EXHIBIT 10
PROGRAM FOR ACCOUNTS RECEIVABLE TRANSFER AGREEMENT
     THIS PROGRAM FOR ACCOUNTS RECEIVABLE TRANSFER AGREEMENT is made this 8th
day of March, 2006 among FIFTH THIRD BANK, an Ohio banking corporation,
(together with any successor, “Fifth Third”), UNIVERSAL FOREST PRODUCTS RMS,
LLC, a Michigan limited liability company (“Client”) and UNIVERSAL FOREST
PRODUCTS, INC., a Michigan corporation(“Guarantor”).
Recitals
     Guarantor is the indirect owner of Client through Guarantor’s wholly owned
subsidiary that owns the sole membership interest in Client. Client from time to
time will own accounts receivable resulting from the sale of products or
services by Client or one of its affiliates. Client wishes to sell certain
accounts receivable to Fifth Third in accordance with the terms hereof. For
purposes hereof, terms defined in Annex I hereto shall have the respective
meanings assigned therein.
     Therefore, for good and valuable consideration, the parties agree as
follows:
     1. Purchase of Receivables.
          (a) In connection with the execution and delivery of this Agreement,
Client shall sell to Fifth Third Receivables owned by Client, and Fifth Third
shall purchase such Receivables from Client, on the terms set forth herein and
on the initial Schedule A hereto (such Schedule A and each other Schedule A
hereto being incorporated herein by reference). After the date hereof, Client
may from time to time (x) submit an additional proposed Schedule A, in form and
substance satisfactory to Fifth Third and executed by Client, to Fifth Third,
which additional proposed Schedule A shall pertain to certain additional
Receivables owned by Client; and (y) Fifth Third shall purchase such additional
Receivables, subject to the terms, conditions and limitations of this Agreement.
The purchase of any such Receivables by Fifth Third shall be made pursuant to
the terms hereof.
     All Purchased Receivables shall be evidenced by invoices (in electronic or
paper form) reflecting a due date within the Maximum Invoice Tenor Period.
     Without limiting the other terms of this Agreement, Fifth Third’s purchase
of Receivables of an Account Debtor (not including Replacement Receivables
purchased pursuant to Section 1(b)(4) below as to which only (E) through
(G) shall apply) shall be subject to the following conditions:
     (A) Client shall submit a completed and executed Schedule A relating to
such Receivables, which shall contain the relevant terms and conditions with
respect thereto;
     (B) Unless Fifth Third shall notify client in writing of any change in the
Agreed Dilution Percentage, or of any error or omission in such Schedule A
within 10 days, Fifth Third’s consent to such Schedule A in the form submitted
shall be deemed to

 

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have occurred. In the event Fifth Third provides such a notice, Client shall
promptly revise and re-submit such Schedule A to contain terms mutually
agreeable to the parties; absent such agreement the Schedule A shall be deemed
to be rejected by Fifth Third and any purchase effected thereunder rescinded.
     (C) The aggregate amount of such Receivables being purchased shall, subject
to Section 1(b)(4), be equal to the relevant Required Amount;
     (D) The relevant Schedule A shall contain the Effective Date;
     (E) The Revolving Period shall not have terminated;
     (F) As of the date purchased, the aggregate amount of the Agreed Base
Values for the Receivables to be purchased and for the Purchased Receivables
less any Remittances received in respect of such Purchased Receivables shall not
exceed the Maximum Facility Limit; and
     (G) As of the date purchased, the aggregate amount of the Agreed Base
Values for the Receivables to be purchased from a particular Account Debtor and
for the Purchased Receivables from a particular Account Debtor less any
Remittances received in respect of such Purchased Receivables shall not exceed
the Concentration Limit with respect to such Account Debtor.
All Receivables (including Replacement Receivables) purchased by Fifth Third
shall be purchased on a non-recourse basis, provided that Client shall have an
obligation to repurchase certain Receivables upon the limited circumstances
provided herein. It is the express intention of the parties to this Agreement
that the purchase of Receivables hereunder shall be, and shall be construed as,
a true sale of such Receivables by Client to Fifth Third. Client acknowledges
that the representations and warranties made herein (including without
limitation in Section 4) are a material inducement of Fifth Third’s purchase of
the Receivables to be purchased hereunder.
          (b) The parties agree as follows with respect to Receivables (not
including Replacement Receivables) that Fifth Third purchases in connection with
an executed Schedule A submitted by Client to Fifth Third:
               (1) Receivables shall be purchased by Fifth Third in an amount
equal to the Purchase Price.
               (2) The parties shall consummate Client’s sale of the subject
Receivables as promptly as practicable after Fifth Third’s deemed election to
purchase such Receivables. The parties shall take the following actions to
effect each such purchase and sale:
                    (i) On each Effective Date, Fifth Third shall pay Client an
amount equal to the aggregate Purchase Price for the Receivables to be purchased
on such date, which shall be wired to the following account: [Confidential]

 

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                    (ii) With respect to all Remittances of cash required to be
paid over to Fifth Third pursuant to Section 1(b)(4), Client shall make such
payment in the form of a wire transfer to the following account: [Confidential]
                    (iii) Client shall execute and deliver to Fifth Third an
assignment of or schedule of accounts (or both) with respect to each Receivable
to be purchased in such form as Fifth Third may require. In addition, Client
shall deliver to Fifth Third with respect to the Receivables to be purchased:
(aa) if requested by Fifth Third, a purchase order signed by the applicable
Account Debtor or, alternatively, an unsigned purchase order accompanied by an
invoice and signed proof of delivery; (bb) if requested by Fifth Third, a valid
invoice in the form currently used by Client with regard to the subject
Receivables with evidence of shipment of goods in accordance with any applicable
purchase order; (cc) if requested by Fifth Third, a certificate duly executed by
or on behalf of the applicable Account Debtor stating that all merchandise has
been duly delivered or services have been satisfactorily completed in accordance
with the purchase order; (dd) any contracts, agreements, chattel paper, notes,
securities and instruments evidencing or relating to the Receivable to the
extent any of the preceding exists and is requested by Fifth Third; (ee) any
credit memoranda and (ff) such other documents and certificates as Fifth Third
may request.
                    (iv) With respect to the initial purchase of Purchased
Receivables under Schedule A-1, such purchase shall not occur or be effective
until the first date, on or after the date specified as the “Effective Date” on
such Schedule A-1, on which Fifth Third shall have received: (aa) duly executed
counterparts of this Agreement, (bb) duly executed counterparts of the Blocked
Account Agreement, (cc) to the extent applicable, evidence satisfactory to Fifth
Third that all existing liens on the Receivables to be purchased have been
released and appropriate arrangements made to amend or terminate the UCC filings
related thereto, (dd) Client’s authorizing corporate resolutions, corporate
organizational documents and (ee) legal opinions (covering, at a minimum,
(x) due authorization, execution and delivery, (y) enforceability and perfection
and (z) true sale) as Fifth Third may request;
               (3) From and after Client’s sale and Fifth Third’s purchase of
any Receivable, Fifth Third shall (i) have exclusive control and shall, subject
to Section 1(b)(4), be entitled to collect and receive all amounts payable under
the Purchased Receivable and (ii) have a first claim to any rights under a
policy of insurance relating to the Purchased Receivable. Fifth Third shall from
and after such time be vested with all of Client’s rights in the Purchased
Receivable including without limitation: (i) Client’s right of replevin and
reclamation with respect to the merchandise underlying the Purchased Receivable;
and (ii) subject only to the rights assigned to Servicer under Section 6,
Client’s right to extend the time for payment under, or make any compromise,
adjustment or modification with respect to, the Purchased Receivable; provided,
however, that Fifth Third shall not undertake any of the foregoing unless an
Event of Default has occurred and is continuing or the Termination Date has
occurred or Client shall have failed to take appropriate action with respect to
such Purchased Receivable after Fifth Third’s reasonable request therefor.
Without limiting the foregoing, Client hereby assigns to Fifth Third all rights
of Client under each contract underlying a Purchased Receivable relating to the
collectibility of payments thereunder, security interests and other liens
created in connection therewith and the enforcement thereof, but Fifth Third
does not and shall not thereby assume any obligations of Client under any such
contract. Notwithstanding the foregoing, (i) Client shall

 

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perform all of its obligations (if any) pursuant to any contract or agreement
relating to any Purchased Receivables to the same extent as if such Purchased
Receivables had not been transferred hereunder (and the exercise by Fifth Third
of its rights hereunder shall not relieve Client from such obligations),
(ii) Client shall pay when due any taxes payable by Client under applicable law,
including any sales taxes payable in connection with Purchased Receivables and
their creation and satisfaction, and (iii) Fifth Third shall not have any
obligation or liability with respect to any Purchased Receivable or any security
or document or agreement related thereto, nor shall Fifth Third be obligated to
perform any of the obligations of Client or any Account Debtor under any of the
foregoing.
               (4) All amounts received by Client with respect to Purchased
Receivables (other than any amounts in excess of the aggregate Agreed Base
Values for such Purchased Receivables) shall be tracked separately from amounts
received by Client on Receivables that do not constitute Purchased Receivables
and held in trust by Client for Fifth Third, and Client (or Servicer, if
different from Client) will deliver to Fifth Third all amounts, checks, monies
or other forms of payment with respect to Purchased Receivables (collectively,
payment received “Remittances”), net of any amounts that have been earned by
Client (or Servicer, if different from Client) as an Incentive Servicing Fee in
accordance with Section 6(a); provided, however, that, until the Termination
Date and subject to Section 3(e), such Remittances may be used by Servicer, as
agent for and on account of Fifth Third, to purchase from Client like
Receivables that meet all of the requirements contained herein applicable to the
original Purchased Receivables (“Replacement Receivables”), including
Sections 1(a)(E) through (G), but excluding Sections 1(a)(A) through (D). Such
Replacement Receivable shall be repurchased by the Client in an amount equal to
the face amount thereof, times the Purchase Price Percentage set forth in the
current Schedule A (or supplement thereto). The Replacement Receivables shall
(i) also be held for the exclusive benefit and account of Fifth Third to the
same extent as the original Purchased Receivables, and (ii) shall constitute
“Purchased Receivables” for all purposes of this Agreement. Fifth Third assumes
no responsibility in the acceptance of checks or other forms of payment of the
Purchased Receivables. Irrespective of whether or not a Termination Date has
occurred, Client and/or Servicer will (x) pursuant to Section 5(g), deposit into
the Blocked Account (for the benefit of Fifth Third) all Remittances received
on, or on account of, Purchased Receivables, net of any amounts that have been
earned by Client (or Servicer, if different from Client) as an Incentive
Servicing Fee in accordance with Section 6(a), and (y) thereafter, weekly remit
to Fifth Third such Remittances held in the Blocked Account (for the benefit of
Fifth Third) to the extent such Remittances are not used to purchase Replacement
Receivables in accordance with the terms of the proviso set forth in the first
sentence of this Section 1(b)(4). For purposes of maintaining the perfection of
Fifth Third’s interest in any Purchased Receivables and the proceeds thereof,
Fifth Third hereby appoints Client as its agent in respect of any Remittances
prior to such Remittances being used to purchase Replacement Receivables;
provided that Client’s sole duty as such agent shall be to hold such Remittances
for the benefit of Fifth Third or purchase Replacement Receivables on behalf of
Fifth Third as aforesaid.
               (5) Fifth Third shall not be obligated to purchase any Receivable
hereunder (other than Replacement Receivables purchased in accordance with
Section 1(b)(4)) unless and until: (i) Fifth Third accepts the Receivable for
sale in accordance with the terms hereof; and (ii) all other terms and
conditions set forth herein with respect to such purchase shall

 

