Exhibit 10(i)A(7)

 

 

 

LOAN AND SECURITY AGREEMENT

by and among

ACUITY ENTERPRISE, INC.

as “Borrower”

ACUITY SPECIALTY PRODUCTS, INC.

as the initial “Servicer”

REGIONS BANK

as a “Lender” and as “Administrative Agent”

and

The Other LENDERS

From Time to Time Party Hereto

as “Lenders”

October 14, 2009

 

 

 

 

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TABLE OF CONTENTS

 

               

Page

1.

 

Definitions; Related Terms

   1  

1.1

  

Certain UCC Terms

   1  

1.2

  

Defined Terms

   1  

1.3

  

Financial Terms

   17

2.

 

The Credit Facility

   17  

2.1

  

Revolving Loan Commitment

   17  

2.2

  

The Note

   18  

2.3

  

Interest

   18  

2.4

  

Requests for Borrowings; Conversions

   18  

2.5

  

Excess Outstandings

   19  

2.6

  

Repayment of Loans and Obligations

   19  

2.7

  

Additional Payment Provisions

   20  

2.8

  

Application of Collections

   20  

2.9

  

Fees

   22  

2.10

  

Statement of Account

   22  

2.11

  

Termination

   22  

2.12

  

USA Patriot Act Notice

   22

3.

 

Security Agreement

   22  

3.1

  

Security Interest

   22  

3.2

  

Financing Statements; Power of Attorney

   23  

3.3

  

Entry

   23  

3.4

  

Other Rights

   23  

3.5

  

Accounts

   23  

3.6

  

Waiver of Marshaling

   24  

3.7

  

Control; Further Assurances

   24

4.

 

Conditions Precedent to Occurrence of the Closing Date

   24  

4.1

  

Conditions Precedent to Occurrence of Closing Date

   24  

4.2

  

Conditions Precedent to Each Loan

   25  

4.3

  

Special Condition Precedent to Initial Loans

   26

5.

 

Representations and Warranties

   27  

5.1

  

Existence and Power

   27  

5.2

  

Power and Authority; Due Authorization, Execution and Delivery

   27  

5.3

  

No Conflict

   27  

5.4

  

Governmental Authorization

   27  

5.5

  

Actions, Suits

   27  

5.6

  

Binding Effect

   27  

5.7

  

Accuracy of Information

   28  

5.8

  

Margin Regulations; Use of Proceeds

   28  

5.9

  

Good Title

   28  

5.10

  

Perfection

   28  

5.11

  

Places of Business and Locations of Records

   28  

5.12

  

Accounts

   28  

5.13

  

No Material Adverse Effect

   28  

5.14

  

Names

   28  

5.15

  

Ownership of Borrower; No Subsidiaries

   28  

5.16

  

Not an Investment Company

   29  

5.17

  

Solvency

   29  

5.18

  

Eligible Receivables

   29

 

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TABLE OF CONTENTS

(continued)

 

               

Page

 

5.19

  

Sales by Originators

   29  

5.20

  

Disclosure

   29  

5.21

  

Sanctioned Persons; Sanctioned Countries

   29  

5.22

  

Instruments

   29  

5.23

  

Compliance with Law

   29  

5.24

  

Compliance with Credit and Collection Policy

   29  

5.25

  

Accounting

   29  

5.26

  

Borrowing Limitations

   30

6.

 

Affirmative Covenants of Borrower and Servicer

   30  

6.1

  

Compliance with Laws, Etc.

   30  

6.2

  

Preservation of Legal Existence

   30  

6.3

  

Performance and Compliance with Receivables

   30  

6.4

  

Reporting Requirements

   30  

6.5

  

Use of Proceeds

   33  

6.6

  

Separate Legal Entity

   33  

6.7

  

Adverse Claims on Receivables

   34  

6.8

  

Further Assurances

   34  

6.9

  

Servicing

   35  

6.10

  

Field Examinations

   35  

6.11

  

Cooperation

   35  

6.12

  

Facilities

   35  

6.13

  

Deposit Accounts

   35  

6.14

  

Certain Notices

   36  

6.15

  

Payment of Taxes, Etc.

   36  

6.16

  

Covenants Regarding Collateral

   36

7.

 

Negative Covenants of Borrower and Servicer

   37  

7.1

  

Sales, Liens, Etc.

   37  

7.2

  

Mergers, Acquisitions, Sales, Subsidiaries, etc.

   37  

7.3

  

Change in Business

   37  

7.4

  

Other Debt

   37  

7.5

  

Organizational Documents

   38  

7.6

  

Jurisdiction of Organization; Location of Records

   38  

7.7

  

Financing Statements

   38  

7.8

  

Business Restrictions

   38  

7.9

  

Other Agreements

   38  

7.10

  

Investments

   38  

7.11

  

Restricted Payments

   38

8.

 

SERVICER

   38  

8.1

  

Initial Servicer

   38  

8.2

  

Certain Duties of Servicer

   39  

8.3

  

Servicing Compensation

   41  

8.4

  

Agreement Not to Resign

   41  

8.5

  

Designation of Servicer

   41  

8.6

  

Termination

   41  

8.7

  

Servicer Events of Default

   41

9.

 

Default

   42  

9.1

  

Events of Default

   42  

9.2

  

Remedies

   44

 

ii

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TABLE OF CONTENTS

(continued)

 

               

Page

 

9.3

  

Receiver

   44  

9.4

  

Insurance

   44

10.

 

ADMINISTRATIVE AGENT AND THE LENDERS

   44  

10.1

  

Appointment; Powers and Immunities

   44  

10.2

  

Nature of Duties of Administrative Agent

   45  

10.3

  

Lack of Reliance on Administrative Agent

   45  

10.4

  

Certain Rights of Administrative Agent

   45  

10.5

  

Reliance by Administrative Agent

   45  

10.6

  

Administrative Agent in its Individual Capacity

   45  

10.7

  

Successor Administrative Agent

   46  

10.8

  

Additional Agencies; No Duties Imposed Upon Syndication Agents or Documentation
Agents

   46  

10.9

  

Collateral Matters

   46  

10.10

  

Replacement of Certain Lenders

   47

11.

 

CHANGE IN CIRCUMSTANCES; COMPENSATION

   48  

11.1

  

Basis for Determining Interest Rate Inadequate or Unfair

   48  

11.2

  

Illegality

   48  

11.3

  

Increased Cost and Reduced Return

   48  

11.4

  

Base Rate Loans or Other LIR Loans Substituted for Affected LIR Loans

   49

12.

 

Miscellaneous

   49  

12.1

  

No Waiver, Remedies Cumulative

   49  

12.2

  

Survival of Representations

   50  

12.3

  

Expenses; Indemnity By Borrower and Servicer

   50  

12.4

  

Notices

   51  

12.5

  

Governing Law

   51  

12.6

  

Successors and Assigns; Participations and Assignments; Register

   52  

12.7

  

Counterparts; Telecopied Signatures

   53  

12.8

  

No Usury

   53  

12.9

  

Powers

   53  

12.10

  

Approvals; Amendments

   53  

12.11

  

Waiver of Certain Defenses

   54  

12.12

  

Additional Provisions

   54  

12.13

  

Integration; Final Agreement

   54  

12.14

  

LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES

   54  

12.15

  

WAIVER OF JURY TRIAL

   55  

12.16

  

SUBMISSION TO JURISDICTION; VENUE

   55  

12.17

  

[Intentionally Omitted]

   55  

12.18

  

Confidentiality

   55  

12.19

  

No Tax Advice

   56

 

iii

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EXHIBITS AND SCHEDULES

EXHIBITS:

 

Exhibit A

  

-

  

Form of Revolving Note

Exhibit B

  

-

  

Form of Notice of Borrowing

Exhibit C

  

-

  

Form of Compliance Certificate

Exhibit D

  

-

  

Form of Assignment and Acceptance

Exhibit E

  

-

  

[Reserved]

Exhibit F

  

-

  

[Reserved]

Exhibit G

  

-

  

Form of Telephone Instruction Letter

Exhibit H

  

-

  

[Reserved]

Exhibit I

  

-

  

[Reserved]

Exhibit J

  

-

  

[Reserved]

Exhibit K

  

-

  

Form of Borrowing Base Certificate

Exhibit L

     

Form of Performance Undertaking

SCHEDULES:

     

Schedule 5.9

  

-

  

Non-Collateral Property

Schedule 5.11

  

-

  

Places of Business

Schedule 5.12

  

-

  

Lock Boxes, Lock Box Accounts, and Other Deposit Accounts

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LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT, dated as of October 14, 2009 (this
“Agreement”), by and among ACUITY ENTERPRISE, INC., a Delaware corporation (the
“Borrower”), ACUITY SPECIALTY PRODUCTS, INC., a Georgia corporation in its
capacity as the initial servicer (in such capacity, together with its successors
and permitted assigns in such capacity, the “Servicer”), REGIONS BANK, an
Alabama bank, in its capacity as a Lender (as defined below), and in its
capacity as administrative agent (in such capacity, together with its successors
and assigns in such capacity, the “Administrative Agent”), and each of the other
financial institutions from time to time party hereto as lenders (each, together
with its successors and assigns, a “Lender”).

W I T N E S S E T H :

In consideration of the premises and of the mutual covenants herein contained
and to induce Lenders to extend credit to Borrower, the parties agree as
follows:

 

 

1.        

DEFINITIONS; RELATED TERMS.

1.1         Certain UCC Terms. Any term used in this Agreement or in any
financing statement filed in connection herewith which is defined in the UCC and
not otherwise defined in this Agreement or in any other Loan Document shall have
the meaning given to the term in the UCC, including, without limitation,
Accession, Account Debtor, Chattel Paper, Account, Commercial Tort Claim,
Deposit Account, Document, Electronic Chattel Paper, Equipment, Fixture, General
Intangible, Instrument, Inventory, Investment Property, Letter-of-Credit Right,
Proceeds, Supporting Obligation, and Tangible Chattel Paper.

1.2         Defined Terms. Capitalized terms that are not otherwise defined
herein shall have the meanings set forth in this Section 1.2.

“Accounts Receivable Turnover Ratio” means, on any date of determination, the
ratio computed as of the most recent Calculation Date by dividing (a) the
aggregate amount of net Sales during the 12 consecutive Calculation Periods most
recently ended by (b) the average amount of the Unpaid Balance of all
Receivables on the 12 most recent Calculation Dates.

“Activation Notice” means, with respect to any Lock Box Account, a notice given
by Administrative Agent to the applicable Lock Box Bank in accordance with the
terms of this Agreement and the Deposit Account Control Agreement covering such
Lock Box Account, pursuant to which Administrative Agent notifies such Lock Box
Bank that from and after the date of such notice and any period of implementing
the same (if and to the extent set forth in such Deposit Account Control
Agreement), such Lock Box Bank shall follow only the instructions of
Administrative Agent in respect of any withdrawals, transfers, or other
disposition of funds from such Lock Box Account.

“Advance Rate” means, on any date of determination, a percentage equal to
(a) 100% minus (b) the Reserve Percentage.

“Adverse Claim” means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, encumbrance or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or lessor under any
conditional sale, capitalized lease or other title retention agreement).

“Affected Lender” has the meaning set forth in Section 10.10.

“Affiliate” of any Person means any other Person directly or indirectly
controlling, controlled by, or under common control with such Person. For
purposes of this definition, “control” (including with correlative meanings, the
terms “controlling”, “controlled by” and “under common control with”) as applied
to any Person means (i) with respect to any Person holding voting shares or
their equivalent and elected directors, managers or Persons performing similar
functions, the possession, directly or indirectly, of the power to vote 10% or
more of the Equity

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Interests having ordinary voting power of such Person or (ii) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
shares or their equivalent, by contract or otherwise.

“Agent’s Account” means one or more Deposit Accounts maintained by Borrower with
Administrative Agent or established and maintained by Administrative Agent in
its own name (whether at Administrative Agent or another bank) into which
Collections shall, to the extent provided or required herein or in the other
Loan Documents, be deposited or paid and to which only Administrative Agent
shall have access to withdraw or otherwise direct the disposition of funds on
deposit therein.

“Applicable Margin” shall mean 2.25% per annum; provided, however, that, the
Applicable Margin shall decrease to 2.00% per annum automatically on the first
date on which each of the following conditions shall be satisfied: (a) a notice
of the type described in the proviso to clause (b) of the definition of
“Defaulted Receivable” shall have been delivered and the related 30-day notice
period shall have elapsed and (b) a notice of the type described in the last
paragraph of the definition of “Loss Reserve” shall have been delivered and the
related 30-day notice period shall have elapsed.

“ASP” means Acuity Specialty Products, Inc., and its successors and assigns.

“Assignee” has the meaning set forth in Section 12.6(c).

“Assignment and Acceptance” means an assignment and acceptance executed in
accordance with Section 12.6(c) in the form attached hereto as Exhibit D.

“Base Rate” means, as of any day, the rate per annum (rounded upwards, if
necessary, to the nearest whole multiple of 1/100 of 1%) equal to the greatest
of (a) the Federal Funds Rate in effect on such day plus  1/2 of 1%; (b) the
Prime Rate in effect on such day and (c) 1.00%. If for any reason Administrative
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable, after due inquiry, to ascertain the Federal
Funds Rate for any reason, including the inability or failure of Administrative
Agent to obtain sufficient quotations in accordance with the terms hereof, the
Base Rate shall be determined without regard to clause (a) of the first sentence
of this definition until the circumstances giving rise to such inability no
longer exist. Any change in the Base Rate due to a change in the Prime Rate or
the Federal Funds Rate shall be effective on the effective date of such change
in the Prime Rate or the Federal Funds Rate, respectively.

“Base Rate Loan” means a Loan, or portion thereof, during any period in which it
bears interest at a rate based on the Base Rate.

“Borrowing Base” means, on any date of determination, an amount equal to the sum
of (a) the product of (i) the Advance Rate as of the most recent Calculation
Date times (ii) the Net Receivable Balance, less (b) Reserves.

“Borrowing Base Certificate” means a borrowing base certificate substantially in
the form of Exhibit K, attached hereto and made a part hereof, and which will be
delivered in connection with each Receivables Report.

“Borrowing Base Deficit” means, on any date of determination, an amount equal to
the excess, if any, of (a) the aggregate principal amount of all outstanding
Loans at such time over (b) the Borrowing Base (as reported in the most recent
Borrowing Base Certificate).

“Business Day” means (a) any weekday on which Administrative Agent is open for
business in Birmingham, Alabama, and Atlanta, Georgia, and (b) with respect to
the determination of the LIBOR Index Rate, any day that is also a day for
trading by and between banks in U.S. dollar deposits in the London interbank
market.

“Calculation Date” means the last day of each Fiscal Month.

 

2

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“Calculation Period” means each Fiscal Month (or portion thereof in the case of
the first and last periods) which elapses during the term of this Agreement. The
first Calculation Period shall commence on the Closing Date, and the final
Calculation Period shall terminate on the Termination Date.

“Change of Control” has the meaning given such term in the Receivables Sale
Agreement.

“Change of Law” has the meaning set forth in Section 11.2.

“Charge-Off” means a Receivable not previously deemed a Defaulted Receivable
that is written-off by the Servicer.

“Closing Date” means the earliest date on or after October 14, 2009, on which
all of the conditions precedent in Section 4.1 of this Agreement are satisfied.

“Collateral” means all of Borrower’s right, title, and interest in and to the
following property, wherever located and whether now owned by Borrower or
hereafter acquired: (a) all Receivables, Collections, and Related Security;
(b) all of Borrower’s rights, remedies, powers, and privileges in respect of the
Receivables Sale Agreement, including, without limitation, its rights to receive
Purchase Price Credits and indemnity payments thereunder; (c) each Lock Box and
all mail and Items therein (to the extent the same constitute Collateral or
Proceeds of the Collateral) and each Lock Box Account and all other Deposit
Accounts (including, without limitation, the Agent’s Account) and all funds on
deposit therein, together with all certificates and Instruments, if any, from
time to time evidencing such Lock Box Accounts or other Deposit Accounts or such
funds on deposit; (d) all funds otherwise on deposit with or under the Control
of Administrative Agent or any Lender or any of their agents or correspondents;
(e) to the extent constituting Proceeds of any other Collateral, all General
Intangibles, all Instruments, Documents, Items, any other instrument or
intangible representing payment for goods or services, and all Investment
Property; and (f) all Proceeds (including, without limitation, insurance
proceeds) of any and all of the property described above. Collateral also
includes any other real or personal property in which Administrative Agent has,
now or hereafter, been granted a Lien to secure all or a portion of the
Obligations.

“Collateral Disclosure Certificate” means, as to each of Borrower and
Originator, the most recent Collateral Disclosure Certificate (in the form
delivered on or about the Closing Date) executed and delivered to Administrative
Agent by such Person, as the same may be amended, restated, supplemented, or
otherwise modified from time to time or replaced from time to time in accordance
with the terms of this Agreement.

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

“Commitment” means, with respect to each Lender, (a) the amount set forth as its
“Commitment” opposite the name of such Lender on the signature pages hereof, and
(b) as to any Lender which enters into any Assignment and Acceptance (whether as
transferor Lender or as Assignee thereunder), the amount of such Lender’s
“Commitment” after giving effect to such Assignment and Acceptance.

“Commitment Percentage” means, for each Lender at any time of determination,
(a) the percentage equal to its Commitment at such time divided by the Revolving
Loan Commitment at such time or (b) if the Commitments have terminated, the
percentage equal to the aggregate outstanding balance of its Loans at such time
divided by the aggregate outstanding principal amount of all Loans.

“Compliance Certificate” means a compliance and no default certificate
substantially in the form of Exhibit C, attached hereto and made a part hereof.

“Concentration Limit” means, as to any Obligor and its Affiliates (if any) and
on any date of determination, the maximum percentage of all Eligible Receivables
which the Receivables of such Obligor and its Affiliates may comprise, which
maximum percentage shall be determined by reference to the following table for
Obligors who

 

3

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have short term unsecured debt ratings currently assigned to them by S&P and
Moody’s (or in the absence thereof, the equivalent long term unsecured senior
debt ratings):

 

S&P Rating

 

Moody’s Rating

 

Allowable % of Eligible

Receivables

A-1+

  P-1   10%

A-1

  P-1   8%

Below A-1 or Rated by neither S&P nor Moody’s

  Below P-1 or Rated by neither S&P nor Moody’s   4%

; provided, however, that (a) if any Obligor has a split rating, the applicable
rating will be the lower of the two, (b) if any Obligor is rated by neither S&P
nor Moody’s, the applicable Concentration Limit shall be the one set forth in
the last line of the table above, (c) any of the percentages in the foregoing
table may be modified in writing from time to time by mutual agreement of
Administrative Agent and Borrower; and (d) upon Borrower’s request from time to
time, Administrative Agent may agree to a greater Concentration Limit for a
particular Obligor and its Affiliates (each such higher percentage, a “Special
Concentration Limit”), it being understood that any Special Concentration Limit
may be cancelled by Administrative Agent upon not less than five (5) Business
Days’ written notice to the Loan Parties. As of the Closing Date, the Special
Concentration Limit for all Receivables owing from The Home Depot, Inc., and its
Affiliates is 30% of the aggregate Unpaid Balance of all Eligible Receivables.

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

“Contract” has the meaning given such term in the Receivables Sale Agreement.

“Contractual Dilutions” means, for any period of determination, the aggregate
amount of reductions to Sales during such period including, but not limited to,
buy-back or repurchase arrangements, pre-negotiated freight charges, volume
rebates, and advertising allowances.

“Contractual Dilution Reserve” means, for any period of determination, the
aggregate amount of balance sheet accruals, established in accordance with GAAP,
reflecting the liability for Contractual Dilutions.

“Control” means, with respect to any asset, right, or property with respect to
which a security interest therein is perfected by a secured party’s having
“control” thereof (whether pursuant to the terms of an agreement or through the
existence of certain facts and circumstances), that Administrative Agent or any
Lender has “control” of such asset, right, or property in accordance with the
terms of Article 9 of the UCC.

“Credit and Collection Policy” has the meaning given such term in the
Receivables Sale Agreement, as the same may be amended, restated, supplemented,
or otherwise modified from time to time in accordance with this Agreement.

“Credit Party” means each Borrower and Servicer.

“Days Sales Outstanding Ratio” means, on any date of determination, the ratio
computed as of the most recent Calculation Date by dividing (a) 360 by (b) the
Accounts Receivable Turnover Ratio determined as of such Calculation Date.

“Debt” of any Person means, without duplication, (a) all indebtedness of such
Person for borrowed money, (b) all indebtedness of such Person for the deferred
purchase price of property or services (other than property and services
purchased, and expense accruals and deferred compensation items arising, in the
ordinary course of

 

4

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business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments (other than performance, surety and
appeal bonds arising in the ordinary course of business), (d) all indebtedness
of such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property),
(e) all obligations of such Person under leases which have been or should be, in
accordance with GAAP, recorded as capital leases, to the extent required to be
so recorded, (f) all reimbursement, payment or similar obligations of such
Person, contingent or otherwise, under acceptance, letter of credit or similar
facilities (other than letters of credit in support of trade obligations or in
connection with workers’ compensation, unemployment insurance, old-age pensions
and other social security benefits in the ordinary course of business), (g) all
net obligations of such Person in respect of interest rate swap, cap, collar,
swaption, option or similar agreements, (h) all obligations arising in
connection with a sale or other transfer of any of such Person’s financial
assets which are, or are intended to be, classified as loans for federal tax
purposes, (i) all Debt referred to in clauses (a) through (h) above guaranteed
directly or indirectly by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement (i) to pay or purchase such Debt
or to advance or supply funds for the payment or purchase of such Debt, (ii) to
purchase, sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment of
such Debt or to assure the holder of such Debt against loss in respect of such
Debt, (iii) to supply funds to or in any other manner invest in the debtor
(including any agreement to pay for property or services irrespective of whether
such property is received or such services are rendered) or (iv) otherwise to
assure a creditor against loss in respect of such Debt, and (j) all Debt
referred to in clauses (a) through (h) above secured by (or for which the holder
of such Debt has an existing right, contingent or otherwise, to be secured by) a
Lien upon or in property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Debt.

“Default” means any event or circumstance which, upon satisfaction of any
requirement for the giving of notice or the lapse of time, or the happening of
any further condition, event, or act, would constitute an Event of Default.

“Default Rate” means, as of any date, a rate per annum that is equal to (a) in
the case of each Loan outstanding on such date, 2.00% in excess of the rate
otherwise applicable to such Loan on such date and (b) in the case of any other
Obligations outstanding on such date, 2.00% in excess of the Base Rate in effect
on such date.

“Default Ratio” means, on any date of determination, the ratio (expressed as a
percentage) computed as of the most recent Calculation Date by dividing (a) the
sum (without double counting) of (i) the Unpaid Balance of Receivables that
became Defaulted Receivables during the Calculation Period ending on such
Calculation Date, plus (ii) the Unpaid Balance of Receivables that became
Charge-Offs (but not including any Receivable which was, at the time it became a
Charge-Off, a Defaulted Receivable) during the Calculation Period ending on such
Calculation Date by (b) Sales for the Calculation Period ending 3 months prior
to such Calculation Date.

“Defaulted Receivable” means, as of any time of determination, any Receivable
(a) which, in accordance with the Credit and Collection Policy, would be written
off Borrower’s books as uncollectible or the Servicer has charged-off or deemed
uncollectible or (b) as to which, as of such date of determination, any payment,
or part thereof, remains unpaid for 61 days or more past the original due date
for such payment (provided, however, that, until either Administrative Agent or
Borrower provides to the other 30 days’ prior written notice to the contrary, no
“Sales and Service aging” Receivable (as opposed to a “Retail aging” Receivable)
shall constitute a Defaulted Receivable under this clause (b) unless such
Receivable remains unpaid for 91 days or more past the original due date for
such payment).

“Defaulting Lender” means any Lender which has defaulted in any of its
obligations to Administrative Agent, any other Lender or Borrower hereunder, if
and so long as such default is continuing without express waiver or permitted
cure.

“Delinquency Ratio” means, on any date of determination, the ratio (expressed as
a percentage) computed as of the most recent Calculation Date, by dividing
(a) the Unpaid Balance of Receivables that are Delinquent Receivables as of such
Calculation Date by (b) an amount equal to the Net Receivable Balance as of such
Calculation Date.

 

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“Delinquent Receivable” means, on any date of determination, any Receivable
(other than a Defaulted Receivable) as to which, as of such time, any payment or
part thereof remains unpaid for 31 days or more past the original due date for
such payment.

“Deposit Account Control Agreement” means each agreement executed and delivered
by Borrower, Administrative Agent, and a Lock Box Bank or other depository
institution with respect to one or more Lock Box Accounts or other Deposit
Accounts, pursuant to which Borrower grants Control of such Lock Box Accounts or
other Deposit Accounts to Administrative Agent, as the same may be amended,
restated, supplemented, or otherwise modified from time to time as provided
therein.

