Rate or LMIR, then the Agent
shall suspend the availability of such LIBO Rate or LMIR, as the case may be,
and require Seller to select the Alternate Base Rate for any Receivable Interest
accruing Yield at such rate.

Section 4.6 Default Rate. From and after the occurrence of an Amortization
Event, all Receivable Interests shall accrue Yield at the Default Rate.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

Section 5.1 Representations and Warranties of the Seller Parties. Each Seller
Party hereby represents and warrants to the Agent and Purchaser, as to itself,
as of the Effective Date and as of the date of each Incremental Purchase and the
date of each Reinvestment that:

(a) Organization; Powers. Such Seller Party (a) is duly organized, validly
existing and in good standing or active status under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority to
own its Property and to carry on its business as now conducted and as proposed
to be conducted, (c) is qualified to do business in, and is in good standing in,
every jurisdiction where such qualification is required, except where the
failure so to qualify could not reasonably be expected to result in a Material
Adverse Effect, and (d) has the power and authority to execute, deliver and
perform its obligations under each of the Transaction Documents and each other
agreement or instrument contemplated hereby to which it is or will be a party.

(b) Authorization. The execution, delivery and performance by such Seller Party
of each of the Transaction Documents to which it is a party (a) have been duly
authorized by all requisite corporate and, if required, stockholder action and
(b) will not (i) violate (A) any provision of law, statute, rule or regulation,
or of the certificate or articles of incorporation or other constitutive
documents or by-laws of such Seller Party, (B) any order of any Governmental
Authority or (C) any provision of any indenture, agreement or other instrument
to which such Seller Party is a party or by which any of them or any of their
Property is or may be bound, (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default under, or
give rise to any right to accelerate or to require the prepayment, repurchase or
redemption of any obligation under any such indenture, agreement or other
instrument or (iii) result in the creation or imposition of any Adverse Claim
upon or with respect

 

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to any Property now owned or hereafter acquired by such Seller Party (other than
any Adverse Claim created hereunder or under the other Transaction Documents).

(c) No Conflict. The execution and delivery by such Seller Party of this
Agreement and each other Transaction Document to which it is a party, and the
performance of its obligations hereunder and thereunder do not contravene or
violate (i) its Organizational Documents, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or by which it or any of its property is
bound, or (iv) any order, writ, judgment, award, injunction or decree binding on
or affecting it or its property, and do not result in the creation or imposition
of any Adverse Claim on assets of such Seller Party or its Subsidiaries (except
as created under the Transaction Documents) except, in any case, where such
contravention or violation could not reasonably be expected to have a Material
Adverse Effect; and no transaction contemplated hereby requires compliance with
any bulk sales act or similar law.

(d) Governmental Approvals. Other than the filing of the financing statements
required hereunder, no action, consent or approval of, registration or filing
with or any other action by any Governmental Authority is or will be required in
connection with the transactions contemplated hereby.

(e) Litigation. Except as set forth on Schedule 5.1(e), there are not any
actions, suits or proceedings at law or in equity or by or before any
Governmental Authority now pending or, to the knowledge of such Seller Party,
threatened against or affecting such Seller Party or any of its Subsidiaries or
any business, Property or rights of any such Person (i) that involve any
Transaction Document or the transactions contemplated thereby or (ii) as to
which there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect

(f) Enforceability. This Agreement has been duly executed and delivered by such
Seller Party and constitutes, and each other Transaction Document to which such
Seller Party is a party when executed and delivered by the such Seller Party
will constitute, a legal, valid and binding obligation of such Seller Party
enforceable against such Seller Party in accordance with its terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors’ rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).

(g) Accuracy of Information. No information, report, financial statement,
exhibit or schedule furnished by or on behalf of such Seller Party to the Buyer
or the Agent in connection with the negotiation of any Transaction Document or
included therein or delivered pursuant thereto contained, contains or will
contain any material misstatement of fact or omitted, omits or will omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were, are or will be made, not misleading
as of the date such information is dated or certified; provided that to the
extent any such information, report, financial statement, exhibit or schedule
was based upon or constitutes a forecast or projection, such Seller Party
represents only that it acted in good faith and utilized reasonable assumptions
and due care in the preparation of such information, report, financial
statement, exhibit or schedule.

 

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(h) Use of Proceeds. No portion of the proceeds of any purchase hereunder will
be used for a purpose that violates, or would be inconsistent with, any law,
rule or regulation applicable to such Seller Party including, without
limitation, Regulation T, U or X of the Board of Governors of the Federal
Reserve System.

(i) Good Title. Seller is the legal and beneficial owner of the Receivables and
Related Security with respect thereto, free and clear of any Adverse Claim,
except as created by the Transaction Documents. There have been duly filed all
financing statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect
Seller’s ownership interest in each Receivable, its Collections and the Related
Security.

(j) Perfection. This Agreement is effective to create a valid security interest
in favor of the Agent for the benefit of the Secured Parties in the Purchased
Assets to secure payment of the Aggregate Unpaids, free and clear of any Adverse
Claim except as created by the Transactions Documents. There have been duly
filed all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect the Agent’s (on behalf of the Secured Parties) security interest in
the Purchased Assets. Such Seller Party’s jurisdiction of organization is a
jurisdiction whose law generally requires information concerning the existence
of a nonpossessory security interest to be made generally available in a filing,
record or registration system as a condition or result of such a security
interest’s obtaining priority over the rights of a lien creditor which respect
to collateral.

(k) Places of Business and Locations of Records. The principal places of
business and chief executive office of such Seller Party and the offices where
it keeps all of its Records are located at the address(es) listed on Exhibit III
or such other locations of which the Agent has been notified in accordance with
Section 7.2(a) in jurisdictions where all action required by Section 13.3(a) has
been taken and completed. Seller’s Federal Employer Identification Number is
correctly set forth on Exhibit III.

(l) Collections. The conditions and requirements set forth in Section 7.1(j) and
Section 8.2 have at all times been satisfied and duly performed. The names,
addresses and jurisdictions of organization of all Collection Banks, together
with the account numbers of the Collection Accounts of Seller at each Collection
Bank and the post office box number of each Lock-Box, are listed on Exhibit IV.
Seller has not granted any Person, other than the Agent as contemplated by this
Agreement, dominion and control of any Lock-Box or Collection Account, or the
right to take dominion and control of any such Lock-Box or Collection Account at
a future time or upon the occurrence of a future event.

(m) Material Adverse Effect. (i) The initial Servicer represents and warrants
that since August 31, 2007, no event has occurred that would have a material
adverse effect on the financial condition or operations of the initial Servicer
and its Subsidiaries or the ability of the initial Servicer to perform its
obligations under this Agreement, and (ii) Seller represents and warrants that
since the date of this Agreement, no event has occurred that would have a
material adverse effect on (A) the financial condition or operations of Seller,
(B) the ability of Seller to perform its obligations under the Transaction
Documents, or (C) the collectibility of the Receivables generally or any
material portion of the Receivables.

 

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(n) Names. The name in which Seller has executed this Agreement is identical to
the name of Seller as indicated on the public record of its state of
organization which shows Seller to have been organized. In the past five
(5) years, Seller has not used any corporate names, trade names or assumed names
other than the name in which it has executed this Agreement.

(o) Ownership of Seller. Parent owns, directly or indirectly, 100% of the issued
and outstanding Equity Interests of Seller, free and clear of any Adverse Claim.
Such Equity Interests are validly issued, fully paid and nonassessable, and
there are no options, warrants or other rights to acquire securities of Seller.

(p) Not an Investment Company. Such Seller Party is not an “investment company”
within the meaning of the Investment Company Act of 1940, as amended, or any
successor statute.

(q) Compliance with Law. Such Seller Party has complied with all applicable
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, except where the failure to so comply could
not reasonably be expected to have a Material Adverse Effect. Each Receivable,
together with the Contract related thereto, does not contravene any laws, rules
or regulations applicable thereto (including, without limitation, laws, rules
and regulations relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy), and no part of such Contract is in violation of any such law, rule or
regulation, except where such contravention or violation could not reasonably be
expected to have a Material Adverse Effect.

(r) Compliance with Credit and Collection Policy. Such Seller Party has complied
in all material respects with the Credit and Collection Policy with regard to
each Receivable and the related Contract, and has not made any material change
to such Credit and Collection Policy, except such material change as to which
the Agent has been notified in accordance with Section 7.1(a)(vii).

(s) Payments to Applicable Originator. With respect to each Receivable
transferred to Seller under the Receivables Sale Agreement, Seller has given
reasonably equivalent value to the applicable Originator in consideration
therefor and such transfer was not made for or on account of an antecedent debt.
No transfer by any Originator of any Receivable under the Receivables Sale
Agreement is or may be voidable under any section of the Bankruptcy Reform Act
of 1978 (11 U.S.C. §§ 101 et seq.), as amended.

(t) Enforceability of Contracts. Each Contract with respect to each Receivable
is effective to create, and has created, a legal, valid and binding obligation
of the related Obligor to pay the Outstanding Balance of the Receivable created
thereunder and any accrued interest thereon, enforceable against the Obligor in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other

 

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similar laws relating to or limiting creditors’ rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).

(u) Eligible Receivables. Each Receivable included in the Net Pool Balance as an
Eligible Receivable on the date of any Monthly Report was an Eligible Receivable
on such date.

(v) Purchase Limit and Maximum Receivable Interests. Immediately after giving
effect to each Incremental Purchase hereunder, the Aggregate Invested Amount is
less than or equal to the Purchase Limit and the aggregate of the Receivable
Interests does not exceed 100%.

(w) Accounting. The manner in which such Seller Party accounts for the
transactions contemplated by this Agreement and the Receivables Sale Agreement
does not jeopardize the true sale analysis.

ARTICLE VI.

CONDITIONS OF PURCHASES

Section 6.1 Conditions Precedent to Initial Incremental Purchase. The initial
Incremental Purchase of a Receivable Interest under this Agreement and of the
Aggregate Unpaids (as such term is defined in the Existing Agreement) pursuant
to Section 13.13(b) is subject to the conditions precedent that (a) the Agent
shall have received on or before the date of such Purchase those documents
listed on Schedule A, (b) the Agent shall have received all fees and expenses
required to be paid on such date pursuant to the terms of this Agreement and the
Fee Letter, (c) Latham & Watkins LLP shall have received all of its outstanding
legal fees and expenses, and (d) the date on which such initial Incremental
Purchase is made shall be on or prior to March 10, 2009.

Section 6.2 Conditions Precedent to All Purchases and Reinvestments. Each
Incremental Purchase and each Reinvestment shall be subject to the further
conditions precedent that (a) in the case of each such Purchase: (i) the
Servicer shall have delivered to the Agent on or prior to the date of such
Purchase, in form and substance satisfactory to the Agent, all Monthly Reports
as and when due under Section 8.5 and (ii) upon the Agent’s request, the
Servicer shall have delivered to the Agent at least three (3) Business Days
prior to such Purchase an interim Monthly Report showing the amount of Eligible
Receivables; (b) the Agent shall have received such other approvals, opinions or
documents as it may reasonably request and (c) on each Purchase Date, the
following statements shall be true (and acceptance of the proceeds of such
Incremental Purchase or Reinvestment shall be deemed a representation and
warranty by Seller that such statements are then true):

(i) the representations and warranties set forth in Section 5.1 are true and
correct on and as of the date of such Incremental Purchase or Reinvestment as
though made on and as of such Purchase Date;

(ii) no event has occurred and is continuing, or would result from such
Incremental Purchase or Reinvestment, that will constitute an Amortization
Event, and no event has occurred and is continuing, or would result from such
Incremental Purchase or Reinvestment, that would constitute an Unmatured
Amortization Event; and

 

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(iii) the Aggregate Invested Amount does not exceed the Purchase Limit and the
aggregate Receivable Interests do not exceed 100%.

It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or Purchaser, occur automatically on each day that the
Servicer shall receive any Collections without the requirement that any further
action be taken on the part of any Person and notwithstanding the failure of
Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of Seller to satisfy any of the foregoing conditions
precedent in respect of any Reinvestment shall give rise to a right of the
Agent, which right may be exercised at any time on demand of the Agent, to
rescind the related purchase and direct Seller to pay to the Agent’s Account,
for the benefit of Purchaser, an amount equal to the Collections prior to the
Facility Termination Date that shall have been applied to the affected
Reinvestment.

ARTICLE VII.

COVENANTS

Section 7.1 Affirmative Covenants of the Seller Parties. Until the date on which
the Aggregate Unpaids have been indefeasibly paid in full and this Agreement
terminates in accordance with its terms, each Seller Party hereby covenants, as
to itself, as set forth below:

(a) Financial Reporting. Seller Party will maintain, for itself and each of its
Subsidiaries, a system of accounting established and administered in accordance
with GAAP, and furnish or cause to be furnished to the Agent:

(i) Annual Reporting. Within 90 days after the end of each fiscal year of
Parent: (A) Parent’s balance sheet and related statements of income and cash
flows showing the financial condition of Parent and its consolidated
Subsidiaries as of the close of such fiscal year and the results of their
operations during such year, all in reasonable detail and audited by
PricewaterhouseCoopers LLP or other independent public accountants of recognized
national standing and accompanied by an opinion of such accountants (which shall
not be qualified in any material respect) to the effect that such consolidated
financial statements fairly present in all material respects the financial
condition and results of operations of Parent and its Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, setting forth
in each case in comparative form the corresponding statements for the preceding
fiscal year; and (B) comparable unaudited financial statements for Seller.

(ii) Quarterly Reporting. Within 45 days after the end of each of the first
three fiscal quarters of each fiscal year of Parent: (A) Parent’s consolidated
balance sheet and related statements of income and cash flows showing the
financial condition of Parent and its consolidated Subsidiaries as of the close
of such fiscal quarter and the results of their operations during such fiscal
quarter and the then elapsed portion of the fiscal year, all in reasonable
detail and certified by one of its Financial Officers as fairly presenting in
all material respects the financial condition and results of operations of

 

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Parent and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit adjustments,
setting forth in each case in comparative form the corresponding statements for
the corresponding period in the preceding fiscal year, and (B) comparable
unaudited financial statements for Seller.

(iii) Compliance Certificate. Together with the financial statements required
hereunder, a compliance certificate in substantially the form of Exhibit V
signed by a Financial Officer of such Seller Party and dated the date of such
annual financial statement or such quarterly financial statement, as the case
may be.

(iv) Shareholders Statements and Reports. Promptly upon the furnishing thereof
to the shareholders of Parent, copies of all financial statements, reports and
proxy statements so furnished.

(v) S.E.C. Filings. Promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials filed by
Parent or any Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed to holders
of its Indebtedness pursuant to the terms of the documentation governing such
Indebtedness (or any trustee, agent or other representative therefor), as the
case may be.

(vi) Copies of Notices. Promptly upon its receipt of any notice, request for
consent, financial statements, certification, report or other communication
under or in connection with any Transaction Document from any Person other than
the Agent or Purchaser, copies of the same.