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have been satisfied. Fifth Third’s purchase of any Receivable or Receivables on
one occasion shall not obligate Fifth Third to purchase any other Receivable
(other than Replacement Receivables purchased in accordance with
Section 1(b)(4)) on any future occasion.
               (6) All invoices relating to the Receivables to be purchased
shall be in a form substantially similar to the form of invoice with respect to
such Receivables initially reviewed and approved by Fifth Third prior to the
relevant Effective Date (or in such other form as Fifth Third may from time to
time approve).
               (7) If: (i) an Account Debtor, after receiving and accepting
goods or services rendered (subject to all representations and warranties
herein), fails to pay a Purchased Receivable when due and such nonpayment shall
be the result of or arise from the assertion of any claim or dispute by such
Account Debtor against Client or its affiliate for any reason whatsoever,
including without limitation, denial of or disputes over the amount of a claim
represented by a Purchased Receivable, lack of adequate coverage, disputes
concerning the delivery, quantity, quality, or other attributes of the goods or
services rendered, or the exercise of any counterclaim or offset (whether or not
such claim, counterclaim or offset relates to the specific Purchased Receivable)
or (ii) any representation or warranty made by client set forth in Section 4 has
been breached or any unauthorized or fraudulent act on the part of the Client or
the Servicer with respect to a Purchased Receivable has occurred and, in each
case, remains uncured for ten (10) days after notice thereof (each of the
circumstances (i) and (ii) referred to as a “Repurchase Event”) then such
Purchased Receivables shall be subject to repurchase by Client as provided in
Section 9(a). It is understood and agreed that in the event that any Purchased
Receivable shall be a Delinquent Receivable other than as a result of a
Financial Inability to Pay, the applicable Account Debtor shall be presumed to
have asserted a claim or dispute with respect thereto (thus giving rise to a
Repurchase Event with respect to such Receivable), unless Client shall rebut
such presumption to the satisfaction of Fifth Third and, in connection
therewith, shall provide to Fifth Third all of the materials referenced in
Section 6(d) with respect to such Receivable. Once a Receivable has been
repurchased pursuant to Section 9, it shall no longer be a Purchased Receivable.
               (8) If at any time, either (i) the aggregate amount of the Agreed
Base Values (as of the relevant Effective Date) for the Purchased Receivables
less any Remittances received in respect of such Purchased Receivables shall
exceed the Maximum Facility Limit or (ii) the aggregate amount of the Agreed
Base Values (as of the relevant Effective Date) for the Purchased Receivables
from a particular Account Debtor less any Remittances received in respect of
such Purchased Receivables from a particular Account Debtor, shall exceed the
Concentration Limit with respect to such Account Debtor, such occurrence shall
be referred to as a “Rescission Event.” Upon the occurrence of a Rescission
Event, Fifth Third shall be entitled to rescind its purchase of Purchased
Receivables (such Purchased Receivables the “Rescission Receivables”) having an
aggregate face amount equal to the amount of such excess, and Client shall
thereupon be immediately obligated to remit to Fifth Third an amount equal to
the face amount of such Rescission Receivable, times the Purchase Price
Percentage set forth in the current Schedule A (or supplement thereto). Provided
no Servicer Default then exists or has occurred, the Servicer shall have the
right, on behalf of Fifth Third, to designate which Purchased Receivables shall
be Rescission Receivables. Fifth Third shall be deemed to have exercised its
rescission rights hereunder automatically, upon the occurrence of any Rescission

 

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Event, unless and until Client shall receive notice from Fifth Third to the
contrary. Rescission Receivables shall, upon remittance by the Client of the
rescission amount therefor, immediately cease to be Purchased Receivables under
this Agreement; provided, however, that nothing herein shall prevent such
Rescission Receivables from being eligible to be subsequently re-tendered for
purchase hereunder. Once the Client has remitted the rescission amount for a
Purchased Receivable pursuant to this Section 1(b)(8), it shall no longer be a
Purchased Receivable.
          (c) The sale or other transfer or conveyance of Purchased Receivables
do not create, nor are they intended to create, an assumption by Fifth Third of
any of Client’s obligations in connection with such Receivables or any agreement
or instrument relating thereto, including, without limitation, any obligation to
any Account Debtor. Notwithstanding the foregoing, it is the further intention
of the parties to this Agreement that, if a court of competent jurisdiction were
to determine that such transfer of Purchased Receivables is not a sale, such
transfer shall be deemed a grant of a first priority security interest in such
Purchased Receivables, the Blocked Account and all proceeds thereof to secure
Client’s obligations to Fifth Third under this Agreement, including (without
limitation) Client’s obligation to repurchase certain Purchased Receivables as
provided in Section 9(a).
     2. Term and Payment of Remittances.
          (a) Fifth Third may immediately upon [Confidential] the occurrence of
an Event of Default, accelerate the date on and after which Client can no longer
use Remittances to purchase Replacement Receivables under a particular
Schedule A as set forth in the definition of “Termination Date”.
          (b) The facility shall terminate at the end of the Revolving Period.
At such time, Fifth Third shall have no further obligation to take any action
after Client’s tender of Receivables for purchase, and the Client shall not use
Remittances to purchase Replacement Receivables.
          (c) With respect to any Purchased Receivable, all Remittances in
respect thereof shall be paid to Fifth Third in accordance with the terms of
Section 1(b)(4).
     3. Fees.
          (a) Servicer shall be entitled to a Servicing Fee from Fifth Third as
set forth in Section 6.
          (b) The parties hereto acknowledge and agree that (i) the discount
rate paid by Fifth Third for Purchased Receivables, as reflected in the Purchase
Price Percentage has been negotiated based upon a certain spread (e.g., 100 bps)
in excess of a reference rate for Fifth Third’s cost of funds (commonly referred
to as the London Interbank Offered Rate (“LIBOR”)) for the Day Count specified
in the current Schedule A, (ii) that Fifth Third shall provide the Client with
the applicable LIBOR, prior to any applicable Effective Date or Reset Date and
(iii) upon each Effective Date and Reset Date, Client will pay to Fifth Third an
amount (the “Reset Date Payment”) equal to: the Principal * (LIBOR+Program Fee)
* Day Count/360; provided that after an Event of Default shall have occurred and
be continuing or after any event that with the passage of time shall be an Event
of Default, “LIBOR” shall equal the Default Rate.

 

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               Fifth Third shall notify Client two business days prior to each
Effective Date or each Reset Date, as applicable, of the relevant LIBOR rate for
the specified term commencing on such Effective Date or such Reset Date. Client
agrees to pay to Fifth Third on the relevant Effective Date or such Reset Date
the amount of the Reset Date Payment owing by Client to Fifth Third on such
Effective Date or such Reset Date pursuant to this Section 3(b). Fifth Third
shall provide Client with reasonable detail of the manner in which any amount
payable under this Section 3(b) was calculated and Fifth Third’s determination
of any such amount shall be conclusive in the absence of manifest error. Each
Reset Date Payment made hereunder shall be applied by Fifth Third as follows:
(i) with respect to Purchased Receivables other than Purchased Receivables with
respect to which a Repurchase Event or Rescission Event shall have occurred, the
applicable portion of each Reset Date Payment shall be applied as an adjustment
to the Purchase Price paid by Fifth Third therefor; and (ii) with respect to
Purchased Receivables with respect to which a Repurchase Event or Rescission
Event shall have occurred, the applicable portion of each Reset Date Payment
shall be applied toward the repurchase obligation of Client, pursuant to Section
9(a) with respect to such Purchased Receivable.
          (c) [Reserved]
          (d) [Reserved]
          (e) If a particular Schedule A includes an annex indicating a
different projected Required Amount for each Reset Date following the Effective
Date, then on (or prior to) each Reset Date prior to the Termination Date Client
and Guarantor shall execute a new supplemental Schedule A (denoted
“Schedule A-___(___)”; e.g., “Schedule A-5(b)”), which supplemental Schedule A
shall be deemed to amend and restate the initial Schedule A (e.g.,
“Schedule A-5(a)”) and any subsequent Schedule as to which such supplement
relates. Such supplemental Schedule A will reference the same Stated Termination
Date, but will include a new Effective Date (which shall be the relevant Reset
Date), Required Amount (per the annex to the relevant initial Schedule A),
Purchase Price (which shall be subject to adjustment pursuant to Section 3(b))
and Structuring Fee, and may include a different Agreed Dilution Percentage
and/or other terms as negotiated and mutually agreed upon by the parties. In the
event that the new Required Amount on the applicable Reset Date is less than the
immediately preceding applicable Required Amount, then the new Required Amount
shall constitute a cap on the amount of Remittances that may be used by Client
to purchase Replacement Receivables, and the Remittances from Purchased
Receivables purchased by Fifth Third pursuant to a prior Schedule A that are not
applied to Replacement Receivables (including because such application would
cause the amount of Purchased Receivables to exceed the then-applicable Required
Amount) shall be remitted to Fifth Third in accordance with Section 1(b)(4). In
the event that the new Required Amount on the applicable Reset Date is greater
than the immediately preceding applicable Required Amount, then the amount by
which the new Required Amount exceeds the immediately preceding applicable
Required Amount shall constitute additional Receivables to be purchased by Fifth
Third hereunder, which purchase shall be funded by Fifth Third to Client on the
applicable Reset Date at the applicable Purchase Price Percentage set forth on
the relevant supplemental Schedule A.

 

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     4. Representations and Warranties.
          (a) Each of Client, Servicer and Guarantor represents and warrants to
Fifth Third on the date hereof, on each applicable Effective Date (and, with
respect to each Replacement Receivable, on the date that Fifth Third is deemed
to have purchased such Replacement Receivable) and at each time Client submits
to Fifth Third a request that Fifth Third purchase any Receivable that: (i) it
is duly organized and validly existing and in good standing under the laws of
the jurisdiction of its organization with the corporate power and authority to
carry on its activities as now conducted and as contemplated under this
Agreement, and to execute, deliver, perform and secure its obligations under
this Agreement in accordance with its terms; (ii) the execution, delivery and
performance by it of this Agreement (aa) have been duly authorized by all
necessary action, and (bb) do not and will not conflict with, or result in a
violation of, any applicable provision of existing law, rule or regulation
applicable to it, any judgment, order or decree applicable to or binding on it,
its charter or bylaws or any indenture, contract, agreement, mortgage, deed of
trust or other instruments to which Client is a party or by which it or its
property is bound; (iii) this Agreement has been duly authorized, executed and
delivered by it, and is a legal, valid and binding obligation of it enforceable
against it in accordance with its terms, except to the extent, if any, that the
enforceability thereof may be limited by (aa) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium, debt adjustment or other
similar law or enactment now or hereafter enacted affecting the enforcement of
creditors’ rights generally and (bb) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law);
(iv) all authorizations, permits, consents, approvals, licenses or exemptions
from, registrations or filings with, or reports to, any governmental or
regulatory unit or other party or entity necessary for it to enter into this
Agreement and to perform its obligations hereunder have been obtained and remain
in full force and effect, and no other such authorizations, permits, consents,
approvals, licenses, exemptions, registrations, filings or reports are necessary
for the due execution, delivery and performance by it of this Agreement; (v) no
agreement exists between Client and any Account Debtor that could interfere with
such Account Debtor’s payment of and performance under the Purchased Receivables
in accordance with the relevant invoices; (vi) each contract underlying a
Purchased Receivable, by its terms, is freely transferable; (vii) each contract
underlying a Purchased Receivable is governed according to the laws of a state
of the United States of America; (viii) each contract underlying a Purchased
Receivable contains (aa) no material restrictions or limitations on Client’s (or
its assignee’s) ability to pursue collection of such Receivables and enforcement
of such contract and (bb) no mandatory arbitration provisions; and (ix) it has
complied (and will continue to comply) with all applicable agreements and
requirements contained in this Agreement, including without limitation those set
forth in Section 5.
          (b) Client acknowledges that as to each Receivable sold hereunder that
it expressly represents, warrants, agrees (and furthermore acknowledges that
Fifth Third is expressly relying thereon) that immediately prior to the purchase
of such Receivable by Fifth Third pursuant to Section 1 hereof: (i) Client is
the lawful owner of each such Receivable; (ii) each such Receivable shall be
sold and assigned to Fifth Third as absolute owner free and clear of all liens,
claims and security interests and Fifth Third shall have a first priority
perfected security interest in the Purchased Receivables, and Client has
complied with (and will continue to comply with) the requirements of Section
5(e) with respect to each such Receivable; (iii) each