“Dilution Horizon Ratio” means, on any date of determination, the ratio
(expressed as a percentage) computed as of the most recent Calculation Date by
dividing (a) an amount equal to (i) Sales for the Calculation Period ending on
such Calculation Date plus (ii) an amount equal to 50% (or such other percent as
Administrative Agent may choose in its commercially reasonable discretion) of
Sales for the immediately preceding Calculation Period, by (b) an amount equal
to the Net Receivable Balance as of such Calculation Date.

“Dilution Ratio” means, on any date of determination, the ratio (expressed as a
percentage) computed as of the most recent Calculation Date by dividing
(a) Dilutions (other than Contractual Dilutions) for the Calculation Period
ending on such Calculation Date by (b) Sales for the Calculation Period ending
one Calculation Period prior to such Calculation Date.

“Dilution Reserve” means, on any date of determination, the product (expressed
as a percentage) computed as of the most recent Calculation Date, of

(a) the sum of

(i) the product of (x) the Stress Factor times (y) the Expected Dilution Ratio
plus

(ii) the product of (x) the positive difference, if any, between (1) the
Dilution Spike Rate less (2) the Expected Dilution Ratio times (y) a ratio
computed by dividing (1) the Dilution Spike Rate by (2) the Expected Dilution
Ratio; times

(b) the Dilution Horizon Ratio.

“Dilution Spike Rate” means, on any date of determination, the highest Dilution
Ratio over the 12 Calculation Periods ending on the most recent Calculation
Date.

“Dilutions” means returns, allowances, net credits, and any other non-cash
deductions or reductions to the Sales during such period (other than Contractual
Dilutions).

“Eligible Financial Institution” in reference to assignments and participations
made or sold pursuant to Section 12.6, means (i) any existing Lender, (ii) any
Affiliate of an existing Lender, and (iii) any other commercial bank or other
financial institution not described in clauses (i) or (ii) above, which is
domiciled in the United States and has total assets in excess of $5,000,000,000
(or a United States Affiliate thereof); provided that, in the case of clause
(iii) only, Administrative Agent and, unless an Event of Default then exists,
Borrower, each shall have consented to such Person becoming an “Eligible
Financial Institution”; provided, further, that Borrower’s consent, when
required, shall not be unreasonably withheld, delayed or conditioned.
Notwithstanding the foregoing, solely for purposes of Section 12.6(b); (i.e.,
sale of participations) “Eligible Financial Institution” shall include any
commercial bank or other financial institution which, in the ordinary course of
business of a Lender, acts as a conduit for the reallocation by such Lender of
interest rate risks associated with the making and carrying of LIR Loans, and
neither Administrative Agent’s consent nor Borrower’s consent shall be required
relative thereto.

 

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“Eligible Receivable” means each Receivable:

(a)         which was created by Originator in its ordinary course of business;
is not owing in respect of any installment sales contract or similar
arrangement;

(b)         which was documented in compliance with the applicable Originator’s
standard administration and documentation policies and procedures and which
satisfies all applicable requirements of the Credit and Collection Policy;

(c)         which is not a Defaulted Receivable; which is not a Receivable that
has been re-aged or converted or subject to, or constitutes, any debit memo or
similar advice;

(d)         which is denominated and payable in U.S. dollars and is only payable
in the United States of America;

(e)         the Obligor of which is a resident of the United States of America;

(f)         the Obligor of which is not an officer, director, or Affiliate of
Borrower, Servicer, Originator, or Parent;

(g)         the Obligor of which is not (i) a Governmental Authority (provided,
however, that, until the date which is 2 Business Days after Borrower’s receipt
of written notice from Administrative Agent to the contrary, up to 2.50% of the
aggregate amount of Eligible Receivables may be derived from Eligible
Receivables which would otherwise be deemed ineligible solely on account of this
clause (g)(i)) or (ii) a Sanctioned Person;

(h)         which requires repayment in full of the Unpaid Balance thereof
within 60 days of the date of the creation thereof (it being understood that net
60 days terms are eligible) (except that up to 5% of the aggregate Unpaid
Balance of all Receivables may have terms payable within 61-90 days of the
original billing date, to the extent such Receivables otherwise constitute
Eligible Receivables hereunder);

(i)         which is not owing from an Obligor as to which more than 35% of the
aggregate Unpaid Balance of all Receivables owing from such Obligor are
Defaulted Receivables;

(j)         which was not a Delinquent Receivable on the date on which it was
acquired by Borrower from the applicable Originator;

(k)         as to which, at the time of the sale of such Receivable to Borrower,
the applicable Originator was the sole owner thereof and had good and marketable
title thereto, and which was sold to Borrower pursuant to the Receivables Sale
Agreement free and clear of all Adverse Claims other than Permitted
Encumbrances;

(l)         the assignment of which by the applicable Originator to Borrower
pursuant to the Receivables Sale Agreement does not in any material manner
contravene or conflict with any law, rule or regulation or any contractual or
other restriction, limitation or encumbrance, and the sale or assignment of
which does not require the consent of the Obligor thereof;

(m)         that is in full force and effect and constitutes the legally valid
and binding payment obligation of the Obligor with respect thereto, enforceable
against such Obligor in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
creditors’ rights generally and general principles of equity;

(n)         [Intentionally Omitted];

(o)         as to which each of Borrower’s and Administrative Agent’s first
priority (subject to Permitted Encumbrances) security interest in such
Receivable has been perfected under the applicable UCC and other applicable
laws;

(p)         as to which Servicer is in possession of the related Records;

 

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(q)         which constitutes an “account” or a “payment intangible” under and
as defined in Article 9 of the UCC of all applicable jurisdictions;

(r)         which is not subject to any dispute, right of rescission, set-off,
customer deposit, counterclaim or any other defense (including defenses arising
out of violations of usury laws) of the applicable Obligor against the
applicable Originator or any other Adverse Claim other than Permitted
Encumbrances, and the Obligor thereon holds no right as against Originator to
cause Originator to repurchase the goods the sale of which shall have given rise
to such Receivable (except with respect to sale discounts effected pursuant to
the Contract, or goods returned in accordance with the terms of the Contract);
provided, however, that (i) if such dispute, offset, counterclaim or defense
affects only a portion of the Unpaid Balance of such Receivable, then such
Receivable may be deemed an Eligible Receivable to the extent of the portion of
such Unpaid Balance which is not so affected and (ii) no portion of any
Receivable which is otherwise an Eligible Receivable will be excluded on account
of any dispute, offset, counterclaim, or defense to the extent any such dispute,
offset, counterclaim, or defense is already taken into account in the
calculation of the Contractual Dilution Reserve;

(s)         the applicable Originator has satisfied and fully performed all
obligations on its part with respect to such Receivable required to be fulfilled
by it, and no further action is required to be performed by any Person with
respect thereto other than payment thereon by the applicable Obligor (excluding
product and service warranty obligations in favor of Obligors under which no
claims exist);

(t)         arises under a Contract which does not contain a confidentiality
provision that purports to restrict the ability of Administrative Agent or any
Lender to exercise its respective rights under this Agreement, including,
without limitation, its right to review the Contract related thereto;

(u)         which arises under a Contract that contains an obligation to pay a
specified sum of money;

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

(w)         as to which each of the representations and warranties contained in
Sections 5.7, 5.18, 5.19, 5.21, 5.24, and 5.25 is true and correct; and

(x)         as to which the Obligor thereon has not suffered and is not the
subject of an Event of Bankruptcy.

For purposes of clarification only, no Receivable shall constitute an Eligible
Receivable unless it satisfies each of the foregoing criteria.

“Equity Interest” means, with respect to any Person, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interest in (however designated) equity of such Person,
including, without limitation, any common stock, preferred stock, limited or
general partnership interests, and limited liability company membership
interests, whether voting or non-voting.

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

“Event of Bankruptcy” shall be deemed to have occurred with respect to a Person
if either:

(a)         a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the liquidation,
reorganization, debt arrangement, dissolution, winding up, or composition or
readjustment of debts of such Person, the appointment of a trustee, receiver,
custodian, liquidator, assignee, sequestrator or the like for such Person or all
or substantially all of its assets, or any similar action with respect to such
Person under any law relating to bankruptcy, insolvency, reorganization, winding
up or composition or adjustment of debts and such case or proceeding shall
continue undismissed, or unstayed and in effect, for a period of 60 consecutive
days; or an order for relief in respect of such Person shall be entered in an
involuntary case under the federal bankruptcy laws or other similar laws now or
hereafter in effect; or

 

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(b)         such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law now or hereafter in effect, or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) for such Person or
for any substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall fail to, or admit in writing its
inability to, pay its debts generally as they become due, or, if a corporation
or similar entity, its board of directors shall vote to implement any of the
foregoing.

“Event of Default” has the meaning given such term in Section 9.1.

“Excess Concentration Amount” means, on any date of determination, with respect
to any Obligor and its Affiliates considered as if they were one and the same
Obligor, the aggregate Unpaid Balance of all Eligible Receivables of such
Obligor at such time which is in excess of the Concentration Limit applicable to
such Obligor.

“Excluded Taxes” means, in the case of any Indemnified Party, Taxes imposed on
its overall net income, and franchise taxes and branch profit taxes based on net
income imposed on it, and Taxes imposed by a Governmental Authority as a result
of a connection or former connection between an Indemnified Party and the
jurisdiction imposing such tax, including without limitation, any connection
arising from such Indemnified Party being a citizen, domiciliary, or resident of
such jurisdiction, being organized in such jurisdiction, or having a permanent
establishment or fixed place of business therein, but excluding any such
connection arising solely from this Agreement or the Loan Documents.

“Expected Dilution Ratio” means, on any date of determination, the rolling
twelve-month average Dilution Ratio for the 12 Calculation Periods ending on the
most recent Calculation Date.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal, for each day during such period, to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations at approximately 10:00
a.m. (Birmingham, Alabama, time) for such day on such transactions received by
Administrative Agent from 3 federal funds brokers of recognized standing
selected by it in its discretion.

“Fee Letter” means that certain letter agreement regarding Fees, dated as of the
Closing Date, and executed and delivered by Borrower and Administrative Agent,
as the same may be amended, restated, supplemented, or otherwise modified from
time to time by agreement of Borrower and Administrative Agent.

“Fees” means the Unused Fee and all other fees payable from time to time by
Borrower to Administrative Agent or the Lenders under this Agreement or the
other Loan Documents, including, without limitation, all fees payable to
Administrative Agent in accordance with the Fee Letter.

“Finance Charges” means, with respect to any Contract, any finance, interest,
late payment charges or similar charges owing by an Obligor pursuant to such
Contract.

“Fiscal Month,” “Fiscal Quarter,” and “Fiscal Year” means, with respect to any
Person, each of such Person’s fiscal months, quarters, or years, as applicable.

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

“Governmental Authority” means any nation or government, any federal, state,
local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative authority or
functions of or pertaining to government including any authority or other
quasi-governmental entity established to perform any of such functions.

 

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“Indemnified Amount” means any amounts arising for any reason which any Credit
Party is required to pay to any Indemnified Party pursuant to this Agreement.

“Indemnified Party” has the meaning set forth in Section 12.3(b).

“Independent Director” has the meaning given such term in Section 6.6(b).

“Item” means any “item” as defined in Section 4-104 of the UCC, and shall also
mean and include checks, drafts, money orders or other media of payment.

“Landlord Waiver” means each landlord waiver in form and substance satisfactory
to Administrative Agent pursuant to which, among other things, the landlord of
any premises at which any Collateral is located has agreed to subordinate its
interests (if any) in and to such Collateral to Administrative Agent’s interest
therein and granted Administrative Agent access to such premises for purposes of
assembling, copying, examining, repossessing or otherwise dealing with the
Collateral located on such premises, as the same may be amended, restated,
supplemented, or otherwise modified from time to time.

“Lending Office” means, as to each Lender, its office located at its address set
forth on the signature pages hereof (or identified on the signature page of an
Assignment and Acceptance as its “Lending Office”) or such other office as such
Lender may hereafter designate as its “Lending Office” by notice to Borrower and
Administrative Agent.

“LIBOR” means a rate per annum equal to the rate offered by prime banks in the
London interbank eurodollar market for deposits in U.S. dollars in an amount
comparable to the Loan for which such rate is being determined and for a period
equal to the interest period applicable thereto, all as determined by
Administrative Agent with reference to the financial information reporting
service used by Administrative Agent at the time of such determination. Each
calculation by Administrative Agent of LIBOR shall be conclusive and binding for
all purposes, absent manifest error.

“LIBOR Index Rate” means, for any LIR Loan and on any date of determination, a
per annum rate equal to LIBOR determined with respect to an interest period of
one month. The LIBOR Index Rate shall be determined by Administrative Agent on
the first Business Day of each calendar month and such rate as so determined by
Administrative Agent shall be the LIBOR Index Rate for such day and each day
thereafter, through but not including the first Business Day of the following
calendar month. Upon Borrower’s request from time to time, Administrative Agent
shall inform Borrower and each Lender of the LIBOR Index Rate for the applicable
calendar month. The initial LIBOR Index Rate is set forth in Section 2.3(g).

“LIBOR Reserve Requirements” means the maximum reserves (whether basic,
supplemental, marginal, emergency, or otherwise) prescribed from time to time by
the Board of Governors of the Federal Reserve System (or any successor) with
respect to liabilities or assets consisting of or including “Eurocurrency
liabilities” (as defined in Regulation D of the Board of Governors of the
Federal Reserve System).

“Lien” means any lien (statutory or otherwise), mortgage, deed of trust, deed to
secure debt, pledge, hypothecation, security interest, trust arrangement,
security deed, financing lease, collateral assignment, encumbrance, conditional
sale or title retention agreement, or any other interest in property designed to
secure the repayment or performance of any obligation, whether arising by
agreement or under any statute or law or otherwise.

“LIR Loan” means a Loan, or portion thereof, during any period in which it bears
interest at a rate based on the LIBOR Index Rate.

 

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“Loan Documents” means this Agreement, the Receivables Sale Agreement, the
Performance Undertaking, each Deposit Account Control Agreement, and each other
now existing or hereafter arising document, agreement, or instrument evidencing,
describing, guaranteeing, or securing the Obligations or delivered in connection
with this Agreement and the Receivables Sale Agreement, including, without
limitation, each Security Agreement, Note, Landlord Waiver, Third Party
Agreement, Collateral Disclosure Certificate, Notice of Borrowing, Receivables
Report, and UCC financing statement, as the same may be amended, restated,
supplemented, or otherwise modified from time to time.

“Loans” means the Revolving Loans.

“Lock Box” means a locked postal box maintained on behalf of Borrower or
Servicer for the purpose of receiving Items constituting Collections of the
Receivables.

“Lock Box Account” means any of those Deposit Accounts described on Schedule
5.12 hereto and any additional or replacement Deposit Account to which Mail
Payments are deposited for clearing regardless of whether the same is associated
with a Lock Box.

“Lock Box Bank” means, at any time of determination, any of the banks at which
one or more Lock Box Accounts is maintained.

“Loss Horizon Ratio” means, on any date of determination, the ratio (expressed
as a percentage) computed as of the most recent Calculation Date by dividing:

(a)         the aggregate Sales generated by the Originators during the last 3.5
Fiscal Months ending on such date (or such other period as Administrative Agent
shall determine); by

(b)         an amount equal to the Net Receivable Balance as of such Calculation
Date.

“Loss Reserve” means, on any date of determination but subject to the following
paragraph, the lesser of:

(a)         the product (expressed as a percentage) of (i) the highest rolling
3-month average Default Ratio over the 12 most recent Calculation Periods, times
(ii) the Loss Horizon Ratio as of such Calculation Date, times (iii) the Stress
Factor; and

(b)         an amount (expressed as a percentage) equal to (i) the aggregate
Unpaid Balance of all Receivables which remain unpaid 61 days or more after
their original due date, divided by (ii) the aggregate Unpaid Balance of all
Receivables.

Any of the foregoing of this definition to the contrary notwithstanding, the
Loss Reserve shall be determined solely by reference to clause (a) at all times
after either Administrative Agent or Borrower shall have given the other 30
days’ prior written notice to such effect.

“Mail Payments” has the meaning set forth in Section 8.2(c).

“Master Account” means a Deposit Account established and maintained by Borrower
at Bank of America, N. A., on or after the Closing Date, which Borrower will
utilize, if and when such Deposit Account is established, to accept the deposit
of collected balances swept from its other Lock Box Accounts maintained at Bank
of America, N.A.

“Material Adverse Effect” means any material adverse effect upon (a) the
validity, performance, or enforceability of any of the Loan Documents or any of
the transactions contemplated hereby or thereby; (b) the properties, business,
or condition (financial or otherwise) of (i) Borrower, (ii) Parent and its
Subsidiaries as a whole or (iii) at any time when ASP is not Servicer, Servicer;
(c) the ability of any Credit Party to fulfill any obligation under any of the
Loan Documents; (d) the existence, validity, perfection, or priority of
(i) Administrative Agent’s (for the benefit of the Secured Parties) security
interest in the Collateral or any significant portion thereof or (ii) Borrower’s
ownership interest in a significant portion of the Receivables; or (e) the
validity, enforceability or collectibility of any significant portion of the
Receivables.

 

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“Material Agreement” means an agreement to which any Credit Party or Performance
Guarantor is a party (other than the Loan Documents) and (a) which would, as to
such Credit Party or Performance Guarantor, constitute a material contract in
accordance with Regulation S-K promulgated by the Securities and Exchange
Commission under the Securities Act of 1933 or (b) for which breach,
termination, cancellation, nonperformance, or failure to renew could reasonably
be expected to have a Material Adverse Effect.

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

“Net Receivable Balance” means, on any date of determination, (a) the aggregate
Unpaid Balance of all Eligible Receivables, minus (b) the Excess Concentration
Amount for all Obligors, minus (c) the Contractual Dilution Reserve.

“Note” shall mean the Revolving Notes and any other promissory note now or
hereafter evidencing any Obligations, as the same may be amended, restated,
supplemented, or otherwise modified from time to time.

“Notice of Borrowing” means each written request for a Revolving Loan
substantially in the form of Exhibit B, attached hereto and made a part hereof.

“Obligations” means all obligations and covenants now or hereafter from time to
time owed to Administrative Agent or any Lender or any Affiliate of
Administrative Agent or any Lender by or on behalf of Borrower, related to the
Loans, this Agreement, the Loan Documents, or the transactions contemplated
herein or therein, including, without limitation or duplication, (a) the Loans
and (b) all other amounts now owed or hereafter from time to time owed under the
terms of this Agreement and the other Loan Documents, or arising out of the
transactions described herein or therein, including, without limitation,
principal, interest, commissions, fees (including, without limitation,
reasonable attorneys’ fees), charges, costs, expenses, and all amounts due or
from time to time becoming due under the indemnification and reimbursement
provisions of this Agreement and the other Loan Documents (including, without
limitation, Section 12.3), together, in each of the foregoing cases in this
definition, with all interest accruing thereon, including any interest on
pre-petition Debt accruing after bankruptcy (whether or not allowable in such
bankruptcy), and whether any of the foregoing amounts are now due or from time
to time hereafter become due, are direct or indirect, or are certain or
contingent, and whether such amounts due are from time to time reduced or
entirely extinguished and thereafter re-incurred.

“Obligor” means, with respect to any Receivable, each Person obligated to make
payments with respect to such Receivable, including any guarantor thereof.

“OFAC” means the United States Department of the Treasury’s Office of Foreign
Assets Control or any successor thereto.

“Organizational Documents” means, for any Person, the documents for its
formation and organization, which, for example, (a) for a corporation, are its
corporate charter and bylaws, (b) for a partnership, are its certificate of
partnership (if applicable) and partnership agreement, (c) for a limited
liability company, are its certificate of formation or organization and its
operating agreement, regulations or the like and (d) for a trust, is the trust
agreement, declaration of trust, indenture or bylaws under which it is created.

“Originator” means ASP.

“Parent” means Zep Inc., a Delaware corporation, together with its successors
and assigns.

“Participant” has the meaning set forth in Section 12.6(b).

“Participant Register” has the meaning set forth in Section 12.6(g).

“Performance Guarantor” means Parent.

 

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“Performance Undertaking” means that certain Performance Undertaking dated as of
the Closing Date and substantially in the form of Exhibit L, attached hereto and
made a part hereof, as the same may be amended, restated, supplemented, or
otherwise modified from time to time.

“Permitted Encumbrances” means (a) Liens for taxes or assessments or other
governmental charges not yet due and payable or being contested in good faith;
(b) Liens created by the Loan Documents; and (c) any Liens whose existence is
revealed by the Supplemental Lien Searches.

“Permitted Investment” means, at any time:

(i) marketable obligations issued by, or the full and timely payment of which is
directly and fully guaranteed or insured by, the United States government or any
other government with an equivalent rating, or any agency or instrumentality
thereof when such marketable obligations are backed by the full faith and credit
of the United States government or such other equivalently rated government, as
the case may be, but excluding any securities which are derivatives of such
obligations;

(ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the acquisition thereof, a commercial paper rating of
at least “A-1” from S&P or at least “P-1” from Moody’s; and

(iii) time deposits, bankers’ acceptances and certificates of deposit of any
domestic commercial bank or any United States branch or agency of a foreign
commercial bank which (A) has capital, surplus and undivided profits in excess
of $100,000,000 and which has a commercial paper or certificate of deposit
rating meeting the requirements specified in clause (iv) below (or equivalent
rating from S&P and Moody’s) or (B) is set forth in a list (which may be updated
from time to time) approved by Administrative Agent.

“Person” means any natural person, corporation, unincorporated organization,
trust, joint-stock company, joint venture, association, company, limited or
general partnership, limited liability company, any government or any agency or
political subdivision of any government, or any other entity or organization.

“Prime Rate” means that rate announced by Administrative Agent from time to time
as its prime rate and is one of several interest rate bases used by
Administrative Agent. Administrative Agent lends at rates both above and below
its prime rate, and Borrower acknowledges that Administrative Agent’s prime rate
is not represented or intended to be the lowest or most favorable rate of
interest offered by Administrative Agent.

“Purchase Price Credit” has the meaning set forth in the Receivables Sale
Agreement.

“Purchase Report” has the meaning set forth in the Receivables Sale Agreement.

“Receivable” means each “Receivable” under and as defined in the Receivables
Sale Agreement in which Borrower now has or hereafter acquires any right, title
or interest.

“Receivables Report” means a report in form and substance reasonably
satisfactory to Administrative Agent from to time, which shall be prepared by
Servicer as of each Receivables Reporting Date and shall be signed by a
Responsible Officer of Servicer.

“Receivables Reporting Date” means:

(a)         at all times when the Settlement Date occurs on a monthly basis, the
last day of the Fiscal Month ending immediately before each Settlement Date;

(b)         at all times when the Settlement Date occurs on a weekly basis, the
last day of the calendar week ending immediately before each Settlement Date;
and

 

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(c)         at all times when the Settlement Date occurs on a daily basis, the
day immediately preceding each Settlement Date.

“Receivables Sale Agreement” means that certain Second Amended and Restated
Receivables Sale Agreement, dated as of October 14, 2009, by and among
Originator, as “Seller,” and Borrower, as “Buyer,” as such agreement may be
further amended, supplemented, restated, or otherwise modified from time to time
to the extent permitted herein.

“Receivables Sale Documents” means the Receivables Sale Agreement, the
Subordinated Note, and all other documents, instruments, and agreements executed
and/or delivered in connection therewith, together with all exhibits, schedules,
annexes, and attachments thereto, and all amendments, restatements, supplements,
and other modifications thereto.

“Records” means with respect to a Receivable, (i) the Contract giving rise to
the Receivable and other evidences of the Receivable, including, without
limitation, tapes, discs, punch cards and related property and rights and
(ii) each UCC financing statement related thereto, if any.

“Register” has the meaning set forth in Section 12.6(g).

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.

“Related Security” has the meaning given such term in the Receivables Sale
Agreement.

“Reporting Period” means each of (a) the period beginning on (and including) the
Closing Date and ending on (and including) the first Receivables Reporting Date
thereafter, and (b) each period thereafter beginning on (and including) the day
after each Receivables Reporting Date and ending on (and including) the earlier
to occur of the succeeding Receivables Reporting Date or the Termination Date.

“Required Capital Amount” means $15,000,000.

“Required Lenders” means, at any time, the Lender or Lenders having, in the
aggregate, more than 50% of the aggregate amount of the Commitments or, if the
Commitments are no longer in effect, the Lender or Lenders holding more than 50%
of the aggregate outstanding principal amount of the Loans; provided, however,
that such calculation shall be made without including any Commitment of, or any
principal amount of the Revolving Note held by, any Defaulting Lender.

“Reserve Floor” means, for any Calculation Period, the sum (expressed as a
percentage) of (a) 20% (or such other percentage as may be mutually agreed upon
in writing between Administrative Agent and Borrower) and (b) the product of
(i) the Expected Dilution Ratio times (ii) the Dilution Horizon Ratio, in each
case, as of the immediately preceding Calculation Date.