(vii) Change in Credit and Collection Policy. At least thirty (30) days prior to
the effectiveness of any material change in or material amendment to the Credit
and Collection Policy, a copy of the Credit and Collection Policy then in effect
and a notice (A) indicating such proposed change or amendment, and (B) if such
proposed change or amendment would be reasonably likely to adversely affect the
collectibility of the Receivables or decrease the credit quality of any newly
created Receivables, requesting the Agent’s consent thereto.

(viii) Other Information. Promptly, from time to time, such other information,
documents, records or reports relating to the Receivables originated by such
Originator or the condition or operations, financial or otherwise, of such
Originator as Buyer (or its assigns) may from time to time reasonably request in
order to protect the interests of Buyer (and its assigns) under or as
contemplated by this Agreement.

(b) Notices. Such Seller Party will notify the Agent in writing of any of the
following promptly upon learning of the occurrence thereof, describing the same
and, if applicable, the steps being taken with respect thereto:

(i) Amortization Events or Unmatured Amortization Events. The occurrence of each
Amortization Event and each Unmatured Amortization Event, by a statement of a
Financial Officer of such Seller Party.

 

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(ii) Material Adverse Effect. The occurrence of any event or condition that has
had, or could reasonably be expected to have, a Material Adverse Effect.

(iii) Termination Date. The occurrence of the “Termination Date” under and as
defined in the Receivables Sale Agreement.

(iv) Defaults Under Other Agreements. The occurrence of an event of default (as
to which any notice period or cure period has expired without cure) under any
other financing arrangement pursuant to which such Seller Party is a debtor or
an obligor which, in the case of a Seller Party other than Seller, involves a
line of credit or Indebtedness, in each case, of $1 million or more.

(v) Notices under Receivables Sale Agreement. Copies of all notices delivered
under the Receivables Sale Agreement.

(vi) Downgrade of Servicer. Downgrade in the rating of any Indebtedness of
Servicer by S&P or Moody’s, setting forth the Indebtedness affected and the
nature of such change.

(vii) ERISA.

(a) The occurrence or the reasonably expected occurrence of any ERISA Event
that, when taken together with all other such ERISA Events, could reasonably be
expected to result in a material liability.

(b) The filing or the written indication to Parent or the relevant ERISA
Affiliate of the intent of the PBGC to file notice of a Lien in relation to any
Plan or with regard to any of the Purchased Assets.

(viii) Change in Credit and Collection Policy. At least thirty (30) days prior
to the effectiveness of any material change in or material amendment to the
Credit and Collection Policy, a copy of the Credit and Collection Policy then in
effect and a notice (A) indicating such change or amendment, and (B) if such
proposed change or amendment would be reasonably likely to adversely affect the
collectibility of the Receivables or decrease the credit quality of any newly
created Receivables, requesting the Agent’s consent thereto.

(c) Compliance with Laws and Preservation of Corporate Existence. Such Seller
Party will comply in all respects with all applicable laws, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it may be
subject, except where the failure to so comply could not reasonably be expected
to have a Material Adverse Effect. Such Seller Party will preserve and maintain
its corporate existence, rights, franchises and privileges in the jurisdiction
of its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where its business is conducted, except
where the failure to so preserve and maintain or qualify could not reasonably be
expected to have a Material Adverse Effect.

 

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(d) Audits. Seller Party will furnish to the Agent from time to time such
information with respect to it and the Receivables as the Agent may reasonably
request. Such Seller Party will, from time to time during regular business hours
as requested by the Agent upon reasonable notice and at the sole cost of such
Seller Party, permit the Agent, or its agents or representatives (and shall
cause each Originator to permit the Agent or its agents or representatives):
(i) to examine and make copies of and abstracts from all Records in the
possession or under the control of such Person relating to the Purchased Assets,
including, without limitation, the related Contracts, and (ii) to visit the
offices and properties of such Person for the purpose of examining such
materials described in clause (i) above, and to discuss matters relating to such
Person’s financial condition or the Purchased Assets or any Person’s performance
under any of the Transaction Documents or any Person’s performance under the
Contracts and, in each case, with any of the officers or employees of Seller or
the Servicer having knowledge of such matters (each of the foregoing
examinations and visits, a “Review”); provided, however, that, so long as no
Amortization Event has occurred and is continuing, (A) the Seller Parties shall
only be responsible for the costs and expenses of one (1) Review in any one
calendar year, and (B) the Agent will not request more than four (4) Reviews in
any one calendar year.

(e) Keeping and Marking of Records and Books.

(i) The Servicer will (and will cause each Originator to) maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Receivables in the event of the
destruction of the originals thereof), and keep and maintain all documents,
books, records and other information reasonably necessary or advisable for the
collection of all Receivables (including, without limitation, records adequate
to permit the immediate identification of each new Receivable and all
Collections of and adjustments to each existing Receivable). The Servicer will
(and will cause each Originator to) give the Agent notice of any material change
in the administrative and operating procedures referred to in the previous
sentence.

(ii) Such Seller Party will (and will cause each Originator to): (A) on or prior
to the Effective Date, mark its standard monthly accounts receivable aging
reports regarding the Receivables with a legend, acceptable to the Agent,
describing the Agent’s security interest in the Purchased Assets and (B) upon
the request of the Agent following the occurrence and during the continuance of
an Amortization Event: (x) mark each Contract with a legend describing the
Agent’s security interest and (y) deliver to the Agent all Contracts (including,
without limitation, all multiple originals of any such Contract constituting an
instrument, a certificated security or chattel paper) relating to the
Receivables.

(f) Compliance with Contracts and Credit and Collection Policy. Such Seller
Party will (and will cause each Originator to) timely and fully (i) perform and
comply with all provisions, covenants and other promises required to be observed
by it under the Contracts related to the Receivables, and (ii) comply in all
respects with the Credit and Collection Policy in regard to each Receivable and
the related Contract.

 

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(g) Performance and Enforcement of Receivables Sale Agreement. Seller will, and
will require each Originator to, perform each of their respective obligations
and undertakings under and pursuant to the Receivables Sale Agreement, will
purchase Receivables thereunder in strict compliance with the terms thereof and
will vigorously enforce the rights and remedies accorded to Seller under the
Receivables Sale Agreement. Seller will take all actions to perfect and enforce
its rights and interests (and the rights and interests of the Agent, as Seller’s
assignee) under the Receivables Sale Agreement as the Agent may from time to
time reasonably request, including, without limitation, making claims to which
it may be entitled under any indemnity, reimbursement or similar provision
contained in the Receivables Sale Agreement.

(h) Ownership. Seller will (or will cause each Originator to) take all necessary
action to (i) vest legal and equitable title to the Purchased Assets purchased
under the Receivables Sale Agreement irrevocably in Seller, free and clear of
any Adverse Claims (other than Adverse Claims in favor of the Agent, for the
benefit of the Secured Parties) including, without limitation, the filing of all
financing statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect
Seller’s interest in such Purchased Assets and such other action to perfect,
protect or more fully evidence the interest of Seller therein as the Agent may
reasonably request), and (ii) establish and maintain, in favor of the Agent, for
the benefit of the Secured Parties, a valid and perfected first priority
security interest in all Purchased Assets, free and clear of any Adverse Claims,
including, without limitation, the filing of all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable law)
of all appropriate jurisdictions to perfect the Agent’s (for the benefit of the
Secured Parties) security interest in the Purchased Assets and such other action
to perfect, protect or more fully evidence the interest of the Agent for the
benefit of the Secured Parties as the Agent may reasonably request.

(i) Reliance. Seller acknowledges that the Agent and Purchaser are entering into
the transactions contemplated by this Agreement in reliance upon Seller’s
identity as a legal entity that is separate from each Originator. Therefore,
from and after the date of execution and delivery of this Agreement, Seller
shall take all reasonable steps, including, without limitation, all steps that
the Agent or Purchaser may from time to time reasonably request, to maintain
Seller’s identity as a separate legal entity and to make it manifest to third
parties that Seller is an entity with assets and liabilities distinct from those
of each Originator and any Affiliates thereof (other than Seller) and not just a
division of any Originator or any such Affiliate. Without limiting the
generality of the foregoing and in addition to the other covenants set forth
herein, Seller will:

(A) conduct its own business in its own name and require that all full-time
employees of Seller, if any, identify themselves as such and not as employees of
any Originator (including, without limitation, by means of providing appropriate
employees with business or identification cards identifying such employees as
Seller’s employees);

(B) compensate all employees, consultants and agents directly, from Seller’s own
funds, for services provided to Seller by such employees, consultants and agents
and, to the extent any employee, consultant or agent of Seller is also an
employee, consultant or agent of any Originator or any Affiliate thereof,
allocate the compensation of such employee, consultant or agent between Seller
and such Originator or such Affiliate, as applicable, on a basis that reflects
the services rendered to Seller and such Originator or such Affiliate, as
applicable;

 

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(C) clearly identify its offices (by signage or otherwise) as its offices and,
if such office is located in the offices of any Originator, Seller shall lease
such office at a fair market rent;

(D) have a separate telephone number, which will be answered only in its name
and separate stationery and checks in its own name;

(E) conduct all transactions with each Originator and the Servicer (including,
without limitation, any delegation of its obligations hereunder as Servicer)
strictly on an arm’s-length basis, allocate all overhead expenses (including,
without limitation, telephone and other utility charges) for items shared
between Seller and such Originator on the basis of actual use to the extent
practicable and, to the extent such allocation is not practicable, on a basis
reasonably related to actual use;

(F) at all times have a Board of Directors consisting of three members, at least
one member of which is an Independent Director;

(G) observe all corporate formalities as a distinct entity, and ensure that all
corporate actions relating to (A) the selection, maintenance or replacement of
the Independent Director, (B) the dissolution or liquidation of Seller or
(C) the initiation of, participation in, acquiescence in or consent to any
bankruptcy, insolvency, reorganization or similar proceeding involving Seller,
are duly authorized by unanimous vote of its Board of Directors (including the
Independent Director);

(H) maintain Seller’s books and records separate from those of each Originator
and any Affiliate thereof and otherwise readily identifiable as its own assets
rather than assets of any Originator or any Affiliate thereof;

(I) prepare its financial statements separately from those of each Originator
and insure that any consolidated financial statements of any Originator or any
Affiliate thereof that include Seller and that are filed with the Securities and
Exchange Commission or any other governmental agency have notes clearly stating
that Seller is a separate corporate entity and that its assets will be available
first and foremost to satisfy the claims of the creditors of Seller;

(J) except as herein specifically otherwise provided, to the maximum extent
within Seller’s control, maintain the funds or other assets of Seller separate
from, and not commingled with, those of any Originator or any Affiliate thereof
and only maintain bank accounts or other depository accounts to which Seller
alone is the account party, into which Seller alone makes deposits and from
which Seller alone (or the Agent hereunder) has the power to make withdrawals;

(K) pay all of Seller’s operating expenses from Seller’s own assets (except for
certain payments by any Originator or other Persons pursuant to allocation
arrangements that comply with the requirements of this Section 7.1(i));

 

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(L) operate its business and activities such that: it does not engage in any
business or activity of any kind, or enter into any transaction or indenture,
mortgage, instrument, agreement, contract, lease or other undertaking, other
than the transactions contemplated and authorized by this Agreement and the
Receivables Sale Agreement; and does not create, incur, guarantee, assume or
suffer to exist any indebtedness or other liabilities, whether direct or
contingent, other than (1) as a result of the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business, (2) the incurrence of obligations under this Agreement,
(3) the incurrence of obligations, as expressly contemplated in the Receivables
Sale Agreement, to make payment to the applicable Originator thereunder for the
purchase of Receivables from such Originator under the Receivables Sale
Agreement, and (4) the incurrence of operating expenses in the ordinary course
of business of the type otherwise contemplated by this Agreement;

(M) maintain its corporate charter in conformity with this Agreement, such that
it does not amend, restate, supplement or otherwise modify its Organizational
Documents in any respect that would impair its ability to comply with the terms
or provisions of any of the Transaction Documents, including, without
limitation, Section 7.1(i) of this Agreement;

(N) maintain the effectiveness of, and continue to perform under the Receivables
Sale Agreement and the Performance Undertaking, such that it does not amend,
restate, supplement, cancel, terminate or otherwise modify the Receivables Sale
Agreement or the Performance Undertaking, or give any consent, waiver, directive
or approval thereunder or waive any default, action, omission or breach under
the Receivables Sale Agreement or the Performance Undertaking or otherwise grant
any indulgence thereunder, without (in each case) the prior written consent of
the Agent;

(O) maintain its corporate separateness such that it does not merge or
consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions, and except as
otherwise contemplated herein) all or substantially all of its assets (whether
now owned or hereafter acquired) to, or acquire all or substantially all of the
assets of, any Person, nor at any time create, have, acquire, maintain or hold
any interest in any Subsidiary;

(P) maintain at all times the Required Capital Amount (as defined in the
Receivables Sale Agreement) and refrain from making any dividend, distribution,
redemption of capital stock or payment of any subordinated indebtedness which
would cause the Required Capital Amount to cease to be so maintained; and

(Q) take such other actions as are necessary on its part to ensure that the
facts and assumptions set forth in the opinion issued by Quarles & Brady LLP, as
counsel for Seller, in connection with the closing or initial Purchase under the
Existing Agreement and relating to substantive consolidation issues, and in the
certificates accompanying such opinion, remain true and correct in all material
respects at all times.

(j) Collections. Such Seller Party will cause (1) all proceeds from all
Lock-Boxes to be directly deposited by a Collection Bank into a Collection
Account and (2) each

 

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Lock-Box and Collection Account to be subject at all times to a Collection
Account Agreement that is in full force and effect. In the event any payments
relating to the Purchased Assets are remitted directly to Seller or any
Affiliate of Seller, Seller will remit (or will cause all such payments to be
remitted) directly to a Collection Bank and deposited into a Collection Account
within two (2) Business Days following receipt thereof, and, at all times prior
to such remittance, Seller will itself hold or, if applicable, will cause such
payments to be held in trust for the exclusive benefit of the Agent and
Purchaser. Seller will maintain exclusive ownership, dominion and control
(subject to the terms of this Agreement) of each Lock-Box and Collection Account
and shall not grant the right to take dominion and control of any Lock-Box or
Collection Account at a future time or upon the occurrence of a future event to
any Person, except to the Agent as contemplated by this Agreement.

(k) Taxes. Such Seller Party will file all tax returns and reports required by
law to be filed by it and will promptly pay all taxes and governmental charges
at any time owing, except any such taxes which are not yet delinquent or are
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside on its
books. Seller will pay when due any taxes payable in connection with the
Receivables, exclusive of taxes on or measured by income or gross receipts of
the Agent or Purchaser.

(l) Payment to Applicable Originator. With respect to any Receivable purchased
by Seller from any Originator, such sale shall be effected under, and in strict
compliance with the terms of, the Receivables Sale Agreement, including, without
limitation, the terms relating to the amount and timing of payments to be made
to such Originator in respect of the purchase price for such Receivable.