 

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such Receivable is for a certain, definite, undisputed and liquidated amount and
represents an amount owed to Client as a result of a bona fide sale in the
ordinary course of business of a product or service to an Account Debtor who is
not affiliated with Client; (iv) complete deliveries have been made under any
agreement, representation or understanding between Client and the applicable
Account Debtor with respect to each such Receivable, and, as required by Section
1(b)(2)(iii)(dd), any contracts or agreements relating to each such Receivable
have been delivered to Fifth Third; (v) no such Receivable is past due according
to its terms (i.e., unpaid beyond the Maximum Invoice Tenor Period); (vi) the
applicable Account Debtor is not, and will not be, entitled to any offset,
deduction, counterclaim, contra account and/or other credit with respect to such
Receivable or will be subject to any dispute or claim (other than Credits that
would not cause a breach of the representation in clause (vii) below) by an
Account Debtor including, but not limited to, with respect to price, terms,
quality, quantity or delay in shipment; (vii) no such Receivable is or shall
otherwise be subject to, any offset, counterclaim, contra account or any defense
of any kind or character with respect to any such Receivable (collectively,
“Credits”) that would cause the aggregate amount of all Credits with respect to
all Purchased Receivables purchased by Fifth Third under a particular Schedule A
to exceed the Agreed Dilution Percentage; (viii) Client does not have any
knowledge of any fact that could reasonably be expected to affect the validity
or collectibility of any such Receivable (other than Credits that would not
cause a breach of the representation in Section 4(b)(vii)); (ix) no such
Receivable represents a delivery of merchandise upon “consignment,” “guaranteed
sale,” “sale or return,” “payment on reorder” or similar terms; (x) no such
Receivable represents a “pack, bill and hold” or similar transaction; (xi) the
names of the Account Debtors and the amounts owing on the due dates of each such
Receivable are correctly stated in all instruments of assignment, schedules,
invoices or other documentation furnished by Client to Fifth Third; (xii) no
other sale, assignment or grant of a security interest or lien of any kind
whatsoever presently exists or will thereafter be created in favor of any person
or entity with respect to any such Receivable; (xiii) any and all information
furnished by Client to Fifth Third in connection with the sale of each such
Receivable is and will be true and correct in all material respects at the time
that such information is furnished to Fifth Third; (xiv) Client has strictly
complied with all applicable laws and regulations in connection with Client’s
sale of products or services giving rise to each such Receivable; (xv) all
proceeds from the sale of such Receivables will be used by Client in accordance
with requirements of law, and will not be used, directly or indirectly, to
purchase or carry margin stock (within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System) or to extend credit to others for
the purpose of purchasing or carrying margin stock or to refund indebtedness
originally incurred for such purpose; (xvi) each such Receivable is and will be
payable in United States dollars; (xviii) each such Receivable constitutes an
“account” as defined in Section 9-102 of the Uniform Commercial Code as in
effect in the state of Client’s formation and in the state of Client’s principal
place of business, (xix) each obligor of a Receivable is an Account Debtor, and
(xx) no such Receivable has a due date beyond the Maximum Invoice Tenor Period.
Client acknowledges that the representations and warranties made herein are a
material inducement to Fifth Third’s purchase of the Receivables to be purchased
hereunder.
          (c) Client authorizes Fifth Third to represent and warrant to any
subsequent transferee or assignee of any Receivable that at the date of purchase
of the Receivable by Fifth Third the Receivable represented a legally valid
indebtedness of the applicable Account Debtor for the amount of such Receivable
and that there were no known defaults or counterclaims with

 

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respect to such Receivable. Client shall indemnify Fifth Third from and against
any liability incurred by Fifth Third, or any claims made against Fifth Third,
as a result of any such representation or warranty by Fifth Third.
     5. Covenants of Client. Client and, to the extent applicable, Servicer and
Guarantor shall comply with each of the following covenants during the term of
this Agreement:
          (a) Client shall deliver to Fifth Third in form and detail
satisfactory to Fifth Third (but only to the extent not delivered to Fifth Third
under Client’s syndicated bank credit facility or otherwise):
               (i) as soon as available, but not later than 95 days after the
end of each fiscal year, a copy of the audited consolidated balance sheet of
Guarantor as at the end of such year and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, and accompanied by the opinion of a nationally-recognized
independent public accounting firm, which opinion shall state that such
consolidated financial statements present fairly, in all material respects, the
financial position for the periods indicated in conformity with Generally
Accepted Accounting Principles applied on a basis consistent with prior years
(except for changes agreed upon by Guarantor and such auditors which are
disclosed and described in such statements). Such opinion shall not be qualified
or limited because of a restricted or limited examination by such accountant of
any material portion of the records of Guarantor; and
               (ii) as soon as available, but not later than 50 days after the
end of each of the first three fiscal quarters of each fiscal year, a copy of
the unaudited consolidated balance sheet of Guarantor as of the end of such
quarter and the related consolidated statements of income and cash flows for the
period commencing on the first day and ending on the last day of such quarter,
and certified by any responsible financial officer of Guarantor as being
complete and correct and fairly presenting in all material respects, in
accordance with Generally Accepted Accounting Principles, the financial position
and the results of the operations of Guarantor.
          (b) Client, Servicer and Guarantor each shall do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence, rights and privileges as a corporation or partnership, as the case
may be, under the laws of its state of organization.
          (c) Neither Client nor Servicer will create, incur, assume or suffer
to exist any lien or other encumbrance (other than those arising hereunder and
except for such non-consensual encumbrances as may arise in the ordinary course
of Client’s business) on: (i) the Purchased Receivables (whether now existing or
hereafter arising) or (ii) any proceeds of the Purchased Receivables.
          (d) Notwithstanding anything to the contrary, Client and Servicer each
shall apply all amounts, checks, monies or other forms of payment received
(i) from any Account Debtor who is an Account Debtor with respect to Purchased
Receivables and with whom Client has other Receivables and (ii) which do not
clearly indicate the Receivables which are being

 

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paid, first to Purchased Receivables on such Account Debtor until all such
Receivables have been paid in full and, thereafter, to Receivables which are not
Purchased Receivables.
          (e) In connection with each Purchased Receivable and at its own
expense, Client and Servicer each shall (i) on the applicable date of sale to
Fifth Third, indicate or cause to be indicated clearly and unambiguously in its
accounting records and mark or cause to be marked on any paper invoice or the
electronic ledger for any electronic invoice that such Receivable has been sold
to Fifth Third pursuant to this Agreement; (ii) ensure that its balance sheet
indicates that the Purchased Receivables have been sold to Fifth Third;
(iii) not mislead any creditor with respect to Fifth Third’s ownership of the
Purchased Receivables; (iv) inform any person or entity that may inquire that
the Purchased Receivables have been sold to Fifth Third without recourse;
(v) not hold out the Purchased Receivables as being able to satisfy any
obligation owed or that may be owed to any creditor or potential creditor of
Client; and (vi) promptly (and in any event within five (5) days) upon the
request of Fifth Third, provide Fifth Third with a list of, an accounts
receivable aging report for and any other similar financial or accounting
document relating to, all Purchased Receivables.
          (f) Client and Servicer each shall notify Fifth Third in the event any
of the following events occur as promptly as practical (but in any event within
five (5) days) after Client or Servicer, as applicable, becomes aware, or has
any reason to believe, such event has occurred or will likely occur:
               (i) a general meeting of unsecured creditors shall be called by
any Account Debtor or on behalf of such Account Debtor;
               (ii) a voluntary or involuntary proceeding shall have been
instituted in a United States Bankruptcy Court to adjudge an Account Debtor
bankrupt;
               (iii) a petition shall have been filed in a United States
Bankruptcy Court for the corporate reorganization of an Account Debtor (Chapters
11 or 12, as may be amended from time to time) or for the arrangement of the
debts of an Account Debtor (Chapter 13, as may be amended from time to time);
               (iv) a receiver is appointed of the whole or any part of the
property of an Account Debtor;
               (v) an Account Debtor, or a third party on behalf of such Account
Debtor, shall have made a general offer of compromise, in writing, to his, her
or its creditors for less than his, her or its indebtedness;
               (vi) possession shall have been taken of an Account Debtor’s
assets under an assignment or deed of trust executed by such person for the
benefit of his, her or its creditors;
               (vii) a creditors committee shall have been formed for the sole
purpose of liquidation of an Account Debtor;

 

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               (viii) possession shall have been taken of an Account Debtor’s
business assets under a chattel mortgage given thereon;
               (ix) a sale in bulk is made of an Account Debtor’s property;
               (x) an Account Debtor’s assets shall have been sold under a writ
of execution or attachment, or a writ of execution shall have been returned
unsatisfied;
               (xi) an Account Debtor shall have absconded;
               (xii) an Account Debtor’s assets shall have been sold under a
distraint or levy by any taxing authority, or by a landlord;
               (xiii) [ Confidential ]
               (xiv) the assertion of any material dispute of, or any claim of a
Credit with respect to, any Purchased Receivable by any Account Debtor;
               (xv) a Servicer Default shall have occurred hereunder; or
               (xvi) an Event of Default shall have occurred hereunder.
          (g) In accordance with Section 1(b)(4), Client, Servicer and Guarantor
shall cause all Remittances to be held in trust for the benefit of Fifth Third
and forward such Remittances to the Blocked Account on a weekly basis. For
purposes of maintaining the perfection of Fifth Third’s interest in any
Remittances forwarded to, or otherwise received by, Client, Servicer or
Guarantor, Fifth Third hereby appoints each of Client, Servicer and Guarantor as
its agent in respect of such funds and other property; provided that, subject to
Section 1(b)(4), Client’s, Servicer’s and Guarantor’s sole duty as such agent
shall be to hold such funds or other property in trust for the benefit of Fifth
Third and to transfer such funds or other property to the Blocked Account as
aforesaid. As a matter of clarification, it is understood and agreed that all
Remittances in the possession of Client, Servicer or Guarantor, whether held in
the Blocked Account or otherwise, shall constitute the property of Fifth Third
to be held in trust for the benefit of Fifth Third pursuant to the terms of this
Agreement (including the terms of Section 1(b)(4)).
          (h) Client and Servicer each shall do or cause to be done all things
necessary or reasonably requested by Fifth Third under any foreign laws
applicable to an Account Debtor that is incorporated or organized in a
jurisdiction outside of the United States in order to (i) ensure that Fifth
Third has and continues to have good title to the Purchased Receivables, and
(ii) ensure that Fifth Third has and continues to have the ability to enforce
all rights purported to be transferred to Fifth Third hereunder with respect to
the Purchased Receivables.
          (i) Neither Client nor Servicer shall make any material change in its
credit and collections procedures that would adversely affect the validity,
enforceability or collectibility

 