“Reserve Percentage” means the greater of (a) the Reserve Floor and (b) a
percentage equal to the sum of (i) the Loss Reserve, (ii) the Dilution Reserve,
(iii) the Yield Reserve, and (iv) the Servicing Reserve.

“Reserves” means such amounts as may be required by Administrative Agent at any
time and from time to time in Administrative Agent’s reasonable credit judgment;
provided, however, that Reserves shall never be (a) less than $0.00 or
(b) greater than the amount, if any, by which (i) the Borrowing Base calculated
only with regard to clauses (a)(i) and (ii) of the definition thereof but
otherwise in accordance with the terms of this Agreement as in effect on the
date of calculation exceeds (ii) the Borrowing Base calculated only with regard
to clauses (a)(i) and (ii) of the definition thereof and otherwise on the
presumptions that (x) both of the notices of the types described in the proviso
to clause (b) of the definition of “Defaulted Receivable” and in the last
paragraph of the definition of “Loss Reserve” shall have been given and (y) the
30-day notice periods related to such provisions shall have elapsed; provided,
further, that (x) Reserves established as a result of litigation shall not
exceed $5,000,000 and (y) Administrative Agent shall not establish any Reserves
with respect to litigation unless Administrative Agent shall have a reasonable
basis for believing that one or more judgments totaling more than $1,000,000 in
the aggregate are likely to be entered against Borrower in respect of actual,
pending, or threatened litigation involving Borrower.

 

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“Responsible Officer” means, with respect to any Person, its president, chief
executive officer, corporate controller, treasurer, vice president of finance or
chief financial officer.

“Revolving Loan” means a loan made by Lenders pursuant to Section 2.1.

“Revolving Loan Commitment” means the aggregate commitment of Lenders, subject
to the terms and conditions herein, to make Revolving Loans in accordance with
the provisions of Section 2, in an aggregate amount not to exceed $40,000,000 at
any one time.

“Revolving Note” has the meaning set forth in Section 2.2.

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

“Sales” means, for any applicable period, the aggregate amount of all trade
receivables generated by Originator during such period with credit terms of any
kind.

“Sanctioned Country” means a country subject to the sanctions program identified
on the list maintained by OFAC and available at the following website or as
otherwise published from time to time:
http://www.treas.gov/offices/enforcement/ofac/programs/.

“Sanctioned Person” means (a) any Person named on the list of Specially
Designated Nationals or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/eotffc/ofac/sdn/index.html or as otherwise
published from time to time, (b) any agency, authority, or subdivision of the
government of a Sanctioned Country, (c) any Person or organization controlled by
a Sanctioned Country, or (d) any Person resident in a Sanctioned Country, to the
extent subject to a sanctions program administered by OFAC.

“Secured Parties” means each Lender, Administrative Agent, and each Indemnified
Party and the successors and assigns of each of the foregoing.

“Security Agreement” means this Agreement as it relates to a security interest
in the Collateral, and any other mortgage instrument, deed of trust, pledge
agreement, life insurance assignment, security agreement, or similar agreement
or instrument now or hereafter executed by any Credit Party or other Person
granting Lender a Lien in any property to secure the Obligations.

“Servicer Event of Default” has the meaning set forth in Section 8.7.

“Servicing Fee” means, for each day in a Calculation Period, an amount equal to
(a) the Servicing Fee Rate, times (b) the aggregate Unpaid Balance of all
Receivables at the close of business on the Calculation Date for the immediately
preceding Calculation Period, times (c) 1/360.

“Servicing Fee Rate” means (a) at all times when Originator is Servicer,
1.00% per annum (or such other percentage as Administrative Agent and Borrower
may from time to time agree upon in writing based upon then prevailing market
conditions) and (b) at all other times, a percentage per annum determined by
mutual agreement of Borrower and Administrative Agent and based on the
prevailing market rate; provided, however, if Borrower and Administrative Agent
are unable to agree upon such percentage under this clause (b) within 2 Business
Days after Administrative Agent proposes a percentage to Borrower in writing,
then the Servicing Fee Rate will be the percentage determined by Administrative
Agent in its commercially reasonable discretion and based on the prevailing
market rate.

 

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“Servicing Reserve” means, on any date of determination, an amount (expressed as
a percentage) equal to (a) the highest Days Sales Unpaid Ratio during the 12
Calculation Periods ending on the most recent Calculation Date, times (b) the
Stress Factor, times (c) the Servicing Fee Rate, times (d) 1/360.

“Settlement Date” means (a) the 20th day of each calendar month beginning on the
20th day of the calendar month following the Closing Date and (b) such other day
or day of the month as Administrative Agent may require from time to time upon
written notice to Borrower and Servicer (including, without limitation, on each
Business Day); provided, however, (i) if any such day is not a Business Day, the
applicable Settlement Date shall be the immediately following Business Day and
(ii) Administrative Agent may not require that Settlement Dates occur more
frequently than on a monthly basis unless (A) a Default or Event of Default then
exists or (B) the aggregate principal balance of the Loans exceeds 80% of the
lesser of (1) the Borrowing Base and (2) the Revolving Loan Commitment;
provided, further, that, if Administrative Agent, in accordance with this
definition, requires Settlement Dates to occur on a more frequent basis than
monthly, then such increased frequency shall continue until such time as
Administrative Agent shall direct otherwise.

“Solvent” means, with respect to any Person, that as of the date of
determination both (a)(i) the then fair saleable value of the property of such
Person is (A) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (B) not less than the amount that will be
required to pay the probable liabilities on such Person’s then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person’s
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, nor does it reasonably believe that it will incur, debts beyond its
ability to pay such debts as they become due and (b) such Person is “solvent”
within the meaning given that term and similar terms under applicable laws
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

“Stress Factor” means 2.0.

“Subordinated Note” means that certain promissory note dated as of the Closing
Date and made by Borrower to the order of Originator substantially in the form
of Exhibit VII to the Receivables Sale Agreement, as the same may be amended,
restated, supplemented, or otherwise modified from time to time.

“Subsidiary” means, as to any Person, any other Person of which more than 50% of
the Equity Interests issued by such other Person are directly or indirectly
owned or effectively controlled by such Person.

“Supplemental Lien Searches” has the meaning given such term in Section 4.3(a).

“Taxes” means any tax, imposts, levies, duties, deductions, or withholdings of
any nature now or at anytime hereafter imposed by any Governmental Authority or
by any taxing authority thereof or therein.

“Telephone Instruction Letter” means a telephone instruction letter
substantially in the form of Exhibit G, attached hereto and made a part hereof.

“Term” means the period from and including the Closing Date to but not including
the Termination Date.

“Termination Date” means the earliest to occur of (a) September 30, 2012;
(b) the date on which Borrower terminates this Agreement and the entire
Revolving Loan Commitment pursuant to Section 2.11; and (c) the date on which
Administrative Agent terminates the Revolving Loan Commitment pursuant to
Section 9.2 hereof.

“Third Party” means (a) any lessor, mortgagee, mechanic or repairman, warehouse
operator, processor, packager, or other third party which may have possession of
any Collateral or lienholders’ enforcement rights against any Collateral or
(b) any licensor whose rights in or with respect to any intellectual property or
Collateral limit or restrict or may, in Administrative Agent’s determination,
limit or restrict Borrower’s or Administrative Agent’s right to sell or
otherwise dispose of such Collateral.

 

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“Third Party Agreement” means (i) an agreement in form and substance
satisfactory to Administrative Agent pursuant to which a Third Party, as
applicable and as required by Administrative Agent, waives or subordinates in
favor of Administrative Agent such Third Party’s lienholders’ enforcement rights
against any Collateral, grants Administrative Agent access to the Collateral for
purposes of allowing Administrative Agent to exercise its rights hereunder and
under the other Loan Documents, or authorizes Administrative Agent to dispose of
Collateral bearing or consisting of, in whole or in part, such Third Party’s
intellectual property and (ii) any Landlord Waiver.

“Transferee” has the meaning set forth in Section 12.6(d).

“Type” means, with respect to a Loan, whether such Loan is a Base Rate Loan or a
LIR Loan.

“UCC” means the Uniform Commercial Code (or any successor statute), as adopted
and in force in the applicable jurisdiction or, when the laws of any other state
govern the method or manner of the perfection or enforcement of any Lien in any
of the Collateral, the Uniform Commercial Code (or any successor statute) of
such other state.

“UCC Filing” has the meaning set forth in Section 5.10.

“Unpaid Balance” means, with respect to any Receivable and at any time of
determination, an amount equal to (a) the then outstanding principal balance
thereof, plus (without duplication), and (b) the aggregate amount required to
pay in full all interest, finance, prepayment, and other fees or charges of any
kind payable in respect of such Unpaid Balance as of such time.

“Unused Fee” has the meaning given such term in Section 2.9(a).

“U.S.” means the United States of America.

“USA Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act
of 2001, as the same may be amended, restated, supplemented, or otherwise
modified from time to time.

“Yield Reserve” means, on any date of determination, an amount (expressed as a
percentage) equal to (a) the highest Days Sales Outstanding Ratio during the 12
Calculation Periods ending on the most recent Calculation Date times (b) the
Stress Factor times (c) the Prime Rate as in effect on such Calculation Date
divided by (d) 360.

1.3         Financial Terms. All financial terms used herein shall have the
meanings assigned to them under GAAP unless another meaning shall be specified.

 

 

2.

THE CREDIT FACILITY.

2.1         Revolving Loan Commitment. Subject to the terms and conditions of
this Agreement, each Lender severally agrees to make Revolving Loans to Borrower
from time to time during the Term for the purposes set forth in Section 6.5.
Lenders shall have no obligation to make a Revolving Loan (a) if doing so would,
after giving effect thereto, cause a Borrowing Base Deficit to exist or cause
the aggregate outstanding principal amount of all Revolving Loans made by such
Lender to exceed such Lender’s Commitment or (b) during the existence of any
Default or Event of Default, if Administrative Agent refuses to permit or accept
a request for a Revolving Loan in accordance with Section 9.2. Within the
foregoing limits and subject to the terms and conditions of this Agreement,
Borrower may borrow, repay, and reborrow the principal amount of the Revolving
Loans at any time during the Term.

 

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2.2         The Note. On the Closing Date, Borrower shall execute and deliver to
Administrative Agent a promissory note in the form of Exhibit A, attached hereto
and made a part hereof (the “Revolving Note”), which Revolving Note, together
with Administrative Agent’s records, shall evidence all of the Revolving Loans
and interest accruing thereon.

2.3         Interest.

(a)         Types of Loans. Subject to the terms and conditions of this
Agreement, the Revolving Loans may be Base Rate Loans or LIR Loans. Unless
otherwise required by Section 2.3(f), all Loans shall be made and maintained as
LIR Loans.

(b)         Agreement to Pay Interest. Borrower agrees to pay interest on the
unpaid principal amount of each Loan from the respective date each such Loan is
made until such Loan is paid in full (whether at stated maturity, upon
acceleration, or otherwise) at the rates of interest and at the times set forth
in this Agreement. Notwithstanding anything herein to the contrary, interest
shall continue to accrue on the principal amount of each Loan which remains
unpaid after the Termination Date.

(c)         Interest Rate. All Loans shall bear interest at a rate equal to
(a) with respect to Base Rate Loans, the Base Rate plus the Applicable Margin
and (b) with respect to LIR Loans, LIBOR Index Rate plus the Applicable Margin.
All interest on any Loan and on all other Obligations shall be calculated on the
presumed basis of a year of 360 days, for the actual number of days elapsed,
plus, in any case, the Default Rate when and as applicable.

(d)         Adjustment of Interest Rate. The rate of interest on any Base Rate
Loan shall be adjusted daily to reflect any change in the Base Rate. Subject to
Section 2.3(f), the rate of interest on any LIR Loan shall be adjusted as
provided in the definition of “LIBOR Index Rate.”

(e)         Default Rate. At Administrative Agent’s option, during the existence
of any Event of Default, the principal amount of all Obligations shall bear
interest at the Default Rate. In any event, the Default Rate shall automatically
and without notice to any Person apply from the time Administrative Agent
accelerates or is deemed to have accelerated any or all of the Obligations
pursuant to Section 9.2 until such Obligations are, or any judgment thereon is,
paid in full.

(f)         Automatic Conversion to Base Rate. Any provision of this Agreement
to the contrary notwithstanding and without limiting the provisions of
Section 11, if Administrative Agent should at any time determine (or, in the
case of clause (iii) below, be notified that any Lender has determined) that
(i) it is not reasonably possible to determine LIBOR or the LIBOR Index Rate,
(ii) that LIBOR or the LIBOR Index Rate is no longer available, (iii) it is no
longer lawful for one or more Lenders to make Loans at any rate based on LIBOR
or the LIBOR Index Rate, or (iv) a Default or Event of Default exists and
Administrative Agent shall so elect, then, in each case, (A) all affected LIR
Loans shall automatically and without notice be converted into Base Rate Loans
and (B) all obligations of the Lenders to make LIR Loans shall cease until such
time as Administrative Agent shall have determined (or, in the case of clause
(iii) above, be notified that any Lender has determined) that it is able to
determine LIBOR or the LIBOR Index Rate, as applicable, such illegality shall be
reversed, or such Event of Default shall have been waived or cured, as
applicable.

(g)         Opening LIBOR Index Rate. The LIBOR Index Rate on the date hereof is
0.25% per annum and, therefore, the rate of interest in effect hereunder on the
date hereof, expressed in simple interest terms (but on a 360-day basis), is
2.50% per annum with respect to any portion of the Revolving Loans bearing
interest as a LIR Loan.

2.4         Requests for Borrowings; Conversions.

(a)         Making Requests for New Loans. Each request for the making of a
Revolving Loan may be made telephonically; provided, however, that
Administrative Agent, in its sole discretion, may from time to time or at all
times require each such request to be in writing. If Administrative Agent
requires Borrower to make a

 

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request for a Revolving Loan in writing, Borrower shall submit a Notice of
Borrowing therefor. Each request (whether telephonic or in writing) shall
specify (i) the date for the making of the applicable Loan, which date must be a
Business Day; (ii) the principal amount of the applicable Loan to be made;
(iii) lawful instructions for the disbursement of the proceeds of such Loan; and
(iv) such other information as Administrative Agent may reasonably require from
time to time.

(b)         Timing and Acceptance of Requests. Requests made under this
Section 2.4 (whether telephonic or in writing) are irrevocable. Requests under
this Section 2.4 which Administrative Agent receives after 12:00 p.m. (Atlanta,
Georgia, time) shall be deemed to have been received on the next Business Day.
Lenders shall make all Revolving Loans hereunder in immediately available funds
on the same Business Day on which Administrative Agent receives or is deemed to
have received the request therefor or, if Borrower has requested the Loan be
made on a later date, the Business Day requested by Borrower in a written Notice
of Borrowing relating to such Loan.

2.5         Excess Outstandings. Any provision of this Agreement to the contrary
notwithstanding, Administrative Agent may, in its sole and absolute discretion,
make or permit to remain outstanding Revolving Loans which are causing or would
cause a Borrowing Base Deficit to exist, and all such excess amounts shall
(a) be part of the Obligations evidenced by the Revolving Note, (b) bear
interest as provided herein, (c) be payable ON DEMAND, (d) be secured by the
Collateral, and (e) be entitled to all rights and security as provided under the
Loan Documents.

2.6         Repayment of Loans and Obligations.

(a)         Repayment of Obligations Generally. Borrower shall pay all
outstanding principal amounts and accrued interest under the Note in accordance
with the terms of the Note and this Agreement.

(b)         Payments in Respect of Revolving Loans.

(i)         All outstanding principal of the Revolving Loans shall be due and
payable on the Termination Date. Before the Termination Date, Borrower:

(A)         may, from time to time on any Business Day, make a prepayment, in
whole or in part, of the outstanding principal amount of any Loans;

(B)         shall, immediately upon any acceleration of any Loans pursuant to
Section 9.2(c), repay all Loans; and

(C)         shall, immediately upon discovering that a Borrowing Base Deficit
exists or that the outstanding aggregate principal amount of all Loans exceeds
the Revolving Loan Commitment, pay the amount of such excess to Administrative
Agent on behalf of Lenders.

Each such prepayment shall be subject to the payment of any amounts required by
Section 11.

(ii)         Borrower shall pay all accrued and unpaid interest hereunder, in
arrears, on (x) the Termination Date and (y) each of the following Settlement
Dates, in each case for the period commencing on and including the most recent
Settlement Date (or, in the case of the first Settlement Date to occur
hereunder, the Closing Date) on which interest was paid, to but not including
such Settlement Date:

(A)         at all times when the Settlement Date occurs on a monthly basis, on
each Settlement Date;

(B)         at all times when the Settlement Date occurs on a weekly basis, on
the third Settlement Date occurring in each calendar month; and

 

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(C)         at all times when the Settlement Date occurs on a daily basis, on
the first Settlement Date occurring on or after the 20th day of each calendar
month.

2.7         Additional Payment Provisions.

(a)         Payment of Other Obligations. Borrower shall pay Administrative
Agent on behalf of Lenders the balance of the Obligations under the Loan
Documents requiring the payment of money on the terms set forth in the Loan
Documents, or, if no date of payment is otherwise specified in the Loan
Documents, (i) if no Default or Event of Default is then in existence, within
seven Business Days after Administrative Agent informs or notifies Borrower
thereof and (ii) if a Default or Event of Default is in existence, ON DEMAND.
This Section 2.7(a) shall apply to all Obligations, including, without
limitation, all amounts required to be paid or reimbursed by a Credit Party
under Section 12.3.

(b)         Authorization to Debit. (i) Subject to clause (iii), each Lender
may, without the consent of Borrower, debit any Deposit Account or other account
over which such Lender has Control and apply such amounts to the payment of
Obligations which are then due and payable (and such Lender shall promptly
notify Administrative Agent of any such debits and applications). (ii) Subject
to clause (iii), Administrative Agent may, without the consent of Borrower,
debit the Agent’s Account and apply such amounts to the payment of Obligations
which are then due and payable. (iii) Administrative Agent or the applicable
Lender will provide notice to Borrower before it debits any of Borrower’s
Deposit Accounts or other accounts over which it has Control, unless an Event of
Default is in existence or Administrative Agent has delivered an Activation
Notice with respect to the applicable Deposit Account being debited, in which
cases no such notice shall be required.

(c)         Time and Location of Payment. Borrower shall make each payment of
principal of and interest and other Obligations which are due and payable not
later than 2:00 p.m. (Atlanta, Georgia, time) on the date due, without set-off,
counterclaim, or other deduction, in immediately available funds to Lender at
its address referred to in Section 12.4 or such other address or account as
Administrative Agent may direct from time to time. If any payment of any
Obligations shall be due on a day which is not a Business Day, such payment
shall be due and payable the next Business Day, and interest shall accrue during
such time.

(d)         Tax Forms. Each Lender agrees to complete and deliver to Borrower a
duly completed and executed copy of Internal Revenue Service Form W-9 or
successor form that indicates that such Lender is a United States Person for
U.S. federal income tax purposes and is not subject to backup withholding and
information reporting requirements on or prior to becoming a Lender under this
Agreement. Notwithstanding the foregoing provisions, and without limiting any
terms of Section 12.6, unless an Event of Default then exists, no Lender shall
sell any participation in its interests herein, or make any assignment of its
interests herein, to any Transferee not organized under the laws of the United
States or any State thereof unless, prior to any such sale or assignment
becoming effective, the affected Transferee shall have filed all appropriate
forms and taken other appropriate action to obtain a certificate or other
appropriate document from the appropriate Governmental Authority in the
jurisdiction imposing the relevant Taxes, establishing that it is entitled to
receive payments of principal and interest under this Agreement and the Note
without deduction and free from withholding of any Taxes imposed by such
jurisdiction, and shall have provided to Borrower an Internal Revenue Service
Form W-8ECI or any successor thereto or other Internal Revenue Service form
entitling it to an exemption from United States withholding tax on all payments
to be made to such non-U.S. Lender by Borrower.

2.8         Application of Collections.

(a)         All Collections shall be distributed by Servicer or Administrative
Agent, as applicable, at such times and in the order of priority set forth in
this Section 2.8.

 

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(b)         Before the Termination Date, Servicer shall, on each Settlement
Date, distribute from Collections (if any) received during the Reporting Period
to which such Settlement Date relates the following amounts, without duplication
and in the following order of priority:

first, to Servicer, for the payment of the accrued Servicing Fee payable for the
most recently ended Calculation Period, to the extent then due and payable,
plus, if applicable, the amount of Servicing Fee payable for any prior
Calculation Period to the extent such amount has not been distributed to
Servicer;

second, to Administrative Agent for the account of the Lenders, for the payment
of all accrued and unpaid interest on the Loans, to the extent due and owing
under this Agreement;

third, to Administrative Agent for its own account and for the account the
Lenders, for the payment of all accrued and unpaid Fees, to the extent due and
owing under any Loan Document;

fourth, to Administrative Agent, for the payment or reimbursement of
Administrative Agent’s actual costs incurred under or in connection with this
Agreement, to the extent due and owing under any Loan Document;

fifth, to Administrative Agent for the account of the Lenders, for the payment
of principal of the Loans, in an amount equal to the Borrowing Base Deficit, if
any;

sixth, to Administrative Agent for its own account and for the account of the
applicable Secured Parties, for the payment of all other Obligations to the
Secured Parties, to the extent then due and owing under any Loan Document; and

seventh, to Borrower for its own account or otherwise in accordance with
Borrower’s lawful instructions.

(c)         Without limiting recourse to Borrower for the Obligations under
Section 2.6(a), on the Termination Date and on each day thereafter, Servicer
shall set aside and hold in trust for the Secured Parties, all Collections
received by Servicer on such day. On and after the Termination Date, Servicer
shall, on each Settlement Date and each other Business Day specified by
Administrative Agent from time to time, remit all Collections received by
Servicer (after deducting therefrom all accrued and unpaid Servicing Fee which
is then due and payable) to Administrative Agent in accordance with
Administrative Agent’s written instructions delivered to Servicer from time to
time and, on each such date, Administrative Agent shall apply all of such
Collections, together with all other Collections received by Administrative
Agent, as follows:

first, to Administrative Agent, for the payment or reimbursement of
Administrative Agent’s actual costs incurred under or in connection with this
Agreement;

second, to Administrative Agent for the account of the Lenders, for the payment
of all accrued and unpaid interest on the Loans;

third, to Administrative Agent for its own account and for the account the
Lenders, for the payment of all accrued and unpaid Fees;

fourth, to Administrative Agent for the account of the Lenders, for the payment
of principal of the Loans;

fifth, to Administrative Agent for its own account and for the account of the
applicable Secured Parties, for the payment of all other Obligations to the
Secured Parties; and

sixth, to Borrower for its own account or otherwise in accordance with
Borrower’s lawful instructions.

(d)         Each payment of principal of the Loans shall be applied to such
Loans as Borrower shall direct or, in the absence of such notice or during the
existence of an Event of Default, as Administrative Agent shall

 

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determine in its sole discretion. After the Termination Date has occurred, and
after all Obligations have been indefeasibly reduced to zero, all Collections
shall be paid to Borrower or otherwise in accordance with Borrower’s
instructions. All Collections to be applied to the payment of Obligations owing
to the Lenders shall, in the orders of priority provided above, be allocated
among the Lenders by Administrative Agent in accordance with their Commitment
Percentages.

2.9         Fees.

(a)         Borrower shall pay to the Administrative Agent for the account of
the Lenders in accordance with their respective Commitment Percentages a fee
(the “Unused Fee”) for each day commencing with, and including, the Closing Date
and ending on, and including, the Termination Date, equal to (A) 0.35%, divided
by (B) 360, times (C) the amount by which the Revolving Loan Commitment exceeded
the aggregate outstanding principal amount of Loans on such day. Borrower shall
pay the Unused Fee, in arrears, on each date on which interest is or would
otherwise be due and payable hereunder.

(b)         Borrower shall pay to Administrative Agent for its own account the
Fees set forth in the Fee Letter.

(c)         Unless otherwise expressly provided, all fees payable hereunder or
with respect to any Obligations shall be calculated on the presumed basis of a
year of 360 days, for the actual number of days elapsed. All Fees, once paid,
shall be deemed fully earned upon their becoming due and payable and, once paid,
shall be non-refundable, in whole or in part.

2.10         Statement of Account. If Administrative Agent provides Borrower
with a statement of account on a periodic basis, each such statement will be
presumptive evidence of the matters set forth therein unless, within 45 days of
its receipt, Borrower objects in writing and with specificity to such statement.