Section 7.2 Negative Covenants of the Seller Parties. Until the date on which
the Aggregate Unpaids have been indefeasibly paid in full and this Agreement
terminates in accordance with its terms, each Seller Party hereby covenants, as
to itself, that:

(a) Name Change, Offices and Records. Such Seller Party will not change its
name, identity or structure (within the meaning of any applicable enactment of
the UCC), relocate its chief executive office at any time while the location of
its chief executive office is relevant to perfection of the Agent’s security
interest, for the benefit of the Secured Parties, in the Receivables, Related
Security and Collections, or change any office where Records are kept unless it
shall have: (i) given the Agent at least forty-five (45) days’ prior written
notice thereof and (ii) delivered to the Agent all financing statements,
instruments and other documents requested by the Agent in connection with such
change or relocation.

(b) Change in Payment Instructions to Obligors. Except as may be required by the
Agent pursuant to Section 8.2(b), such Seller Party will not add or terminate
any bank as a Collection Bank, or make any change in the instructions to
Obligors regarding payments to be made to any Lock-Box or Collection Account,
unless the Agent shall have received, at least ten (10) days before the proposed
effective date therefor, (i) written notice of such addition, termination or
change and evidence reasonably satisfactory to the Agent that all Adverse Claims
to such Lock-Box or Collection Account have been released and (ii) with respect
to the addition of a Collection Bank or a Collection Account or Lock-Box, an
executed Collection Account

 

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Agreement with respect to the new Collection Account or Lock-Box; provided,
however, that the Servicer may make changes in instructions to Obligors
regarding payments if such new instructions require such Obligor to make
payments to another existing Collection Account.

(c) Modifications to Contracts and Credit and Collection Policy. Such Seller
Party will not, and will not permit any Originator to, make any material change
to the Credit and Collection Policy that could materially adversely affect the
collectibility of the Receivables or decrease the credit quality of any newly
created Receivables. Except as provided in Section 8.2(d), the Servicer will
not, and will not permit any Originator to, extend, amend or otherwise modify
the terms of any Receivable or any Contract related thereto other than in
accordance with the Credit and Collection Policy.

(d) Sales, Liens. Seller will not sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with respect to, or
create or suffer to exist any Adverse Claim upon (including, without limitation,
the filing of any financing statement) or with respect to, any of the Purchased
Assets, or assign any right to receive income with respect thereto (other than,
in each case, the creation of a security interest therein in favor of the Agent
as provided for herein), and Seller will defend the right, title and interest of
the Secured Parties in, to and under any of the foregoing property, against all
claims of third parties claiming through or under Seller or any Originator.

(e) Use of Proceeds. Seller will not use the proceeds of the Purchases for any
purpose other than (i) paying for Receivables and Related Security under and in
accordance with the Receivables Sale Agreement, including without limitation,
making payments on the Subordinated Notes to the extent permitted thereunder and
under the Receivables Sale Agreement, (ii) making Demand Advances to Parent at
any time prior to the Facility Termination Date while it is acting as Servicer
and no Amortization Event or Unmatured Amortization Event exists and is
continuing, (iii) paying its ordinary and necessary operating expenses when and
as due, and (iv) making Restricted Junior Payments to the extent permitted under
this Agreement.

(f) Termination Date Determination. Seller will not designate the Termination
Date (as defined in the Receivables Sale Agreement), or send any written notice
to any Originator in respect thereof, without the prior written consent of the
Agent, except with respect to the occurrence of such Termination Date arising
pursuant to Section 5.1(d) of the Receivables Sale Agreement.

(g) Restricted Junior Payments. Seller will not make any Restricted Junior
Payment if after giving effect thereto, Seller’s Net Worth (as defined in the
Receivables Sale Agreement) would be less than the Required Capital Amount (as
defined in the Receivables Sale Agreement).

(h) Seller Indebtedness. Seller will not incur or permit to exist any
Indebtedness or liability on account of deposits except: (i) the Aggregate
Unpaids, (ii) the Subordinated Loans, and (iii) other current accounts payable
arising in the ordinary course of business and not overdue.

 

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(i) Prohibition on Additional Negative Pledges. No Seller Party will enter into
or assume any agreement (other than this Agreement and the other Transaction
Documents) prohibiting the creation or assumption of any Adverse Claim upon the
Purchased Assets except as contemplated by the Transaction Documents, or
otherwise prohibiting or restricting any transaction contemplated hereby or by
the other Transaction Documents, and no Seller Party will enter into or assume
any agreement creating any Adverse Claim upon the Subordinated Notes.

ARTICLE VIII.

ADMINISTRATION AND COLLECTION

Section 8.1 Designation of Servicer.

(a) The servicing, administration and collection of the Receivables shall be
conducted by such Person (the “Servicer”) so designated from time to time in
accordance with this Section 8.1. Parent is hereby designated as, and hereby
agrees to perform the duties and obligations of, the Servicer pursuant to the
terms of this Agreement. The Agent may at any time following the occurrence and
during the continuance of an Amortization Event, designate as Servicer any
Person to succeed Parent or any successor Servicer.

(b) Parent may delegate, and Parent hereby advises the Agent and Purchaser that
it has delegated, to the other Originators, as sub-servicers of the Servicer,
certain of its duties and responsibilities as Servicer hereunder in respect of
the Receivables originated by such other Originator. Without the prior written
consent of the Agent and Purchaser, Parent shall not be permitted to delegate
any of its duties or responsibilities as Servicer to any Person other than
(i) the other Originators, and (ii) with respect to certain Defaulted
Receivables, outside collection agencies in accordance with its customary
practices (each other Originator and outside collection agency, when acting as
such a delegate, a “Permitted Sub-Servicer”). No Permitted Sub-Servicer shall be
permitted to further delegate to any other Person any of the duties or
responsibilities of the Servicer delegated to it by Parent. If at any time the
Agent shall designate as Servicer any Person other than Parent, all duties and
responsibilities theretofore delegated by Parent to the other Originators may,
at the discretion of the Agent, be terminated forthwith on notice given by the
Agent to Parent and to Seller and the other Originators.

(c) Notwithstanding the foregoing subsection (b): (i) Parent shall be and remain
primarily liable to the Agent and Purchaser for the full and prompt performance
of all duties and responsibilities of the Servicer hereunder and (ii) the Agent
and Purchaser shall be entitled to deal exclusively with Parent in matters
relating to the discharge by the Servicer of its duties and responsibilities
hereunder. The Agent and Purchaser shall not be required to give notice, demand
or other communication to any Person other than Parent in order for
communication to the Servicer and its sub-servicer or other delegate with
respect thereto to be accomplished. Parent, at all times that it is the
Servicer, shall be responsible for providing any sub-servicer or other delegate
of the Servicer with any notice given to the Servicer under this Agreement.

Section 8.2 Duties of Servicer.

 

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(a) The Servicer shall take or cause to be taken all such actions as may be
necessary or advisable to collect each Receivable from time to time, all in
accordance with applicable laws, rules and regulations, with reasonable care and
diligence, and in accordance with the Credit and Collection Policy.

(b) The Servicer will instruct all Obligors to pay all Collections directly to a
Lock-Box or Collection Account. The Servicer shall effect a Collection Account
Agreement in a form reasonably acceptable to the Agent with each bank party to a
Collection Account at any time. In the case of any remittances received in any
Lock-Box or Collection Account that shall have been identified, to the
satisfaction of the Servicer, to not constitute Collections or other proceeds of
the Receivables or the Related Security, the Servicer shall promptly remit such
items to the Person identified to it as being the owner of such remittances.
From and after the date the Agent delivers to any Collection Bank a Collection
Notice pursuant to Section 8.3, the Agent may request that the Servicer, and the
Servicer thereupon promptly shall instruct all Obligors with respect to the
Receivables, to remit all payments thereon to a new depositary account specified
by the Agent and, at all times thereafter, Seller and the Servicer shall not
deposit or otherwise credit, and shall not permit any other Person to deposit or
otherwise credit to such new depositary account any cash or payment item other
than Collections.

(c) The Servicer shall administer the Collections in accordance with the
procedures described herein and in Article II. The Servicer shall set aside and
hold in trust for the account of Seller and Purchaser their respective shares of
the Collections in accordance with Article II. The Servicer shall, upon the
request of the Agent, segregate, in a manner acceptable to the Agent, all cash,
checks and other instruments received by it from time to time constituting
Collections from the general funds of the Servicer or Seller prior to the
remittance thereof in accordance with Article II. If the Servicer shall be
required to segregate Collections pursuant to the preceding sentence, the
Servicer shall segregate and deposit with a bank designated by the Agent such
allocable share of Collections of Receivables set aside for Purchaser on the
first Business Day following receipt by the Servicer of such Collections, duly
endorsed or with duly executed instruments of transfer.

(d) The Servicer may, in accordance with the Credit and Collection Policy,
extend the maturity of any Receivable or adjust the Outstanding Balance of any
Receivable as the Servicer determines to be appropriate to maximize Collections
thereof; provided, however, that such extension or adjustment shall not alter
the status of such Receivable as a Delinquent Receivable or Defaulted Receivable
or limit the rights of the Agent or Purchaser under this Agreement.
Notwithstanding anything to the contrary contained herein, following the
occurrence and during the continuance of an Amortization Event, the Agent shall
have the absolute and unlimited right to direct the Servicer to commence or
settle any legal action with respect to any Receivable or to foreclose upon or
repossess any Related Security.

(e) The Servicer shall hold in trust for Seller and the Agent and Purchaser all
Records that (i) evidence or relate to the Receivables, the related Contracts
and Related Security or (ii) are otherwise necessary or desirable to collect the
Receivables and shall, as soon as practicable upon demand of the Agent, deliver
or make available to the Agent all such Records, at a place selected by the
Agent. The Servicer shall, as soon as practicable following receipt thereof turn
over to rightful owner or its designee any cash collections or other cash
proceeds received with respect to Indebtedness not constituting Receivables. The
Servicer shall, from time to time at the request of the Agent or Purchaser,
furnish to Purchaser (promptly after any such request) a calculation of the
amounts set aside for Purchaser pursuant to Article II.

 

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(f) Any payment by an Obligor in respect of any indebtedness owed by it to
Originator or Seller shall, except as otherwise specified by such Obligor or
otherwise required by contract or law and unless otherwise instructed by the
Agent, be applied as a Collection of any Receivable of such Obligor (starting
with the oldest such Receivable) to the extent of any amounts then due and
payable thereunder before being applied to any other receivable or other
obligation of such Obligor.

Section 8.3 Collection Notices. The Agent is authorized at any time to date and
to deliver to the Collection Banks the Collection Notices. Seller hereby
transfers to the Agent for the benefit of Purchaser the exclusive ownership and
control of each Lock-Box and the Collection Accounts; provided however, that the
Seller shall retain the right to direct the disposition of funds from each of
the Collection Accounts until the Agent delivers the applicable Collection
Notice. In case any authorized signatory of Seller whose signature appears on a
Collection Account Agreement shall cease to have such authority before the
delivery of such notice, such Collection Notice shall nevertheless be valid as
if such authority had remained in force. Seller hereby authorizes the Agent, and
agrees that the Agent shall be entitled (i) at any time after delivery of the
Collection Notices, to endorse Seller’s name on checks and other instruments
representing Collections, (ii) at any time after the occurrence of an
Amortization Event, to enforce the Receivables, the related Contracts and the
Related Security, and (iii) at any time after the occurrence of an Amortization
Event, to take such action as shall be necessary or desirable to cause all cash,
checks and other instruments constituting Collections of Receivables to come
into the possession of the Agent rather than Seller.

Section 8.4 Responsibilities of Seller. Anything herein to the contrary
notwithstanding, the exercise by the Agent, on behalf of Purchaser, of the
Agent’s rights hereunder shall not release the Servicer, any Originator or
Seller from any of their duties or obligations with respect to any Receivables
or under the related Contracts. The Agent and Purchaser shall have no obligation
or liability with respect to any Receivables or related Contracts, nor shall any
of them be obligated to perform the obligations of Seller or any Originator
thereunder.

Section 8.5 Monthly Reports. The Servicer shall prepare and forward to the Agent
(i) on each Monthly Reporting Date, a Monthly Report and an electronic file of
the data contained therein and (ii) at such times as the Agent shall request, a
listing by Obligor of all Receivables together with an aging of such
Receivables; provided, however, that if an Amortization Event exists and is
continuing, the Agent may request that the Servicer deliver a Monthly Report
more frequently than monthly.

Section 8.6 Servicing Fee. As compensation for the Servicer’s servicing
activities on their behalf, the Servicer shall be paid the Servicing Fee in
arrears on each Settlement Date out of Collections.

 

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ARTICLE IX.

AMORTIZATION EVENTS

Section 9.1 Amortization Events. The occurrence of any one or more of the
following events shall constitute an Amortization Event:

(a) Any Seller Party shall fail to make any payment or deposit required to be
made by it under the Transaction Documents when due and, for any such payment or
deposit which is not in respect of principal, such failure continues for 5
consecutive Business Days.

(b) Any representation, warranty, certification or statement made by any Seller
Party in any Transaction Document to which it is a party or in any other
document delivered pursuant thereto shall prove to have been incorrect when made
or deemed made.

(c) Any Seller Party shall fail to perform or observe any covenant contained in
Section 7.2 or 8.5 when due.

(d) Any Seller Party shall fail to perform or observe any other covenant or
agreement under any Transaction Documents and such failure shall continue for
thirty (30) consecutive Business Days.

(e) Failure of Seller to pay any Indebtedness (other than the Aggregate Unpaids)
when due or the default by Seller in the performance of any term, provision or
condition contained in any agreement under which any such Indebtedness was
created or is governed, the effect of which is to cause, or to permit the holder
or holders of such Indebtedness to cause, such Indebtedness to become due prior
to its stated maturity; or any such Indebtedness of Seller shall be declared to
be due and payable or required to be prepaid (other than by a regularly
scheduled payment) prior to the date of maturity thereof.

(f) Parent or any Subsidiary (other than Seller) shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any Indebtedness
in a principal amount in excess of $10,000,000, when and as the same shall
become due and payable, or (ii) fail to observe or perform any other term,
covenant, condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness if the effect of any failure
referred to in this clause (ii) is to cause, or to permit the holder or holders
of such Indebtedness or a trustee on its or their behalf (with or without the
giving of notice, the lapse of time or both) to cause, such Indebtedness to
become due prior to its stated maturity.

(g) An Event of Bankruptcy shall occur with respect to any Seller Party.

(h) As at the end of any Calculation Period:

(i) the three-month rolling average Delinquency Ratio shall exceed 2.5%,

(ii) the three-month rolling average Default Trigger Ratio shall exceed 2.75%,
or

 

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(iii) the three-month rolling average Dilution Ratio shall exceed 12.25%.

(i) A Change in Control shall occur.