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of the Purchased Receivables or materially adversely affect the ability of
Client or Servicer to perform its obligations hereunder without the prior
written consent of Fifth Third.
          (j) Without the prior written consent of Fifth Third, Client will not
amend, modify or waive any term or condition of any contract underlying any
Purchased Receivable, which amendment, modification or waiver would adversely
affect the validity, enforceability or collectibility of such Receivable or
adversely affect Fifth Third’s right to collect any Purchased Receivable.
     6. Servicing.
          (a) Until Fifth Third gives notice to Client of the designation of a
new Servicer as provided herein, Client is hereby designated as, and hereby
agrees to perform the duties and obligations of, the servicer pursuant to the
terms hereof (the “Servicer”) with respect to the Purchased Receivables;
provided that, with respect to any group of Purchased Receivables, Client
(solely in its capacity as Servicer) may, at any time, upon prior written notice
to Fifth Third, designate any affiliate of Client as sub-servicer hereunder;
provided, however, that such affiliate shall not become Servicer and,
notwithstanding any such delegation, Client shall remain liable for the
performance of the duties and obligations of Servicer in accordance with the
terms of this Agreement without diminution of such liability by virtue of such
delegation and to the same extent and under the same terms and conditions as if
Client alone were performing such duties and obligations. The parties agree that
Guarantor shall serve as the initial such sub-servicer hereunder. Client
acknowledges that Fifth Third has relied on the agreement of Client to act as
Servicer hereunder in making its decision to execute and deliver this Agreement.
Accordingly, Client agrees that it shall not voluntarily resign as Servicer. In
consideration of the performance by Servicer of its obligations hereunder with
respect to Purchased Receivables under a particular Schedule A, Servicer shall
be entitled to receive the Servicing Fee from Fifth Third. Such Servicing Fee
shall be payable in advance with respect to each Schedule A or supplemental
Schedule A, on or prior to the Effective Date thereof. Furthermore, to the
extent collected by Client, Client shall be entitled to receive and retain an
amount equal to Remittances collected on Purchased Receivables in excess of the
aggregate amount of the Agreed Base Values (as of the relevant Effective Date)
for such Purchased Receivables as an “Incentive Servicing Fee.” If an Event of
Default or Servicer Default occurs hereunder, (i) Fifth Third may designate as
Servicer with respect to all or any portion of the Purchased Receivables any
person (including Fifth Third or any of its affiliates) to succeed Client or any
successor Servicer, on the condition in each case that any such person so
designated shall agree to perform the duties and obligations of Servicer
pursuant to the terms hereof, and Client agrees that it shall reimburse Fifth
Third for all increase in costs, expenses or fees incurred by it as a result of,
or in connection with, such designation, and (ii) Fifth Third shall have the
right to setoff any Servicing Fee owed to Client pursuant to this Section 6(a)
against the amount of any of Client’s indemnity or other obligations hereunder.
          (b) Servicer shall take or cause to be taken all such action as may be
necessary or advisable to administer, service and collect each Purchased
Receivable from time to time (including without limitation minimizing the amount
of any Credits and keeping a proper accounting of any Credits that are asserted
by an Account Debtor), all at the Servicer’s expense and in accordance with this
Agreement and all applicable laws, rules and regulations, with

 

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reasonable care and diligence, and in accordance with any credit and collection
policy agreed to by Client and Fifth Third with respect to a Purchased
Receivable; provided, however, that Servicer shall not extend the maturity of
any Purchased Receivable without Fifth Third’s prior consent, which consent
shall not be unreasonably withheld. In addition, Servicer shall remit any and
all Remittances received with respect to any Purchased Receivables to Fifth
Third in accordance with the terms of Section 1(b)(4), and shall likewise
forward all other payments and fees owed to Fifth Third pursuant to the terms
hereof. Without Fifth Third’s consent, Client, in its capacity as Servicer,
shall not take any action (or omit to take any action that it would customarily
take in servicing Receivables) where such action (or inaction) with respect to
any Purchased Receivable is reasonably likely to impair Fifth Third’s rights
therein or the enforceability, value or collectibility thereof. Without limiting
the foregoing, Client, in its capacity as Servicer, shall not take any action
(or omit to take any action that it would customarily take in servicing
Receivables) that results in preferential treatment for Receivables of an
Account Debtor that do not constitute Purchased Receivables. Servicer shall have
the right to directly communicate with any Account Debtor with respect to
Purchased Receivables (and, in the case of clause (ii), to commence collection
proceedings with Fifth Third’s consent on Fifth Third’s behalf): (i) to obtain
current information not already provided on such Account Debtor’s financial
condition and creditworthiness, and (ii) to determine if any portion of any
Purchased Receivable is past due. Notwithstanding anything to the contrary
contained herein, upon the occurrence and continuance of an Event of Default or
to the extent any Purchased Receivable is a Delinquent Receivable, Fifth Third
may direct Servicer, at Fifth Third’s sole expense, to commence or settle any
legal action to enforce collection of any Purchased Receivable or to foreclose
upon or repossess any underlying security related thereto.
          (c) If Client is not Servicer, then Client shall deliver to Servicer
and Servicer shall hold for the benefit of Client and Fifth Third in accordance
with their respective interests, all records and documents (including computer
tapes or disks) with respect to each Purchased Receivable. Servicer shall hold
(and shall cause each sub-servicer to hold) in trust (and, during the
continuance of an Event of Default, at the request of Fifth Third, segregate)
for Fifth Third’s benefit, any Remittances received by Servicer (or any
sub-servicer) with respect to the Purchased Receivables, and distribute the same
to Fifth Third in accordance with the terms of Section 1(b)(4) or otherwise upon
Fifth Third’s direction. Servicer agrees to make its records, files and books of
account available to Fifth Third on request, and to allow Fifth Third and its
agents and representatives to visit Servicer’s premises upon reasonable notice
and during normal business hours to examine such records, files and books of
account, to make copies or extracts thereof, and to conduct such examinations as
Fifth Third deems necessary. In addition, on the fifteenth calendar day of each
month, Servicer shall deliver to Fifth Third a statement of its account showing
all accountings relating to all Purchased Receivables as of the last day of such
month. Such statements of account shall be deemed correct and binding absent
manifest error, unless Servicer receives a written statement from Fifth Third to
the contrary within five (5) days after same is received by Fifth Third.
          (d) For all Purchased Receivables which are past due for any reason,
but excluding those Purchased Receivables which are past due solely as a result
of a Repurchase Event, Servicer shall immediately notify Fifth Third and provide
to Fifth Third, promptly (and in any event within one business day), each of the
following: (i) a copy of the applicable Account Debtor’s purchase order and/or a
signed confirmation thereof or a signed confirmation of the

 

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delivery of goods thereunder; (ii) a copy of each outstanding invoice (in
electronic or paper form) and all credit memoranda; (iii) a notarized statement
of account; (iv) at Fifth Third’s request, copy of all correspondence to and
from the applicable Account Debtor relating to such Purchased Receivables; (v) a
copy of Servicer’s complete collection file on the applicable Account Debtor
relating to such Purchased Receivables; (vi) all guarantees, collateral
documents and security agreements relating to such Purchased Receivables,
(vii) proof of delivery of goods or rendering of services relating to such
Purchased Receivables, and (viii) such other documents and information that
Fifth Third may reasonably request relating to such Purchased Receivables.
Further, with respect to any Purchased Receivable that is a Delinquent
Receivable and that has not been repurchased by Client, Servicer shall provide
to Fifth Third upon request (promptly, and in any event within one business day)
(x) a true and complete copy of any contract relating to such Purchased
Receivable, together with any modifications or side letters related thereto,
each written in English, and (y) any other evidence of nonpayment of such
Purchased Receivable as may reasonably be requested by Fifth Third.
          (e) The occurrence of any one or more of the following events shall
constitute a “Servicer Default” hereunder:
               (1) (a) Servicer shall fail to perform or observe any term,
covenant or agreement hereunder and such failure shall remain unremedied for ten
(10) days following Fifth Third’s written notice thereof to Servicer, or
(b) Servicer shall fail to make any payment or deposit to be made by it
hereunder when due; or
               (2) any representation, warranty, certification or statement made
by the Servicer in this Agreement or in any other document shall prove to have
been incorrect in any material respect when made or deemed made; or
               (3) an Event of Default; or
               (4) if any Purchased Receivable is not paid (or repurchased) or
rescinded within 5 Business Days of a Repurchase Event or Rescission Event, as
applicable.
          (f) Notwithstanding any other provision of this Agreement, during the
continuance of Servicer Default, Fifth Third may, by written notice to Client
and/or Servicer (as applicable):
               (1) direct the applicable Account Debtor(s) that payment of all
amounts payable under any Purchased Receivable be made directly to Fifth Third
or its designee;
               (2) instruct Client or Servicer (as applicable) to give notice to
the applicable Account Debtor(s), which notice shall be given at
Client’s/Servicer’s expense, directing that payment of all amounts payable under
any Purchased Receivable be made directly to Fifth Third or its designee; and/or
               (3) terminate and replace Servicer.
          (g) Client shall provide to Servicer on a timely basis all information
needed for the servicing, administration and collection obligations of Servicer,
including notice of the

 

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occurrence of any Event of Default or any event specified in Section 5(f) hereof
as promptly as practicable (but in any event within five (5) days) after Client
becomes aware, or has any reason to believe, such event has occurred or will
likely occur.
          (h) Client shall deliver to Fifth Third Schedule B-[calendar year] in
substantially the form attached as Exhibit B hereto, annually on or before the
first Reset Date prior to the following fiscal year of the Client; provided that
Schedule B-2006 will be delivered on March 8, 2006 and will cover the period
from March 8, 2006 through the Company’s 2006 fiscal year.
          (i) By the 15th day of the Client’s fiscal month, Client shall deliver
to Fifth Third each of the following reports: Factored A/R Detailed Aging, A/R
Aging by Customer, and Customer A/R Activity Factored for the Client’s fiscal
month.
     7. Attorney-in-Fact. Client hereby grants and conveys to Fifth Third an
irrevocable power of attorney (coupled with an interest) authorizing and
permitting Fifth Third, at its option, with or without notice to Client, to do
any one of the following: (a) endorsing the name of Client upon any checks or
other instruments that may come into Fifth Third’s possession in payment of
Purchased Receivables; (b) endorsing the name of Client on any freight or
express bill or bill of lading relating to any Purchased Receivables; (c) taking
all action as Fifth Third deems appropriate, including without limitation the
execution and filing of financing statements, in the name of and on behalf of
Client to perfect any of the security interests granted to Fifth Third herein;
provided, however, that Fifth Third shall not exercise any such power until the
occurrence and during the continuance of an Event of Default. Client agrees that
neither Fifth Third nor the attorney-in-fact will be liable for any acts of
commission or omission nor for any error of judgment or mistake of fact or law
except to the extent the same constitutes gross negligence or willful
misconduct.
     8. Waiver. The waiver by Fifth Third of any particular breach by Client of
a provision of this Agreement, or Fifth Third’s failure to exercise a right
granted to it herein, shall not constitute a waiver of any subsequent breach or
any other right.
     9. Indemnity and Repurchase Obligations.
          (a) Fifth Third’s purchase of a Receivable shall not relieve Client
from any liability that might arise out of Client’s breach of any
representation, warranty, covenant or agreement hereunder, or out of any
unauthorized or fraudulent acts of Client, its officers, employees or agents. In
the event of a Repurchase Event, Client agrees upon Fifth Third’s request, to
repurchase such Receivable at a price equal to the Agreed Base Value thereof as
of the Effective Date for such Receivable less any Remittances received with
respect to such Receivable.
          (b) Client agrees to indemnify Fifth Third from and against all
losses, damages, liabilities and costs, including attorneys fees and expenses
(whether incurred in connection with trial or appellate proceedings or
otherwise), incurred by Fifth Third as a result of or in connection with:
(i) any claim or defense which any Account Debtor or other person may have or
assert against Client or Fifth Third in connection with Purchased Receivables or
this

 