2.11         Termination. Borrower may terminate this Agreement and the
Commitments before the Termination Date, in whole or in part, by giving
Administrative Agent 30 days prior written notice; provided, however, (a) no
complete termination of the Commitments by Borrower shall be effective until all
Obligations have been fully and finally paid and performed; (b) no partial
termination of the Commitments shall be effective if, after giving effect
thereto, the Revolving Loan Commitment would be less than $20,000,000; and
(c) no partial termination of the Commitments shall be effective if, after
giving effect thereto, a Borrowing Base Deficit would exist or the aggregate
outstanding principal balance of all Loans would exceed the Revolving Loan
Commitment. Any notice of termination (whether total or partial) shall be
irrevocable once delivered to the Administrative Agent. Administrative Agent may
terminate this Agreement and the Revolving Loan Commitment on the terms set
forth in Section 9.2. Any reduction of the Commitments shall applied to each
Lender’s Commitment in accordance with such Lender’s Commitment Percentage.

2.12         USA Patriot Act Notice. To help fight the funding of terrorism and
money laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each Person who opens an
account. For purposes of this section, account shall be understood to include
loan accounts.

 

 

3.

SECURITY AGREEMENT.

3.1         Security Interest.

(a)         As security for the full and final payment and performance of the
Obligations, Borrower hereby grants to Administrative Agent (on behalf of the
Secured Parties) a continuing security interest in and to all right, title, and
interest of Borrower in and to the Collateral, whether now owned or hereafter
acquired by Borrower.

(b)         Administrative Agent’s sole duty with respect to the custody,
safekeeping, and physical preservation of the Collateral shall be to exercise
reasonable care and it shall have no further obligation to (i) exercise any
degree of care in connection with any Collateral in its possession or (ii) take
any steps necessary to preserve any rights in the Collateral or to preserve any
rights in the Collateral against senior or prior parties (which

 

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steps Borrower agrees to take). In any case, Administrative Agent shall be
deemed to have exercised reasonable care of the Collateral if Administrative
Agent takes such steps for the care and preservation of the Collateral or rights
therein as it does with similar property for its own account; provided that
Administrative Agent’s omission to take any action not requested by Borrower
shall not be deemed a failure to exercise reasonable care. Administrative
Agent’s segregation or specific allocation of specified items of Collateral
against any of Borrower’s liabilities shall not waive or affect any Lien against
other items of Collateral or any of Administrative Agent’s options, powers, or
rights under this Agreement or otherwise arising.

(c)         Notwithstanding anything herein to the contrary, no Instrument or
other obligation or property of any kind due from, owed by, or belonging to, a
Sanctioned Person shall be Collateral or shall be credited toward the payment of
the Obligations.

3.2         Financing Statements; Power of Attorney. Borrower authorizes
Administrative Agent to file any financing statements (and other similar filings
or public records or notices relating to the perfection of Liens), and
amendments thereto relating to the Collateral which Administrative Agent deems
appropriate, in form and substance required by Administrative Agent, and to
(a) describe the Collateral thereon in a manner consistent with the Liens
granted to the Administrative Agent under the Loan Documents and (b) include
therein all other information which is required by Article 9 of the UCC or other
applicable law with respect to the preparation or filing of a financing
statement (or other similar filings or public records or notices relating to the
perfection of Liens) or amendment. Borrower appoints Administrative Agent as its
attorney-in-fact to perform all acts which Administrative Agent deems
appropriate to perfect and to continue perfection of the Lien granted to
Administrative Agent under any Security Agreement, including, without
limitation, (i) the filing of financing statements (and other similar filings or
public records or notices relating to the perfection of Liens) and amendments,
(ii) the execution in Borrower’s name of any agreements which Administrative
Agent determines are reasonably necessary to create Control in favor
Administrative Agent over, or perfection of Administrative Agent’s security
interest in, any applicable Collateral, and (iii) during the existence of an
Event of Default or at any time after an Activation Notice has been delivered by
Administrative Agent, the indorsement, presentation, and collection on behalf of
Borrower and in Borrower’s name of any Items or other documents necessary or
desirable to collect any amounts which Borrower may be owed, such power of
attorney being coupled with an interest and is therefore irrevocable. Borrower
grants Administrative Agent a license or other right to use, without charge,
Borrower’s labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks and advertising matter, and any Property of a
similar nature, as it pertains to the Collateral, in advertising for sale and
selling any Collateral, and Borrower’s rights under all licenses and all
franchise agreements shall inure to Administrative Agent’s benefit. Borrower
shall be liable for any and all expense incurred in connection with
Administrative Agent’s exercising its rights under this Section 3.2.

3.3         Entry. Borrower irrevocably consents to any lawful act by
Administrative Agent or its agents in entering upon any premises for the
purposes of either, in accordance with the Loan Documents, (a) inspecting any
Collateral or (b) taking possession of any Collateral. Borrower waives, as to
Administrative Agent and its agents, any now existing or hereafter arising claim
based upon trespass or any similar cause of action for entering upon any
premises where Collateral may be located.

3.4         Other Rights. Without limiting any Credit Party’s or Performance
Guarantor’s obligations under the Loan Documents, Borrower authorizes
Administrative Agent from time to time (a) to (i) take from any party and hold
additional Collateral for the payment of the Obligations or any part thereof,
(ii) exchange or release such Collateral or any part thereof, and (iii) release
or substitute any indorser or any party who has granted Administrative Agent any
security interest in any property as security for the payment of the Obligations
or any part thereof or any party in any way obligated to pay the Obligations or
any part thereof, and (b) during the existence of any Event of Default, to
direct the manner of the disposition of the Collateral and the enforcement of
any indorsements, guaranties, letters of credit, or other security or Supporting
Obligations relating to the Obligations or any part thereof as Administrative
Agent in its sole discretion may determine.

3.5         Accounts. After the occurrence and during the continuance of any
Event of Default, Administrative Agent may contact any Obligor or Account Debtor
(a) to direct such Obligor or Account Debtor to make payments (and to verify
that such Obligor is making payments) on Borrower’s Accounts to a Lock Box
Account or the Collections Account (as applicable) or as otherwise directed by
Administrative Agent in accordance with Section 8.2(c)(ii) and (b) to notify
such Obligor of the existence of Administrative Agent’s Liens under the Security
Agreements.

 

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3.6         Waiver of Marshaling. Borrower hereby waives any right it may have
to require marshaling of its assets.

3.7         Control; Further Assurances. Borrower will, at its expense,
cooperate with Administrative Agent in (a) obtaining Control of, or Control
agreements with respect to, Collateral for which Control or a Control agreement
is required for perfection of Administrative Agent’s security interest under the
UCC and (b) perfecting Administrative Agent’s Lien in the Collateral.

 

 

4.

CONDITIONS PRECEDENT TO OCCURRENCE OF THE CLOSING DATE.

4.1         Conditions Precedent to Occurrence of Closing Date. The Closing Date
shall not be deemed to have occurred unless and until the following conditions
precedent shall have been satisfied, in the sole opinion of Administrative Agent
and its counsel:

(a)         Loan Documents. Borrower, Servicer, Parent, and each other party to
any Loan Document, as applicable, shall have executed and delivered this
Agreement, the Note, and the other required Loan Documents (including, without
limitation, the Receivables Sale Agreement), all in form and substance
satisfactory to Administrative Agent.

(b)         Supporting Documents and Other Conditions. Borrower and Servicer
shall cause to be delivered to Administrative Agent the following documents
(each of which must be in form and substance satisfactory to Administrative
Agent) and shall satisfy the following conditions:

(i)         (A) A copy of the Organizational Documents of Borrower, Parent, and
Originator; (B) good standing certificates of Borrower, Parent, and Originator,
certified by the appropriate official of their respective states of
incorporation; and (C) good standing certificates of Borrower and Originator,
certified by the appropriate official of each of the state in which such Person
has a physical location;

(ii)         Incumbency certificates and certified resolutions of the board of
directors (or other appropriate governing body) of Borrower, Servicer, Parent,
and Originator, signed by the secretary or another Responsible Officer of such
Person, authorizing the execution, delivery, and performance of the Loan
Documents;

(iii)         The legal opinion of each Credit Party’s and Performance
Guarantor’s legal counsel addressed to Administrative Agent regarding
(A) organization, existence and good standing, corporate authority, necessary
approvals, execution and delivery, enforceability, attachment and perfection of
security interests and purchase rights, no conflicts with Material Agreements,
laws, orders, decrees, and judgments, or Organizational Documents, Investment
Company Act, Regulations T, U, and X, and such other matters as Administrative
Agent and its counsel may reasonably request and (B) true-sale and substantive
non-consolidation matters;

(iv)         An opening Receivables Report and Borrowing Base Certificate, dated
as of the Closing Date;

(v)         A full and complete copy of the Credit and Collections Policy as
existing on the Closing Date;

(vi)         UCC-1 searches and other Lien searches (other than the Supplemental
Lien Searches) showing no existing security interests in or Liens on the
Collateral (other than Permitted Encumbrances acceptable to Administrative
Agent);

(vii)         A Collateral Disclosure Certificate duly completed by each of
Borrower and the Originator;

 

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(viii)        A fully executed Landlord Waiver respecting each location at which
any Records owned by Borrower or in which Borrower has an interest are
maintained, to the extent required by Administrative Agent;

(ix)         UCC financing statements (and other similar filings or public
records or notices relating to the perfection of Liens) to perfect
(A) Borrower’s security interest / rights as purchaser in and to the
Receivables, all Related Security, and all Collections and (B) Administrative
Agent’s security interest in the Collateral (for itself and for the benefit of
the Secured Parties) shall, in each case, have been recorded or filed in the
manner and places required by law to establish, preserve, protect, and perfect
the interests and rights created or intended to be created by the Receivables
Sale Agreement and the Security Agreements and all taxes, fees, and other
charges in connection with the execution, delivery, and filing of the Security
Agreements and the financing statements (and any other similar filings or public
records or notices relating to the perfection of Liens) shall have been paid;

(x)         Certified copies of all documents evidencing any necessary consents
and governmental approvals (if any) with respect to the Loan Documents;

(xi)         Copies of the Receivables Sale Documents, each of which shall have
been executed and delivered by all parties thereto, as applicable, and each of
which shall be certified as to accuracy and completeness by a Responsible
Officer of Borrower;

(xii)         All conditions precedent to the effectiveness of the Receivables
Sale Documents shall have been satisfied or waived in accordance with the terms
thereof (other than any condition precedent which is satisfied solely by the
effectiveness of this Agreement);

(xiii)         A Deposit Account Control Agreement, duly executed by all of the
parties thereto, with respect to each Lock Box Account;

(xiv)         All collateral and field inspections required by Administrative
Agent shall have been completed to Administrative Agent’s satisfaction;

(xv)         Satisfactory evidence of payment of all fees due and reimbursement
of all costs incurred by Administrative Agent and Lenders, and evidence of
payment to other parties of all fees or costs, which, in each case, Borrower is
required under the Loan Documents to pay by the date of the initial Loan;

(xvi)         Administrative Agent shall have received evidence satisfactory to
it that the account names on each of the Lock Box Accounts and all other Deposit
Accounts established or maintained by Borrower are in the name of Borrower only
and do not reflect any “d/b/a”;

(xvii)         Administrative Agent shall have received Borrower’s financial
statements for the Borrower, Servicer, and Parent’s Fiscal Quarter ending on or
about May 31, 2009, and such other financial reports and information concerning
such Persons as Administrative Agent shall reasonably request;

(xviii)         Lender shall have received a fully executed Telephone
Instruction Letter; and

(xix)         Borrower shall have delivered, or caused Wachovia Bank, National
Association, to have delivered, to Administrative Agent an authenticated record
(in form and substance satisfactory to Administrative Agent) from Wachovia Bank,
National Association, authorizing Administrative Agent or its designees to file
UCC-3 amendments to terminate the effectiveness of all financing statements and
amendments thereto in which, on the one hand, Borrower or ASP (whether as
Originator or Servicer) is shown as debtor or seller (or similar appellation)
and, on the other hand, Wachovia Bank, National Association is shown as secured
party or purchaser (or similar appellation).

4.2         Conditions Precedent to Each Loan. In addition to any other
requirements set forth in this Agreement, no Lender shall be required to fund
its portion of any Loan unless and until the Closing Date shall have

 

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occurred and each of the following conditions shall have been satisfied, in
Administrative Agent’s sole opinion (with it being agreed that each request for
a Loan (whether or not a written Notice of Borrowing is required) shall be
deemed to be a representation that all such conditions have been satisfied):

(a)         Notice of Borrowing. If required by this Agreement or by
Administrative Agent, Borrower shall have delivered to Administrative Agent a
Notice of Borrowing and such other information as required to be delivered in
connection therewith;

(b)         No Default. No Default, Event of Default or Servicer Event of
Default shall have occurred and be continuing or would result from the making or
issuance of the requested Loan;

(c)         Correctness of Representations. All representations and warranties
made to Administrative Agent and/or Lenders by any Credit Party in any Loan
Document to which it is a party or otherwise in writing by such Person shall be
true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of date of the requested
Loan except to the extent that they expressly relate to an earlier date;

(d)         Limitations Not Exceeded. No Borrowing Base Deficit exists and the
making or issuance of any requested Revolving Loan would not cause a Borrowing
Base Deficit to exist;

(e)         Termination Date. The Termination Date shall not have occurred;

(f)         Field Examination. Administrative Agent shall have received and
found satisfactory the results of a field examination (conducted at Borrower’s
expense and of the type and nature described in Section 6.10); provided,
however, that this condition precedent shall be applicable only if, at the time
such Loan is requested, the then-most-recent field examination is more than six
months old; and

(g)         Accounts. Each of the Lock Box Accounts shall be subject to a valid
and perfected first priority security interest in favor of Administrative Agent
for the benefit of the Secured Parties.

4.3     Special Condition Precedent to Initial Loans.

(a)         Borrower acknowledges and agrees that Administrative Agent shall at
Borrower’s expense conduct Lien searches (collectively, the “Supplemental Lien
Searches”) with respect to Acuity Specialty Products Group, Inc., a Delaware
corporation, Acuity Brands, Inc., and Old ABI, Inc., a Delaware corporation, in:

(i)         the states of incorporation for each of such entities and the
counties in which the chief executive office of each such entity is located; and

(ii)         if the results of the Lien searches described in the foregoing
clause (i) indicate or evidence the existence of any Lien which, as determined
by Administrative Agent in its reasonable discretion, attaches to any
Collateral, such other jurisdictions and filing offices as Administrative Agent
may reasonably require.

(b)         In addition to any other requirements set forth in this Agreement,
no Lender shall be required to fund its portion of the initial Loan to be made
hereunder unless and until Administrative Agent shall be satisfied that the
results of the Supplemental Lien Searches do not indicate or evidence the
existence of any Lien which, as determined by Administrative Agent in its
reasonable discretion, attaches to any Collateral or, if such results do so
indicate or evidence the existence of any Lien attaching to any Collateral, then
Administrative Agent shall have received such evidence as it shall reasonably
require that any such Lien either does not, in fact, exist or has been released.

(c)         Borrower agrees to provide from time to time all information
concerning the Supplemental Lien Searches as Administrative Agent may reasonably
request and represents and warrants that all of such information shall be true
and correct in all material respects.

 

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5.

REPRESENTATIONS AND WARRANTIES.

To induce Administrative Agent and Lenders to enter into this Agreement and to
induce Lenders to make the Loans or extend credit as provided for herein, each
of Borrower and Servicer makes the following representations and warranties as
to itself, all of which shall survive the execution and delivery of the Loan
Documents. Unless otherwise specified, such representations and warranties shall
be deemed made as of the date hereof, as of the date of each request for a Loan
or extension of credit hereunder, and as of each Settlement Date.

5.1         Existence and Power. Parent is a corporation duly organized under
the laws of the State of Delaware. Borrower is a corporation duly organized
under the laws of the State of Delaware. ASP is a corporation duly organized
under the laws of the State of Georgia. Each of Servicer, Borrower, and Parent
is validly existing and in good standing under the laws of its state of
organization and is duly qualified to do business and is in good standing as a
foreign corporation, and has and holds all power and all governmental licenses,
authorizations, consents, and approvals required to carry on its business in
each jurisdiction in which its business is conducted except where the failure to
so qualify or so hold could not reasonably be expected to have a Material
Adverse Effect.

5.2         Power and Authority; Due Authorization, Execution and Delivery. The
execution and delivery by each of Servicer and Borrower of this Agreement and of
Servicer, Borrower, and Parent of each other Loan Document to which it is a
party, and the performance of its obligations hereunder and thereunder, and
Borrower’s use of the proceeds of the Loans made hereunder, are within its
powers and authority and have been duly authorized by all necessary corporate
action on its part. This Agreement and each other Loan Document to which
Servicer, Borrower, or Parent is a party has been duly executed and delivered by
Servicer, Borrower, or Parent, as the case may be.

5.3         No Conflict. The execution and delivery by each of Borrower,
Servicer, Originator, or Performance Guarantor of the Loan Documents to which it
is a party, and the performance of its respective obligations hereunder and
thereunder, as applicable, do not contravene or violate (a) its Organizational
Documents, (b) any law, rule or regulation applicable to it, (c) any
restrictions under any agreement, contract or instrument to which it is a party
or by which it or any of its property is bound, or (d) any order, writ,
judgment, award, injunction or decree binding on or affecting it or its
property, and do not result in the creation or imposition of any Adverse Claim
on its assets (except Permitted Encumbrances) except, in any case, where such
contravention or violation could not reasonably be expected to have a Material
Adverse Effect. No transaction contemplated hereby requires compliance with any
bulk sales act or similar law in any applicable jurisdiction.

5.4         Governmental Authorization. Other than the filing of the financing
statements required hereunder, no authorization or approval or other action by,
and no notice to or filing with, any Governmental Authority or regulatory body
is required for the due execution and delivery by Servicer, Borrower, or Parent
of the Loan Documents to which it is a party and the performance of its
obligations hereunder and thereunder, as applicable.

5.5         Actions, Suits. There is no litigation, arbitration, governmental
investigation, proceeding, or inquiry pending or, to the knowledge of any of
their officers, threatened against or affecting Borrower, Servicer, Parent, or
any of their respective Subsidiaries which could reasonably be expected to have
a Material Adverse Effect or which seeks to prevent, enjoin or delay the making
or repayment of any Loans. Other than any liability incident to any litigation,
arbitration or proceeding which could not reasonably be expected to have a
Material Adverse Effect, none of Borrower, Servicer, Parent, nor any of their
respective Subsidiaries has any material contingent obligations not provided for
or disclosed in the footnotes to Parent’s financial statements delivered to
Administrative Agent prior to the Closing Date.

5.6         Binding Effect. This Agreement and each other Loan Document to which
Servicer or Borrower is a party constitutes the legal, valid, and binding
obligations of such Person, enforceable against it in accordance with their
respective terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws relating to or
limiting creditors’ rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).

 

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5.7         Accuracy of Information. All information furnished by Parent,
Originator, Servicer, or Borrower for purposes of or in connection with this
Agreement, any of the other Loan Documents or any transaction contemplated
hereby or thereby was true and accurate in every material respect on the date
such information was stated or certified and did not contain any material
misstatement of fact or omit to state a material fact or any fact necessary to
make the statements contained therein, taken as a whole, together with all other
information so furnished, not misleading.

5.8         Margin Regulations; Use of Proceeds. Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Loans, directly or indirectly, will be used for a
purpose that violates, or would be inconsistent with, Regulations T, U, and X
promulgated by the Federal Reserve Board from time to time. No portion of the
proceeds of any Loan hereunder will be used for a purpose that violates any
other law, rule, or regulation applicable to Borrower.

5.9         Good Title. Upon the occurrence of the Closing Date, Borrower
(a) will be the legal and beneficial owner of all Receivables and the other
Collateral and (b) will be the legal and beneficial owner of the Related
Security or possesses a valid and perfected security interest therein, in each
case, free and clear of any Adverse Claim, except Permitted Encumbrances. There
have been duly filed all financing statements or other similar instruments or
documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect Borrower’s ownership interest in each such Receivable,
its Collections and the Related Security. Borrower owns no property other than
the property described in clauses (a) through (f) of the definition of
“Collateral,” such other property as is described on Schedule 5.9, attached
hereto and made a part hereof, and such other property having a fair market
value of $100,000 or less.

5.10         Perfection. This Agreement will be effective to create a valid
security interest in the Collateral in favor of Administrative Agent, for the
benefit of the Secured Parties, upon Borrower’s acquiring any rights in the
Collateral. Upon filing of all financing statements or other similar instruments
or documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions (each such filing, a “UCC Filing”), Administrative Agent shall
have a first priority, perfected security interest, subject to any Permitted
Encumbrances, for the benefit of the Secured Parties, in the Collateral in which
a security interest may be perfected by a UCC Filing.

5.11         Places of Business and Locations of Records. Borrower maintains
Records related to all Receivables in excess of $200,000 at the addresses
referred to on Schedule 5.11 to this Agreement (or at such other locations,
notified in writing to Administrative Agent in jurisdictions where all action
required to perfect or maintain the perfection of Administrative Agent’s
security interest in the Collateral has been taken and for which Borrower has
performed its obligations under Section 6.16(b)). Borrower’s Delaware
organizational identification number is accurately set forth in its Collateral
Disclosure Certificate.

5.12         Accounts. Schedule 5.12, attached hereto and made a part hereof, is
a complete and accurate listing, as of the Closing Date, of each Lock Box, Lock
Box Account, and each other Deposit Account owned by Borrower. Each Lock Box
Account has been established and maintained in Borrower’s name. Neither Servicer
nor Borrower has granted any interest in any Lock Box, any Lock Box Account, or
other Deposit Account to any Person other than Administrative Agent (and except
to the extent expressly provided in any applicable Deposit Account Control
Agreement). Administrative Agent has exclusive control of each Lock Box Account
and (upon establishing the Master Account (if any) and amending an existing
Deposit Account Control Agreement to cover such Master Account) the Master
Account, except for Borrower’s rights in and to each such Lock Box Account and
the Master Account existing before the implementation of an Activation Notice
regarding such Lock Box Account or Master Account.

5.13         No Material Adverse Effect. Since the Fiscal Quarter ending on or
about May 31, 2009, no event has occurred that could reasonably be expected to
have a Material Adverse Effect.

5.14         Names. The name in which Borrower has executed this Agreement is
identical to the name of Borrower as indicated on the public record of the State
of Delaware. Borrower has not used any legal name or assumed name other than the
name in which it has executed this Agreement, except for any change in its legal
name permitted under Section 7.3.

5.15         Ownership of Borrower; No Subsidiaries. All of the issued and
outstanding equity interests of Borrower are owned beneficially and of record by
ASP, free and clear of any Adverse Claim other than Permitted Encumbrances. Such
equity interests are validly issued, fully paid, and nonassessable, and there
are no options, warrants, or other rights to acquire securities of Borrower.
Borrower has no Subsidiaries.

 

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5.16         Not an Investment Company. None of Borrower nor any of its
Affiliates is an “investment company” within the meaning of the Investment
Company Act of 1940, as amended, or any successor statute.

5.17         Solvency. Both before and after giving effect to each Loan,
Borrower is Solvent.

5.18         Eligible Receivables. Each Receivable identified in a Borrowing
Base Certificate or a Receivables Report as an “Eligible Receivable” was an
Eligible Receivable on the date of such Borrowing Base Certificate or
Receivables Report.

5.19         Sales by Originators. Each sale of Receivables by Originator to
Borrower shall have been effected under, and in accordance with the terms of,
the Receivables Sale Agreement, including payments by Borrower to Originator of
an amount equal to the purchase price therefor in the manner described in the
Receivables Sale Agreement and each such sale shall have been made for
“reasonably equivalent value” (as such term is used under § 548 of the United
States Bankruptcy Code) and not for or on account of “antecedent debt” (as such
term is used under § 547 of the United States Bankruptcy Code) owed by Borrower
to Originator. No liabilities have been transferred by Originator to Borrower
(including, without limitation, any unclaimed credit balances or liabilities
with respect to any escheat or similar laws).

5.20         Disclosure. Borrower has disclosed to Administrative Agent and
Lenders all agreements, instruments, and corporate or other restrictions to
which Borrower is subject, and all other matters known to Borrower or Servicer,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect.

5.21         Sanctioned Persons; Sanctioned Countries. None of Parent nor any of
its Subsidiaries (a) is a Sanctioned Person or (b) does business in a Sanctioned
Country or with a Sanctioned Person in violation of the economic sanctions of
the United States administered by OFAC. Borrower will not use the proceeds of
any extension of credit hereunder to fund any operation in, finance any
investments or activities in, or make any payments to, a Sanctioned Person or a
Sanctioned Country.

5.22         Instruments. To Borrower’s knowledge, each of Borrower’s
Instruments which constitutes Collateral and evidences an obligation greater
than $25,000 is (unless Borrower has otherwise notified Administrative Agent
thereof) (a) genuine and enforceable in accordance with its terms except for
such limits thereon arising from bankruptcy and similar laws relating to
creditors’ rights; (b) not subject to any defense, set-off, claim, or
counterclaim of a material nature; (c) not subject to any other circumstances
that would impair the validity, enforceability or amount of such Collateral
except; (d) free of all Liens other than Permitted Encumbrances.