(j) (i) One or more final judgments for the payment of money in an aggregate
amount of $10,750 or more shall be entered against Seller or (ii) one or more
judgments for the payment of money in an aggregate amount in excess of
$10,000,000 shall be rendered against Parent, any Subsidiary of Parent (Other
than Seller) or any combination thereof and the same shall remain undischarged
for a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to levy upon assets or properties of Parent or any Subsidiary to enforce any
such judgment.

(k) The “Termination Date” under and as defined in the Receivables Sale
Agreement shall occur under the Receivables Sale Agreement or any Originator
shall for any reason cease to transfer, or cease to have the legal capacity to
transfer, or otherwise be incapable of transferring Receivables to Seller under
the Receivables Sale Agreement.

(l) This Agreement shall terminate in whole or in part (except in accordance
with its terms), or shall cease to be effective or to be the legally valid,
binding and enforceable obligation of Seller, or any Obligor shall directly or
indirectly contest in any manner such effectiveness, validity, binding nature or
enforceability, or the Agent for the benefit of Purchaser shall cease to have a
valid and perfected first priority security interest in the Purchased Assets.

(m) On any Settlement Date, after giving effect to the turnover of Collections
by the Servicer on such date and the application thereof to the Aggregate
Unpaids in accordance with this Agreement, the Aggregate Invested Amount shall
exceed the Purchase Limit.

(n) The Performance Undertaking shall cease to be effective or to be the legally
valid, binding and enforceable obligation of Performance Guarantor, or
Performance Guarantor shall directly or indirectly contest in any manner such
effectiveness, validity, binding nature or enforceability of its obligations
thereunder.

(o) An ERISA Event shall have occurred that, when taken together with all other
such ERISA Events, could reasonably be expected to result in liability of Parent
and its ERISA Affiliates in an aggregate amount exceeding $10,000,000.

(p) The Internal Revenue Service shall file notice of a lien pursuant to
Section 6323 of the Tax Code with regard to any of the Purchased Assets and such
lien shall not have been released within seven (7) days, or the PBGC shall, or
shall indicate in writing to the Parent or the relevant ERISA Affiliate its
intention to, file notice of a lien pursuant to Section 4068 of ERISA with
regard to any Plan of the Purchased Assets.

(q) Any event shall occur which (i) materially and adversely impairs the ability
of the Originators to originate Receivables of a credit quality that is at least
equal to the credit quality of the Receivables sold or contributed to Seller on
the date of this Agreement or (ii) has, or could be reasonably expected to have
a Material Adverse Effect.

 

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(r) The Net Pool Balance shall, on any date, be less than an amount equal to the
sum of (i) the Aggregate Invested Amount plus (ii) the Required Reserve (after
giving effect to any turnover of Collections by the Servicer on such date and
the application thereof to the Aggregate Unpaids in accordance with this
Agreement).

(s) The Performance Guarantor shall breach any of the covenants contained in
Sections 6.19.1 or 6.19.2 of that certain Amended and Restated Credit Agreement
dated as of December 22, 2004 (the “Amended and Restated Credit Agreement”)
among Actuant Corporation, the lenders from time to time party thereto, JPMorgan
Chase Bank, N.A. (successor by merger to Bank One, NA (Illinois)), as
Administrative Agent, Wachovia Bank, National Association and U.S. Bank,
National Association, as Syndication Agents, LaSalle Bank National Association
and M&I Marshall & Ilsley Bank, as Documentation Agents, and Bank of America,
N.A. and Harris Trust and Savings Bank, as Documentation Agents, as amended and
in effect on the date of this Agreement or as hereafter amended, modified or
replaced pursuant to any written amendment or agreement to which the Agent
hereunder gives its express written consent; provided, that so long as the Agent
is a lender under the Amended and Restated Credit Agreement, its consent as
lender to any written amendment, consent or other agreement amending, modifying
or replacing Section 6.19.1 or Section 6.19.2 of the Amended and Restated Credit
Agreement shall be deemed to be the express written consent of Purchaser and the
Agent to such amendment, consent or other agreement hereunder. Notwithstanding
the above, if the Amended and Restated Credit Agreement shall no longer be in
effect and shall not have been amended, modified or replaced then such agreement
shall be deemed to continue for purposes of this Clause 9.1(s).

Section 9.2 Remedies.

Upon the occurrence and during the continuation of an Amortization Event, the
Agent may take any of the following actions: (i) replace the Person then acting
as Servicer if the Agent has not already done so, (ii) declare the Facility
Termination Date to have occurred, whereupon Reinvestments shall immediately
terminate and the Facility Termination Date shall forthwith occur, all without
demand, protest or further notice of any kind, all of which are hereby expressly
waived by each Seller Party; provided, however, that upon the occurrence of an
Event of Bankruptcy with respect to any Seller Party, the Facility Termination
Date shall automatically occur, without demand, protest or any notice of any
kind, all of which are hereby expressly waived by each Seller Party,
(iii) deliver the Collection Notices to the Collection Banks, (iv) exercise all
rights and remedies of a secured party upon default under the UCC and other
applicable laws, and (v) notify Obligors of the Agent’s security interest in the
Receivables and other Purchased Assets. The aforementioned rights and remedies
shall be without limitation, and shall be in addition to all other rights and
remedies of the Agent and Purchaser otherwise available under any other
provision of this Agreement, by operation of law, at equity or otherwise, all of
which are hereby expressly preserved, including, without limitation, all rights
and remedies provided under the UCC, all of which rights shall be cumulative.

ARTICLE X.

INDEMNIFICATION

 

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Section 10.1 Indemnities by the Seller Parties. Without limiting any other
rights that the Agent or Purchaser may have hereunder or under applicable law,
(A) Seller hereby agrees to indemnify (and pay upon demand to) the Agent,
Purchaser and each of the respective assigns, officers, directors, agents and
employees of the foregoing (each, an “Indemnified Party”) from and against any
and all damages, losses, claims, Other Taxes, Indemnified Taxes, liabilities,
costs, expenses and for all other amounts payable, including reasonable
attorneys’ fees (which attorneys may be employees of the Agent or another
Indemnified Party) and disbursements (all of the foregoing being collectively
referred to as “Indemnified Amounts”) awarded against or incurred by any of them
arising out of or as a result of this Agreement or the acquisition, either
directly or indirectly, by Purchaser of an interest in the Receivables, and
(B) the Servicer hereby agrees to indemnify (and pay upon demand to) each
Indemnified Party for Indemnified Amounts awarded against or incurred by any of
them arising out of the Servicer’s activities as Servicer hereunder excluding,
however, in all of the foregoing instances under the preceding clauses (A) and
(B):

(a) Indemnified Amounts to the extent a final judgment of a court of competent
jurisdiction holds that such Indemnified Amounts resulted from gross negligence
or willful misconduct on the part of the Indemnified Party seeking
indemnification;

(b) Indemnified Amounts to the extent the same includes losses in respect of
Receivables that are uncollectible on account of the insolvency, bankruptcy or
lack of creditworthiness of the related Obligor; or

(c) Excluded Taxes;

provided, however, that nothing contained in this sentence shall limit the
liability of any Seller Party or limit the recourse of Purchaser to any Seller
Party for amounts otherwise specifically provided to be paid by such Seller
Party under the terms of this Agreement. Without limiting the generality of the
foregoing indemnification, Seller shall indemnify the Agent and Purchaser for
Indemnified Amounts (including, without limitation, losses in respect of
uncollectible receivables, regardless of whether reimbursement therefor would
constitute recourse to Seller or the Servicer) relating to or resulting from:

(i) any representation or warranty made by any Seller Party or any Originator
(or any officers of any such Person) under or in connection with this Agreement,
any other Transaction Document or any other information or report delivered by
any such Person pursuant hereto or thereto, which shall have been false or
incorrect when made or deemed made;

(ii) the failure by Seller, the Servicer or any Originator to comply with any
applicable law, rule or regulation with respect to any Receivable or Contract
related thereto, or the nonconformity of any Receivable or Contract included
therein with any such applicable law, rule or regulation or any failure of any
Originator to keep or perform any of its obligations, express or implied, with
respect to any Contract;

(iii) any failure of Seller, the Servicer or any Originator to perform its
duties, covenants or other obligations in accordance with the provisions of this
Agreement or any other Transaction Document;

 

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(iv) any products liability, personal injury or damage suit, or other similar
claim arising out of or in connection with merchandise, insurance or services
that are the subject of any Contract or any Receivable;

(v) any dispute, claim, offset or defense (other than discharge in bankruptcy of
the Obligor) of the Obligor to the payment of any Receivable (including, without
limitation, a defense based on such Receivable or the related Contract not being
a legal, valid and binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from the sale of the
merchandise or service related to such Receivable or the furnishing or failure
to furnish such merchandise or services;

(vi) the commingling of Collections of Receivables at any time with other funds;

(vii) any investigation, litigation or proceeding related to or arising from
this Agreement or any other Transaction Document, the transactions contemplated
hereby, the use of the proceeds of any Purchase, the Purchased Assets or any
other investigation, litigation or proceeding relating to Seller, the Servicer
or any Originator in which any Indemnified Party becomes involved as a result of
any of the transactions contemplated hereby;

(viii) any inability to litigate any claim against any Obligor in respect of any
Receivable as a result of such Obligor being immune from civil and commercial
law and suit on the grounds of sovereignty or otherwise from any legal action,
suit or proceeding;

(ix) any Amortization Event of the type described in Section 9.1(g);

(x) any failure of Seller to acquire and maintain legal and equitable title to,
and ownership of any of the Purchased Assets from the applicable Originator,
free and clear of any Adverse Claim (other than as created hereunder); or any
failure of Seller to give reasonably equivalent value to any Originator under
the Receivables Sale Agreement in consideration of the transfer by such
Originator of any Receivable, or any attempt by any Person to void such transfer
under statutory provisions or common law or equitable action;

(xi) any failure to vest and maintain vested in the Agent for the benefit of
Purchaser, or to transfer to the Agent for the benefit of the Secured Parties, a
valid first priority perfected security interests in the Purchased Assets, free
and clear of any Adverse Claim (except as created by the Transaction Documents);

(xii) the failure to have filed, or any delay in filing, financing statements or
other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any Purchased Assets, and
the proceeds thereof, whether at the time of any Purchase or at any subsequent
time;

(xiii) any action or omission by any Seller Party which reduces or impairs the
rights of the Agent or Purchaser with respect to any Purchased Assets or the
value of any Purchased Assets;

 

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(xiv) any attempt by any Person to void any Purchase or the Agent’s security
interest in the Purchased Assets under statutory provisions or common law or
equitable action; and

(xv) the failure of any Receivable included in the calculation of the Net Pool
Balance as an Eligible Receivable to be an Eligible Receivable at the time so
included.

Section 10.2 Increased Cost and Reduced Return. If after the date hereof,
Purchaser shall be charged any fee, expense or increased cost on account of any
Regulatory Change: (i) that subjects Purchaser to any Taxes, charge or
withholding on or with respect to this Agreement or its obligations under this
Agreement, or on or with respect to the Receivables, or changes the basis of
taxation of payments to Purchaser of any amounts payable under this Agreement or
any other Transaction Documents (except for changes in the rate of tax on the
overall net income of Purchaser or taxes excluded by Section 10.1) or (ii) that
imposes, modifies or deems applicable any reserve, assessment, insurance charge,
special deposit or similar requirement against assets of, deposits with or for
the account of Purchaser, or credit extended by Purchaser pursuant to this
Agreement or (iii) that imposes any other condition the result of which is to
increase the cost to Purchaser of performing, funding and/or maintaining its
obligations under this Agreement, or to reduce the rate of return on Purchaser’s
capital as a consequence of its obligations under this Agreement (including,
without limitation, by any participations therein), or to reduce the amount of
any sum received or receivable by Purchaser under this Agreement (including,
without limitation, by any participations therein) or to require any payment
calculated by reference to the amount of interests or loans held or interest
received by it (including, without limitation, by any participations therein),
then, upon demand by the Agent, Seller shall pay to the Agent, for the benefit
of Purchaser, such amounts charged to Purchaser or such amounts to otherwise
compensate Purchaser for such increased cost or such reduction.

Section 10.3 Expenses. Seller shall pay to the Agent and Purchaser on demand all
costs and out-of-pocket expenses in connection with the preparation, execution,
delivery and administration of this Agreement, the transactions contemplated
hereby and the other documents to be delivered hereunder, including without
limitation, the cost of Purchaser’s auditors auditing the books, records and
procedures of Seller, reasonable fees and out-of-pocket expenses of legal
counsel for Purchaser and the Agent (which such counsel may be employees of
Purchaser or the Agent) with respect thereto and with respect to advising
Purchaser and the Agent as to their respective rights and remedies under this
Agreement. Seller shall pay to the Agent on demand any and all costs and
expenses of the Agent and Purchaser, if any, including reasonable counsel fees
and expenses in connection with the enforcement of this Agreement and the other
documents delivered hereunder and in connection with any restructuring or
workout of this Agreement or such documents, or the administration of this
Agreement following an Amortization Event.

ARTICLE XI.

THE AGENT

Section 11.1 Authorization and Action. Purchaser, on behalf of itself and its
assigns, hereby designates and appoints Wachovia to act as its agent under this
Agreement and under each other Transaction Document, and authorizes the Agent to
take such actions as agent on its behalf and to exercise such powers as are
delegated to the Agent by the terms of this Agreement and the other Transaction
Documents together with such powers as are reasonably incidental thereto,
including, without limitation, the power to perfect all security interests
granted under the Transaction Documents.

 

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ARTICLE XII.

ASSIGNMENTS AND PARTICIPATIONS

Section 12.1 Assignments and Participations by Purchaser. Each of the parties
hereto, on behalf of its successors and assigns, hereby agrees and consents to
the complete or partial sale by Purchaser of all or any portion of its rights
under, interest in, title to and obligations under this Agreement to one or more
banks or other entities (each an “Assignee”), regardless of whether such sale
constitutes an assignment or the sale of a participation in such rights and
obligations. The consent of Seller shall be required prior to an assignment
becoming effective unless the Assignee is a Purchaser, an Affiliate of a
Purchaser or an Approved Fund, provided that the consent of the Purchaser shall
not be required if an Amortization Event has occurred and is continuing. The
consent of the Agent shall be required for assignments prior to an assignment
becoming effective. Any consent required under this Section 12.1 shall not be
unreasonably withheld or delayed. Upon (i) delivery to the Agent of an
assignment agreement, in form and substance acceptable to Agent together with
any consents required by this section, and (ii) payment of a $3,500 fee to the
Agent for processing such assignment (unless such fee is waived by the Agent),
such assignment shall become effective on the effective date specified in such
assignment. On and after the effective date for such assignment, such Assignee
shall for all purposes be a Purchaser party to this Agreement and any other
Transaction Document executed by or on behalf of the Purchaser and shall have
all the rights and obligations of a Purchaser under the Transaction Documents,
to the same extent as if it were an original party thereto. In the case of an
assignment covering all of the assigning Purchaser’s rights and obligations
under this Agreement, such Purchaser shall cease to be a Purchaser hereunder but
shall continue to be entitled to the benefits of, and subject to, those
provisions of this Agreement and the other Transaction Documents which survive
payment of the Recourse Obligations and termination of the applicable agreement.