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Agreement; or (ii) any breach of any of Client’s representations, warranties,
covenants or agreements contained herein, in each of (i) and (ii) except to the
extent resulting from Fifth Third’s gross negligence or willful misconduct.
          (c) Fifth Third shall have the right to charge (by setoff or
otherwise) any of Client’s accounts maintained with Fifth Third, without notice,
for the amount of any of Client’s indemnity or other obligations hereunder.
          (d) The remedies set forth in this Agreement or otherwise available
under applicable law shall be cumulative, and no election by Fifth Third to
exercise any remedy shall preclude it from thereafter exercising any other
remedy.
     10. Default and Remedies. An event of default (“Event of Default”) shall be
deemed to have occurred hereunder upon the occurrence of one or more of the
following:
          (a) Client shall fail (i) to pay, when and as required to be paid
herein, any amount on account of repurchasing any Purchased Receivable, or
(ii) to make any payment or deposit to be made by it hereunder when due; or
          (b) Servicer or Guarantor (i) shall fail to make any payment in
respect of any indebtedness having an aggregate principal amount of $10,000,000
or more when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure continues after the
applicable grace or notice period, if any, specified in the document relating
thereto on the date of such failure; or (ii) shall fail to perform or observe
any other condition or covenant, or any other event shall occur or condition
exist, under any agreement or instrument relating to any such indebtedness, and
such failure continues after the applicable grace or notice period, if any,
specified in the document relating thereto on the date of such failure, if the
effect of such failure, event or condition is to cause, or to permit, the holder
or holders of such indebtedness or beneficiary or beneficiaries of such
indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such indebtedness to be declared to be
due and payable prior to its stated maturity; or
          (c) Servicer or Guarantor (i) shall generally fail to pay its debts as
they become due; (ii) commences any insolvency proceeding with respect to
itself; or (iii) takes any action to effectuate or authorize any of the
foregoing; or
          (d) Any involuntary lien, garnishment, attachment or the like shall be
issued against or shall attach to the Purchased Receivables, the Collateral or
any portion thereof and the same is not released or Client fails to repurchase
such Purchased Receivables within ten (10) days;
          (e) (i) Any involuntary insolvency proceeding is commenced or filed
against Servicer or Guarantor; or any writ, judgment, warrant of attachment,
execution or similar process, is issued or levied against a substantial part of
Servicer’s or Guarantor’s properties, and any such proceeding or petition shall
not be dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 60 days
after commencement, filing or levy; (ii) Servicer or Guarantor admits the
material allegations of a petition against it in any insolvency proceeding, or
an order for relief (or similar

 

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order under non-U.S. law) is ordered in any insolvency proceeding; or
(iii) Servicer or Guarantor acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar person for itself or a substantial portion of its
property or business; or
          (f) One or more non-interlocutory judgments, orders or decrees shall
be entered against Servicer or Guarantor involving in the aggregate a liability
(not covered by independent third-party insurance) as to any single or related
series of transactions, incidents or conditions, of $10,000,000 or more, and the
same shall remain unsatisfied, unvacated and unstayed pending appeal for a
period of 30 days after the entry thereof.
          (g) Client, including in its role as Servicer hereunder, shall breach
any covenant or agreement set forth herein, or any warranty or representation
set forth herein shall be untrue when made, and the same is not cured to Fifth
Third’s reasonable satisfaction within ten (10) days after such breach or
occurrence;
          (h) Any report, certificate, schedule, financial statement, profit and
loss statement or other statement furnished by Servicer, or by any other person
on behalf of Client, to Fifth Third is not true and correct in any material
respect as of the date given.
          (i) A material adverse change shall have occurred in Servicer’s
financial conditions, business or operations in Fifth Third’s opinion.
Upon the occurrence and during the continuance of any such Event of Default,
Fifth Third (i) the discount rate set forth in Section 3(b) shall be the Default
Rate, (ii) shall have no further obligation to take any action after Client’s
tender of Receivables for purchase, (iii) may, by written notice to Client,
accelerate the date on and after which Client or Servicer can no longer use
Remittances to purchase Replacement Receivables and (iv) may immediately
exercise its rights and remedies hereunder or pursuant to applicable law with
respect to the Purchased Receivables, including giving notice to each Account
Debtor to remit payment of all amounts payable under any Purchased Receivable
directly to Fifth Third or to an account identified by Fifth Third; provided,
however, that Fifth Third will hold all collections that are not Remittances in
trust for Client and, subject to the provisions of Section 5(d) hereof, will
deliver such collections to Client promptly.
     11. Cumulative Rights; Waivers. All rights, remedies and powers granted to
Fifth Third in this Agreement, or in any other instrument or agreement between
Client and Fifth Third are cumulative and may be exercised singularly or
concurrently with such other rights as Fifth Third may have. These rights may be
exercised from time to time as to all or any part of the Purchased Receivables
as Fifth Third in its reasonable discretion may determine. In the event Fifth
Third deems it necessary to seek equitable relief, including, but not limited
to, injunctive or receivership remedies, as a result of Client’s default, Client
waives any requirement that Fifth Third post or otherwise obtain or procure any
bond. Alternatively, in the event Fifth Third, in its sole and exclusive
discretion, desires to procure and post a bond, Fifth Third may procure and file
with the court a bond in an amount up to and not greater than $10,000,000.00
notwithstanding any common or statutory law requirement to the contrary. Upon
Fifth Third’s posting of such bond it shall be entitled to all benefits as if
such bond was posted in compliance

 

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with state law. Client also waives any right it may be entitled to, including an
award of attorney’s fees or costs, in the event any equitable relief sought by
and awarded to Fifth Third is thereafter, for whatever reason(s), vacated,
dissolved or reversed.
     12. Termination. No termination or cancellation (regardless of cause or
procedure) of the transactions or relationship contemplated under this Agreement
shall in any way affect or impair the obligations, duties and liabilities of
Client or the rights of Fifth Third relating to any transaction or event
occurring prior to such termination or cancellation. All undertakings,
agreements, indemnifications, covenants, warranties and representations
contained herein shall survive such termination or cancellation. Client
acknowledges that it has a duty to timely pay any tax obligation(s) and that if,
for whatever reason, a tax lien or levy were to issue, Client shall cause such
lien or levy to be satisfied or discharged within ten (10) days. Until such lien
or levy is satisfied and discharged, Fifth Third shall be entitled to withhold
any sum(s) that may otherwise be due Client and may remit same to the
appropriate governmental tax authority. Moreover, Client agrees that until the
tax lien or levy is satisfied or discharged, Fifth Third shall be entitled to
collect all proceeds of Purchased Receivables and apply such proceeds to
Client’s obligations hereunder. Nothing contained herein shall suspend or abate
any obligation Client owes to Fifth Third.
     13. Expenses. Client agrees to pay all reasonable out-of-pocket due
diligence expenses incurred by Fifth Third in connection with Fifth Third’s
purchase of Purchased Receivables hereunder. In addition to such due diligence
expenses, Client agrees to pay, and save Fifth Third harmless against liability
for the payment of, all reasonable out-of-pocket expenses of Fifth Third arising
in connection with the transactions contemplated herein (including any
modifications relating hereto). Such expenses include, without limitation, the
following: (a) any and all state documentary stamp taxes or other taxes
(including interest and penalties, if any) which may be determined to be payable
with respect to the execution and delivery of this Agreement or any assignment
or other document executed in connection with this Agreement or any such
modification; (b) all search fees and filing fees incurred in connection with
the transactions contemplated herein; (c) reasonable travel expenses;
(d) reasonable legal fees and expenses in connection with documenting and
closing the transactions contemplated herein and with collecting an account due
to Client’s failure to pay or perform its obligations hereunder, as Servicer or
otherwise; (e) credit reports and (f) reasonable expenses incurred for examining
books, records, accounts or procedures or policies of Client or Servicer. Client
agrees that Fifth Third shall be entitled to indemnification and recovery of any
and all attorneys’ fees or costs in respect of any litigation based hereon,
arising out of, or related hereto whether, under or in connection with this
and/or any agreement executed in conjunction herewith, or any course of conduct,
course of dealing, statements (whether verbal or written) or actions of either
party; provided, however, that Fifth Third shall not be entitled to
indemnification and recovery of such legal costs where such legal costs relate
to litigation initiated by Fifth Third that results in a judgment in favor of
Client.
     14. Security Interest. It is the intention of the parties hereto that
Client’s transfer of Receivables to Fifth Third shall constitute a sale and
assignment, which sale and assignment shall be absolute, irrevocable and without
recourse (other than with respect to the limited repurchase obligations provided
herein) and shall provide Fifth Third with the full benefits of ownership of the
Purchased Receivables. Notwithstanding the foregoing, to protect Fifth Third in

 

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the event that any transfer of Purchased Receivables is deemed by a court,
contrary to the express intent of the parties, to constitute a pledge rather
than a sale and assignment of such Purchased Receivables, Client and Guarantor
do each hereby grant to Fifth Third a security interest in and lien upon all of
such person’s respective right, title and interest in and to the Purchased
Receivables, the Blocked Account and all proceeds thereof (the “Collateral”) to
secure Client’s obligations to Fifth Third under this Agreement, including
(without limitation) Client’s obligation to repurchase certain Purchased
Receivables as provided in Section 9(a). Client and Guarantor do each agree to
comply with all appropriate laws in order to perfect Fifth Third’s security
interest in and to the Collateral, whether now existing or hereafter acquired,
to execute any financing statements, continuations thereof, amendment thereto or
additional documents as Fifth Third may require. Client and Guarantor do each
hereby authorize Fifth Third to prepare and file such financing statements
(including renewal statements) or amendments thereof or supplements thereto or
other instruments as Fifth Third may from time to time deem necessary or
appropriate in order to perfect and maintain the security interests granted
hereunder in accordance with the UCC. Neither Client nor Guarantor shall
(a) alter its corporate existence or, in one transaction or in a series of
transactions, merge into or consolidate with any other entity, or sell all or
substantially all of its assets, (b) change its state of incorporation or
formation or (c) change its registered corporate name, without, in each case,
(i) providing 30 days prior written notice to Fifth Third, (ii) providing such
information as Fifth Third may reasonably require in order to allow Fifth Third
to file appropriate amendments to any previously filed financing statements and
(iii) executing any such additional documents as Fifth Third may reasonably
require in order to protect its rights and remedies hereunder. The occurrence
and continuation of any Event of Default shall entitle Fifth Third to all of the
default rights and remedies (without limiting the other rights and remedies
exercisable by Fifth Third either prior or subsequent to an Event of Default) as
available to a secured party under the Uniform Commercial Code in effect in any
applicable jurisdiction. Nothing in this Section 14 shall be construed as a
representation, on the part of the Guarantor, that it has any right, title or
interest in or to any of the Purchased Receivables or the Blocked Account.
     15. Agreement of Client. Client authorizes and empowers Fifth Third, in its
sole discretion at any time during the continuance of an Event of Default, to:
(i) place a hold on Client’s checking and other accounts now or hereafter
maintained at Fifth Third ; and (ii) withdraw funds from any such account and
remit the same to Fifth Third. Any division or department of Fifth Third is
authorized to comply with each such direction made by any other division or
department of Fifth Third without any duty to determine whether such direction,
or any action pursuant thereto, is authorized hereunder or otherwise complies
with the terms hereof. Fifth Third shall have no liability to Client or any
other entity as a result of its compliance with any such direction, and Client
shall indemnify Fifth Third from and against all such liability except to the
extent that such liability arises as a result of Fifth Third’s gross negligence
or willful misconduct. Fifth Third is authorized to apply all funds received by
it hereunder to Client’s obligations hereunder in such order as Fifth Third may
elect. The parties acknowledge that the amount held in each such account may
exceed the amount of Client’s obligations as ultimately determined. Client
agrees that neither Fifth Third nor any institution, nor any of their respective
affiliates, shall be liable for the dishonor of any item as the result of a hold
being placed on Client’s accounts or as the result of any withdrawal of funds in
any such account in accordance with the terms hereof.