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

5.24         Compliance with Credit and Collection Policy. Borrower and Servicer
have complied in all material respects with the Credit and Collection Policy
with regard to each Receivable and the related Contract, and neither Borrower
nor Servicer has made any change to such Credit and Collection Policy, except to
the extent permitted by Section 6.4(a).

5.25         Accounting. The manner in which Borrower accounts for the
transactions contemplated by the Receivables Sale Agreement does not jeopardize
the characterization of the transactions contemplated therein as being true
sales.

 

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5.26         Borrowing Limitations. After giving effect to each Loan and at the
time of settlement on each Settlement Date (and after giving effect to each Loan
made on such Settlement Date), the aggregate outstanding principal balance of
the Loans is less than or equal to the Borrowing Base and is less than or equal
to the Revolving Loan Commitment.

 

 

6.

AFFIRMATIVE COVENANTS OF BORROWER AND SERVICER.

Each of Borrower and Servicer (as applicable) covenants and agrees as to itself
that from the date hereof until the full and final payment in cash and
performance of the Obligations and the termination of this Agreement:

6.1         Compliance with Laws, Etc. Each of Borrower and Servicer will comply
with all applicable laws, rules, regulations, and orders of all governmental
authorities (including those which relate to the Receivables), except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect.

6.2         Preservation of Legal Existence. Each of Borrower and Servicer will
preserve and maintain its existence rights, franchises, and privileges in the
jurisdiction of its organization, and qualify and remain qualified in good
standing as a foreign entity in the jurisdictions where the failure to preserve
and maintain such existence, rights, franchises, privileges and qualifications
would have a Material Adverse Effect.

6.3         Performance and Compliance with Receivables. Each of Borrower and
Servicer will timely and fully perform and comply in all material respects with
all provisions, covenants, and other promises required to be observed by it
under the Receivables Sale Agreement and all other agreements related to such
Receivables.

6.4         Reporting Requirements. Borrower and/or Servicer, as the case may
be, will furnish to Administrative Agent and each Lender:

(a)         Financial Statements.

(i)         Annual / Borrower. As soon as available, and in any event within 90
days after the end of each Fiscal Year of Borrower (or such later date as Parent
has been permitted to deliver its financial statements by the Securities and
Exchange Commission), Borrower shall deliver to Administrative Agent and each
Lender a copy of the unaudited balance sheet of Borrower as at the end of such
Fiscal Year, presented on a consolidated basis, together with the related
statement of earnings for such Fiscal Year, presented on a consolidated basis,
together with a Compliance Certificate executed and delivered by the chief
executive officer, chief financial officer, vice president of finance, or
controller of Borrower (which Compliance Certificate shall state that (A) such
balance sheet and statement of earnings fairly present the financial condition
and results of operations for such year in accordance with GAAP except for the
absence of footnotes and (B) such officer has obtained no knowledge that an
Event of Default or Default has occurred and is continuing, or if, in the
opinion of such officer, such an Event of Default or Default has occurred and is
continuing, a statement as to the nature thereof);

(ii)         Annual / Originator. As soon as available, and in any event within
90 days after the end of each Fiscal Year of Originator (or such later date as
Parent has been permitted to deliver its financial statements by the Securities
and Exchange Commission), Originator shall deliver to Administrative Agent and
each Lender a copy of the unaudited balance sheet of Originator as at the end of
such Fiscal Year, presented on a consolidated basis, together with the related
statement of earnings for such Fiscal Year, presented on a consolidated basis,
together with a Compliance Certificate executed and delivered by the chief
executive officer, chief financial officer, vice president of finance, or
controller of Originator (which Compliance Certificate shall state that (A) such
balance sheet and statement of earnings fairly present the financial condition
and results of operations for such year in accordance with GAAP except for the
absence of footnotes and (B) such officer has obtained no knowledge that an
Event of Default or Default has occurred and is continuing, or if, in the
opinion of such officer, such an Event of Default or Default has occurred and is
continuing, a statement as to the nature thereof);

(iii)         Annual / Servicer. As soon as available, and in any event within
90 days after the end of each Fiscal Year of Servicer (or such later date as
Parent has been permitted to deliver its financial statements by the Securities
and Exchange Commission), Servicer shall deliver to Administrative Agent and
each

 

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Lender a copy of the unaudited balance sheet of Servicer as at the end of such
Fiscal Year, presented on a consolidated basis, together with the related
statement of earnings for such Fiscal Year, presented on a consolidated basis,
together with a Compliance Certificate executed and delivered by the chief
executive officer, chief financial officer, vice president of finance, or
controller of Servicer (which Compliance Certificate shall state that (A) such
balance sheet and statement of earnings fairly present the financial condition
and results of operations for such year in accordance with GAAP except for the
absence of footnotes and (B) such officer has obtained no knowledge that an
Event of Default or Default has occurred and is continuing, or if, in the
opinion of such officer, such an Event of Default or Default has occurred and is
continuing, a statement as to the nature thereof); provided, however, that
Servicer shall not be required to deliver any information under this clause
(iii) unless Servicer is an Affiliate of Borrower;

(iv)         Annual / Parent. As soon as available and in any event within 90
days after the end of each Fiscal Year of Parent (or such later date as Parent
has been permitted to deliver its financial statements by the Securities and
Exchange Commission), Servicer shall deliver to Administrative Agent and each
Lender a balance sheet of Parent and its Subsidiaries as at the end of such
Fiscal Year, presented on a consolidated basis, and the related statements of
income, shareholders’ equity, and cash flows of Parent and its Subsidiaries for
such Fiscal Year, presented on a consolidated basis, setting forth in each case
in comparative form the figures for the previous Fiscal Year, all in reasonable
detail and accompanied by a report thereon of Ernst & Young or other independent
public accountants of comparable recognized national standing, which such report
shall be unqualified as to going concern and scope of audit and shall state that
such financial statements present fairly in all material respects the financial
condition as at the end of such Fiscal Year on a consolidated basis, and the
results of operations and statements of cash flows of Parent and its
Subsidiaries for such Fiscal Year in accordance with GAAP and that the
examination by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards;

(v)         Quarterly / Parent. As soon as available and in any event within 45
days after the end of each Fiscal Quarter of Parent (other than the fourth
Fiscal Quarter) (or such later date as Parent has been permitted to deliver its
financial statements by the Securities and Exchange Commission), Servicer shall
deliver to Administrative Agent and each Lender a balance sheet of Parent and
its Subsidiaries as at the end of such quarter presented on a consolidated basis
and the related statements of income, shareholders’ equity, and cash flows of
Parent and its Subsidiaries for such Fiscal Quarter and for the portion of
Parent’s Fiscal Year ended at the end of such quarter, presented on a
consolidated basis setting forth in each case in comparative form the figures
for the corresponding quarter and the corresponding portion of Parent’s previous
Fiscal Year, all in reasonable detail, together with a Compliance Certificate
executed and delivered by the chief financial officer, chief executive officer,
vice president of finance, or controller of Parent certifying that such
financial statements fairly present in all material respects the financial
condition of Parent and its Subsidiaries as at the end of such Fiscal Quarter on
a consolidated basis, and the results of operations and statements of cash flows
of Parent and its Subsidiaries for such Fiscal Quarter and such portion of
Parent’ Fiscal Year, in accordance with GAAP consistently applied (subject to
normal year-end audit adjustments and the absence of certain footnotes);

(vi)         Quarterly / Borrower. As soon as available and in any event within
45 days after the end of each Fiscal Quarter of Borrower (or such later date as
Parent has been permitted to deliver its financial statements by the Securities
and Exchange Commission), Servicer shall deliver to Administrative Agent and
each Lender a balance sheet of Borrower and its Subsidiaries as at the end of
such quarter presented on a consolidated basis and the related statement of
income of Borrower and its Subsidiaries for such Fiscal Quarter and for the
portion of Borrower’s Fiscal Year ended at the end of such quarter, presented on
a consolidated basis, all in reasonable detail, together with a Compliance
Certificate executed and delivered by the chief financial officer, chief
executive officer, or controller of Borrower certifying that such financial
statements fairly present in all material respects the financial condition of
Borrower and its Subsidiaries as at the end of such Fiscal Quarter on a
consolidated basis, and the results of operations and statements of cash flows
of Borrower and its Subsidiaries for such Fiscal Quarter and such portion of
Borrower’s Fiscal Year, in accordance with GAAP consistently applied (subject to
normal year-end audit adjustments and the absence of certain footnotes);

(vii)         Shareholders Statements and Reports. Promptly upon the mailing
thereof to the shareholders of the Parent generally, copies of all financial
statements, reports, and proxy statements so mailed;

 

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(viii)         S.E.C. Filings. Promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and annual, quarterly, or monthly
reports which the Parent shall have filed with the Securities and Exchange
Commission;

(ix)         [Intentionally Omitted]; and

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

(b)         Receivables Reports; Purchase Reports; Agings Reports.

(i)         On or before each Settlement Date, Servicer shall prepare and
deliver to Administrative Agent and each Lender a Receivables Report and
Borrowing Base Certificate prepared as of the then-most-recent Receivables
Reporting Date, signed by a Responsible Officer of Servicer.

(ii)         Servicer shall deliver to Administrative Agent and each Lender a
copy of each Purchase Report required to be delivered pursuant to the
Receivables Sale Agreement on the date required for delivery of such Purchase
Report thereunder.

(iii)         From time to time upon Administrative Agent’s reasonable request,
Servicer shall prepare and deliver to Administrative Agent agings reports in
form and substance reasonably satisfactory to Administrative Agent.

(c)         Defaults and Events of Default. As soon as possible but in any event
within three (3) Business Day after any Responsible Officer of Borrower or
Servicer has actual knowledge of the occurrence of a Default or an Event of
Default, Borrower or Servicer, as the case may be, will deliver to
Administrative Agent written notice setting forth details of such event and,
upon further request of Administrative Agent from time to time, a written
description of the action that Borrower or Servicer, as the case may be, has
taken or proposes to take with respect thereto.

(d)         Servicing Certificate. Servicer shall deliver, or cause to be
delivered, to Administrative Agent, on or before the date that is 95 days after
the end of each of its Fiscal Years, an officer’s certificate signed by a
Responsible Officer of Servicer, dated as of the last day of the preceding
Fiscal Year, stating that (i) a review of the activities of Servicer during the
preceding Fiscal Year and of its performance under this Agreement has been made
under such officer’s supervision and (ii) to the best of such officer’s
knowledge, based on such review, Servicer has fulfilled its obligations in all
material respects under the Agreement throughout such Fiscal Year, or, if there
has been a default of a material nature in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.

(e)         [Intentionally Omitted].

(f)         Other. Promptly, from time to time, such other information,
documents, records or reports respecting the Collateral, the Receivables or the
condition or operations, financial or otherwise, of any Credit Party as
Administrative Agent may from time to time reasonably request in order to
protect the interests of Administrative Agent or Lenders under or as
contemplated by this Agreement or the other Loan Documents.

(g)         Auditor’s Management Letters. To the extent received by Borrower or
Servicer, promptly upon receipt thereof, copies of each report submitted to
Parent, Borrower, or Servicer by independent public accountants in connection
with any annual, interim, or special audit made by them of Servicer’s or
Borrower’s books including, without limitation, each report submitted to
Servicer or Borrower concerning its accounting practices and systems and any
final comment letter submitted by such accountants to management in connection
with Servicer’s or Borrower’s annual audit.

 

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(h)         Collateral Disclosure Certificate. From time to time upon the
reasonable request of Administrative Agent (but, in the absence of any Event of
Default, not more frequently than once per year), Borrower shall execute and
deliver to Administrative Agent a Collateral Disclosure Certificate with then
current information. At any time when ASP is Servicer, from time to time upon
the reasonable request of Administrative Agent (but, in the absence of any Event
of Default, not more frequently than once per year), Servicer shall execute and
deliver to Administrative Agent a Collateral Disclosure Certificate with then
current information. The proper disclosure of any information in any Collateral
Disclosure Certificate shall not, in and of itself, constitute any waiver of any
Default or Event of Default which may otherwise exist.

6.5         Use of Proceeds. Borrower will use the proceeds of the Loans made
hereunder solely in connection with (a) the acquisition or funding of
Receivables and Related Security, (b) the making of Permitted Investments,
(c) to pay Borrower’s expenses to the extent such expenses do not violate the
provisions of this Agreement, and (d) subject to Sections 6.6(k) and 7.11, to
make distributions from time to time to ASP and payments of principal or
interest on the Subordinated Note in accordance with applicable law.

6.6         Separate Legal Entity. Borrower hereby acknowledges that Lenders and
Administrative Agent are entering into the transactions contemplated by this
Agreement and the other Loan Documents in reliance upon Borrower’s identity as a
legal entity separate from Servicer, Parent, Originator, and each other Person.
Therefore, from and after date on which Borrower was incorporated, Borrower has
taken and, on and after the Closing Date, shall take all reasonable steps to
continue Borrower’s identity as a separate legal entity and to make it apparent
to all Persons that Borrower is an entity with assets and liabilities distinct
from those of any other Person and is not a division of Parent, Originator, or
any other Person. Since its incorporation, Borrower has complied, and, on and
after the occurrence of the Closing Date, Borrower shall continue to comply,
with all applicable entity laws concerning separateness and will observe all
procedures required by its Organizational Documents concerning separateness.
Without limiting the generality of the foregoing and in addition to and
consistent with the covenant set forth in Section 6.2, since its incorporation,
Borrower has taken, and, on and after the occurrence of the Closing Date,
Borrower shall continue to take, such actions as shall be required in order
that:

(a)         Borrower will be a limited purpose corporation whose primary
activities are restricted to purchasing the Receivables and Related Security and
financing the acquisition thereof, to providing (or arranging for the provision
of) services necessary for the collection of such Receivables and the
maintenance of ownership of such Receivables and Related Security and the
proceeds thereof, and conducting such other activities that are incidental to
and necessary or convenient to carry out its primary activities;

(b)         At all times at least one member of Borrower’s Board of Directors
(each, an “Independent Director”) shall be an individual who is not, and during
the past five (5) years has not been, a director, officer, employee, or
Affiliate of Parent, Originator, or any of their respective Subsidiaries or
Affiliates (other than Borrower) or beneficial owner (at the time of such
Person’s appointment as an Independent Director or at any time thereafter while
serving as an Independent Director) of the outstanding common stock of Borrower,
Originator, or any of their respective Subsidiaries or Affiliates or any Person
or entity beneficially owning any outstanding shares of common stock of Parent
or any of its Affiliates; provided, however, that an individual shall not be
deemed to be ineligible to be an Independent Director solely because such
individual serves or has served in the capacity of an “independent director” or
similar capacity for special purpose entities formed by Parent or any of its
Affiliates. The certificate of incorporation of Borrower shall provide, among
other things, that (i) the Board of Directors shall not approve, or take any
other action to cause the filing of, a voluntary bankruptcy petition with
respect to Borrower unless each Independent Director shall approve the taking of
such action in writing prior to the taking of such action and (ii) such
provision cannot be amended without the prior written consent of each
Independent Director;

(c)         Any employee, consultant or agent of Borrower will be compensated by
Borrower, as appropriate, for services provided to Borrower; Borrower will
provide separately for its expenses and liabilities and will fairly and
reasonably allocate any expenses associated with services provided by common
employees, consultants or agents, office space, or other administrative expenses
with any Affiliate;

(d)         Borrower will allocate and charge fairly and reasonably overhead
expenses shared with any other Person, and, to the extent, if any, that Borrower
and any other Person share items of expenses such as legal, auditing and other
professional services, such expenses will be allocated to the extent practical
on the basis of

 

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actual use or the value of services rendered, and otherwise on a basis
reasonably related to the actual use or the value of services rendered;
Borrower’s operating expenses will not be paid by any other Person except as
permitted under the terms of this Agreement or otherwise consented to by
Administrative Agent; any Person that renders or otherwise furnishes services to
Borrower will be compensated thereby at market rates for such services it
renders or otherwise furnishes thereto;

(e)         Borrower will maintain its books, records, accounts, and financial
statements separate from those of any other person or entity, except to the
extent that the assets, liabilities, and operations of Borrower may be reflected
in Parent’s or any other Person’s consolidated financial statements; further, if
its assets and liabilities are included in the consolidated financial statements
of Parent or any other Person, Parent will ensure that such consolidated
financial statements include footnotes, detailed notes or other appropriate
information to disclose that (i) all of Borrower’s assets are owned by Borrower,
(ii) Borrower is the sole owner of the Receivables, (iii) Borrower is a separate
legal entity, and (iv) that the assets of Borrower will not be available to
satisfy Parent’s or any other Person’s obligations; if the assets and
liabilities or results of operations of Borrower are included in the tax return
of Parent or any other Person, Parent will ensure that such tax return is not
provided to any third party (other than the taxing authorities) without a
contemporaneous disclosure to the effect that Borrower’s assets will not be
available to satisfy the obligations of Parent or such other Person, as
applicable;

(f)         Borrower will conduct its business in its own name; all written and
oral communications from Borrower to a third party, including letters and
invoices, will be made solely in the name of Borrower or by ASP as Servicer;

(g)         Borrower’s assets will be maintained in a manner that facilitates
their identification and segregation from those of any other Person; Borrower
will not identify itself as a division of any other person or entity, and will
hold itself out to creditors and the public as a legal entity separate and
distinct from any other Person;

(h)         Borrower will strictly observe corporate formalities in its dealings
with all other Persons, and funds or other assets of Borrower will not be
commingled with those of any other Person, except in connection with Servicer’s
corporate cash management program and otherwise in a manner consistent with the
terms of this Agreement;

(i)         Borrower shall not, directly or indirectly, be named or enter into
an agreement to be named, as a direct or contingent beneficiary or loss payee,
under any insurance policy with respect to any amounts payable due to
occurrences or events related to any other Person;

(j)         Borrower will not guarantee or become obligated for or hold itself
out to any person as being liable for the payment of any liability of any other
Person and none of the assets of Borrower will be held out as being available
for the payment of any liability or debt of any other person or entity; Borrower
will not hold itself out to be responsible for the decisions or actions
respecting the daily business and affairs of any other Person;

(k)         Borrower will be adequately capitalized for its intended purpose and
operations and, at a minimum, shall maintain at all times the Required Capital
Amount; and

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

6.7         Adverse Claims on Receivables. Each of Borrower and Servicer will,
and will require Originator to, defend each Receivable against all claims and
demands of all Persons at any time claiming the same or any interest therein
adverse to Administrative Agent and the Secured Parties.

6.8         Further Assurances. At its expense, each of Borrower and Servicer
will perform all acts and execute all documents reasonably requested by
Administrative Agent at any time to evidence, perfect, maintain, and

 

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enforce the title or the security interest of Administrative Agent in the
Receivables and the priority thereof. Borrower shall, and shall cause Parent,
ASP, and Originator to, cause its computer records, master data processing
records and other books and records relating to the Receivables to be marked,
with a legend stating that the Receivables have been sold to Borrower and that
the Collateral has been pledged to Administrative Agent for the benefit of the
Secured Parties.

6.9         Servicing. Servicer shall use all commercially reasonable measures
to prevent or minimize any loss being realized on a Receivable and shall take
all reasonable steps to recover the full amount of such loss. Borrower and
Servicer shall, at their own expense, take such steps as are necessary to
maintain perfection of any security interest created by each Receivable in the
related goods and merchandise subject thereto. Servicer shall use its
commercially reasonable efforts, consistent with prudent servicing procedures,
to repossess or otherwise convert the ownership of the goods or merchandise
securing any Receivable which becomes a Defaulted Receivable and to pay any and
all proceeds thereof to Borrower promptly upon receipt. Servicer shall follow
such practices and procedures for servicing the Receivables as would be
customary and usual for a prudent servicer under similar circumstances,
including using commercially reasonable efforts to realize upon any recourse to
the Obligors and selling the goods securing a Receivable at a public or private
sale.

6.10         Field Examinations. Each of Borrower and Servicer shall permit
Administrative Agent, and its duly authorized agents, representatives,
attorneys, or auditors, to conduct field examinations of the Collateral and such
Person’s other property and books and records reasonably related to the
transactions contemplated in the Loan Documents (which may include, among other
things, verification of accounts and inspections of properties) at such times
and with such frequency as Administrative Agent may reasonably request from time
to time with reasonable notice thereof. Borrower shall pay the cost of such
field examinations; provided that, (a) so long as no Default or Event of Default
is in existence and so long as the outstanding principal amount of the Loans is
$0.00, Borrower shall not be required to pay for more than one such field
examination per calendar year, (b) so long as no Default or Event of Default is
in existence and the outstanding principal amount of the Loans is greater than
$0.00, Borrower shall not be required to pay for more than two such field
examinations per calendar year, and (c) Administrative Agent shall not conduct
more than four field examinations during any Fiscal Year unless an Event of
Default is in existence. Upon instructions from Administrative Agent, each of
Borrower and Servicer shall provide a copy of any document in its possession
related to any Receivables to Administrative Agent if reasonably requested by
Administrative Agent.

6.11         Cooperation. Each of Borrower and Servicer shall provide such
cooperation, information and assistance, and prepare and supply Administrative
Agent with such data regarding the performance by the Obligors of their
obligations under the Receivables and the performance by Borrower and Servicer
of their respective obligations under the Loan Documents, as may be reasonably
requested by Administrative Agent from time to time.

6.12         Facilities. Servicer shall maintain its facilities from which it
services the Receivables in their present condition, ordinary wear and tear
excepted, or such other facilities of similar quality, security and safety as
Servicer may select from time to time. Servicer shall make all property tax
payments, lease payments and all other payments with respect to such facilities,
except for such payments which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being maintained.
Servicer shall (i) ensure that Administrative Agent shall have reasonable access
during inspections pursuant to Section 6.10 to such facilities and all computers
and other systems relating to the servicing of the Receivables and all persons
employed at such facilities having knowledge of such matters, and (ii) continue
to store on a daily basis all back-up files relating to the Receivables and the
servicing of the Receivables at Servicer’s facilities, or such other storage
facilities of similar quality, security and safety as Servicer may select from
time to time, in the case of each of clauses (i) and (ii) until the receipt of
all Collections in respect of all Receivables or all remaining Receivables have
been deemed to be uncollectible.

6.13         Deposit Accounts. Borrower shall not establish or maintain any
Deposit Account other than the Deposit Accounts described on Schedule 5.12 and
the Agent’s Account, unless Borrower shall have provided Administrative Agent
not less than 20 days prior written notice thereof (or such lesser period of
time to which Administrative Agent may agree in writing), such Deposit Account
is opened at a bank located in the United States, and, contemporaneously with
the establishment of such Deposit Account, a Deposit Account Control Agreement
in form and substance satisfactory to Administrative Agent is executed and
delivered by the bank at which such

 

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Deposit Account was established, Borrower, and Administrative Agent (provided,
however, that Administrative Agent hereby acknowledges receipt of sufficient
notice with respect to the establishment of the Master Account and agrees that,
with respect to the Master Account, the form of Deposit Account Control
Agreement executed and delivered by Borrower, Bank of America, N. A., and
Administrative Agent on or about the Closing Date with respect to Borrower’s
Lock Box Accounts maintained at Bank of America, N. A., is acceptable in form
and substance (including, without limitation, the application of the $50,000
“Retained Balance” (as such term is defined and used in such Deposit Account
Control Agreement) to the Master Account, so long as the Master Account is then
the only of Borrower’s Deposit Accounts at Bank of America, N. A., subject to
such Retained Balance). Except as set forth in the last sentence of
Section 8.2(c)(ii), neither Borrower nor Servicer shall make, nor will either of
them permit Originator to make, any change in its instructions to Obligors
regarding payments to be made to a Lock Box. Neither Borrower nor Servicer will
change any Lock Box Bank or close any Lock Box or Lock Box Account unless
Administrative Agent shall have received at least thirty (30) days’ prior notice
of such change and (i) in the case of a closed Lock Box, all applicable Obligors
have been notified to make payments to another Lock Box that clears through a
Lock Box Account which is subject to a Deposit Account Control Agreement, or
(ii) in the case of termination of a Lock Box Bank or closing of a Lock Box
Account, a new Deposit Account Control Agreement is entered into with respect to
any new or replacement Lock Box Account or Lock Box Bank. Borrower shall
establish and thereafter maintain the Agent’s Account at Administrative Agent
within 30 days following the Closing Date and, if requested by Administrative
Agent, execute and deliver a Deposit Account Control Agreement in form and
substance satisfactory to Administrative Agent with respect thereto.