Section 12.2 Prohibition on Assignments by Seller Parties. No Seller Party may
assign any of its rights or obligations under this Agreement without the prior
written consent of the Agent and Purchaser.

ARTICLE XIII.

MISCELLANEOUS

Section 13.1 Waivers and Amendments.

(a) No failure or delay on the part of the Agent or Purchaser in exercising any
power, right or remedy under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or remedy
preclude any other further exercise thereof or the exercise of any other power,
right or remedy. The rights and remedies herein provided shall be cumulative and
nonexclusive of any rights or remedies provided by law. Any waiver of this
Agreement shall be effective only in the specific instance and for the specific
purpose for which given.

 

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(b) No provision of this Agreement may be amended, supplemented, modified or
waived except in writing signed by Seller, Servicer, Purchaser and Agent.

Section 13.2 Notices. Except as provided in this Section 13.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or
(iii) if given by any other means, when received at the address specified in
this Section 13.2. Seller hereby authorizes the Agent to effect Purchases and
Interest Period and Yield Rate selections based on telephonic notices made by
any Person whom the Agent in good faith believes to be acting on behalf of
Seller. The Seller Parties agree to deliver promptly to the Agent a written
confirmation of each telephonic notice signed by a Financial Officer of a Seller
Party; provided, however, the absence of such confirmation shall not affect the
validity of such notice. If the written confirmation differs from the action
taken by the Agent, the records of the Agent shall govern absent manifest error.

Section 13.3 Protection of Agent’s Security Interest.

(a) Seller agrees that from time to time, at its expense, it will promptly
execute and deliver all instruments and documents, and take all actions, that
may be necessary or desirable, or that the Agent may request, to perfect,
protect or more fully evidence the Agent’s security interest in the Purchased
Assets, or to enable the Agent or Purchaser to exercise and enforce their rights
and remedies hereunder. At any time, the Agent may, or the Agent may direct
Seller or the Servicer to, notify the Obligors of Receivables, at Seller’s
expense, of the ownership or security interests of Purchaser under this
Agreement and may also direct that payments of all amounts due or that become
due under any or all Receivables be made directly to the Agent or its designee.
Seller or the Servicer (as applicable) shall, at the Agent’s request, withhold
the identities of the Agent and Purchaser in any such notification.

(b) If any Seller Party fails to perform any of its obligations hereunder, the
Agent or Purchaser may (but shall not be required to) perform, or cause
performance of, such obligations, and the Agent’s or Purchaser’s costs and
expenses incurred in connection therewith shall be payable by Seller as provided
in Section 10.3. Each Seller Party irrevocably authorizes the Agent at any time
and from time to time in the sole discretion of the Agent, and appoints the
Agent as its attorney-in-fact, to act on behalf of such Seller Party (i) to
execute on behalf of Seller as debtor and to file financing statements necessary
or desirable in the Agent’s sole discretion to perfect and to maintain the
perfection and priority of the interest of Purchaser in the Receivables and
(ii) to file a carbon, photographic or other reproduction of this Agreement or

 

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any financing statement with respect to the Receivables as a financing statement
in such offices as the Agent in its sole discretion deems necessary or desirable
to perfect and to maintain the perfection and priority of the Agent’s security
interest in the Purchased Assets, for the benefit of the Secured Parties. This
appointment is coupled with an interest and is irrevocable. Each of the Seller
Parties (A) hereby authorizes the Agent to file financing statements and other
filing or recording documents with respect to the Receivables and Related
Security (including any amendments thereto, or continuation or termination
statements thereof), without the signature or other authorization of such Seller
Party, in such form and in such offices as the Agent reasonably determines
appropriate to perfect or maintain the perfection of the security interest of
the Agent hereunder, (B) acknowledges and agrees that it is not authorized to,
and will not, file financing statements or other filing or recording documents
with respect to the Receivables or Related Security (including any amendments
thereto, or continuation or termination statements thereof), without the express
prior written approval by the Agent, consenting to the form and substance of
such filing or recording document, and (C) approves, authorizes and ratifies any
filings or recordings made by or on behalf of the Agent in connection with the
perfection of the security interests in favor of Seller or the Agent.

Section 13.4 Confidentiality.

(a) Each of the Seller Parties shall maintain and shall cause each of its
employees and officers to maintain the confidentiality of this Agreement and the
other confidential or proprietary information with respect to the Agent and
Purchaser and their respective businesses obtained by it or them in connection
with the structuring, negotiating and execution of the transactions contemplated
herein, except that such Seller Party and its officers and employees may
disclose such information to such Seller Party’s external accountants and
attorneys and as required by any applicable law or order of any judicial or
administrative proceeding.

(b) Anything herein to the contrary notwithstanding, each Seller Party hereby
consents to the disclosure of any nonpublic information with respect to it
(i) to the Agent or Purchaser by each other, (ii) by the Agent or Purchaser to
any prospective or actual assignee or participant of any of them and (iii) by
the Agent and Purchaser to their respective employees, officers, directors,
outside accountants, attorneys and other advisors, provided that each such
Person is informed of the confidential nature of such information and agrees to
keep such information confidential. In addition, Purchaser and the Agent may
disclose any such nonpublic information pursuant to any law, rule, regulation,
direction, request or order of any judicial, administrative or regulatory
authority or proceedings (whether or not having the force or effect of law).

Section 13.5 [Intentionally Deleted].

Section 13.6 Limitation of Liability. Except with respect to any claim arising
out of the willful misconduct or gross negligence of Purchaser or the Agent, no
claim may be made by any Seller Party or any other Person against Purchaser, the
Agent or their respective Affiliates, directors, officers, employees, attorneys
or agents for any special, indirect, consequential or punitive damages in
respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement, or
any act, omission or event occurring in connection therewith; and each Seller
Party hereby waives, releases, and agrees not to sue upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.

 

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Section 13.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW (EXCEPT IN THE CASE OF THE OTHER TRANSACTION DOCUMENTS, TO THE
EXTENT OTHERWISE EXPRESSLY STATED THEREIN) AND EXCEPT TO THE EXTENT THAT THE
PERFECTION OF THE OWNERSHIP INTEREST OF SELLER OR THE SECURITY INTEREST OF THE
AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, IN ANY OF THE COLLATERAL IS
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF ILLINOIS.

Section 13.8 CONSENT TO JURISDICTION. EACH PARTY TO THIS AGREEMENT HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH PERSON PURSUANT TO THIS AGREEMENT, AND EACH SUCH PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING
PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE AGENT OR ANY PURCHASER
OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.

Section 13.9 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY
SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.

Section 13.10 Integration; Binding Effect; Survival of Terms.

(a) This Agreement and each other Transaction Document contain the final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof superseding all prior
oral or written understandings.

 

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(b) This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns (including any
trustee in bankruptcy). This Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with its terms and
shall remain in full force and effect until terminated in accordance with its
terms; provided, however, that the rights and remedies with respect to (i) any
breach of any representation and warranty made by any Seller Party pursuant to
Article V, (ii) the indemnification and payment provisions of Article X, and
Sections 13.4 and 13.5 shall be continuing and shall survive any termination of
this Agreement.

Section 13.11 Counterparts; Severability; Section References. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of a signature page to this Agreement. Any provisions of this
Agreement which are prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. Unless otherwise
expressly indicated, all references herein to “Article,” “Section,” “Schedule”
or “Exhibit” shall mean articles and sections of, and schedules and exhibits to,
this Agreement.

Section 13.12 Characterization.

(a) It is the intention of the parties hereto that each Purchase hereunder shall
constitute and be treated as an absolute and irrevocable sale, which Purchase
shall provide the Purchaser with the full benefits of ownership of the
applicable Receivable Interest. Except as specifically provided in this
Agreement, each sale of a Receivable Interest hereunder is made without recourse
to Seller; provided, however, that (i) Seller shall be liable to Purchaser and
the Agent for all representations, warranties, covenants and indemnities made by
Seller pursuant to the terms of this Agreement, and (ii) such sale does not
constitute and is not intended to result in an assumption by Purchaser or the
Agent or any assignee thereof of any obligation of Seller or any Originator or
any other person arising in connection with the Receivables, the Related
Security, or the related Contracts, or any other obligations of Seller or any
Originator.

(b) In addition to any ownership interest which the Agent or Purchaser may from
time to time acquire pursuant hereto, Seller hereby grants to the Agent for the
ratable benefit of Purchaser a valid and perfected security interest in all of
Seller’s right, title and interest in, to and under all Receivables now existing
or hereafter arising, the Collections, each Lock-Box, each Collection Account,
all Related Security, all other rights and payments relating to such
Receivables, and all proceeds of any thereof prior to all other liens on and
security interests therein to secure the prompt and complete payment of the
Aggregate Unpaids. The Agent, on behalf of Purchaser, shall have, in addition to
the rights and remedies that it may have under this Agreement, all other rights
and remedies provided to a secured creditor under the UCC and other applicable
law, which rights and remedies shall be cumulative.

 

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Section 13.13 Transactions on the Effective Date.

The parties hereto agree that, on the Effective Date, the following transactions
shall be deemed to occur automatically, without further action by any party
hereto:

(a) the “Existing Agreement” shall be deemed to be amended and restated in its
entirety in the form of this Agreement;

(b) all “Aggregate Unpaids” (as defined in the Existing Agreement, the “Existing
Obligations” ) outstanding on the Effective Date shall, to the extent not paid
on the Effective Date, be deemed to be Aggregate Unpaids outstanding hereunder;

(c) the security interests created hereunder in favor of the Agent for the
benefit of Purchaser, and securing payment of the Existing Obligations, as
amended and restated on the Effective Date, shall remain in full force and
effect with respect to the Aggregate Unpaids and are hereby reaffirmed; and

(d) all references in the other Transaction Documents to the Existing Credit
Agreement shall be deemed to refer without further amendment to this Agreement.

Section 13.14 Termination. To the extent that the conditions precedent to the
initial Incremental Purchase set forth in Section 6.1 have not been satisfied or
waived (in Agent’s sole discretion) on or prior to the date that is one Business
Day prior to the Amortization Date (as defined in the Existing Agreement), then
this Agreement shall terminate and be of no further force or effect and neither
Purchaser nor Agent shall have any commitments or obligations hereunder and the
terms of the Existing Agreement shall remain in effect and shall not be amended
and restated hereby.

<signature pages follow>

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized officers or attorneys-in-fact as of the
date hereof.

 

ACTUANT RECEIVABLES CORPORATION By:   /s/ Patrick C. Dorn

Name:

Title:

 

Patrick C. Dorn

President

 

  Address: 3993 Howard Hughes Pkwy.

       Suite 100

       Las Vegas, Nevada 89109

 

  Attn: Pat Dorn

 

  Phone: (702) 691-2210

  Fax: (702) 691-2236

 

ACTUANT CORPORATION By:   /s/ Terry M. Braatz

Name:

Title:

 

Terry M. Braatz

Treasurer

 

  Address: 13000 W Silver Spring Road

       Milwaukee, WI 53007

 

  Attn: Terry M. Braatz

 

  Phone: (262) 373-7437

 

  Fax: (262) 790-6820

 

 

[Signature Page to the A/R Receivables Purchase Agreement]

 

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WACHOVIA BANK, NATIONAL ASSOCIATION, AS PURCHASER AND AS AGENT

By:   /s/ Michael J. Landry

Name:

Title:

 

Michael J. Landry

Vice President

Address:

 

       Wachovia Bank, National Association

       171 17th Street, N.W., 4th Floor

       Mail Stop GA 4524

       Atlanta, GA 30363

 

  Attention: Michael J. Landry, Asset-Backed Finance

  Facsimile: (404) 214-5481

 

 

[Signature Page to the A/R Receivables Purchase Agreement]

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EXHIBIT I

DEFINITIONS

As used in this Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):

“Adjusted Dilution Ratio” means, at any time, the rolling average of the sum of
the Contractual Dilution Ratio plus the Non-Contractual Dilution Ratio for the
12 Calculation Periods then most recently ended.

“Adverse Claim” means a lien, security interest, charge or encumbrance, or other
right or claim in, of or on any Person’s assets or properties in favor of any
other Person.

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person or any Subsidiary of such Person. A Person shall be
deemed to control another Person if the controlling Person owns 5% or more of
any class of voting securities of the controlled Person or possesses, directly
or indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.

“Agent” has the meaning set forth in the preamble to this Agreement.

“Agent’s Account” means account #8735-098787 at Wachovia Bank, National
Association, ABA #053100494.

“Aggregate Invested Amount” means, on any date of determination, the aggregate
Invested Amount of all Receivable Interests outstanding on such date.

“Aggregate Reduction” has the meaning specified in Section 1.3.

“Aggregate Unpaids” means, at any time, an amount equal to the sum of (i) the
Aggregate Invested Amount, plus (ii) all Recourse Obligations (whether due or
accrued) at such time.

“Agreement” means this Amended and Restated Receivables Purchase Agreement, as
it may be amended or modified and in effect from time to time.

“Alternate Base Rate” means for any day, the rate per annum equal to the higher
as of such day of (i) the Prime Rate, or (ii) one-half of one percent (0.50%)
above the Federal Funds Rate. For purposes of determining the Alternate Base
Rate for any day, changes in the Prime Rate or the Federal Funds Rate shall be
effective on the date of each such change.

“Amortization Date” means the earliest to occur of (i) September 8, 2009,
(ii) the day on which any of the conditions precedent set forth in Section 6.2
are not satisfied, (iii) the Business Day immediately prior to the occurrence of
an Event of Bankruptcy with respect to any Seller Party, (iv) the Business Day
specified in a written notice from the Agent following the occurrence and during
the continuance of any other Amortization Event, and (v) the date which is not
less than 10 Business Days after the Agent’s receipt of written notice from
Seller that it wishes to terminate the facility evidenced by this Agreement.

 

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“Amortization Event” has the meaning specified in Article IX.

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

“Broken Funding Costs” means for any Receivable Interest: (i) which is accruing
Yield at LMIR and which has its Invested Amount reduced without compliance by
Seller with the notice requirements hereunder, (ii) which is accruing Yield at a
LIBO Rate and which has its Invested Amount reduced on any day other than the
last day of the applicable Interest Period or (iii) which is accruing Yield
either at LMIR or a LIBO Rate and which does not become subject to an Aggregate
Reduction following the delivery of any Reduction Notice; an amount equal to the
excess, if any, of (A) the Yield that would have accrued during the remainder of
the Interest Periods determined by the Agent to relate to such Receivable
Interest subsequent to the date of such reduction (or in respect of clause
(ii) above, the date such Aggregate Reduction was designated to occur pursuant
to the Reduction Notice) of the Invested Amount of such Receivable Interest if
such reduction had not occurred or such Reduction Notice had not been delivered,
over (B) the sum of (x) to the extent all or a portion of such Invested Amount
is allocated to another Receivable Interest, the amount of Yield actually
accrued during the remainder of such period on such Invested Amount for the new
Receivable Interest, and (y) to the extent such Invested Amount is not allocated
to another Receivable Interest, the income, if any, actually received during the
remainder of such period by the holder of such Receivable Interest from
investing the portion of such Invested Amount not so allocated. All Broken
Funding Costs shall be due and payable hereunder upon demand.