 

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     16. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered by (a) personal delivery;
(b) courier; (c) telecopy, or (d) certified or registered mail, postage prepaid
to the address set forth below and shall be deemed given at the time of personal
delivery or, if by mail, as of the date of first attempted delivery:

     
If to Fifth Third Bank, at:
  Asset Securitization Group
 
  38 Fountain Square Plaza
 
  MD 10903B
 
  Cincinnati, OH 45202-3910
 
  Attn: Brian Gardner
 
  Telephone: 513-534-7949
 
  Telecopy: 513-534-6256
 
   
If to Client, at:
  Universal Forest Products RMS, LLC
 
  c/o Universal Forest Products, Inc.
 
  2801 East Beltline NE
 
  Grand Rapids, MI 49525
 
  Attn: Michael R. Cole, Chief Financial Officer
 
  Telephone: 616-365-1540
 
  Telecopy: 616-364-3136
 
   
If to Guarantor, at:
  Universal Forest Products, Inc.
 
  2801 East Beltline NE
 
  Grand Rapids, MI 49525
 
  Attn: Michael R. Cole, Chief Financial Officer
 
  Telephone: 616-364-1540
 
  Telecopy: 616-364-3136

     17. Account Statements. Absent manifest error, Fifth Third’s books and
records shall be admissible in evidence without objection as prima facie
evidence of the status of the accounts between Fifth Third and Client.
     18. Confidential Information.
          The parties agree that the negotiation, existence and terms of this
Agreement shall constitute confidential information and each party shall keep
the existence and terms of this Agreement confidential.
          The parties further agree that the information furnished by Client to
Fifth Third regarding any Account Debtor, Client’s relationship with such
Account Debtor and the goods and services furnished by Client to such Account
Debtor (including but not limited to any information delivered pursuant to
Section 1(b)(2)(iii)(dd) hereof) shall constitute confidential information.
Fifth Third agrees not to disclose such information in whole or in part to any
other person or entity without Client’s prior written consent, except for
disclosure (i) on a confidential basis to Fifth Third’s affiliates and employees
who are involved in the consummation of the transactions contemplated by this
Agreement and to accountants, attorneys and other professional advisors retained
by Fifth Third or its affiliates in connection with this Agreement

 

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or in any way related to the Purchased Receivables; (ii) as may be required by
law; or (iii) of the name of such Account Debtor, the amount of the related
Purchased Receivable, the Maximum Invoice Tenor Period for such Purchased
Receivable and the quantity of goods purchased as specified in the Contract
underlying such Purchased Receivable (which disclosure may include delivery of
the invoice underlying such Purchased Receivable as required by the relevant
hedge counterparty, in such redacted form as approved by Fifth Third and Client,
such approvals not to be unreasonably withheld) to the extent necessary to carry
out any hedging activity by Fifth Third related to the Purchased Receivables or
assignment by Fifth Third of its rights under this Agreement or in respect of
the Purchased Receivables; provided that any hedging counterparty or assignee
agrees in writing, on terms approved in advance by Client, to observe and
preserve the confidentiality of any such information so provided.
          Notwithstanding anything herein to the contrary, the information
subject to this Section 18 shall not include, and the parties hereto (including
their employees, representatives or other agents) may disclose, (i) without
limitation of any kind any information with respect to the “tax treatment” and
“tax structure” (in each case, within the meaning of Treasury Regulation Section
1.6011-4) of the transactions contemplated hereby and all materials of any kind
(including opinions or other tax analyses) that are provided to Fifth Third or
Client relating to such tax treatment and tax structure; provided that with
respect to any document or similar item that in either case contains information
concerning the tax treatment or tax structure of the transactions as well as
other information, this sentence shall only apply to such portions of the
document or similar item that relate to the tax treatment or tax structure of
the transactions contemplated hereby; and (ii) any information regarding the
transactions and matters pertaining thereto, but only to the extent that the
same is required to be reported on the financial statements and other
information included in the public filings or disclosures of or by Guarantor and
its affiliates made pursuant to applicable provisions of state or federal
securities laws including, without limitation, the Securities Exchange Act of
1934, as amended; provided, however, the parties agree that each Schedule A as
well as all pricing information concerning this transaction shall remain
confidential.
     19. Miscellaneous.
          (a) This Agreement shall be governed and construed in accordance with
the laws of the State of Ohio without reference to the conflict of laws
provisions thereof.
          (b) Client shall not assign this Agreement without the prior written
consent of Fifth Third. This Agreement shall be deemed to be one of financial
accommodation and not assumable by any debtor, trustee or debtor-in-possession
in any bankruptcy proceeding without Fifth Third’s express written consent and
may be suspended in the event a petition in bankruptcy is filed by or against
Client.
          (c) This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns.
          (d) This Agreement contains the entire agreement between the parties
hereto regarding the subject matter hereof, excepting only assignments and
schedules thereto that may

 

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be executed from time to time. This Agreement shall not be modified except by
written instrument signed by all of the parties hereto.
          (e) Client agrees to execute such further instruments as may be
required by Fifth Third to evidence the transactions contemplated herein. If any
provision of this Agreement is found invalid, the remaining provisions of this
Agreement shall not be affected thereby.
          (f) Nothing set forth herein or otherwise shall render the parties
partners of one another.
          (g) Client acknowledges that there is no, and it will not seek or
attempt to establish any, fiduciary relationship between Fifth Third and Client
on Client’s behalf, and Client waives any right to assert, now or in the future,
the existence or creation of any such fiduciary relationship between Fifth Third
and Client in any action or proceeding (whether by way of claim, counterclaim,
crossclaim or otherwise) for damages.
          (h) Fifth Third agrees that notwithstanding anything to the contrary
set forth herein, unless and until such time as an Event of Default or the
Termination Date shall have occurred and be continuing or any Purchased
Receivable shall be a Delinquent Receivable, Fifth Third shall not, and shall
not cause Servicer to, contact any Account Debtor directly for any reason with
respect to any Purchased Receivable.
          (i) This Agreement may be executed in a number of identical
counterparts, each of which shall be deemed an original for all purposes and all
of which constitute, collectively, one agreement.
     20. Jury Trial Waiver; Jurisdiction. FIFTH THIRD AND CLIENT HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A
TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED ON THIS AGREEMENT OR ANY
TRANSACTIONS CONTEMPLATED HEREIN, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY RELATED DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO,
OR TO ANY RELATED DOCUMENT. THE PARTIES CONSENT TO JURISDICTION AND VENUE IN THE
STATE OR FEDERAL COURTS IN ANY CITY, COUNTY AND STATE OF OHIO. CLIENT FURTHER
AGREES TO WAIVE ANY RIGHT IT MAY HAVE TO SEEK A CHANGE OF VENUE BASED ON
INCONVENIENCE OF THE FORUM OR OTHERWISE. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE PARTIES ENTERING INTO THE SUBJECT TRANSACTION.
     21. Guaranty. Guarantor is the indirect owner of Client through Guarantor’s
wholly owned subsidiary that owns the sole membership interest in Client.
Guarantor hereby unconditionally and irrevocably guarantees to Fifth Third the
due and punctual payment, performance and observance by Client and Servicer of
all of the terms, covenants, conditions, agreements and undertakings on the part
of Client and Servicer to be performed or observed under this Agreement,
including, without limitation, the punctual payment when due of all obligations
of Client and Servicer now or hereafter existing under this Agreement, whether
for

 

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indemnification payments, fees, expenses, repurchase obligations or otherwise
(all of the foregoing being collectively referred to as the “Obligations”). In
the event that Client or Servicer shall fail in any manner whatsoever to perform
or observe any of the Obligations when the same shall be required to be
performed or observed under this Agreement, then upon either actual knowledge of
an officer of Guarantor or demand of Fifth Third, Guarantor shall perform, cause
to be performed or make payment to allow such Obligations to be performed and
shall fully indemnify and hold harmless Fifth Third from and against any and all
damages, losses, claims, liabilities and costs and expenses, including
attorney’s fees and disbursements awarded against or incurred by them or any of
them relating to such failure of Client or Servicer.
          Guarantor further agrees that nothing contained herein shall prevent
Fifth Third from foreclosing on its security interest in or lien on any asset,
if any, or from exercising any other rights available to it under this Agreement
or any other instrument of security, if any, and the exercise of any of the
aforesaid rights and the completion of any foreclosure proceedings shall not
constitute a discharge of any of Guarantor’s obligations hereunder; it being the
purpose and intent of Guarantor that its obligations hereunder shall be
absolute, independent and unconditional under any and all circumstances. Neither
Guarantor’s obligations hereunder nor any remedy for the enforcement thereof
shall be impaired, modified, changed, released or limited in any manner
whatsoever by an impairment, modification, change, release or limitation of the
liability of Client or Servicer or by reason of the bankruptcy or insolvency of
Client or Servicer. The Guarantor waives any and all notice of the creation,
renewal, extension or accrual of or increase in any of the Obligations and
notice of or proof of reliance by Fifth Third upon this Section 21 or acceptance
of this Section 21. This Agreement shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon this Section 21. All dealings between Client, Servicer and
Guarantor, on the one hand, and Fifth Third, on the other hand, likewise shall
be conclusively presumed to have been had or consummated in reliance upon this
Section 21.
          Guarantor hereby waives any and all presentments, demands, notices,
and protests against Guarantor, and any requirement that Fifth Third commence or
exhaust any remedies against Client or Servicer or any collateral securing the
Obligations. Guarantor’s liability hereunder shall be unconditional irrespective
of (i) any lack of enforceability of the Obligations, (ii) any law, regulation
or order of any jurisdiction affecting any term of the Obligations or Fifth
Third’s rights with respect thereto, and (iii) any other circumstance which
might otherwise constitute a defense available to, or discharge of, Client,
Servicer or Guarantor. This guarantee is a guarantee of payment and performance
and not of collection and shall remain in full force and effect until payment in
full of the Obligations. The obligations of Guarantor under this Section 21 do
rank and will rank pari passu in priority of payment with all other unsecured
and unsubordinated obligations for borrowed money of Guarantor. Notwithstanding
any provision to the contrary contained herein, to the extent the obligations of
Guarantor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of
Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the United States Bankruptcy Code).

 

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     IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of
the date first above written.
FIFTH THIRD BANK
By:
                                                                                
Printed Name:
Title:
UNIVERSAL FOREST PRODUCTS RMS, LLC
By:
                                                                                
Printed Name:
Title:
UNIVERSAL FOREST PRODUCTS, INC.
By:
                                                                                
Printed Name:
Title:
Signature page for PARTS Agreement

S-1

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ANNEX I
TO
PARTS AGREEMENT
DEFINITIONS

     
Account Debtor:
  [Confidential]
 
   
Agreed Base Value:
  With respect to any Receivable, an amount equal to the product of (a) the face
amount of such Receivable, times (b) a percentage equal to 100% less the Agreed
Dilution Percentage.
 
   
Agreed Dilution
Percentage:
   
[Confidential] or such other percentage set forth after such term on the current
Schedule A (or supplement thereto), which represents the agreed level of Credits
(expressed as a percentage of the face amount of the relevant Purchased
Receivables) that may exist with respect to Purchased Receivables.
 
   
Agreement:
  The Program for Accounts Receivable Transfer Agreement to which this Annex I
is attached (together with any applicable Schedule A), as amended, restated,
extended, supplemented or otherwise modified in writing from time to time.
 
   
Base Rate:
  [Confidential]
 
   
Blocked Account:
  The deposit account numbered [Confidential] at Fifth Third for the purpose of
receiving Remittances on the Purchased Receivables, which account is subject to
the Blocked Account Agreement.
 
   
Blocked Account
Agreement:
   
A letter agreement between Client and Fifth Third detailing their agreement with
regard to control of, and access to, the Blocked Account.
 
   
Client:
  As defined in the introductory paragraph of the Agreement.
 