6.14         Certain Notices.

(a)         Shall provide Administrative Agent prompt notice upon knowledge or
receipt, as applicable, of any of the following, together with, where
applicable, copies thereof: (i) any litigation involving Borrower, any of the
Receivables, or other Collateral involving a claim for actual damages or
liability in excess of $1,000,000; (ii) any notice from taxing authorities as to
claimed deficiencies or any tax lien, any notice relating to alleged ERISA
violations or any “Reportable Event,” as defined in ERISA, in each case, where
the assessment of withdrawal liability, the deficiency, the condition or the
event could result in the imposition of liability on Borrower or Servicer in
excess of $15,000,000; (iii) any Adverse Claim with respect to the voting stock
of Borrower; (iv) Borrower’s obtaining any Instrument evidencing more than
$25,000 (other than Items which have been sent to a Lock Box or deposited into a
Lock Box Account or the Agent’s Account) or any securities issued in connection
with any settlement of any claim held by Borrower against any other Person; and
(v) except as otherwise addressed in the following clause (b), any request for
consent, financial statements, certification, report, or other communication
under or in connection with any Loan Document or Receivables Sale Document from
any Person other than the Administrative Agent; and

(b)         Shall provide Administrative Agent prompt notice (and, in any event
within one Business Day of its receipt thereof) any notice received by Borrower
under Section 4.1(b) of the Receivables Sale Agreement, together with a copy
thereof.

6.15         Payment of Taxes, Etc. Shall pay before delinquent all of its Debts
and taxes, except to the extent such taxes are being properly contested.

6.16         Covenants Regarding Collateral.

(a)         Shall use commercially reasonable efforts to defend the Collateral
against all claims and demands of all Persons, except for Permitted
Encumbrances;

(b)         Shall from time to time upon Administrative Agent’s request, obtain
and deliver to Administrative Agent such Third Party Agreements respecting
locations at which any Records owned by Borrower or in which Borrower has an
interest are located or where any of Borrower’s Goods may be located;

(c)         From time to time upon Administrative Agent’s request, shall
promptly deliver to Administrative Agent all Instruments (other than Items which
have been sent to a Lock Box or deposited in a Lock Box Account or the Agent’s
Account), Chattel Paper, Investment Property in the form of certificated
securities, and,

 

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if requested by Administrative Agent, Documents, in each case to the extent
constituting Collateral, in each case appropriately indorsed to Administrative
Agent’s order or otherwise as Administrative Agent shall direct;

(d)         Shall, within three Business Days after receipt thereof, deliver to
a Lock Box or a Lock Box Account or the Agent’s Account any Items which it may
have received directly and which constitute Collections;

(e)         Shall not create any Electronic Chattel Paper without first granting
Administrative Agent Control thereof pursuant to such measures as Administrative
Agent shall reasonably request; and

(f)         Shall promptly notify Administrative Agent of the existence of any
Commercial Tort Claim constituting Collateral and having a value in excess of
$1,000,000 which arises after the Closing Date and shall provide Administrative
Agent with such information, and otherwise take such action with respect to such
Commercial Tort Claims, as is reasonably necessary for Administrative Agent to
perfect its security interest thereon.

 

 

7.

NEGATIVE COVENANTS OF BORROWER AND SERVICER.

Each of Borrower and Servicer (as applicable) covenants and agrees as to itself
that from the date hereof and until the full and final payment in cash and
performance of all Obligations and the termination of this Agreement:

7.1         Sales, Liens, Etc. Except pursuant to, or as contemplated by, the
Loan Documents, Borrower shall not sell (and shall not permit Servicer, acting
on Borrower’s behalf to), assign (by operation of law or otherwise) or otherwise
dispose of, or create or suffer to exist voluntarily or involuntarily any
Adverse Claims (other than Permitted Encumbrances) upon or with respect to any
of Borrower’s assets which constitute Collateral.

7.2         Mergers, Acquisitions, Sales, Subsidiaries, etc. Borrower shall not:

(a)         be a party to any merger or consolidation, or directly or indirectly
purchase or otherwise acquire all or substantially all of the assets or any
stock of any class of, or any partnership or joint venture interest in, any
other Person, except for Permitted Investments, or sell, transfer, assign,
convey or lease any of its property and assets (or any interest therein) other
than pursuant to, or as contemplated by, this Agreement or the other Loan
Documents;

(b)         make, incur or suffer to exist an investment in, equity contribution
to, loan or advance to, or payment obligation in respect of the deferred
purchase price of property from, any other Person, except for Permitted
Investments or pursuant to the Loan Documents;

(c)         create any direct or indirect Subsidiary or otherwise acquire direct
or indirect ownership of any equity interests in any other Person other than
pursuant to the Loan Documents; or

(d)         enter into any transaction with any Affiliate except for the
transactions contemplated by the Loan Documents and other transactions upon fair
and reasonable terms materially no less favorable to Borrower than would be
obtained in a comparable’s arm’s length transaction with a Person not an
Affiliate.

7.3         Change in Business. Borrower will not make any material change in
the character of its business. Borrower will not change its name unless it shall
have: (i) given Administrative Agent at least ten (10) days’ prior written
notice thereof and (ii) delivered to Administrative Agent all financing
statements, instruments and other documents reasonably requested by
Administrative Agent in connection with such change.

7.4         Other Debt. Borrower will not incur any Debt to any Person other
than pursuant to this Agreement, the Receivables Sale Agreement or otherwise in
connection with a transaction involving Lenders and Administrative Agent.

 

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7.5         Organizational Documents. Borrower shall not amend its
Organizational Documents in any manner that violates any of the covenants
contained in this Agreement or otherwise might result in Borrower being
substantively consolidated with Parent, ASP, or any of their respective
Affiliates.

7.6         Jurisdiction of Organization; Location of Records. Borrower shall
not change its jurisdiction of organization or permit the documents and records
evidencing the Receivables to be moved unless (i) Borrower or Servicer, as the
case may be, shall have given to Administrative Agent prior written notice
thereof, clearly describing the new location, and (ii) Borrower shall have taken
such action, satisfactory to Administrative Agent, to maintain the title or
ownership of Borrower and any security interest of Administrative Agent in the
Collateral at all times fully perfected and in full force and effect. Servicer
shall not, in any event, move the location where it conducts the servicing and
collection of the Receivables from the addresses referred to on Schedule 5.11 to
this Agreement unless (i) such address is located within the continental United
States, (ii) Servicer has given Administrative Agent at least thirty (30) days’
prior written notice of such change, (iii) Servicer shall have delivered to
Administrative Agent all financing statements, instruments and other documents
reasonably requested by Administrative Agent in, connection with such change or
relocation and (iv) Servicer shall have delivered to Administrative Agent such
Third Party Agreements as Administrative Agent may reasonably request from time
to time.

7.7         Financing Statements. Borrower shall not execute or approve, or
authorize the filing of, any effective financing statement (or similar statement
or instrument of registration under the laws of any jurisdiction) or statements
relating to any Receivables other than the financing statements described in
Section 3.2.

7.8         Business Restrictions. Borrower shall not (i) engage in any business
other than the acquisition, financing, and collection of Receivables and other
Collateral, (ii) engage in any transactions or be a party to any documents,
agreements, or instruments, other than the Loan Documents and documents,
agreements, or instruments which are reasonably necessary to the conduct of its
business or which are otherwise expressly permitted hereby (including, without
limitation, those related to Permitted Investments), or (iii) incur any trade
payables (other than for professional fees and expenses, fees and expenses for
its independent director, fees and expenses relating to its continued corporate
existence, costs and expenses for products and services incurred or expended in
Borrower’s ordinary course of business, and Fees and expenses payable pursuant
to the Loan Documents) or other liabilities not constituting Debt permitted
under Section 7.4 if the aggregate outstanding balance of such trade payables
and other liabilities would at any time exceed $50,000.

7.9         Other Agreements. Borrower will not amend, restate, supplement,
cancel, terminate, or otherwise modify any Receivables Sale Document or give any
consent, waiver, directive, or approval thereunder or waive any default, action,
omission, or breach under any of the foregoing or otherwise grant any indulgence
thereunder, without (in each case) the prior written consent of Administrative
Agent.

7.10         Investments. Borrower shall not (a) sell, assign, or discount any
of its Instruments other than the discount of promissory notes in the ordinary
course of business for collection and (b) create or accept any Instrument or
other obligation of any kind due from or owed by a Sanctioned Person.

7.11         Restricted Payments. Borrower shall not make any dividend,
distribution, redemption of capital stock or payment of any subordinated
indebtedness (including, without limitation, payments of principal and interest
on the Subordinated Note) unless (a) such dividend, distribution, redemption of
capital stock or payment is (i) permitted under applicable law and (ii) with
respect to payments of principal or interest made under the Subordinated Note,
Originator is permitted to accept and retain such payment under the terms
thereof, and (b) at the time of the making or payment thereof and after giving
effect thereto, (i) no Default or Event of Default exists or would result
therefrom and (ii) Borrower’s net worth equals or exceeds the Required Capital
Amount.

 

 

8.

SERVICER.

8.1         Initial Servicer. The servicing, administering and collection of the
Receivables shall be conducted by the Person designated from time to time as
Servicer under this Agreement. Until such time following the occurrence of a
Servicer Event of Default or an Event of Default as Administrative Agent shall
notify Borrower in writing of the revocation of such power and authority,
Borrower and Administrative Agent hereby appoint ASP to act as a Servicer under
the Loan Documents.

 

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8.2         Certain Duties of Servicer.

(a)         Authorization to Act as Borrower’s Agent. Borrower hereby appoints
Servicer as its agent for the following purposes: (i) selecting the amount of
each requested Loan and executing Notices of Borrowing on behalf of Borrower,
(ii) making transfers among, deposits to and withdrawals from all Deposit
Accounts of Borrower for the purposes described in the Loan Documents,
(iii) arranging payment by Borrower of all Fees, expenses, other Obligations and
other amounts payable under the Loan Documents, (iv) causing the repayment and
prepayment of the Loans as required and permitted pursuant to Section 2 and
(v) executing and preparing the Receivables Reports and Borrowing Base
Certificates; provided, however, that Servicer shall act in such capacity only
as an agent of Borrower and shall incur thereby no additional obligations with
respect to any Loan, and nothing herein shall be deemed to authorize Servicer to
take any action as Borrower’s agent which Borrower is precluded from taking
itself. Borrower irrevocably agrees that (A) it shall be bound by all proper
actions taken by Servicer pursuant to the preceding sentence, and (B) except as
otherwise provided herein or in any Deposit Account Control Agreement,
Administrative Agent and the banks holding all Deposit Accounts of Borrower are
entitled to accept submissions, determinations, selections, specifications,
transfers, deposits and withdrawal requests, and payments from Servicer on
behalf of Borrower.

(b)         Servicer to Act as Servicer.

(i)         Servicer shall service and administer the Receivables on behalf of
Borrower and Administrative Agent (for the benefit of the Secured Parties) and
shall have full power and authority, acting alone and/or through subservicers as
provided in Section 8.2(b)(iii), to do any and all things which they may deem
reasonably necessary or desirable in connection with such servicing and
administration and which are consistent with this Agreement. Consistent with the
terms of this Agreement and the Credit and Collection Policy, Servicer may
waive, modify, or vary any term of any Receivable or consent to the postponement
of strict compliance with any such term or in any manner, grant indulgence to
any Obligor if, in Servicer’s reasonable determination, such waiver,
modification, postponement, or indulgence is not materially adverse to the
interests of Borrower or Administrative Agent (for the benefit of the Secured
Parties); provided, however, that Servicer may not permit any modification with
respect to any Receivable that would reduce the Unpaid Balance (except for
actual payments thereof), or extend the due date thereof, except that Servicer
may (A) take such actions with respect to Defaulted Receivables if such actions
will, in Servicer’s reasonable business judgment, maximize the Collections
thereof and (B) charge-off such Receivable in accordance with its Credit and
Collection Policy. Without limiting the generality of the foregoing, Servicer in
its own name or in the name of Borrower is hereby authorized and empowered by
Borrower when Servicer believes it appropriate in its best judgment to execute
and deliver, on behalf of Borrower, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Receivables.

(ii)         Servicer shall service and administer the Receivables by employing
such procedures (including collection procedures) and degree of care, in each
case consistent with applicable law and its Credit and Collection Policy, as are
customarily employed by Servicer in servicing and administering receivables
owned or serviced by it comparable to the Receivables. Servicer shall take no
action to impair Administrative Agent’s (for the benefit of the Secured Parties)
security interest in any Receivable, except to the extent allowed pursuant to
this Agreement or required by law.

(iii)         Servicer may perform any of its duties pursuant to this Agreement,
including those delegated to it pursuant to this Agreement, through subservicers
appointed by Servicer; provided that such subservicing arrangements may be
terminated, at Administrative Agent’s discretion, upon the replacement of ASP as
Servicer. Such subservicers may include Affiliates of Servicer. Notwithstanding
any such delegation of a duty, Servicer shall remain obligated and liable for
the performance of such duty as if Servicer were performing such duty.

 

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(iv)         Servicer may take such actions as are necessary to discharge its
duties as Servicer in accordance with this Agreement, including the power to
execute and deliver on behalf of Borrower such instruments and documents as may
be customary, necessary or desirable in connection with the performance of
Servicer’s duties under this Agreement (including consents, waivers, and
discharges relating to the Receivables).

(v)         Servicer shall keep true and complete records covering the
transactions contemplated by this Agreement, including the identity and
collection status of each Receivable purchased by Borrower from Originator and
the Purchase Price Credits.

(c)         Collections.

(i)         On or before the Closing Date, Borrower and Servicer shall have
established and shall maintain thereafter the following system of collecting and
processing Collections of Receivables: The Obligors shall, on or before the
Closing Date, be instructed by Servicer to make payments of Receivables only
(A) by check, draft, money order, or other Item mailed to a Lock Box listed on
Schedule 5.12 (such payments, upon receipt in such a Lock Box, being referred to
herein as “Mail Payments”) or (B) by wire transfer or ACH to a Lock Box Account
which is subject to a Deposit Account Control Agreement. If any cash, check,
draft, or money order, or other Item happens to be delivered to Originator,
Originator shall forward the same to a Lock Box or deposit the same (duly
endorsed) into a Lock Box Account which is subject to a Deposit Account Control
Agreement (1) within 3 Business Days following receipt thereof, if no Event of
Default has occurred and is continuing and (2) immediately following receipt
thereof, if any Event of Default has occurred and is continuing.

(ii)         On or before the Closing Date, Administrative Agent shall have
received a fully executed and delivered Deposit Account Control Agreement
covering each Lock Box Account. Administrative Agent will not deliver any
Activation Notice regarding any Lock Box or Lock Box Account except during the
existence of an Event of Default. Borrower agrees that, upon Administrative
Agent’s delivery of any Activation Notice respecting any Lock Box Account, all
of Borrower’s rights, title, and interest in and to such Lock Box Account, and
all control and ownership thereof, shall be deemed transferred by Borrower to
Administrative Agent, simultaneously with the delivery of such Activation Notice
and without further notice to any Person, for the benefit of the Secured
Parties. In addition to the foregoing, after the occurrence and during the
continuance of any Event of Default, Servicer agrees that it shall, upon the
written request of Administrative Agent, notify all Obligors under Receivables
to make payment thereof to (A) one or more bank accounts and/or post office
boxes designated by Administrative Agent and specified in such notice (and such
payments shall be transferred to the Agent’s Account) or (B) any successor
Servicer appointed hereunder.

(iii)         Servicer shall remove all Mail Payments, or cause all Mail
Payments to be removed, from each Lock Box by the close of business on each
Business Day and deposited into a Lock Box Account which is subject to a Deposit
Account Control Agreement. Servicer shall process all such Mail Payments, and
all other payments received in any form on the date received by recording the
amount of the payment received from the Obligor and the applicable account or
invoice number.

(iv)         All Collections received by Originator or Servicer in respect of
Receivables will be identified and, (A) before the Termination Date, held by
Servicer in trust for the benefit of Borrower, pending disposition on the next
occurring Settlement Date and (B) on and after the Termination Date, held by the
Servicer in trust for the exclusive benefit of Administrative Agent, pending
disposition in accordance with the terms of this Agreement and the other Loan
Documents. At Administrative Agent’s direction given during the existence of an
Event of Default, Servicer shall not permit any Collections to be commingled
with any of Servicer’s or Originator’s funds for so long as any Event of Default
continues in existence (unless otherwise agreed in writing by Administrative
Agent).

(v)         Except as otherwise expressly permitted herein and in the other Loan
Documents, each of Borrower and Servicer hereby irrevocably waives any right to
set-off or otherwise deduct any amount owing by or to them from any Collections
received by them prior to remittance thereof in accordance with this Agreement.

(vi)         In performing its duties and obligations hereunder, Servicer shall
not (A) impair the rights of Borrower or Administrative Agent in any Eligible
Receivable, (B) amend the terms of any Eligible Receivable other than in
accordance with this Agreement, (C) release any goods securing an Eligible
Receivable

 

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from the lien created by such Receivable except as specifically provided for
herein, and (D) be entitled to commence or settle any legal action to enforce
collection of any Eligible Receivable or to foreclose upon or repossess any
goods securing such Receivable (unless Servicer, in the exercise of its
reasonable business judgment, determines that doing so is reasonable in the
circumstances). In the event that Servicer shall breach any of its covenants set
forth in clause (A), (B), or (C) of this Section 8.2(c)(vi), Servicer shall pay
the principal amount of the Unpaid Balance of each Receivable affected thereby
on the next Settlement Date following Reporting Period in which such event
occurred. For the purposes of Section 8.7 hereof, Servicer shall not be deemed
to have breached its obligations under this Section 8.2(c)(vi) unless it shall
fail to make such payment with respect to any Receivable affected by Servicer’s
noncompliance with clause (A), (B), or (C) of this Section 8.2(c)(vi).

(vii)         All payments or other amounts collected or received by Servicer in
respect of a Receivable shall be applied to the Unpaid Balance of such
Receivable.

8.3         Servicing Compensation. Servicer, as compensation for its activities
hereunder, shall be entitled to receive the Servicing Fee, which shall be
payable by Borrower on each Settlement Date from Collections in accordance with
Section 2.8. Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder (including payment of the
fees and expenses of any subservicer) and shall not be entitled to reimbursement
therefor except as specifically provided herein.

8.4         Agreement Not to Resign. ASP acknowledges that each Lender and
Administrative Agent have relied on ASP’s agreement to act as Servicer hereunder
in their respective decisions to execute and deliver the respective Loan
Documents to which they are parties. In recognition of the foregoing, ASP agrees
not to resign as Servicer voluntarily, except as required by law (as evidenced
by court order or the delivery of an outside opinion of counsel to
Administrative Agent, in form and substance satisfactory to Administrative
Agent), without the prior written consent of Administrative Agent.

8.5         Designation of Servicer. Borrower agrees not to designate any Person
other than ASP as a Servicer without the prior written consent of Administrative
Agent.

8.6         Termination. The authorization of ASP to act on behalf of Borrower
under this Agreement and the other Loan Documents shall terminate simultaneously
with the appointment of a replacement Servicer selected by Administrative Agent
in accordance with this Agreement.

8.7         Servicer Events of Default. Each of the following shall constitute a
“Servicer Event of Default” under this Agreement:

(a)         Failure to Make Payments and Deposits. Servicer shall fail to make
any payment or deposit required to be made by it hereunder on the date when due
(including, without limitation, the payment of Collections which it has received
when and as those Collections are required to be applied under the terms of this
Agreement) and, in each of the foregoing cases, such failure shall continue for
one additional Business Day.

(b)         Non-Compliance with Other Provisions. Servicer shall fail to perform
or observe in all material respects any term, covenant, or agreement contained
in this Agreement or any other Loan Document which is required to be performed
or observed by Servicer and is not otherwise referred to in or covered by this
Section 8.7 and such failure shall remain unremedied for 15 Business Days after
Servicer becomes aware of such failure.

(c)         Breach of Representations and Warranties. Any representation,
warranty, certification, or statement made by Servicer in such capacity in this
Agreement, any other Loan Document to which Servicer is a party or in any
Receivables Report or other document delivered pursuant hereto or thereto shall
prove to have been incorrect in any material respect when made or deemed made;
provided that the materiality threshold in the preceding clause shall not be
applicable with respect to any representation or warranty which itself contains
a materiality threshold.

(d)         Bankruptcy. An Event of Bankruptcy shall have occurred and remained
continuing with respect to Servicer.

 

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(e)         Judgments. A final judgment or judgments for the payment of money in
excess of $15,000,000 in the aggregate shall have been rendered against
Servicer, in each case after deducting (i) the amount with respect to which
Servicer is insured and with respect to which the insurer has assumed
responsibility in writing and (ii) the amount for which Servicer is otherwise
indemnified if the terms of, and Person providing, such indemnification are
satisfactory to Administrative Agent, and which is not stayed on appeal or
otherwise being appropriately contested in good faith, and the same shall have
remained unsatisfied and in effect, without stay of execution, for a period of
45 consecutive days after the period for appellate review shall have elapsed.

(f)         Cross-Default and Acceleration to Other Debt. (i) Servicer shall
fail to make any payment in respect of its outstanding Debt having an aggregate
principal amount greater than $25,000,000 when due (and after the expiration of
any applicable grace period); (ii) any event or condition shall occur which
results in the acceleration of the maturity of any of such Debt (including,
without limitation, any required mandatory prepayment or “put” of such Debt to
Servicer), or (iii) Servicer shall default in the performance of any financial
covenant contained in any agreement under which such Debt was created or is
governed, the effect of which is to permit the holder(s) of such Debt to
accelerate the maturity thereof or the holders of any commitment to lend in
excess of $25,000,000 to terminate such commitment.

(g)         Collateral Reporting. Servicer shall fail to deliver any Receivables
Report or Borrowing Base Certificate when due.

At any time during the continuance of any Servicer Event of Default,
Administrative Agent may, in its sole discretion, notify Servicer in writing of
the revocation of its appointment as Servicer hereunder. Upon revocation of
Servicer’s appointment hereunder, Administrative Agent shall appoint a successor
Servicer. Servicer agrees that upon receipt of written notification from
Administrative Agent of the revocation of Servicer’s appointment as Servicer
hereunder, Servicer shall upon the written request of Administrative Agent
(which request may be contained in the notification of revocation) (i) notify
all Obligors under the Receivables to make payment thereof to one or more bank
accounts and/or post office boxes designated by Administrative Agent and
specified in such notice, and (ii) pay to Administrative Agent (or its designee)
immediately all Collections then held or thereafter received by Servicer or the
applicable Originator of Receivables, together with all other payment
obligations of Servicer hereunder owing to any Lender or Administrative Agent.
Servicer shall, at its sole cost and expense, cooperate with and assist each
successor Servicer (including, without limitation, providing access to, and
transferring, all Records and all other records (including data-processing
records) relating thereto which shall be held in trust for the benefit of the
parties hereto in accordance with their respective interests and allowing the
successor Servicer to use all licenses, hardware, or software necessary or
desirable to collect the Receivables). ASP irrevocably agrees to act (if
requested to do so) as the data-processing agent for any successor Servicer (in
substantially the same manner as ASP conducted such data-processing functions
while it acted as a Servicer).

 

 

9.

DEFAULT.

9.1         Events of Default. Each of the following shall constitute an Event
of Default:

(a)         Borrower (or Servicer, acting on behalf of Borrower) or Performance
Guarantor shall fail to make any payment when due (including, without
limitation, each payment necessary to remedy any Borrowing Base Deficit) of any
principal of or interest on any Loan, or payment of any other Obligation payable
by or on behalf of Borrower or Performance Guarantor hereunder or under the
other Loan Documents, including, without limitation, any Fees and Indemnified
Amounts, or shall fail to make any deposit required to be made hereunder when
due and in each case such failure shall remain unremedied for (i) with respect
to principal and interest on the Loans and all payments of Obligations which are
required to be made on a Settlement Date, one Business Day and (ii) with respect
to all other Obligations, three Business Days.

(b)         Any “Event of Default” shall occur under the Performance
Undertaking.

(c)         (i) Borrower shall fail to perform or observe any covenant contained
in Section 7 or Section 6.14(b) of this Agreement or (ii) Borrower shall fail to
perform or observe any other term, covenant, or agreement which is contained in
this Agreement or any other Loan Document, which is not otherwise referred to or
addressed in this Section 9.1, and which is required to be performed or observed
by Borrower and such failure shall remain unremedied for 30 days after Borrower
becomes aware of such failure.

 

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(d)         Any representation, warranty, certification, or statement made by
Borrower in this Agreement, any other Loan Document to which it is a party, or
in any other document delivered pursuant hereto or thereto shall prove to have
been incorrect in any material respect when made or deemed made; provided that
the materiality threshold in the preceding clause shall not be applicable with
respect to any representation or warranty which itself contains a materiality
threshold.

(e)         An Event of Bankruptcy shall occur with respect to Borrower.

(f)         The Internal Revenue Service shall file notice of a lien pursuant to
§ 6323 of the Internal Revenue Code with regard to any of the assets of Borrower
or the Pension Benefit Guaranty Corporation shall file a notice of lien pursuant
to § 4068 of ERISA, with regard to any assets of Borrower and, in either of the
foregoing cases, such lien shall not have been released within 15 Business Days.

(g)         A Servicer Event of Default shall have occurred.

(h)         As of any Calculation Date, the Default Ratio calculated on a
rolling-three-month average basis shall exceed 7.00%.