“Business Day” means any day on which banks are not authorized or required to
close in New York, New York or Atlanta, Georgia, and The Depository Trust
Company of New York is open for business, and, if the applicable Business Day
relates to any computation or payment to be made with respect to the LIBO Rate
or LMIR, any day on which dealings in dollar deposits are carried on in the
London interbank market.

“Calculation Period” means a fiscal month.

“Collection Account” means each concentration account, depositary account,
lock-box account or similar account in which any Collections are collected or
deposited and which is listed on Exhibit IV.

“Collection Account Agreement” means an agreement substantially in a form
reasonably acceptable to the Agent among an Originator, Seller, the Agent and a
Collection Bank giving the Agent “control” (as defined in the UCC) over a
Collection Account.

“Collection Bank” means, at any time, any of the banks holding one or more
Collection Accounts.

 

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“Collection Notice” means a notice, in substantially the form attached to a
Collection Account Agreement from the Agent to a Collection Bank terminating the
Seller’s (and, as applicable, the Servicer’s and the applicable Originator’s)
access to a Collection Account.

“Collections” means, with respect to any Receivable, all cash collections and
other cash proceeds in respect of such Receivable, including, without
limitation, all Finance Charges or other related amounts accruing in respect
thereof and all cash proceeds of Related Security with respect to such
Receivable.

“Contingent Obligation” of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a letter of credit.

“Contract” means, with respect to any Receivable, any and all instruments,
agreements, invoices or other writings pursuant to which such Receivable arises
or which evidences such Receivable including, without limitation, all
“contracts” as, when and if such term is defined in the UCC, of the applicable
Originator (or Seller, as its assignee), and in any event, shall include,
without limitation, all sale, service, performance and equipment or property
lease contracts, agreements and grants (whether written or oral, or third party
or intercompany), and any other documents (whether written or oral) between the
applicable Originator and third parties, and all assignments, amendments,
restatements, supplements, extensions, renewals, replacements or modifications
thereof.

“Contractual Dilution” means, with respect to any Receivable, any reduction in
the Outstanding Balance of such Receivable due to a quantity discount, discount
for prompt payment or similar incentive, in each of the foregoing cases, which
discount is readily discernable and quantifiable from the face of the invoice
evidencing such Receivable.

“Contractual Dilution Ratio” means, as of any Cut-Off Date, a ratio (expressed
as a percentage), computed by dividing (i) the total amount of decreases in
Outstanding Balances due to Contractual Dilutions during the Calculation Period
ending on such Cut-Off Date, by (ii) the aggregate sales generated by the
Originators during the Calculation Period prior to the Calculation Period ending
on such Cut-Off Date.

“Credit and Collection Policy” means Seller’s credit and collection policies and
practices relating to Contracts and Receivables existing on the Effective Date
and summarized in Exhibit VII hereto, as modified from time to time in
accordance with this Agreement.

“Cut-Off Date” means the last day of a Calculation Period.

“Days Sales Outstanding” means, as of any day, an amount equal to the product of
(x) 91, multiplied by (y) the amount obtained by dividing (i) the aggregate
outstanding balance of Receivables as of the most recent Cut-Off Date, by
(ii) the aggregate amount of Receivables created during the three
(3) Calculation Periods including and immediately preceding such Cut-Off Date.

 

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“Deemed Collections” means Collections deemed received by Seller under
Section 1.4(a).

“Default Horizon Ratio” means, as of any Cut-Off Date, the ratio (expressed as a
decimal) computed by dividing (i) the aggregate sales generated by the
Originators during the 5 Calculation Periods ending on such Cut-Off Date, by
(ii) the Net Pool Balance as of such Cut-Off Date.

“Default Rate” means a rate per annum equal to the sum of (i) the Alternate Base
Rate plus (ii) 2.00%, changing when and as the Alternate Base Rate changes.

“Default Ratio” means, as of any Cut-Off Date, the ratio (expressed as a
percentage) computed by dividing (x) the total amount of Receivables which
became Defaulted Receivables during the Calculation Period that includes such
Cut-Off Date, by (y) the aggregate sales generated by the Originators during the
Calculation Period occurring 4 months prior to the Calculation Period ending on
such Cut-Off Date.

“Default Trigger Ratio” means , as of any Cut-Off Date, the ratio (expressed as
a percentage) computed by dividing (x) the total Outstanding Balance of all
Defaulted Receivables as of such date, by (y) the total Outstanding Balance of
all Receivables as of such date.

“Defaulted Receivable” means a Receivable: (i) as to which the Obligor thereof
has suffered an Event of Bankruptcy; (ii) which, consistent with the Credit and
Collection Policy, would be written off Seller’s books as uncollectible; or
(iii) as to which any payment, or part thereof, remains unpaid for 91 days or
more from the original due date for such payment.

“Delinquency Ratio” means, at any time, a percentage equal to (i) the aggregate
Outstanding Balance of all Receivables that were Delinquent Receivables at such
time divided by (ii) the aggregate Outstanding Balance of all Receivables at
such time.

“Delinquent Receivable” means a Receivable as to which any payment, or part
thereof, remains unpaid for 61-90 days from the original due date for such
payment.

“Demand Advance” means any advance made by Seller to Parent at any time while it
is acting as the Servicer, which advance (a) is payable upon demand, (b) is not
evidenced by an instrument, chattel paper or a certificated security, (c) bears
interest at a market rate determined by Seller and the Servicer from time to
time, (d) is not subordinated to any other Indebtedness or obligation of the
Servicer, and (e) may not be offset by Parent against amounts due and owing from
Seller to it under its Subordinated Note; provided, however, that no Demand
Advance may be made after the Facility Termination Date or on any date prior to
the Facility Termination Date on which an Amortization Event or an Unmatured
Amortization Event exists and is continuing.

“Dilution” means the amount of any reduction or cancellation of the Outstanding
Balance of a Receivable as described in Section 1.4(a).

 

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“Dilution Horizon Ratio” means, as of any Cut-off Date, a ratio (expressed as a
decimal), computed by dividing (i) the aggregate sales generated by the
Originators during the 2 Calculation Periods ending on such Cut-Off Date, by
(ii) the Net Pool Balance as of such Cut-Off Date.

“Dilution Ratio” means, as of any Cut-Off Date, a ratio (expressed as a
percentage), computed by adding the Contractual Dilution Ratio and the
Non-Contractual Dilution Ratio as of such Cut-Off Date.

“Dilution Reserve” means, for any Calculation Period, the product (expressed as
a percentage) of:

(a) the sum of (i) two (2) times the Adjusted Dilution Ratio as of the
immediately preceding Cut-Off Date, plus (ii) the Dilution Volatility Component
as of the immediately preceding Cut-Off Date, times

(b) the Dilution Horizon Ratio as of the immediately preceding Cut-Off Date.

“Dilution Volatility Component” means the product (expressed as a percentage) of
(i) the difference between (a) the highest three (3)-month rolling average
Non-Contractual Dilution Ratio over the past 12 Calculation Periods and (b) the
Adjusted Dilution Ratio, and (ii) a fraction, the numerator of which is equal to
the amount calculated in (i)(a) of this definition and the denominator of which
is equal to the amount calculated in (i)(b) of this definition.

“Effective Date” means the date on which the conditions precedent to the initial
Incremental Purchase are satisfied in accordance with Section 6.1 herein.

“Eligible Assignee” means a commercial bank having a combined capital and
surplus of at least $250,000,000 with a rating of its (or its parent holding
company’s) short-term securities equal to or higher than (i) A-1 by S&P and
(ii) P-1 by Moody’s.

“Eligible Receivable” means, at any time, a Receivable:

(i) the Obligor of which (a) is not an Affiliate of any of the parties hereto;
(b) is not a government or a governmental subdivision or agency; and (c) if a
natural person, is a resident of the United States or, if a corporation or other
business organization, is organized under the laws of the United States or any
political subdivision thereof and has its chief executive office in the United
States; provided, however, that Receivables with an aggregate Outstanding
Balance of up to 3% of total Receivables that meet all other requirements of
this definition except those set forth in clause (i)(c) may be counted as
“Eligible Receivables”;

(ii) which was not a Defaulted Receivable on the date on which it was acquired
by Seller from the applicable Originator,

(iii) which by its terms is due and payable within 60 days of the original
billing date therefor and has not had its payment terms extended more than once;
provided, however, that if such Receivable is a Trade Show Receivable, up to 2%
of total Eligible Receivables may consist of Trade Show Receivables which, by
their terms, are due and payable within 180 days of the original billing date
therefor and have not have their payment terms extended more than once;

 

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(iv) which is an “account” within the meaning of Article 9 of the UCC of all
applicable jurisdictions,

(v) which is denominated and payable only in United States dollars in the United
States or Canada (except for the provinces of New Foundland and Quebec),

(vi) which arises under a Contract which, together with such Receivable, is in
full force and effect and constitutes the legal, valid and binding obligation of
the related Obligor enforceable against such Obligor in accordance with its
terms,

(vii) which arises under a Contract which (A) does not require the Obligor under
such Contract to consent to the transfer, sale, pledge or assignment of the
rights and duties of the applicable Originator or any of its assignees under
such Contract and (B) does not contain a confidentiality provision that purports
to restrict the ability of Purchaser to exercise its rights under this
Agreement, including, without limitation, its right to review the Contract,

(viii) which arises under a Contract that contains an obligation to pay a
specified sum of money, contingent only upon the sale of goods or the provision
of services by the applicable Originator,

(ix) which, together with the Contract related thereto, does not contravene any
law, rule or regulation applicable thereto (including, without limitation, any
law, rule and regulation relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection practices and
privacy) and with respect to which no part of the Contract related thereto is in
violation of any such law, rule or regulation,

(x) which satisfies all applicable requirements of the Credit and Collection
Policy,

(xi) which was generated in the ordinary course of the applicable Originator’s
business,

(xii) which arises solely from the sale of goods or the provision of services to
the related Obligor by the applicable Originator, and not by any other Person
(in whole or in part),

(xiii) which is not subject to any dispute, counterclaim, right of rescission,
set-off, counterclaim or any other defense (including defenses arising out of
violations of usury laws) of the applicable Obligor against the applicable
Originator or any other Adverse Claim, and the Obligor thereon holds no right as
against such Originator to cause such Originator to repurchase the goods or
merchandise the sale of which shall have given rise to such Receivable (except
with respect to sale discounts effected pursuant to the Contract, or defective
goods returned in accordance with the terms of the Contract); provided, however,
that if such dispute, offset, counterclaim or defense affects only a portion of
the Outstanding Balance of such Receivable, then such Receivable may be deemed
an Eligible Receivable to the extent of the portion of such Outstanding Balance
which is not so affected, and

 

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provided, further, that Receivables of any Obligor which has any accounts
payable by the applicable Originator or by a wholly-owned Subsidiary of such
Originator (thus giving rise to a potential offset against such Receivables) may
be treated as Eligible Receivables to the extent that the Obligor of such
Receivables has agreed pursuant to a written agreement in form and substance
satisfactory to the Agent, that such Receivables shall not be subject to such
offset,

(xiv) as to which the applicable Originator has satisfied and fully performed
all obligations on its part with respect to such Receivable required to be
fulfilled by it, and no further action is required to be performed by any Person
with respect thereto other than payment thereon by the applicable Obligor,

(xv) as to which each of the representations and warranties contained in
Sections 5.1(g), (i), (j), (r), (s), (t) and (u) is true and correct, and

(xvi) all right, title and interest to and in which has been validly transferred
by the applicable Originator directly to Seller under and in accordance with the
Receivables Sale Agreement, and Seller has good and marketable title thereto
free and clear of any Adverse Claim.

“Excluded Taxes” means “Excluded Taxes” under and as defined in the Receivables
Sale Agreement to the extent that such taxes are consistent with the
transactions under this Agreement being treated, for tax purposes, as though the
Agent and the Purchasers made a loan to Seller secured by the Receivables and
Related Security.

“Facility Account” means Seller’s account no. 10-87832 at Bank One, NA, in
Chicago, Illinois, ABA No. 071000013.

“Facility Termination Date” means the earlier of (i) the Liquidity Termination
Date and (ii) the Amortization Date.

“Federal Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as amended and any successor statute thereto.

“Federal Funds Effective Rate” means, for any period, a fluctuating interest
rate per annum for each day during such period equal to (i) the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the preceding Business Day) by the
Federal Reserve Bank of New York in the Composite Closing Quotations for U.S.
Government Securities; or (ii) if such rate is not so published for any day
which is a Business Day, the average of the quotations at approximately 11:30
a.m. (New York time) for such day on such transactions received by the Agent
from three federal funds brokers of recognized standing selected by it.

“Fee Letter” means that certain Thirteenth Amended and Restated Fee Letter dated
as of the Effective Date among Seller, Parent and the Agent, as it may be
amended, restated or otherwise modified and in effect from time to time.

 

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“Final Payout Date” means the date on which all Aggregate Unpaids have been paid
in full and the Purchase Limit has been reduced to zero.

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

“Incremental Purchase” means a purchase of one or more Receivable Interests
which increases the total outstanding Aggregate Invested Amount hereunder.

“Indebtedness” of a Person means such Person’s (i) obligations for borrowed
money, (ii) obligations representing the deferred purchase price of property or
services (other than accounts payable arising in the ordinary course of such
Person’s business payable on terms customary in the trade), (iii) obligations,
whether or not assumed, secured by liens or payable out of the proceeds or
production from property now or hereafter owned or acquired by such Person,
(iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) capitalized lease obligations, (vi) net liabilities under
interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and
(viii) liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA.

“Indemnified Amounts” has the meaning specified in Section 10.1.

“Indemnified Party” has the meaning specified in Section 10.1.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Independent Director” shall mean a member of the Board of Directors of Seller
who is not at such time, and has not been at any time during the preceding five
(5) years: (A) a director, officer, employee or affiliate of Performance
Guarantor, any Originator or any of their respective Subsidiaries or Affiliates
(other than Seller), or (B) the beneficial owner (at the time of such
individual’s appointment as an Independent Director or at any time thereafter
while serving as an Independent Director) of any of the outstanding common
shares of Seller, any Originator, or any of their respective Subsidiaries or
Affiliates, having general voting rights.

“Interest Period” means, with respect to any Receivable Interest:

(a) if Yield for such Receivable Interest is calculated on the basis of the LIBO
Rate, a period of one, two, three or six months, or such other period as may be
mutually agreeable to the Agent and Seller, commencing on a Business Day
selected by Seller or the Agent pursuant to this Agreement. Such Interest Period
shall end on the day in the applicable succeeding calendar month which
corresponds numerically to the beginning day of such Interest Period, provided,
however, that if there is no such numerically corresponding day in such
succeeding month, such Interest Period shall end on the last Business Day of
such succeeding month;

(b) if Yield for such Receivable Interest is calculated on the basis of LMIR,
initially, a period commencing on a Business Day selected by Seller and agreed
to by the Agent and ending on the last day of the calendar month in which such
Business Day falls, and thereafter, each calendar month while such Receivable
Interest remains funded at LMIR; or

 

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(c) if Yield for such Receivable Interest is calculated on the basis of the
Alternate Base Rate, a period commencing on a Business Day selected by Seller
and agreed to by the Agent, provided that no such period shall exceed one month.