   
Collateral:
  As defined in Section 14 of the Agreement.
 
   
Concentration Limit
  [Confidential]
 
   
Credit Rating:
  [Confidential]
 
   
Credits:
  As defined in Section 4(b) of the Agreement.

Annex I-1

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Day Count:
  The number set forth after such term in the current Schedule A (or supplement
thereto), which equals the number of the actual days from and including the
Effective Date through and excluding the Reset Date (or, if earlier, the
Termination Date) and thereafter from and including such Reset Date to and
excluding the succeeding Reset Date (or, if earlier, the Termination Date).
 
   
Default Rate:
  [Confidential]
 
   
Delinquent Receivables:
  Purchased Receivables with respect to which such Purchased Receivables shall
be more than 15 days past due.
 
   
Effective Date:
  With respect to a particular Schedule A (or supplement thereto), the date
identified thereon as the “Effective Date.”
 
   
Event of Default:
  As defined in Section 10 of the Agreement.
 
   
Federal Funds Rate:
  Means, for any day, the per annum rate set forth in the weekly statistical
release designated as H.15(519), or any successor publication, published by the
Federal Reserve Board (including any such successor, “H.15(519)”) for such day
opposite the caption “Federal Funds (Effective)”. If on any relevant day such
rate is not yet published in H.15(519), the rate for such day will be the rate
set forth in the daily statistical release designated as the Composite 3:30 p.m.
Quotations for U.S. Government Securities, or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor,
the “Composite 3:30 p.m. Quotation”) for such day under the caption “Federal
Funds Effective Rate.” If on any relevant day the appropriate rate for such day
is not yet published in either H.15(519) or the Composite 3:30 p.m. Quotations,
the rate for such day will be the arithmetic mean as determined by Fifth Third
of the rates for the last transaction in overnight Federal funds arranged prior
to 9:00 a.m. (New York time) on that day by each of three leading brokers of
Federal funds transactions in New York City selected by the Fifth Third.
 
   
Fifth Third:
  As defined in the introductory paragraph of the Agreement.
 
   
Financial Inability
   
To Pay:
  An Account Debtor’s failure to pay a Purchased Receivable as a result of a
deterioration in such Account Debtor’s credit quality as evidenced by an event
where such Account Debtor (A) (i) is dissolved (other than pursuant to a
consolidation, amalgamation or merger); (ii) becomes insolvent or is unable to
pay its debts or fails or admits in writing its inability generally to pay its
debts as they become due; (iii) makes a general assignment, arrangement or
composition with or for the benefit of its creditors; (iv) institutes or

Annex I-2

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  has instituted against it a proceeding seeking judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or insolvency law or other
similar law affecting creditor’s rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (aa) results in
a judgment of insolvency or bankruptcy or the entry of an order for relief or
the making of an order for its winding-up or liquidation or (bb) is not
dismissed, discharged, stayed or restrained in each case within 30 days of the
institution or presentation thereof; (v) has a resolution passed for its
winding-up, official management or liquidation; (vi) seeks or becomes subject to
the appointment of an administrator, provisional liquidation, conservator,
receiver, trustee, custodian or other similar official for it or for all or
substantially all its assets; (vii) has a secured party take possession of all
or substantially all its assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced or sued on or against all
or substantially all its assets and such secured party maintains possession, or
any such process is not dismissed, discharged, stayed or restrained, in each
case within 30 days thereafter; (viii) causes or is subject to any event with
respect to it which, under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses (i) to (vii)
(inclusive); or (ix) takes any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the foregoing acts; or
(B) fails, after giving effect to any applicable grace period of the relevant
obligation(s) of such Account Debtor (other than such Purchased Receivable), to
make, when due, any payments equal to or exceeding $10,000,000.00 under such
obligations.
 
   
Guarantor:
  Universal Forest Products, Inc., a corporation organized under the laws of the
state of Michigan.
 
   
Incentive Servicing Fee:
  As defined in Section 6(a) of the Agreement.
 
   
LIBOR:
  Means the rate of interest (adjusted for reserves if Fifth Third is required
to maintain reserves with respect to relevant advances) on one month Eurodollar
deposits, as reported on page 3750 of the Dow Jones Telerate news service (or
any successor) as determined by Fifth Third at approximately 10:00 a.m.
Cincinnati, Ohio time on the relevant date of determination.
 
   
Maximum Facility Limit:
  Means $50,000,000.
 
   
Maximum Invoice Tenor
Period:
   
Means, with respect to any Receivable, the time period reflected on the invoice
pertaining to such Receivable which represents the

Annex I-3

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  maximum payment terms afforded to an Account Debtor (i.e., the time period
following the invoice date within which the Account Debtor must pay the relevant
invoice); provided that such time period shall not exceed sixty (60) days after
such invoice date.
 
   
Moody’s:
  Moody’s Investors Service, Inc. or any successor.
 
   
Principal:
  Means the aggregate amount of Purchased Receivables (other than Purchased
Receivables (aa) for which the Client has remitted the rescission amount
therefore pursuant to Section 1(b)(8) or (bb) that have been repurchased
pursuant to Section 9 or (cc) Delinquent Receivables that the Client is not
required to repurchase pursuant to Section 9) outstanding on the Effective Date
or Reset Date, as applicable, multiplied by a percentage equal to 100% less the
Agreed Dilution Percentage.
 
   
Program Fee:
  [Confidential]
 
   
Purchase Price:
  With respect to any Receivables that Fifth Third purchases in connection with
any Schedule A (or supplement thereto), the aggregate total Agreed Base Values
for such Receivables, plus the applicable Servicing Fee minus the applicable
Reset Date Payment minus the applicable Structuring Fee.
 
   
Purchase Price Percentage:
   
With respect to any Receivables, the Purchase Price divided by the Required
Amount (each as set forth on the current Schedule A or supplement thereto)
expressed as a percentage.
 
   
Purchased Receivable:
  Any Receivable (including a Replacement Receivable) purchased by Fifth Third
pursuant to the Agreement.
 
   
Receivables:
  All receivables, instruments, accounts, chattel paper, payment intangibles,
notes, contract rights and general intangibles resulting from Client’s sale of
products or services to an Account Debtor before, on or after the date hereof.
 
   
Remittances:
  As defined in Section 1(b)(4) of the Agreement.
 
   
Replacement Receivables:
   
As defined in Section 1(b)(4) of the Agreement.
 
   
Repurchase Event:
  As defined in Section 1(b)(7) of the Agreement.
 
   
Required Amount:
  The amount set forth after such term on the current Schedule A (or supplement
thereto), which represents the stated value of Receivables that Fifth Third has
approved for purchase under such Schedule A (or supplement thereto).
 
   
Rescission Event:
  As defined in Section 1(b)(8) of the Agreement.

Annex I-4

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Rescission Receivables:
  As defined in Section 1(b)(8) of the Agreement.
 
   
Reset Date:
  With respect to a particular Schedule A (or supplement thereto), the date
identified thereon as the “Reset Date.” In the event the Reset Date is not so
specified it shall be the last day of each of fiscal month of Client to occur
prior to the relevant Stated Termination Date; provided, however, that if any
such Reset Date is not a business day then such Reset Date shall be the next
succeeding business day.
 
   
Reset Date Payment:
  As defined in Section 3(b) of the Agreement.
 
   
Revolving Period:
  The period commencing on March 8, 2006 and ending on the earliest of (x) the
fiscal month of Guarantor ending on or about February, 2009 and (y) the
occurrence of an Event of Default.
 
   
S&P:
  Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc., or any successor.
 
   
Schedule A:
  Any applicable Schedule A (which may be denoted Schedule A-1, etc.), in
substantially the form of Annex II to the Agreement, attached and/or executed in
connection with the Agreement, as such schedule is amended, restated, extended,
supplemented or otherwise modified in writing from time to time.
 
   
Servicer:
  As defined in Section 6(a) of the Agreement.
 
   
Servicer Default:
  As defined in Section 6(e) of the Agreement.
 
   
Servicing Fee:
  [Confidential]
 
   
Stated Termination Date:
  The date set forth after such term on the A/R Aging by Customer report
delivered pursuant to Section 6(i), which represents the date on or prior to
which each Purchased Receivable must be paid by the relevant Account Debtor in
accordance with the payment terms for such Receivable.
 
   
Structuring Fee:
  [Confidential]  
Termination Date:
  With respect to Purchased Receivables under a particular Schedule A (or
supplement thereto), the earlier of (a) the applicable Stated Termination Date,
(b) the date specified in a writing from Fifth Third to Client (which date may
be the date of such writing), such earlier date being the date on and after
which, pursuant to Section 2(a), Client can no longer use Remittances to
purchase Replacement Receivables and (c) the last day of the Revolving Period.

Annex I-5

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EXHIBIT A
FORM OF
SCHEDULE A-___
Subject to Program for Accounts Receivable Transfer Agreement dated March 8,
2006 executed by Client and Guarantor, the terms of which are hereby
incorporated by reference

LIBOR as of 11/9/04
Program Fee
All In Spread
Incentive Servicing Fee ($)
Agreed Dilution Percentage (%)
Required Amount
Aggregate Agreed Base Value
Effective Date
Reset Date
Day Count
Reset Date Payment
UFPI Servicing Fee
Structuring Fee
Legal & Due Diligence Fees (net)
Purchase Price $
Purchase Price %
Prior Period Purchase Price $
Net Purchase (Sale) by Fifth Third

A-1

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UNIVERSAL FOREST PRODUCTS RMS, LLC
By:
                                                                                
Name:
Title:
UNIVERSAL FOREST PRODUCTS, INC.
By:
                                                                                
Name:
Title:
Prospective counterparties should conduct a thorough and independent review of
the legal, tax and accounting aspects of any proposed transaction to determine
its suitability in light of their particular circumstances. Although the
indicative information set forth above is reflective of the terms, as of the
specified date, under which Fifth Third Bank believes a contract might be
structured, no assurance can be given that such a contract will in fact be
executed. Purchase Price represents indicative pricing only; the actual Purchase
Price shall reflect market conditions at the time of closing.

A-2

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EXHIBIT B
FORM OF SCHEDULE B-_
Fee (bps)

                                                  Mthly A/R Cap       Aggregate
Agreed Reset Date   End of Period   Month   Day Count   Structuring Fee  
(forecast)   Required Amount   Base Value
 
                                                     
 
                                                     
 
                                                     
Total
                           

B-1

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EXHIBIT C
BLOCKED ACCOUNT AGREEMENT
(ACCOUNT — WITH ACTIVATION)
DEPOSIT ACCOUNT CONTROL AGREEMENT
     This Agreement is entered into as of March 8, 2006, among Universal Forest
Products RMS, LLC, a Michigan limited liability company (“Company”), Fifth Third
Bank (in its capacity as purchaser under the PARTS Agreement dated as of
March 8, 2006 (the “PARTS Agreement”) among itself, Company and Universal Forest
Products, Inc.) (Fifth Third Bank, in such capacity, is referred to herein as
“PARTS Purchaser”), and Fifth Third Bank (“Bank”) with respect to the following:
     A. Bank has agreed to establish and maintain for Company deposit account
number [ Confidential ] opened under the name “Universal Forest Products RMS,
LLC as trustee for Fifth Third Bank pursuant to that certain Program for
Accounts Receivable Transfer Agreement dated as of March 8, 2006 among Universal
Forest Products RMS, LLC, Universal Forest Products Inc. and Fifth Third Bank”
(the “Account”).
     B. Company has agreed to deposit into the Account certain funds it holds in
trust for PARTS Purchaser pursuant to the PARTS Agreement.
     C. Notwithstanding the fact that Company holds the funds deposited into the
Account in trust for PARTS Purchaser pursuant to the PARTS Agreement, Company
has assigned to PARTS Purchaser a back-up security interest in the Account and
in checks and other payment instructions (“Checks”) deposited in the Account.
     D. Company, PARTS Purchaser and Bank are entering into this Agreement to
evidence PARTS Purchaser’s security interest in the Account and such Checks and
to provide for the disposition of net proceeds of Checks deposited in the
Account.
     Accordingly, Company, PARTS Purchaser and Bank agree as follows:
     1.  (a) This Agreement evidences PARTS Purchaser’s control over the
Account. Notwithstanding anything to the contrary in the agreement between Bank
and Company governing the Account, Bank will comply with instructions originated
by PARTS Purchaser as set forth herein directing the disposition of funds in the
Account without further consent of the Company.
          (b) Company represents and warrants to PARTS Purchaser and Bank that
it has not assigned or granted a security interest in the Account or any Check
deposited in the Account, except to PARTS Purchaser.