(i)         As of any Calculation Date, the Dilution Ratio calculated on a
rolling-three-month average basis shall exceed 4.00%.

(j)         As of any Calculation Date, the Delinquency Ratio calculated as of
the last day of each of the preceding four Fiscal Months shall have exceeded
8.50%.

(k)         (i) Any Loan Document, or any lien or security interest granted with
regard to a material portion of the Collateral, shall (except in accordance with
its terms), in whole or in part, terminate, cease to be effective, or cease to
be the legally valid, binding and enforceable obligation of Borrower, Servicer,
Originator, or Performance Guarantor party to such Loan Document, (ii) Borrower,
Originator, Servicer, or Performance Guarantor shall, directly or indirectly,
contest in any manner such effectiveness, validity, binding nature or
enforceability, or (iii) any security interest securing any Obligation shall, in
whole or in part, cease to be a perfected first priority (except as otherwise
expressly permitted in the Loan Documents and subject to Permitted Encumbrances)
security interest.

(l)         Any “Termination Event” or the “Termination Date” (in each case, as
such terms are defined and used in the Receivables Sale Agreement) shall occur.

(m)         (i) Any Change of Control shall occur; (ii) Parent shall cease to
own, directly or indirectly, 100% of Originator (unless and until Parent and ASP
are merged with one another with one of them being the surviving entity); or
(iii) ASP (or Parent, if ASP and Parent are merged with one another with one of
them being the surviving entity) shall cease to own, directly, 100% of the
outstanding voting stock of Borrower.

(n)         (i) Borrower shall fail to make any payment in respect of its
outstanding Debt (other than the Obligations) when due (and after the expiration
of any applicable grace period); or (ii) any event or condition shall occur
which (A) results in the acceleration of the maturity of any of such Debt
(including, without limitation, any required mandatory prepayment or “put” of
such Debt to Borrower) or (B) enables the holder(s) of such Debt to accelerate
the maturity thereof; provided, that no Event of Default shall exist under this
Section 9.1(n) until such time as all applicable grace periods have expired.

(o)         A final judgment or judgments for the payment of money in excess of
$5,000,000 in the aggregate shall have been rendered against Borrower, in each
case after deducting (i) the amount with respect to which Borrower is insured
and with respect to which the insurer has assumed responsibility in writing and
(ii) the amount for which Borrower is otherwise indemnified if the terms of, and
Person providing, such indemnification are

 

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satisfactory to Administrative Agent, and which is not stayed on appeal or
otherwise being appropriately contested in good faith, and the same shall have
remained unsatisfied and in effect, without stay of execution, for a period of
30 consecutive days.

9.2         Remedies. During the existence of any Default or Event of Default,
Administrative Agent may, and shall at the direction of the Required Lenders,
without prior notice to Borrower, refuse to permit or accept any requests for
Loans or other extensions of credit to Borrower hereunder. During the existence
of any Event of Default, Administrative Agent may at its option take any or all
of the following actions:

(a)         Administrative Agent may declare any or all Obligations to be
immediately due and payable (if not earlier demanded) (provided that, upon the
occurrence of any Event of Default described in Section 9.1(e), the Termination
Date shall be deemed to have occurred automatically and without notice to any
Person and all Obligations shall become immediately due and payable), terminate
the obligation of the Lenders to make Loans and other extensions of credit to
Borrower by declaring the Termination Date to have occurred, bring suit against
Borrower to collect the Obligations, exercise any remedy available to Lender
hereunder or at law, and take any action or exercise any remedy provided herein
or in any other Loan Document or under applicable law.

(b)         Without waiving any of its other rights hereunder or under any other
Loan Document, Administrative Agent shall have all rights and remedies of a
secured party under the UCC (and the UCC of any other applicable jurisdiction)
and such other rights and remedies as may be available hereunder, under other
applicable law, or pursuant to contract. If requested by Administrative Agent,
Borrower and Servicer shall promptly assemble all tangible Collateral and make
it available to Administrative Agent at a place designated by Administrative
Agent. Borrower agrees that any notice by Administrative Agent of the sale or
disposition of the Collateral or any other intended action hereunder, whether
required by the UCC or otherwise, shall constitute reasonable notice to Borrower
if the notice is mailed to Borrower by regular or certified mail, postage
prepaid, at least 10 days before the action to be taken. The proceeds realized
from the sale or other disposition of any Collateral shall be applied in the
manner provided in Section 2.8.

(c)         Administrative Agent may demand, collect, and sue for all amounts
owed pursuant to Accounts, General Intangibles, Chattel Paper, Instruments, or
Documents (to the extent the same constitutes Collateral) or for proceeds of any
Collateral (either in Borrower’s name or Administrative Agent’s name, at
Administrative Agent’s option), with the right to enforce, compromise, settle,
or discharge any such amounts.

9.3         Receiver. In addition to any other remedy available to it,
Administrative Agent shall have the absolute right, during the existence of an
Event of Default, to seek and obtain the appointment of a receiver to take
possession of and operate and/or dispose of the business and assets of Borrower.

9.4         Insurance. Borrower (a) authorizes Administrative Agent to, during
the existence of an Event of Default, collect and apply against the Obligations
when due any refund of insurance premiums paid by Borrower or any insurance
proceeds payable solely to Borrower on account of the loss or damage to any
Collateral and (b) irrevocably appoints Administrative Agent as its
attorney-in-fact to endorse any check or draft or take other action necessary to
obtain such funds.

 

 

10.

ADMINISTRATIVE AGENT AND THE LENDERS.

10.1     Appointment; Powers and Immunities. Each Lender irrevocably appoints
Regions Bank as Administrative Agent and authorizes it to take such actions on
its behalf and to exercise such powers as are delegated to Administrative Agent
under this Agreement and the other Loan Documents, together with all such
actions and powers that are reasonably incidental thereto. Administrative Agent
may perform any of its duties hereunder by or through any one or more sub-agents
appointed by Administrative Agent. Administrative Agent and any such sub-agent
may perform any and all of its duties and exercise its rights and powers through
their respective Related Parties. The exculpatory provisions set forth in this
Section 10 shall apply to any such sub-agent and the Related Parties of
Administrative Agent and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Administrative Agent.

 

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10.2         Nature of Duties of Administrative Agent. Administrative Agent
shall not have any duties or obligations except those expressly set forth in
this Agreement and the other Loan Documents. Without limiting the generality of
the foregoing, (a) Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default or an Event of Default
exists, (b) Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except those
discretionary rights and powers expressly contemplated by the Loan Documents
that Administrative Agent is required to exercise in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided hereunder), and (c) except as expressly set
forth in the Loan Documents, Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to any Obligor that is communicated to or obtained by Administrative
Agent or any of its Affiliates in any capacity. Administrative Agent shall not
be liable for any action taken or not taken by it in its capacity as
Administrative Agent with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided hereunder) or in the absence of its own gross
negligence or willful misconduct. Administrative Agent shall not be deemed to
have knowledge of any Default or Event of Default unless and until written
notice thereof is given to Administrative Agent by Borrower, Servicer or any
Lender, and Administrative Agent shall not be responsible for or have any duty
to ascertain or inquire into (i) any statement, warranty or representation made
in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements, or other terms and conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Section 4 or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to Administrative Agent.

10.3         Lack of Reliance on Administrative Agent. Each Lender acknowledges
that it has, independently and without reliance upon Administrative Agent or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender will, independently and without reliance upon
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, continue to make its own decisions in
taking or not taking of any action under or based on this Agreement, any Loan
Document or any other document furnished hereunder or thereunder.

10.4         Certain Rights of Administrative Agent. If Administrative Agent
shall request instructions from the Required Lenders with respect to any action
or actions (including the failure to act) in connection with this Agreement,
Administrative Agent shall be entitled to refrain from such act or taking such
act, unless and until it shall have received instructions from the Required
Lenders (and Administrative Agent shall not incur liability to any Person in its
capacity as Administrative Agent by reason of so refraining). Without limiting
the foregoing, no Lender shall have any right of action whatsoever against
Administrative Agent as a result of Administrative Agent’s acting or refraining
from acting hereunder in accordance with the instructions of the Required
Lenders where required by the terms of this Agreement.

10.5         Reliance by Administrative Agent. Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document, or other
writing believed by it to be genuine and to have been signed, sent or made by
the proper Person. Administrative Agent also may rely upon any statement made to
it orally or by telephone and believed by it to be made by the proper Person and
shall not incur any liability for relying thereon. Administrative Agent may
consult with legal counsel (including counsel for Borrower), independent public
accountants, and other experts selected by it and shall not be liable for any
action taken or not taken by it in accordance with the advice of such counsel,
accountants, or experts.

10.6         Administrative Agent in its Individual Capacity. Administrative
Agent shall have the same rights and powers under this Agreement and any other
Loan Document in its capacity as a Lender as any other Lender and may exercise
or refrain from exercising the same as though it were not Administrative Agent.
The terms “Lenders,” “Required Lenders,” or any similar terms shall, unless the
context clearly otherwise indicates, include Administrative Agent in its
individual capacity. Administrative Agent and its Affiliates may accept deposits
from, lend money to, and generally engage in any kind of business with any of
the Obligors as if it were not Administrative Agent hereunder.

 

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10.7         Successor Administrative Agent.

(a)         Administrative Agent may resign at any time by giving notice thereof
to the Lenders and Borrower. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor Administrative Agent, subject to the
approval by Borrower if no Event of Default shall exist at such time. If no
successor Administrative Agent shall have been so appointed, and shall have
accepted such appointment, within 30 days after the retiring Administrative
Agent gives notice of resignation, then the retiring Administrative Agent may,
on behalf of the Lenders, appoint a successor Administrative Agent, which shall
be an Eligible Financial Institution.

(b)         Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges, and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under this Agreement and the
other Loan Documents. If within 45 days after written notice is given of the
retiring Administrative Agent’s resignation under this Section 10.7 no successor
Administrative Agent shall have been appointed and shall have accepted such
appointment, then on such 45th day (i) the retiring Administrative Agent’s
resignation shall become effective, (ii) the retiring Administrative Agent shall
thereupon be discharged from its duties and obligations under the Loan
Documents, and (iii) the Required Lenders shall thereafter perform all duties of
the retiring Administrative Agent under the Loan Documents until such time as
the Required Lenders appoint a successor Administrative Agent as provided above.
After any retiring Administrative Agent’s resignation hereunder, the provisions
of this Section 10.7 shall continue in effect for the benefit of such retiring
Administrative Agent and its representatives and agents in respect of any
actions taken or not taken by any of them while it was serving as Administrative
Agent.

10.8         Additional Agencies; No Duties Imposed Upon Syndication Agents or
Documentation Agents.

(a)         Administrative Agent shall have the right from time to time to
designate one or more syndication agents and documentation agents. Upon any such
designation, Administrative Agent shall have the right to replace the cover page
to this Agreement to reflect the addition of such Person as “Syndication Agent”
and/or “Documentation Agent,” as the case may be.

(b)         None of the Persons designated as a “Syndication Agent” or
“Documentation Agent” shall have any right, power, obligation, liability,
responsibility, or duty under this Agreement or any of the other Loan Documents
other than, if such Person is a Lender, those applicable to all Lenders as such.
Without limiting the foregoing, none of the Persons designated as a “Syndication
Agent” or “Documentation Agent” shall have or be deemed to have any fiduciary
duty to or fiduciary relationship with any Lender. In addition to the agreements
set forth in this Section 10.8, each of the Lenders acknowledges that it has not
relied, and will not rely, on any of the Persons so identified in deciding to
enter into this Agreement or in taking or not taking action hereunder.

10.9         Collateral Matters.

(a)         Each Lender authorizes and directs Administrative Agent to enter
into the Security Agreements for the benefit of the Lenders. Each Lender also
authorizes and directs Administrative Agent to review and approve all agreements
regarding any Lock Boxes, any Lock Box Accounts, and the Collections Account on
such terms as Administrative Agent deems necessary. Each Lender hereby agrees
that, except as otherwise set forth herein, any action taken by the Required
Lenders or each of the Lenders, as applicable, in accordance with the provisions
of this Agreement or the Security Agreement, and the exercise by the Required
Lenders or each of the Lenders, as applicable, of the powers set forth herein or
therein, together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of the Lenders. Administrative Agent is
hereby authorized on behalf of all of the Lenders, without the necessity of any
notice to or further consent from any Lender, from time to time prior to an
Event of Default, to take any action with respect to any Collateral or Loan
Document which may be necessary or appropriate to perfect and maintain perfected
the security interest in and liens upon the Collateral granted pursuant to the
Security Agreement. The rights, remedies, powers, and privileges conferred upon
Administrative Agent hereunder and under the other Loan Documents may be
exercised by Administrative Agent without the necessity of the joinder of any
other parties unless otherwise required by applicable law.

 

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(b)         The Lenders hereby authorize Administrative Agent, at its option and
in its discretion, to release any Lien granted to or held by Administrative
Agent upon any Collateral (i) upon termination of the Revolving Loan Commitment
and payment in cash and satisfaction of all of the Obligations at any time
arising under or in respect of this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby or (ii) if approved, authorized, or
ratified in writing by the Required Lenders, unless such release is required to
be approved by all of the Lenders hereunder. Upon request by Administrative
Agent at any time, the Lenders will confirm in writing Administrative Agent’s
authority to release particular types or items of Collateral pursuant to this
Section 10.9.

(c)         Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Agreement, or consented to in writing by
the Required Lenders or all of the Lenders, as applicable, and upon at least 3
Business Days’ prior written request by Borrower, Administrative Agent shall
(and is hereby irrevocably authorized by the Lenders to) execute such documents
as may be necessary to evidence the release of the Liens granted to
Administrative Agent for the benefit of the Secured Parties herein or pursuant
hereto upon the Collateral sold or transferred; provided that (i) Administrative
Agent shall not be required to execute any such document on terms which, in
Administrative Agent’s opinion, would expose Administrative Agent to liability
or create any obligation or entail any consequence other than the release of
such Liens without recourse or warranty and (ii) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens upon (or
obligations of Borrower in respect of) all interests retained by Borrower,
including, without limitation, the proceeds of the sale, all of which shall
continue to constitute part of the Collateral. In the event of any sale or
transfer of Collateral, or any foreclosure with respect to any of the
Collateral, Administrative Agent shall be authorized to deduct all of the
expenses reasonably incurred by Administrative Agent from the proceeds of any
such sale, transfer, or foreclosure.

(d)         Administrative Agent shall have no obligation whatsoever to the
Lenders or to any other Person to assure that the Collateral exists or is owned
by Borrower or is cared for, protected, or insured or that the liens granted to
Administrative Agent herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected, or enforced or are
entitled to any particular priority or to exercise or to continue exercising at
all or in any manner or under any duty of care, disclosure, or fidelity any of
the rights, authorities, and powers granted or available to Administrative Agent
in this Section 10.9 or in the Security Agreement, it being understood and
agreed that in respect of the Collateral, or any act, omission, or event related
thereto, Administrative Agent may act in any manner it may deem appropriate, in
its sole discretion, given Administrative Agent’s own interest in the Collateral
as one of the Lenders and that Administrative Agent shall have no duty or
liability whatsoever to the Lenders, except for its gross negligence or willful
misconduct.

(e)         Administrative Agent shall promptly, upon receipt thereof, forward
to each Lender copies of the results of any inspections by Administrative Agent
with respect to Borrower and any appraisals obtained by Administrative Agent
with respect to any of the Collateral. Administrative Agent shall have no
liability to any Lender for any errors in or omissions from any inspection or
other examination of Borrower or the Collateral, or in any such appraisal,
unless such error or omission was the direct result of Administrative Agent’s
willful misconduct.

10.10         Replacement of Certain Lenders. If a Lender (an “Affected Lender”)
shall have (a) failed to fund its Commitment Percentage of any Loan requested by
Borrower which such Lender is obligated to fund under the terms of this
Agreement and which such failure has not been cured, (b) requested compensation
from Borrower under Section 11 to recover increased costs incurred by such
Lender (or its parent or holding company) which are not being incurred generally
by the other Lenders (or their respective parents or holding companies), or
(c) delivered (or its respective parents or holding companies shall have
delivered) a notice pursuant to Article 11.1 claiming that such Lender (or its
affiliate) is unable to extend LIR Loans to Borrower for reasons not generally
applicable to the other Lenders, then, in any such case and in addition to any
other rights and remedies that Administrative Agent, any other Lender or
Borrower may have against such Affected Lender, Borrower or Administrative Agent
may make written demand on such Affected Lender (with a copy to Administrative
Agent in the case of a demand by Borrower and a copy to Borrower in the case of
a demand by Administrative Agent) for the Affected Lender to assign, and such
Affected Lender shall assign, pursuant to one or more duly executed Assignment
and Acceptances within 5 Business Days after the date of such demand, to one or
more Lenders willing to accept such assignment or assignments or to one or more
Assignees approved by Administrative Agent, all of such Affected Lender’s rights
and obligations under this Agreement (including its Commitment and all
Obligations owing to it) in accordance

 

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herewith; provided, however, that Administrative Agent shall have no duty to
locate an Assignee for the purposes of accepting such assignment. Administrative
Agent is hereby irrevocably authorized to execute one or more Assignment and
Acceptances as attorney-in-fact for any Affected Lender which fails or refuses
to execute and deliver the same within 5 Business Days after the date of such
demand. The Affected Lender shall be entitled to receive, concurrently with
execution and delivery of each such Assignment and Acceptance, all amounts owed
to the Affected Lender hereunder or under any other Loan Document, including the
aggregate outstanding principal amount of the Obligations owed to such Lender,
together with accrued interest thereon through the date of such assignment. Upon
the replacement of any Affected Lender pursuant hereto, such Affected Lender
shall cease to have any participation in, entitlement to, or other right to
share in the Liens of Administrative Agent in any Collateral and such Affected
Lender shall have no further liability to Administrative Agent, any Lender or
any other Person under any of the Loan Documents (except with respect to events
or transactions which occur prior to the replacement of such Affected Lender),
including any commitment to make Loans.

 

 

11.

CHANGE IN CIRCUMSTANCES; COMPENSATION.

11.1         Basis for Determining Interest Rate Inadequate or Unfair. If on or
before the first day of any Calculation Period (a) Administrative Agent
determines that deposits in U.S. dollars (in the applicable amounts) are not
being offered in the relevant market for such Calculation Period or (b) the
Required Lenders advise Administrative Agent that the LIBOR, as the case may be,
as determined by Administrative Agent will not adequately and fairly reflect the
cost to such Lenders of funding of LIR Loans for such Calculation Period, then,
Administrative Agent shall forthwith give notice thereof to Borrower and the
Lenders, whereupon, until Administrative Agent notifies Borrower that the
circumstances giving rise to such suspension no longer exist, the obligations of
the Lenders to make LIR Loans specified in such notice shall be suspended. Upon
notification from Administrative Agent pursuant to this Section 11.1, unless
Borrower notifies Administrative Agent at least one Business Day before the date
of any borrowing of LIR Loans for which a Notice of Borrowing has previously
been given that it elects not to borrow on such date, such borrowing shall
instead be made as a Base Rate borrowing.

11.2         Illegality. If the adoption of any applicable law, rule or
regulation, or any change therein or any existing or future law, rule or
regulation, or any change in the interpretation or administration thereof by any
Governmental Authority (any such event being referred to as a “Change of Law”),
or compliance by any Lender (or its Lending Office) with any request or
directive (whether or not having the force of law) of any Governmental
Authority, in each case, to the extent any such law, rule, regulation, change,
change in interpretation or administration, or request or directive is issued,
adopted, enacted, requested, or otherwise promulgated after the Closing Date,
shall make it unlawful or impossible for any Lender (or its Lending Office) to
make, maintain or fund its LIR Loans and such Lender shall so notify
Administrative Agent, Administrative Agent shall forthwith give notice thereof
to the other Lenders and Borrower, whereupon until such Lender notifies Borrower
and Administrative Agent that the circumstances giving rise to such suspension
no longer exist, the obligation of such Lender to make LIR Loans shall be
suspended. Before giving any notice to Administrative Agent pursuant to this
Section 11.2, such Lender shall designate a different Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender. If such
Lender shall determine that it may not lawfully continue to maintain and fund
any of its outstanding LIR Loans to maturity and shall so specify in such
notice, all affected LIR Loans shall, automatically be deemed converted to Base
Rate Loans in an equal principal amount from such Lender (on which interest and
principal shall be payable contemporaneously with the related LIR Loans of the
other Lenders).

11.3         Increased Cost and Reduced Return.

(a)         If a Change of Law or compliance by any Lender (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any Governmental Authority, in each case, to the extent such Change of Law or
compliance with any request or directive is, as applicable, issued, adopted,
enacted, requested, or otherwise promulgated after the Closing Date: (i) shall
impose, modify or deem applicable any reserve, special deposit or similar
requirement (including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but excluding, with respect to
any LIR Loan, any LIBOR Reserve Requirements) against assets of, deposits with
or for the account of, or credit extended by, any Lender (or its Lending
Office); or (ii) shall impose on any Lender (or its Lending Office) or on the
United States market for certificates of deposit or the London interbank market
any other condition affecting its LIR Loans or its obligation to

 

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make LIR Loans; and the result of either of the foregoing events is to increase
the cost to such Lender (or its Lending Office) of making or maintaining any
Loan, or to reduce the amount of any sum received or receivable by such Lender
(or its Lending Office) under this Agreement or with respect thereto, by an
amount reasonably deemed by such Lender to be material, then, within 15 Business
Days after demand by such Lender (with a copy to Administrative Agent), Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduction, to the extent attributable to
making, funding, or maintaining its Commitment and/or such Loans.

(b)         If any Lender shall have determined in good faith that the adoption
of any applicable law, rule, or regulation regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof,
or compliance by any Lender (or its Lending Office) with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any Governmental Authority, in each case, to the extent such adoption, change,
or change in interpretation or administration is issued, adopted, enacted,
requested, or otherwise promulgated after the Closing Date, has or would have
the effect of reducing the rate of return on such Lender’s capital as a
consequence of its obligations hereunder to a level below that which such Lender
could have achieved but for such adoption, change, or compliance (taking into
consideration such Lender’s policies with respect to capital adequacy) by an
amount reasonably deemed by such Lender to be material, then from time to time,
within 15 Business Days after demand by such Lender, Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction, to the extent attributable to making, funding, or maintaining its
Commitment and/or such Loans.

(c)         Each Lender will promptly notify Borrower and Administrative Agent
of any event of which it has knowledge, occurring after the date hereof, which
will entitle such Lender to compensation pursuant to this Section and will
designate a different Lending Office or otherwise use commercially reasonable
efforts to minimize the amount of any such compensation, if such designation or
efforts will avoid the need for, or reduce the amount of, such compensation and
will not, in the judgment of such Lender, be otherwise disadvantageous to such
Lender. A certificate of any Lender claiming compensation under this Section and
setting forth the additional amount or amounts to be paid to it hereunder shall
be presumptive evidence in the absence of manifest error. In determining such
amount, such Lender may use any reasonable averaging and attribution methods.

(d)         Anything herein to the contrary notwithstanding, Borrower shall not
be required to pay any Lender amounts owing under this Section 11.3 for any
period that is more than 120 days prior to the date on which the request for
payment therefor is delivered to Borrower; provided that, if the event or
occurrence giving rise to such obligation is retroactive, the 120-day period
referred to above shall be extended to include the period of retroactive effect
thereof.

(e)         The provisions of this Section 11.3 shall be applicable with respect
to any Participant, Assignee, or other Transferee, and any calculations required
by such provisions shall be made based upon the circumstances of such
Participant, Assignee, or other Transferee; provided that Borrower shall not be
required to reimburse any Participant in an amount which exceeds the amount that
would have been payable hereunder to the Lender who sold the participation
interest to such Participant, had such Lender not sold such participation.

11.4         Base Rate Loans or Other LIR Loans Substituted for Affected LIR
Loans. If (a) the obligation of any Lender to make or maintain any LIR Loan has
been suspended pursuant to Section 11.2 or (b) any Lender has demanded
compensation under Section 11.3, then, unless and until such Lender notifies
Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer apply, (i) all Loans which would otherwise be made by
such Lender as LIR Loans, as the case may be, shall be made instead as Base Rate
Loans, and (ii) after each of its LIR Loans, as the case may be, has been
repaid, all payments of principal which would otherwise be applied to repay such
LIR Loans shall be applied to repay its Base Rate Loans instead.

 

 

12.

MISCELLANEOUS.

12.1         No Waiver, Remedies Cumulative. No failure or delay on the part of
Administrative Agent or Lenders to exercise any right under this Agreement, any
other Loan Document, or applicable law shall operate as a waiver thereof, nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and are in addition to any other remedies
provided by applicable law, any Loan Document, or otherwise.

 

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12.2         Survival of Representations. All representations and warranties
made in this Agreement and the other Loan Documents shall survive the making of
any extension of credit hereunder and the delivery of the Note and shall
continue in full force and effect until the full and final payment in cash and
performance of the Obligations and the termination of this Agreement.