If any Interest Period would end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day, provided,
however, that in the case of Interest Periods corresponding to the LIBO Rate, if
such next succeeding Business Day falls in a new month, such Interest Period
shall end on the immediately preceding Business Day. In the case of any Interest
Period which commences before the Facility Termination Date and would otherwise
end on a date occurring after the Facility Termination Date, such Interest
Period shall end on the Facility Termination Date. The duration of each Interest
Period which commences after the Facility Termination Date shall be of such
duration as selected by the Agent.

“Invested Amount” of any Receivable Interest means, at any time, (A) the
Purchase Price of such Receivable Interest, minus (B) the sum of the aggregate
amount of Collections and other payments received by the Agent which in each
case are applied to reduce such Invested Amount in accordance with the terms and
conditions of this Agreement; provided that such Invested Amount shall be
restored (in accordance with Section 2.5) in the amount of any Collections or
other payments so received and applied if at any time the distribution of such
Collections or payments are rescinded, returned or refunded for any reason.

“LIBOR Market Index Rate” means, for any day, the one-month Eurodollar Rate for
U.S. dollar deposits as reported on the Reuters Screen LIBOR01 Page or any other
page that may replace such page from time to time for the purpose of displaying
offered rates of leading banks for London interbank deposits in United States
dollars, as of 11:00 a.m. (London time) on such date, or if such day is not a
Business Day, then the immediately preceding Business Day (or if not so
reported, then as determined by the Agent from another recognized source for
interbank quotation), in each case, changing when and as such rate changes.

“LIBO Rate” means, for any Interest Period, the rate per annum determined on the
basis of the offered rate for deposits in U.S. dollars of amounts equal or
comparable to the Invested Amount offered for a term comparable to such Interest
Period, which rates appear on a Reuters Screen LIBOR01 Page effective as of
11:00 A.M., London time, two Business Days prior to the first day of such
Interest Period, provided that if no such offered rates appear on such page, the
LIBO Rate for such Interest Period will be the arithmetic average (rounded
upwards, if necessary, to the next higher 1/100th of 1%) of rates quoted by not
less than two major banks in New York, New York, selected by the Agent, at
approximately 10:00 a.m. (New York time), two Business Days prior to the first
day of such Interest Period, for deposits in U.S. dollars offered by leading
European banks for a period comparable to such Interest Period in an amount
comparable to the Invested Amount, divided by one minus the maximum aggregate
reserve requirement (including all basic, supplemental, marginal or other
reserves) which is imposed against the Agent in respect of Eurocurrency
liabilities, as defined in Regulation D of the Board of Governors of the Federal
Reserve System as in effect from time to time (expressed as a decimal),
applicable to such Interest Period. The LIBO Rate shall be rounded, if
necessary, to the next higher 1/16 of 1%.

 

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“LMIR” means, on any date of determination, a rate per annum equal to the LIBOR
Market Index Rate.

“Lock-Box” means each locked postal box with respect to which a bank who has
executed a Collection Account Agreement has been granted exclusive access for
the purpose of retrieving and processing payments made on the Receivables and
which is listed on Exhibit IV.

“Loss Reserve” means, for any Calculation Period, the product (expressed as a
percentage) of (a) 2.0, times (b) the highest three-month rolling average
Default Ratio during the 12 Calculation Periods ending on the immediately
preceding Cut-Off Date, times (c) the Default Horizon Ratio as of the
immediately preceding Cut-Off Date.

“Material Adverse Effect” means a material adverse effect on (i) the financial
condition or operations of any Seller Party and its Subsidiaries taken as a
whole, (ii) the ability of any Seller Party to perform its obligations under
this Agreement or the Performance Guarantor to perform its obligations under the
Performance Undertaking, (iii) the legality, validity or enforceability of this
Agreement or any other Transaction Document, (iv) the Agent’s security interest,
for the benefit of the Secured Parties, in the Receivables generally or in any
significant portion of the Receivables, the Related Security or the Collections
with respect thereto, or (v) the collectibility of the Receivables generally or
of any material portion of the Receivables.

“Monthly Report” means a report, in substantially the form of Exhibit VIII
hereto (appropriately completed), furnished by the Servicer to the Agent
pursuant to Section 8.5.

“Monthly Reporting Date” means the 17th day of each month after the date of this
Agreement (or if any such day is not a Business Day, the next succeeding
Business Day thereafter) or such other days of any month as Agent may request in
connection with Section 8.5 hereof.

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

“Net Pool Balance” means, at any time, the aggregate Outstanding Balance of all
Eligible Receivables at such time reduced by (a) the aggregate amount by which
the Outstanding Balance of all Eligible Receivables of each Obligor and its
Affiliates exceeds the Obligor Concentration Limit for such Obligor, and (b) the
total amount of Contractual Dilutions during the Calculation Period then most
recently ended.

“Non-Contractual Dilution” means a Dilution which does not constitute a
Contractual Dilution.

“Non-Contractual Dilution Ratio” means, as of any Cut-Off Date, a ratio
(expressed as a percentage), computed by dividing (i) the total amount of
decreases in Outstanding Balances due to Non-Contractual Dilutions during the
Calculation Period ending on such Cut-Off Date, by (ii) the aggregate sales
generated by the Originators during the two (2) Calculation Periods prior to the
Calculation Period ending on such Cut-Off Date.

 

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“Obligor” means a Person obligated to make payments pursuant to a Contract.

“Obligor Concentration Limit” means, at any time, in relation to the aggregate
Outstanding Balance of Receivables owed by any single Obligor and its Affiliates
(if any), the applicable concentration limit shall be determined as follows for
Obligors who have short term unsecured debt ratings currently assigned to them
by S&P and Moody’s (or in the absence thereof, the equivalent long term
unsecured senior debt ratings), the applicable concentration limit shall be
determined according to the following table:

 

                    S&P Rating                     

                  Moody’s Rating                  

Allowable % of

            Eligible Receivables            

A-1+

  P-1   10%

A-1

  P-1   8%

A-2

  P-2   6%

A-3

  P-3   3.5%

Below A-3 or Not Rated by

either S&P or Moody’s

 

Below P-3 or Not Rated by

either S&P or Moody’s

  3.5%

; provided, however, that (a) if any Obligor has a split rating, the applicable
rating will be the lower of the two, (b) if any Obligor is not rated by either
S&P or Moody’s, the applicable Obligor Concentration Limit shall be the one set
forth in the last line of the table above, and (c) may be subject to an increase
in the percentage set forth in clause (a)(i) of the definition of “Required
Reserve,” upon Seller’s request from time to time, the Agent may agree to a
higher percentage of Eligible Receivables for a particular Obligor and its
Affiliates (each such higher percentage, a “Special Concentration Limit”), it
being understood that any Special Concentration Limit may be cancelled by the
Agent upon not less than five (5) Business Days’ written notice to the Seller
Parties.

“Originator” means each of Parent, GB Tools and Supplies, Inc., a Wisconsin
corporation, Versa Technologies, Inc., a Delaware corporation, Kwikee Products
Company, LLC, a Delaware limited liability company, Nielson Hardware Corp., a
Connecticut corporation, B.W. Elliott Manufacturing Co., LLC, a New York limited
liability company, Acme Electric Corporation, a New York corporation, Atlantic
Guest, Inc., a Delaware corporation, Hydratight Operations, Inc. (formerly
Hydratight Sweeney, Inc.), a Delaware corporation, Hydratight, Inc. (formerly
Hydratight Sweeney Products Corporation), a Delaware corporation, D.L. Ricci
Corp., a Minnesota corporation, Precision Sure-Lock, Inc., a Delaware
corporation, Key Components, LLC, a Delaware limited liability company, Maxima
Technologies & Systems, LLC, a Delaware limited liability company, Actown
Electrocoil, Inc., a Delaware corporation, BH Electronics, Inc., a Tennessee
corporation and Templeton, Kenly & Co., Inc., an Illinois corporation, in its
capacity as a seller under the Receivables Sale Agreement.

“Outstanding Balance” of any Receivable at any time means the then outstanding
principal balance thereof.

“Parent” has the meaning set forth in the preamble to this Agreement.

 

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“Performance Guarantor” means Parent.

“Performance Undertaking” means that certain Amended and Restated Performance
Undertaking, dated as of the Effective Date by Performance Guarantor in favor of
Seller, in form and substance acceptable to Agent, as the same may be amended,
restated or otherwise modified from time to time.

“Permitted Sub-Servicer” has the meaning set forth in Section 8.1(b).

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

“Prime Rate” means a rate per annum equal to the prime rate of interest
announced from time to time by Wachovia (which is not necessarily the lowest
rate charged to any customer), changing when and as said prime rate changes.

“Proposed Reduction Date” has the meaning set forth in Section 1.3.

“Purchase” means an Incremental Purchase or a Reinvestment.

“Purchase Date” means each Business Day on which a Purchase is made hereunder.

“Purchase Limit” means $75,000,000.

“Purchase Notice” has the meaning set forth in Section 1.2.

“Purchase Price” means, with respect to any Incremental Purchase of a Receivable
Interest, the amount paid to Seller for such Receivable Interest which shall not
exceed the least of (i) the amount requested by Seller in the applicable
Purchase Notice, (ii) the unused portion of the Purchase Limit on the applicable
purchase date and (iii) the excess, if any, of the Net Pool Balance (less the
Required Reserve) on the applicable purchase date over the aggregate outstanding
amount of Aggregate Invested Amount determined as of the date of the most recent
Monthly Report, taking into account such proposed Incremental Purchase.

“Purchased Assets” means all of Seller’s right, title and interest, whether now
owned and existing or hereafter arising in and to all of the Receivables, the
Related Security, the Collections and all proceeds of the foregoing.

“Purchaser” has the meaning set forth in the preamble to this Agreement.

“Purchaser’s Portion” means, on any date of determination, the sum of the
percentages represented by the Receivable Interests.

“Receivable” means any “Receivable” (under and as defined in the Receivables
Sale Agreement) in which the Seller now has or hereafter acquires any right or
interest.

 

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“Receivable Interest” means, at any time, an undivided percentage ownership
interest (computed as set forth below) associated with a designated amount of
Invested Amount, selected pursuant to the terms and conditions hereof in
(i) each Receivable arising prior to the time of the most recent computation or
recomputation of such undivided interest, (ii) all Related Security with respect
to each such Receivable, and (iii) all Collections with respect to, and other
proceeds of, each such Receivable. Each such undivided percentage interest shall
equal:

        IA + RR        

NPB

where:

 

  IA = the Invested Amount of such Receivable Interest.

 

  NPB = the Net Pool Balance.

 

  RR = the Required Reserve.

Such undivided percentage ownership interest shall be initially computed on its
date of purchase. Thereafter, until the Facility Termination Date, each
Receivable Interest shall be automatically recomputed (or deemed to be
recomputed) on each day prior to the Facility Termination Date. The variable
percentage represented by any Receivable Interest as computed (or deemed
recomputed) as of the close of the business day immediately preceding the
Facility Termination Date shall remain constant at all times thereafter.

“Receivables Sale Agreement” means that certain Receivables Sale Agreement,
dated as of May 30, 2001, among the Originators and Seller, as the same may be
amended, restated or otherwise modified from time to time.

“Records” has the meaning specified in the Receivables Sale Agreement.

“Recourse Obligations” has the meaning set forth in Section 2.1.

“Reduction Notice” has the meaning set forth in Section 1.3.

“Regulatory Change” means any change after the date of this Agreement in United
States (federal, state or municipal) or foreign laws, rules, regulations
(including Regulation D), policy or accounting principles or the adoption or
making after such date of any interpretations, directives or requests applying
to a class of banks (including Purchaser) of or under any United States
(federal, state or municipal) or foreign laws, rules, regulations policy,
guideline or directive (whether or not having the force of law) or change in the
interpretation or administration thereof or accounting principles by any court,
governmental or monetary authority or central bank, or accounting board or
authority (whether or not part of government) charged with the establishment,
interpretation or administration thereof.

“Reinvestment” has the meaning set forth in Section 2.2.

“Related Security” means, with respect to any Receivable, all of Seller’s right,
title and interest in, to and under:

 

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(i) all “Related Security” (under and as defined in the Receivables Sale
Agreement) in which the Seller now has or hereafter acquires any right or
interest,

(ii) the Receivables Sale Agreement and the Performance Undertaking,

(iii) the Demand Advances, and

(iv) all proceeds of any of the foregoing.

“Required Notice Period” means two (2) Business Days.

“Required Reserve” means, on any day during a Calculation Period, the product of
(a) the greater of (i) the Required Reserve Factor Floor and (ii) the sum of the
Loss Reserve, the Yield Reserve, the Dilution Reserve and the Servicing Reserve,
times (b) the Net Pool Balance as of the Cut-Off Date immediately preceding such
Calculation Period.

“Required Reserve Factor Floor” means, for any Calculation Period, the sum
(expressed as a percentage) of (a) 14% plus (b) the product of the Adjusted
Dilution Ratio and the Dilution Horizon Ratio, in each case, as of the
immediately preceding Cut-Off Date.

“Restricted Junior Payment” means (i) any dividend or other distribution, direct
or indirect, on account of any shares of any class of capital stock of Seller
now or hereafter outstanding, except a dividend payable solely in shares of that
class of stock or in any junior class of stock of Seller, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of capital stock of Seller
now or hereafter outstanding, (iii) any payment or prepayment of principal of,
premium, if any, or interest, fees or other charges on or with respect to, and
any redemption, purchase, retirement, defeasance, sinking fund or similar
payment and any claim for rescission with respect to the Subordinated Loans (as
defined in the Receivables Sale Agreement), (iv) any payment made to redeem,
purchase, repurchase or retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of capital
stock of Seller now or hereafter outstanding, and (v) any payment of management
fees by Seller (except for reasonable management fees to any Originator or its
Affiliates in reimbursement of actual management services performed).

“S&P” means Standard and Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.

“Secured Parties” means the Indemnified Parties.

“Seller” has the meaning set forth in the preamble to this Agreement.

“Seller Parties” means, collectively, Seller and, so long as it is acting as
Servicer and/or Performance Guarantor, Parent.

“Servicer” means at any time the Person (which may be the Agent) then authorized
pursuant to Article VIII to service, administer and collect Receivables.