C-1

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          (c) Company will not permit the Account to become subject to any other
pledge, assignment, lien, charge or encumbrance of any kind, other than PARTS
Purchaser’s security interest referred to herein.
     2. During the Activation Period (as defined below), Bank shall prevent
Company from making any withdrawals from the Account. Prior to the Activation
Period, Company may operate and transact business through the Account in its
normal fashion, including making withdrawals from the Account, but covenants to
PARTS Purchaser it will not close the Account. Bank shall have no liability in
the event Company breaches this covenant to PARTS Purchaser. A reasonable period
of time following the commencement of the Activation Period, and continuing on
each Business Day thereafter, Bank shall transfer all collected and available
balances in the Account to PARTS Purchaser at its account specified in the
Notice (as defined below). The “Activation Period” means the period which
commences within a reasonable period of time not to exceed two Business Days
after Bank’s receipt of a written notice from PARTS Purchaser in the form of
Exhibit A (the “Notice”). A “Business Day” is each day except Saturdays, Sundays
and Bank holidays. Funds are not available if, in the reasonable determination
of Bank, they are subject to a hold, dispute or legal process preventing their
withdrawal.
     3. Bank agrees it shall not offset, charge, deduct or otherwise withdraw
funds from the Account, except as permitted by Section 4, until it has been
advised in writing by PARTS Purchaser that all of Company’s obligations that are
secured by the Checks and the Account are paid in full. PARTS Purchaser shall
notify Bank promptly in writing upon payment in full of Company’s obligations.
     4. Bank is permitted to charge the Account:
          (a) for its fees and charges relating to the Account or associated
with this Agreement; and
          (b) in the event any Check deposited into the Account is returned
unpaid for any reason or for any breach of warranty claim.
     5. If the balances in the Account are not sufficient to compensate Bank for
any returned Check, Company agrees to pay Bank on demand the amount due Bank. If
Company fails to so pay Bank immediately upon demand, PARTS Purchaser agrees to
pay Bank within five days after Bank’s demand to PARTS Purchaser to pay any
amount received by PARTS Purchaser with respect to such returned Check. The
failure to so pay Bank shall constitute a breach of this Agreement.
     6.  (a) Bank will send information regarding deposits to the Account to the
address specified below for Company or as otherwise specified in writing by
Company to Bank, and will send a copy of each such deposit advice to the address
specified below for PARTS Purchaser.
          (b) In addition to the original Bank statement provided to Company,
Bank will provide PARTS Purchaser with a duplicate of such statement.

 

--------------------------------------------------------------------------------

 

     7.  (a) Bank will not be liable to Company or PARTS Purchaser for any
expense, claim, loss, damage or cost (“Damages”) arising out of or relating to
its performance under this Agreement other than those Damages which result
directly from its acts or omissions constituting negligence or intentional
misconduct.
          (b) In no event will Bank be liable for any special, indirect,
exemplary or consequential damages, including but not limited to lost profits.
          (c) Bank will be excused from failing to act or delay in acting, and
no such failure or delay shall constitute a breach of this Agreement or
otherwise give rise to any liability of Bank, if (i) such failure or delay is
caused by circumstances beyond Bank’s reasonable control, including but not
limited to legal constraint, emergency conditions, action or inaction of
governmental, civil or military authority, fire, strike, lockout or other labor
dispute, war, riot, theft, flood, earthquake or other natural disaster,
breakdown of public or private or common carrier communications or transmission
facilities, equipment failure, or negligence or default of Company or PARTS
Purchaser or (ii) such failure or delay resulted from Bank’s reasonable belief
that the action would have violated any guideline, rule or regulation of any
governmental authority.
          (d) Bank shall have no duty to inquire or determine whether Company’s
obligations to PARTS Purchaser are in default or whether PARTS Purchaser is
entitled to provide the Notice to Bank. Bank may rely on notices and
communications it believes in good faith to be genuine and given by the
appropriate party.
          (e) Notwithstanding any of the other provisions in this Agreement, in
the event of the commencement of a case pursuant to Title 11, United States
Code, filed by or against Company, or in the event of the commencement of any
similar case under then applicable federal or state law providing for the relief
of debtors or the protection of creditors by or against Company, Bank may act as
Bank deems necessary to comply with all applicable provisions of governing
statutes and shall not be in violation of this Agreement as a result.
          (f) Bank shall be permitted to comply with any writ, levy order or
other similar judicial or regulatory order or process concerning the Account or
any Check and shall not be in violation of this Agreement for so doing.
     8. Company shall indemnify Bank against, and hold it harmless from, any and
all liabilities, claims, costs, expenses and damages of any nature (including
but not limited to allocated costs of staff counsel, other reasonable attorney’s
fees and any fees and expenses) in any way arising out of or relating to
disputes or legal actions concerning Bank’s provision of the services described
in this Agreement. This section does not apply to any cost or damage
attributable to the gross negligence or intentional misconduct of Bank.
Company’s obligations under this section shall survive termination of this
Agreement.
     9. Company shall pay to Bank, upon receipt of Bank’s invoice, all costs,
expenses and attorneys’ fees (including allocated costs for in-house legal
services) incurred by Bank in connection with the enforcement of this Agreement
and any instrument or agreement required hereunder, including but not limited to
any such costs, expenses and fees arising out of the

 

--------------------------------------------------------------------------------

 

resolution of any conflict, dispute, motion regarding entitlement to rights or
rights of action, or other action to enforce Bank’s rights in a case arising
under Title 11, United States Code. Company agrees to pay Bank, upon receipt of
Bank’s invoice, all costs, expenses and attorneys’ fees (including allocated
costs for in-house legal services) incurred by Bank in the preparation and
administration of this Agreement (including any amendments hereto or instruments
or agreements required hereunder).
     10. Termination and Assignment of this Agreement shall be as follows:
          (a) PARTS Purchaser may terminate this Agreement by providing notice
to Company and Bank that all of Company’s obligations which are secured by
Checks and the Account are paid in full. PARTS Purchaser may also terminate or
it may assign this Agreement upon 30 day’s prior written notice to Company and
Bank. Bank may terminate this Agreement upon 30 days’ prior written notice to
Company and PARTS Purchaser. Company may not terminate this Agreement except
with the written consent of PARTS Purchaser and upon prior written notice to
Bank.
          (b) Notwithstanding subsection 10(a), Bank may terminate this
Agreement at any time by written notice to Company and PARTS Purchaser if either
Company or PARTS Purchaser breaches any of the terms of this Agreement, or any
other agreement with Bank.
     11. (a) Each party represents and warrants to the other parties that
(i) this Agreement constitutes its duly authorized, legal, valid, binding and
enforceable obligation; (ii) the performance of its obligations under this
Agreement and the consummation of the transactions contemplated hereunder will
not (A) constitute or result in a breach of its certificate or articles of
incorporation, by-laws or partnership agreement, as applicable, or the
provisions of any material contract to which it is a party or by which it is
bound or (B) result in the violation of any law, regulation, judgment, decree or
governmental order applicable to it; and (iii) all approvals and authorizations
required to permit the execution, delivery, performance and consummation of this
Agreement and the transactions contemplated hereunder have been obtained.
          (b) The parties each agree that it shall be deemed to make and renew
each representation and warranty in subsection 11(a) on and as of each day on
which Company uses the services set forth in this Agreement.
     12. (a) This Agreement may be amended only by a writing signed by Company,
PARTS Purchaser and Bank; except that Bank’s charges are subject to change by
Bank upon 30 days’ prior written notice to Company.
          (b) This Agreement may be executed in counterparts; all such
counterparts shall constitute but one and the same agreement.
          (c) This Agreement controls in the event of any conflict between this
Agreement and any other document or written or oral statement. This Agreement
supersedes all prior understandings, writings, proposals, representations and
communications, oral or written, of any party relating to the subject matter
hereof.

 

--------------------------------------------------------------------------------

 

          (d) This Agreement shall be interpreted in accordance with Michigan
law without reference to that state’s principles of conflicts of law.
     13. Any written notice or other written communication to be given under
this Agreement shall be addressed to each party at its address set forth on the
signature page of this Agreement or to such other address as a party may specify
in writing. Except as otherwise expressly provided herein, any such notice shall
be effective upon receipt.
     14. Nothing contained in the Agreement shall create any agency, fiduciary,
joint venture or partnership relationship between Bank and Company or PARTS
Purchaser.

 

--------------------------------------------------------------------------------

 

     In WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the day and year first above written.
UNIVERSAL FOREST PRODUCTS RMS, LLC
(“COMPANY”)

         
By:
       
Name:
 
 
   
Title:
 
 
   
 
 
 
   

Address for notices:
Universal Forest Products RMS, LLC
2801 East Beltline NE
Grand Rapids, MI 49525
Attn: Michael R. Cole, Chief
Financial Officer
Telephone: 616-364-1540
Telecopy: 616-364-3136

 

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FIFTH THIRD BANK (in its capacity as PARTS
Purchaser)
(“PARTS PURCHASER”)

         
By:
       
Name:
 
 
   
Title:
 
 
   
 
 
 
   

Address for notices:
Asset Securitization Group
38 Fountain Square Plaza
MD 10903B
Cincinnati, OH 45202-3910
Attn: Brian Gardner
Telephone: 513-534-7949
Telecopy: 513-534-6256

 

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FIFTH THIRD BANK
(“BANK”)

         
By:
       
Name:
 
 
   
Title:
 
 
   
 
 
 
   

Address for notices:
Fifth Third Bank
111 Lyon, NW
MD RMOBGJ
Grand Rapids, Michigan 49503
Attn: Randy Wolffis
Telephone: 616-653-5700
Telecopy: 616-653-5831

 

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EXHIBIT A
DEPOSIT ACCOUNT CONTROL AGREEMENT
[Letterhead of PARTS Purchaser]

To:   Fifth Third Bank
[Address]

    Re:   Universal Forest Products RMS, LLC as trustee for Fifth Third Bank
pursuant to that certain Program for Accounts Receivable Transfer Agreement
dated as of March 8, 2006 among Universal Forest Products RMS, LLC, Universal
Forest Products Inc. and Fifth Third Bank         Account No. [ Confidential ]

Ladies and Gentlemen:
     Reference is made to the Deposit Account Control Agreement dated March 8,
2006 (the “Agreement”) among Universal Forest Products RMS, LLC (“Company”), us
(in our capacity as purchaser under the PARTS Agreement dated as of March 8,
2006 among us, Company and Universal Forest Products, Inc.) (“PARTS Purchaser”)
and you regarding the above-described account (the “Account”). In accordance
with Section 2 of the Agreement, we hereby give you notice of our exercise of
control of the Account and we hereby instruct you to transfer funds to our
account as follows:
     Bank Name:
                                                                                       
     ABA No.:
                                                                                          
     Account Name:
                                                                                
     Account No.:
                                                                                    
Very truly yours,
Fifth Third Bank (in its capacity as PARTS Purchaser)

         
By:
       
Name:
 
 
   
Title:
 
 
   
 
 
 
   

A-1