 

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“Servicing Fee” means, for each day in a Calculation Period:

(a) an amount equal to (i) the Servicing Fee Rate (or, at any time while Parent
or one of its Affiliates is the Servicer, such lesser percentage as may be
agreed between Seller and the Servicer on an arms’ length basis based on then
prevailing market terms for similar services), times (ii) the aggregate
Outstanding Balance of all Receivables at the close of business on the Cut-Off
Date immediately preceding such Calculation Period, times (iii) 1/360; or

(b) on and after the Servicer’s reasonable request made at any time when Parent
or one of its Affiliates is no longer acting as Servicer hereunder, an
alternative amount specified by the successor Servicer not exceeding (i) 110% of
such Servicer’s reasonable costs and expenses of performing its obligations
under this Agreement during the preceding Calculation Period, divided by
(ii) the number of days in the current Calculation Period.

“Servicing Fee Rate” means 1.0% per annum.

“Servicing Reserve” means, for any Calculation Period, the product (expressed as
a percentage) of (a) the Servicing Fee Rate, times (b) a fraction, the numerator
of which is the highest Days Sales Outstanding for the most recent 12
Calculation Periods and the denominator of which is 360.

“Settlement Date” means (A) the 2nd Business Day after each Monthly Reporting
Date, and (B) the last day of the relevant Interest Period in respect of each
Receivable Interest.

“Settlement Period” means, with respect to any Receivable Interest, its entire
Interest Period.

“Subsidiary” of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, limited liability company, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

“Terminating Tranche” has the meaning set forth in Section 4.3(b).

“Trade Show Receivable” means any Receivable created as a result of
participation in a trade show within the 45 days prior to the creation thereof.

“Transaction Documents” means, collectively, this Agreement, each Purchase
Notice, the Receivables Sale Agreement, each Collection Account Agreement, the
Performance Undertaking, the Fee Letter, each Subordinated Note (as defined in
the Receivables Sale Agreement) and all other instruments, documents and
agreements executed and delivered in connection herewith.

 

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“UCC” means the Uniform Commercial Code as from time to time in effect in the
specified jurisdiction.

“Unmatured Amortization Event” means an event which, with the passage of time or
the giving of notice, or both, would constitute an Amortization Event.

“Wachovia” means Wachovia Bank, National Association in its individual capacity
and its successors.

“Yield” means for each Interest Period relating to a Receivable Interest, an
amount equal to the product of the applicable Yield Rate for such Receivable
Interest multiplied by the Invested Amount of such Receivable Interest for each
day elapsed during such Interest Period, annualized on a 360 day basis.

“Yield Rate” means, with respect to each Receivable Interest, the LIBO Rate,
LMIR, the Alternate Base Rate or the Default Rate, as applicable.

“Yield Reserve” means, for any Calculation Period, the product (expressed as a
percentage) of (i) 1.5 times (ii) the Alternate Base Rate as of the immediately
preceding Cut-Off Date times (iii) a fraction the numerator of which is the
highest Days Sales Outstanding for the most recent 12 Calculation Periods and
the denominator of which is 360.

All accounting terms not specifically defined herein shall be construed in
accordance with GAAP. All terms used in Article 9 of the UCC in the State of
Illinois, and not specifically defined herein, are used herein as defined in
such Article 9.

 

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EXHIBIT II

FORM OF PURCHASE NOTICE

—

ACTUANT RECEIVABLES CORPORATION

PURCHASE NOTICE

dated                     , 20    

for Purchase on                     , 20    

Wachovia Bank, National Association, as Agent

171 17th Street, N.W., 4th Floor

Mail Stop GA 4524

Atlanta, GA 30363

Attention: Michael J. Landry, Asset-Backed Finance, Fax No. (404) 214-5481

Ladies and Gentlemen:

Reference is made to the Amended and Restated Receivables Purchase Agreement
dated as of September 10, 2008 (effective as of [March 10, 2009]) (as amended,
supplemented or otherwise modified from time to time, the “Receivables Purchase
Agreement”) among Actuant Receivables Corporation (the “Seller”), Actuant
Corporation, as initial Servicer, and Wachovia Bank National Association, as
Agent and Purchaser. Capitalized terms defined in the Receivables Purchase
Agreement are used herein with the same meanings.

1. The [Servicer, on behalf of the] Seller hereby certifies, represents and
warrants to the Agent and Purchaser that on and as of the Purchase Date (as
hereinafter defined):

(a) all applicable conditions precedent set forth in Article VI of the
Receivables Purchase Agreement have been satisfied;

(b) each of its representations and warranties contained in Section 5.1 of the
Receivables Purchase Agreement will be true and correct, in all material
respects, as if made on and as of the Purchase Date;

(c) no event will have occurred and is continuing, or would result from the
requested Purchase, that constitutes an Amortization Event or Unmatured
Amortization Event;

(d) the Facility Termination Date has not occurred; and

(e) after giving effect to the Purchase requested below, the Aggregate Invested
Amount will not exceed the Purchase Limit and the aggregate Receivable Interests
will not exceed 100%.

 

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2. The [Servicer, on behalf of the] Seller hereby requests that Purchaser make a
Purchase on                     , 20     (the “Purchase Date”) as follows:

(a) Purchase Price: $                    

(b) [Servicer on behalf of the] Seller requests that the Invested Amount (which
will initially accrue Yield at the Alternate Base Rate) begin to accrued Yield
at a [LIBO Rate for a Interest Period of              months] [LMIR until
                    , 20    ] on the third Business Day after the Purchase
Date)].

3. Please disburse the proceeds of the Purchase as follows:

[Apply $             to payment of Aggregate Unpaids due on the Purchase Date].
[Wire transfer $             to account no.              at              Bank,
in [city, state], ABA No.             , Reference:             ].

IN WITNESS WHEREOF, the [Servicer, on behalf of the] Seller has caused this
Purchase Request to be executed and delivered as of this              day of
                    ,             .

 

[Actuant Corporation, as Servicer, on behalf of:] Actuant Receivables
Corporation, as Seller By:    

Name:

Title:

 

 

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EXHIBIT III

PLACES OF BUSINESS OF THE SELLER PARTIES; LOCATIONS OF RECORDS;

FEDERAL EMPLOYER IDENTIFICATION NUMBERS

Chief Executive Office:

Seller:

3993 Howard Hughes Parkway

Suite 100

Las Vegas, Nevada 89109

Servicer:

6100 North Baker Road

Glendale, WI 53209

Locations of Records:

3993 Howard Hughes Parkway

Suite 100

Las Vegas, Nevada 89109

6100 North Baker Road

Glendale, WI 53209

Legal, Trade and Assumed Names for Each Seller Party:

 

Actuant Corporation:

          Applied Power Inc. (1/11/01)

Actuant Receivables Corporation:

          n/a

 

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EXHIBIT IV

 

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EXHIBIT V

[FORM OF] COMPLIANCE CERTIFICATE

To: Wachovia Bank, National Association, as Agent

This Compliance Certificate is furnished pursuant to that certain Amended and
Restated Receivables Purchase Agreement dated as of September 10, 2008
(effective as of [March 10, 2009]) among Actuant Receivables Corporation (the
“Seller”), Actuant Corporation (the “Servicer”), and Wachovia Bank, National
Association, as Agent and Purchaser (the “Agreement”).

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1. I am the duly elected                      of Seller.

2. I have reviewed the terms of the Agreement and I have made, or have caused to
be made under my supervision, a detailed review of the transactions and
conditions of Seller and its Subsidiaries during the accounting period covered
by the attached financial statements.

3. The examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or event which constitutes an
Amortization Event or Unmatured Amortization Event, as each such term is defined
under the Agreement, during or at the end of the accounting period covered by
the attached financial statements or as of the date of this Certificate[, except
as set forth in paragraph 5 below].

4. Schedule I attached hereto sets forth financial data and computations
evidencing the compliance with certain covenants of the Agreement, all of which
data and computations are true, complete and correct.

[5. Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which Seller has taken, is taking, or proposes to take
with respect to each such condition or event:                     ].

 

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The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered as of                     , 20    .

 

  By:      

Name:

Title:

 

 

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SCHEDULE I TO COMPLIANCE CERTIFICATE

A. Schedule of Compliance as of [Date] with Sections              of the
Agreement. Unless otherwise defined herein, the terms used in this Compliance
Certificate have the meanings ascribed thereto in the Agreement.

This schedule relates to the month ended:                     

 

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EXHIBIT VI

[FORM OF] COLLECTION ACCOUNT AGREEMENT

[Intentionally Deleted]

 

61

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EXHIBIT VII

CREDIT AND COLLECTION POLICY

See Exhibit V to Receivables Sale Agreement

 

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EXHIBIT VIII

FORM OF MONTHLY REPORT

 

  

Actuant Receivable Corporation Monthly Report

For the Month Ended:             

(Page 1)

($ in Thousands)

   BORROWING AVAILABILITY:                  

I . Portfolio Information

                    

1.

   Beginning of Month Balance: (Total A/R Outstanding)            

2.

   Gross Sales (Domestic & Foreign):            

3.

   Deduct:                   a. Total Collections:                   b. Dilution
(Total)                   c. Write Offs                Add:                   d.
Recoveries            

4.

                              a. Calculated Ending A/R Balance [(1) + (2) - (3
a,b,c)+(3d)]:       b. Reported Ending A/R Balance       c. Difference (If any)
  

5.

   Deduct:          a. Delinquent & Defaulted Receivables    —                b.
Foreign Receivables:    —                c. Other Receivables not Considered
Eligible    —                d. Dilutive credits ineligible for funding    —   
            e. Total Ineligibles    —         

6.

   Eligible Receivables [(4 b) - (5.c.)]:   

7.

   Deduct: Excess Concentration:   

8.

   Net Pool Balance [(6) -(7)]:

  

9.

  

Aging

Schedule:

  

Current

Month

  

%

  

One

Month

  Prior  

  

Two

Months

  Prior  

  

Three

Months

  Prior  

  

a.

   Current    —    —    —    —    —   

b.

   1-30 Days Past Due    —    —    —    —    —   

c.

   31-60 Days Past Due    —    —    —    —    —   

d.

   61-90 Days Past Due    —    —    —    —    —   

e.

   91-120 Days Past Due    —    —    —    —    —   

f.

   121+ Days Past Due    —    —    —    —    —   

g.

   Total:    —    —    —    —    —

 

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Actuant Receivable Corporation Monthly Report

For the Month Ended:             

(Page 2)

($ in Thousands)

II. Calculations Reflecting Current Activity

           

10.

   Aggregate Invested Amount Outstanding             $0

11.

   Required Reserve %            

12.

   Required Reserve [(8) x (11)]:            

III. Compliance

           

13.

   Asset Interest [(10) + (12) / (8)] < 100% :            

14.

   3M Avg. Delinquency Ratio <2.90%                Current Mo. Delinquency Ratio
               1 Mo. Prior Delinquency Ratio                2 Mo. Prior
Delinquency Ratio            

15.

   3M Avg. Default Trigger Ratio <9.75%                Current Mo. Default
Trigger Ratio                1 Mo. Prior Default Trigger Ratio                2
Mo. Prior Default Trigger Ratio            

16.

   3M Avg. Dilution Ratio <7.10%                Current Mo. Dilution Ratio      
         1 Mo. Prior Dilution Ratio                2 Mo. Prior Dilution Ratio   
        

17.

   Facility Limit [(12)<= $65,000,000]    In Compliance         

18.

   Minimum Required Capital Amount            

 

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Actuant Receivable Corporation Monthly Report

For the Month Ended:             

(Page 3)

($ in Thousands)

IV. Excess Concentration: (Calculation)

               Eligible Receivables    #VALUE!               

Allowable

Percentage

  

Max.

Allowable

Balance)

   Credit Rating             3.5%    $0    NR/NR             3.5%    $0    A3/P3
            6.0%    $0    A2/P2             8.0%    $0    A1/P1            
10.0%    $0    A1+/P1            

LARGEST

OBLIGORS

  

SHORT-TERM

DEBT RATING

  

ALLOWABLE

PERCENTAGE

  

TOTAL

RECEIVABLES

  

ALLOWABLE

RECEIVABLES

  

EXCESS

RECEIVABLES

1

   Lowes    NR/NR    0.00%    $0    $0    $0

2

   Home Depot    NR/NR    0.00%    $0    $0    $0

3

   Ace Hardware    NR/NR    0.00%    $0    $0    $0

4

   EDN    NR/NR    0.00%    $0    $0    $0

5

   CSK Auto    NR/NR    0.00%    $0    $0    $0

6

   TruServe    NR/NR    0.00%    $0    $0    $0

7

   Advance Auto    NR/NR    0.00%    $0    $0    $0

8

   West Marine Products    NR/NR    0.00%    $0    $0    $0

9

   WW Grainger    NR/NR    0.00%    $0    $0    $0

10

   Fleetwood    NR/NR    0.00%    $0    $0    $0

11

   Sears    NR/NR    0.00%    $0    $0    $0

12

   Orchard    NR/NR    0.00%    $0    $0    $0

13

   0    NR/NR    0.00%    $0    $0    $0    Total          $0    $0    $0 The
undersigned hereby represents and warrants that the foregoing is a true and
accurate accounting with respect to outstanding Receivables as of
                     accordance with the Amended and Restated Receivables
Purchase Agreement dated September 10, 2008 (effective as of [March 10, 2009])
and that all representations and warranties related to such Agreement are
restated and reaffirmed.

Signed: __________________________________

   Date: _______________________   

Title: __________________________________

 

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EXHIBIT IX

[FORM OF PERFORMANCE UNDERTAKING]

 

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SCHEDULE A

DOCUMENTS TO BE DELIVERED TO THE AGENT

ON OR PRIOR TO THE EFFECTIVE DATE

1. Amendment No. 19 to the Receivables Purchase Agreement, duly executed by the
parties thereto.

2. Amended and Restated Receivables Purchase Agreement, duly executed by the
parties thereto.

3. A certificate of each Seller Party’s Secretary certifying:

(a) A copy of the Resolutions of the Board of Directors of such Seller Party,
authorizing its execution, delivery and performance of the Amended and Restated
Receivables Purchase Agreement and the other documents to be delivered by it
thereunder;

(b) A copy of the Organizational Documents of such Seller Party (also certified,
to the extent that such documents are filed with any governmental authority, by
the Secretary of State of the jurisdiction of organization of such Seller Party
on or within thirty (30) days prior to closing);

(c) Good Standing Certificates for such Seller Party issued by the Secretaries
of State of its state of incorporation and each jurisdiction where it has
material operations; and

(d) The names and signatures of the officers authorized on its behalf to execute
the Amended and Restated Receivables Purchase Agreement and any other documents
to be delivered by it thereunder.

4. State and federal tax lien, judgment lien and UCC lien searches against
Seller Parties.

5. Officer’s Certificate of Seller as to the absence of any Amortization Event
or any Unmatured Amortization Event.

6. A favorable Corporate/UCC opinion of legal counsel for the Seller Parties
reasonably acceptable to the Agent.

7. A Compliance Certificate.

8. The Fee Letter.

9. A Monthly Report for the Monthly Reporting Date then most recently ended.

 

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10. Reaffirmation of Performance Undertaking.

11. Amendment No. 10 to the Receivables Sale Agreement.

 

68