12.3         Expenses; Indemnity By Borrower and Servicer.

(a)         Borrower agrees to pay (without duplication) all (i) reasonable and
documented costs and expenses incurred by Administrative Agent in connection
with (A) the due diligence effort (including, without limitation, public records
searches, recording fees, examinations, and investigations of the properties of
the Credit Parties, the Performance Guarantor or any of their respective
Subsidiaries and their respective operations), negotiation, preparation,
execution, performance of any of the Loan Documents or of any document executed
in connection with the transactions contemplated thereby, perfection of
Administrative Agent’s Liens in the Collateral, maintenance of the Loans, and
any and all amendments, modifications, and supplements of any of the Loan
Documents or restructuring of the Obligations; (B) Administrative Agent’s or
Lenders’ preservation, administration, and enforcement of its rights under the
Loan Documents and applicable law, including (x) the reasonable fees and
disbursements of counsel for Administrative Agent in connection therewith,
whether any suit is brought or not and whether incurred at trial or on appeal,
(y) all costs of repossession, storage, disposition, protection, and collection
of Collateral; and (C) periodic field inspections, audits, and appraisals
performed by Administrative Agent to the extent required to be reimbursed
pursuant to Section 6.10 hereof and (z) reasonable costs and fees associated
with the Agent’s Account or other services provided on Borrower’s behalf in
connection with the enforcement of the Loan Documents.

(b)         In addition to all other Obligations, each of Borrower and Servicer
severally agrees to defend, protect, indemnify, and hold harmless each Lender
and its Affiliates, Administrative Agent and its Affiliates and all of their
respective officers, directors, employees, attorneys, consultants, and agents
(each, an “Indemnified Party”) from and against any and all losses, damages,
liabilities, obligations, penalties, fines, fees and reasonable costs and
expenses (including, without limitation, reasonable attorneys’ and paralegals’
fees, costs and expenses, and reasonable fees, costs and expenses for
investigations and experts) incurred by such Indemnified Parties, whether before
or from and after the Closing Date, as a result of or arising from or relating
to (i) any suit, investigation, action, or proceeding by any Person (other than
Borrower), whether threatened or initiated, asserting a claim for any legal or
equitable remedy against any Person under any statute, regulation, or common law
principle, arising from or in connection with Lenders’ making extensions of
credit or furnishing funds to Borrower under this Agreement; (ii) any civil
penalty or fine assessed by OFAC against Lenders or any Indemnified Party, the
defense thereof by Lenders or any Indemnified Party as a result of Lenders’
making extensions of credit hereunder, the acceptance of payments due under the
Loan Documents, or acceptance of Collateral or (iii) any matter relating to the
financing transactions contemplated by the Loan Documents or by any document
executed in connection with the transactions contemplated thereby, other than,
with respect to each of the foregoing clauses (i), (ii), or (iii), for such
loss, damage, liability, obligation, penalty, fee, cost, or expense arising from
an Indemnified Party’s gross negligence or willful misconduct. If Borrower or
Servicer should fail to pay when due any tax or other amount required by this
Agreement to be paid or which may be reasonably necessary to protect or preserve
any Collateral or Borrower’s or Administrative Agent’s or Lenders’ interests
therein, Administrative Agent and Lenders may make such payment in the manner
provided in Section 2.7(b). In addition, each of Borrower and Servicer agrees to
pay and save Administrative Agent and Lenders harmless against any liability for
payment of any state documentary stamp taxes, intangible taxes, or similar taxes
(including interest or penalties, if any) which may now or hereafter be
determined to be payable in respect to the execution, delivery, or recording of
any Loan Document or the making of any Loan, whether originally thought to be
due or not, and regardless of any mistake of fact or law on the part of
Administrative Agent or Lenders (or their counsel), Borrower or Servicer with
respect to the applicability of such tax, other than in each case, Excluded
Taxes. Borrower’s obligation for indemnification for all of the foregoing
losses, damages, liabilities, obligations, penalties, fees, costs, and expenses
of Lender shall be part of the Obligations, secured by the Collateral,
chargeable against Borrower’s loan account as provided herein, and shall survive
termination of this Agreement. Anything contained in this Section 12.3 to the
contrary notwithstanding, (i) the foregoing indemnification is not intended to,
and shall not, constitute a guarantee of the collectibility or

 

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payment of the Receivables and (ii) nothing within this Section 12.3 shall
require Borrower or Servicer to indemnify an Indemnified Party for Receivables
which are uncollected or unpaid for any reason other than Borrower’s or
Servicer’s failure to perform its obligations under this Agreement or Seller to
perform its obligation under the Receivables Sale Agreement.

(c)         All amounts which are required to be paid or reimbursed by a Credit
Party under this Section 12.3 shall be due and payable in the manner and at the
times provided in Section 2.7(a).

12.4         Notices. Any notice or other communication hereunder or under the
Note to any party hereto or thereto shall be by hand delivery, overnight
delivery via nationally recognized overnight delivery service, facsimile with
receipt confirmed, or registered or certified United States mail with return
receipt and unless otherwise provided herein shall be deemed to have been given
or made when delivered, telegraphed, faxed or, if sent via United States mail,
when receipt therefor is signed by the receiver, postage prepaid, addressed to
the party at its address specified below (or at any other address that the party
may hereafter specify to the other parties in writing):

 

Administrative Agent:

  

Regions Bank

  

191 Peachtree St. NE

  

Suite 3800

Atlanta, GA 30303

Attn: Linda Harris

  

Fax: 404-221-4361

Borrower:

  

Acuity Enterprise, Inc.

  

1310 Seaboard Industrial Boulevard

  

Atlanta, Georgia 30318

  

Attn: Chief Financial Officer

  

Fax: 404-367-4084

With a copy to:

  

Acuity Enterprise, Inc.

  

1310 Seaboard Industrial Boulevard

  

Atlanta, Georgia 30318

  

Attn: General Counsel

  

Fax: 404-367-4084

Servicer:

  

Acuity Specialty Products, Inc.

  

1310 Seaboard Industrial Boulevard

  

Atlanta, Georgia 30318

  

Attn: Chief Financial Officer

  

Fax: 404-367-4084

With a copy to:

  

Acuity Specialty Products, Inc.

  

1310 Seaboard Industrial Boulevard

  

Atlanta, Georgia 30318

  

Attn: General Counsel

  

Fax: 404-367-4084

12.5         Governing Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND ALL
MATTERS ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (WHETHER IN CONTRACT, TORT OR OTHERWISE), SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA.

 

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12.6         Successors and Assigns; Participations and Assignments; Register.

(a)         This Agreement shall be binding upon and shall inure to the benefit
of Borrower, Servicer, Administrative Agent, Lenders, and their respective
successors and assigns; provided that neither Borrower nor Servicer may assign
any of its rights hereunder without the prior written consent of Administrative
Agent, and any such assignment made without such consent will be void in all
respects.

(b)         Any Lender may at any time sell to one or more Eligible Financial
Institutions (each a “Participant”) participating interests in any Loan owing to
such Lender, any Commitment hereunder or any other interest of such Lender
hereunder; provided, however, that if a Lender is selling a participation in
only a portion of its Commitment or any other interest of such Lender hereunder,
the participation being sold (determined as of the effective date of the sale of
the participation) shall be in an amount not less than $5,000,000, reduced,
however, to $1,000,000 for Participants of the type described in the last
sentence of the definition of “Eligible Financial Institution.” In the event of
any such sale by a Lender of a participating interest to a Participant, such
Lender’s obligations under this Agreement shall remain unchanged, such Lender
shall remain solely responsible for the performance thereof, and Borrower and
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender’s rights and obligations under this Agreement. In
no event shall a Lender that sells a participation be obligated to the
Participant to take or refrain from taking any action hereunder, except that
such Lender may agree that it will not (except as provided below), without the
consent of the Participant, agree to (i) extend any date fixed for the payment
of principal of or interest on the related Loan or Loans, (ii) the reduction of
the amount of any principal, interest or fees due on any date fixed for the
payment thereof with respect to the related Loan or Loans, (iii) the change of
the principal of the related Loan or Loans, (iv) any reduction in the rate at
which either interest is payable thereon or (if the Participant is entitled to
any part thereof) fee is payable hereunder from the rate at which the
Participant is entitled to receive interest or fee (as the case may be) in
respect of such participation, or (v) the release or substitution of all or any
substantial part of the Collateral held as security for the Loans. Each Lender
selling a participating interest in any Loan, Commitment, or other interest
under this Agreement, will, within 10 Business Days of such sale, provide
Borrower and Administrative Agent with written notification stating that such
sale has occurred and identifying the Participant and the interest purchased by
such Participant. Borrower acknowledges and agrees that each Participant shall
be entitled to the benefits of Section 12 with respect to its participation in
Loans outstanding from time to time.

(c)         Any Lender may at any time assign to one or more Eligible Financial
Institutions (each an “Assignee”) all or a proportionate part of its rights and
obligations under this Agreement and the other Loan Documents, and such Assignee
shall assume all such rights and obligations, pursuant to an Assignment and
Acceptance, executed by such Assignee, such transferor Lender and Administrative
Agent (and, in the case of an Assignee that is not then a Lender, subject to
clause (iii) below, by Borrower); provided that (i) no interest may be sold by a
Lender pursuant to this subsection (c) unless the Assignee shall agree to assume
ratably equivalent portions of the transferor Lender’s Commitment, (ii) if a
Lender is assigning only a portion of its Commitment, then, the amount of the
Commitment being assigned (determined as of the effective date of the
assignment) shall be in an amount not less than $5,000,000, (iii) a Lender may
not have more than 3 Assignees that are not then Lenders at any one time, and
(iv) any such assignment must comply in any event with Section 2.7(d). Upon
(A) execution of the Assignment and Acceptance by such transferor Lender, such
Assignee, Administrative Agent, and (if applicable) Borrower, (B) delivery of an
executed copy of the Assignment and Acceptance to Borrower and Administrative
Agent, (C) payment by such Assignee to such transferor Lender of an amount equal
to the purchase price agreed between such transferor Lender and such Assignee,
and (D) payment of a processing and recordation fee of $3,500 to Administrative
Agent by the new Lender (reduced, however, to $1,000, if the Assignee is an
existing Lender or an Affiliate of an existing Lender), such Assignee shall for
all purposes be a Lender party to this Agreement and shall have all the rights
and obligations of a Lender under this Agreement to the same extent as if it
were an original party hereto with a Commitment as set forth in such instrument
of assumption, and the transferor Lender shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by
Borrower, Lenders, or Administrative Agent shall be required.

(d)         Subject to the provisions of Section 12.18, Borrower authorizes each
Lender to disclose to any Participant, Assignee, or other transferee which is an
Eligible Financial Institution (each a “Transferee”) and any prospective
Transferee any and all financial information in such Lender’s possession
concerning Borrower which has been delivered to such Lender by Borrower pursuant
to this Agreement or which has been delivered to such Lender by Borrower in
connection with such Lender’s credit evaluation prior to entering into this
Agreement, so long as such Transferee has agreed to be bound by the terms of
Section 12.18.

 

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(e)         No Transferee shall be entitled to receive any greater payment under
Section 2.8 or 10.3 than the transferor Lender would have been entitled to
receive with respect to the rights transferred, unless such transfer is made
with Borrower’ prior written consent or by reason of the provisions of
Section 2.8, 11.2, or 11.3 requiring such Lender to designate a different
Lending Office under certain circumstances or at a time when the circumstances
giving rise to such greater payment did not exist.

(f)         Anything in this Section 12.6 to the contrary notwithstanding, any
Lender may assign and pledge all or any portion of the Loans and/or obligations
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank; provided that any payment in respect of such assigned Loans and/or
obligations made by Borrower to the assigning and/or pledging Lender in
accordance with the terms of this Agreement shall satisfy Borrower’s obligations
hereunder in respect of such assigned Loans and/or obligations to the extent of
such payment. No such assignment shall release the assigning and/or pledging
Lender from its obligations hereunder.

(g)         Administrative Agent shall maintain (and make available for
inspection by Borrower and Lenders on any Business Day upon reasonable prior
notice and at reasonable times) a register for the recordation of, and will
record, the names and addresses of the Lenders and the respective amounts of the
Commitments and Loans of each Lender from time to time (the “Register”). The
entries in the Register shall be presumptive evidence for all purposes, absent
manifest error, and Borrower, Administrative Agent, and Lenders shall treat each
person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. Each Lender that grants a participation, acting for
these purposes solely as an agent of Borrower, shall maintain a register on
which it enters the name and address of each Participant and the principal and
interest amount of each Participant’s interest in the Loans held by it (the
“Participant Register”). The entries in the Participant Register shall be
conclusive, absent manifest error, and such Lender shall treat each person whose
name is recorded in the Participant Register as the owner of such
sub-participation or sub-contract for all purposes of this Agreement.

12.7         Counterparts; Telecopied Signatures. This Agreement and any
amendments, waivers, or consents relating hereto may be executed in any number
of counterparts and by different parties hereto or thereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which when taken together shall constitute but one and the
same instrument. Any signature delivered by a party hereto or to any amendment,
waiver, or consent relating hereto by facsimile transmission or by electronic
email in Adobe Corporation’s Portable Document Format (or PDF) shall be deemed
to be an original signature hereto.

12.8         No Usury. Regardless of any other provision of this Agreement, the
Note, or in any other Loan Document, if for any reason the effective rate of
interest payable hereunder or thereunder should exceed the maximum lawful rate
of interest, the effective rate of interest shall be deemed reduced to, and
shall be, such maximum lawful rate of interest. Any amount paid to or collected
by any Lender as interest which would be in excess of the amount permitted by
applicable law shall be deemed applied to the reduction of the principal balance
of the Obligations and not to the payment of interest, but if such Obligations
have been or are thereby paid in full, the excess shall be returned to the
Person paying same, such application to the principal balance of the Obligations
or the refunding of excess to be a complete settlement and acquittance thereof.

12.9         Powers. All powers of attorney granted to Administrative Agent are
coupled with an interest and are irrevocable.

12.10         Approvals; Amendments.

(a)         Any provision of this Agreement, the Note, or any other Loan
Documents may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by Borrower and the Required Lenders (and, if the
rights or duties of Administrative Agent are affected thereby, by Administrative
Agent and, if the rights or duties of the Servicer are affected thereby, the
Servicer); provided that, no such amendment or waiver shall, unless signed by
all Lenders (other than Defaulting Lenders), (i) change the Commitment of any

 

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Lender or subject any Lender to any additional monetary obligation, (ii) change
the principal of, or reduce the rate of interest on, any Loan or reduce any fees
(other than fees payable to Administrative Agent) hereunder, (iii) extend the
date fixed for any payment of principal of or interest on any Loan or any fees
hereunder, (iv) reduce the amount of principal, interest, or fees due on any
date fixed for the payment thereof, (v) reduce the percentage of the Commitments
or of the aggregate unpaid principal amount of the Note, or the percentage of
Lenders, which shall be required for the Lenders or any of them to take any
action under this Section or any other provision of this Agreement, (vi) change
the provisions with respect to pro rata treatment among Lenders (including,
without limitation, as to sharing of payments and expenses), (vii) except as
expressly provided in this Agreement or any of the other Loan Documents, release
all or any substantial part of the Collateral held as security for the Loans,
(viii) change the provisions of this Section 12.10, (ix) release Performance
Guarantor from its obligations under the Performance Guaranty, (x) change the
several nature of the obligations of the Lenders under their respective
Commitments; provided, further, that, notwithstanding the foregoing,
Administrative Agent and Borrower may, with the consent of the other, amend,
modify, or supplement this Agreement and any other Loan Document to cure any
ambiguity, typographical error, defect, or inconsistency of such amendment,
modification, or supplement which does not adversely affect the rights of any
Lender.

(b)         Borrower will not solicit, request, or negotiate for or with respect
to any proposed waiver or amendment of any of the provisions of this Agreement
except through Administrative Agent, or unless each Lender shall be informed
thereof by Borrower and shall be afforded an opportunity of considering the same
and shall be supplied by Borrower with sufficient information to enable it to
make an informed decision with respect thereto. Executed or true and correct
copies of any waiver or consent effected pursuant to the provisions of this
Agreement shall be delivered by Borrower to Administrative Agent (for
distribution to each Lender) forthwith following the date on which the same
shall have been executed and delivered by the requisite percentage of Lenders.
Borrower will, not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee, or
otherwise, to any Lender (in its capacity as such) as consideration for or as an
inducement to the entering into by such Lender of any waiver or amendment of any
of the terms and provisions of this Agreement unless such remuneration is
concurrently paid, on the same terms, ratably to all such Lenders.

12.11         Waiver of Certain Defenses. To the fullest extent permitted by
applicable law, upon the occurrence of any Event of Default, neither Borrower
nor anyone claiming by or under Borrower will claim or seek to take advantage of
any law requiring Administrative Agent or Lenders to attempt to realize upon any
Collateral, or any appraisement, evaluation, stay, extension, homestead,
redemption, or exemption laws now or hereafter in force to prevent or hinder the
enforcement of this Agreement. Borrower, for itself and all who may at any time
claim through or under Borrower, hereby expressly waives to the fullest extent
permitted by applicable law the benefit of all such laws. All rights of
Administrative Agent and Lenders and all obligations of Borrower hereunder shall
be absolute and unconditional irrespective of (a) any change in the time,
manner, or place of payment of, or any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from any provision of the Loan Documents, (b) any exchange, release, or
non-perfection of any other collateral given as security for the Obligations, or
any release or amendment or waiver of or consent to departure from any guaranty
for all or any of the Obligations, or (c) any other circumstance which might
otherwise constitute a defense available to, or a discharge of, Borrower or any
third party, other than payment and performance in full of the Obligations.

12.12         Additional Provisions. Time is of the essence of this Agreement
and the other Loan Documents. No provision of this Agreement or any of the other
Loan Documents shall be construed against or interpreted to the disadvantage of
any party hereto by any Governmental Authority by reason of such party having or
being deemed to have structured, drafted, or dictated such provision.

12.13         Integration; Final Agreement. This Agreement and the other Loan
Documents, together with all other instruments, agreements, and certificates
executed by the parties in connection therewith or with reference thereto,
embody the entire understanding and agreement between the parties hereto and
thereto with respect to the subject matter hereof and thereof and supersede all
prior agreements, understandings, and inducements, whether express or implied or
oral or written. There are no unwritten oral agreements between the parties.

12.14         LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES. EACH OF THE
PARTIES HERETO, INCLUDING EACH LENDER BY ACCEPTANCE HEREOF, AGREES THAT IN ANY
JUDICIAL, MEDIATION, OR ARBITRATION PROCEEDING OR ANY CLAIM OR CONTROVERSY

 

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BETWEEN OR AMONG THEM (A “DISPUTE”) THAT MAY ARISE OUT OF OR BE IN ANY WAY
CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS, OR ANY OTHER AGREEMENT OR
DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED
HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER
FOR, (a) INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES OR (b) PUNITIVE OR
EXEMPLARY DAMAGES. EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR
CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE
FUTURE IN CONNECTION WITH ANY DISPUTE, REGARDLESS OF WHETHER THE DISPUTE IS
RESOLVED BY ARBITRATION, MEDIATION, JUDICIALLY, OR OTHERWISE.

12.15         WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF BORROWER BY EXECUTION HEREOF AND ADMINISTRATIVE AGENT AND LENDERS BY
ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHT
EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE LOAN DOCUMENTS
OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THIS AGREEMENT
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN), OR ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A
MATERIAL INDUCEMENT TO LENDERS TO ENTER INTO AND ACCEPT THIS AGREEMENT. EACH OF
THE PARTIES AGREES THAT THE TERMS HEREOF SHALL SUPERSEDE AND REPLACE ANY PRIOR
AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE PARTIES CONTAINED IN
ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT OR AGREEMENT HERETOFORE EXECUTED IN
CONNECTION WITH, RELATED TO OR BEING REPLACED, SUPPLEMENTED, EXTENDED, OR
MODIFIED BY, THIS AGREEMENT.

12.16         SUBMISSION TO JURISDICTION; VENUE. EACH OF BORROWER, SERVICER,
ADMINISTRATIVE AGENT, AND EACH LENDER HEREBY IRREVOCABLY SUBMITS (TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW) TO THE NON-EXCLUSIVE JURISDICTION OF ANY
GEORGIA STATE COURT SITTING IN FULTON COUNTY, GEORGIA, OR FEDERAL COURT SITTING
IN THE NORTHERN DISTRICT OF GEORGIA, OVER ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY RELATED
DOCUMENTS AND BORROWER, SERVICER, ADMINISTRATIVE AGENT, AND EACH LENDER EACH
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH GEORGIA STATE OR FEDERAL COURT.
BORROWER, SERVICER, ADMINISTRATIVE AGENT, AND EACH LENDER EACH HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION EACH
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT AS WELL AS ANY RIGHT EACH MAY NOW OR HEREAFTER
HAVE, TO REMOVE ANY SUCH ACTION OR PROCEEDING, ONCE COMMENCED, TO ANOTHER COURT
ON THE GROUNDS OF FORUM NON CONVENIENS OR OTHERWISE. EACH OF SERVICER AND
BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY
ACTION OR PROCEEDING BY THE MAILING OR DELIVERY OF COPIES OF SUCH PROCESS TO IT
AT THE ADDRESS SET FORTH IN SECTION 12.4 HEREOF.

12.17         [Intentionally Omitted].

12.18         Confidentiality. Each of Administrative Agent and the Lenders
agrees to maintain the confidentiality of all Information (as defined below) and
not to disclose the Information to other parties, except that Information may be
disclosed (a) to its Affiliates and to its and its Affiliates’ respective
partners, directors, officers, employees, agents, advisors, and representatives
(provided such Persons are informed of the confidential nature of the
Information and agree to keep the Information confidential), (b) to the extent
requested by any governmental or regulatory authority purporting to have
jurisdiction over it (including any self-regulatory authority), provided,
however, that, to the extent permitted by law, such Person shall provide prior
written notice to the affected Credit Party of any such request, (c) to the
extent required by Applicable Law or by any subpoena or similar legal process,
provided, however, that, to the extent permitted by law, such Person shall
provide prior written notice to the affected Credit Party of any such
requirement, (d) to any other party hereto, (e) to the extent it deems
necessary, in

 

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consultation with counsel, in connection with (i) any litigation to which such
Person or any of its Affiliates may be a party, whether to defend itself, reduce
its liability, protect any of its claims or interests under or in connection
with the Loan Documents or otherwise (but neither Administrative Agent nor any
Lender shall make any disclosure under this clause (e)(i) until it shall have
given Borrower 15 days’ prior written notice of its intention to make such
disclosure (which shall contain a reasonably detailed description of the
Information to be disclosed), unless (A) Administrative Agent’s or such Lender’s
counsel, as applicable, shall have determined in its reasonable judgment that
providing such notice would be unlawful; (B) Borrower or any of its Affiliates
is an adverse party in such litigation and Administrative Agent’s or such
Lender’s counsel, as applicable, shall have determined that providing such
notice would be materially adverse or prejudicial to Administrative Agent’s or
Lender’s position in such litigation or in the prosecution of its claims; or
(C) due to no action of Administrative Agent or such Lender, as applicable, in
contravention of the terms hereof Administrative Agent or such Lender, as
applicable, has less than 15 days notice such disclosure is required (provided
that Administrative Agent or such Lender shall, subject to the foregoing clauses
(A) and (B), provide such notice to Borrower promptly, with a view to maximizing
the number of days of notice afforded Borrower under this clause (e)(i))) or
(ii) the exercise of any remedy under this Agreement or any other Loan Document,
(f) subject to an agreement containing provisions substantially the same as this
Section, to any actual or potential assignee or participant Transferee, (g) with
the consent of Borrower, or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii) is
available to Administrative Agent, any Lender, or any of their Affiliates on a
nonconfidential basis from a source which, to the knowledge of Administrative
Agent or such Lender, as the case may be, is not bound by a confidentiality
agreement with the Credit Parties or their Affiliates. Each Credit Party hereby
authorizes Administrative Agent and each Lender to use the name, logos, and
other insignia and the amount of the credit facility provided hereunder in any
“tombstone” or comparable advertising, on its website or in other of such
Person’s marketing materials. As used herein, “Information” means all
information about the Credit Parties and their Affiliates received from a Credit
Party or their Affiliates relating to it or its business or which is obtained by
Administrative Agent or any Lender in the course of any audit or exam made under
the Loan Documents. Any Person required to maintain the confidentiality of
Information pursuant to this Section shall be deemed to have complied if it
exercises the same degree of care that it accords its own confidential
information. Each of Administrative Agent and the Lenders acknowledges that
(x) Information may include material non-public information concerning a Credit
Party or their Affiliates, (y) it has developed compliance procedures regarding
the use of material non-public information, and (z) it will handle such material
non-public information in accordance with Applicable Law, including federal and
state securities laws.

12.19         No Tax Advice. Each Credit Party hereby acknowledges and agrees
that, with respect to all tax and accounting matters relating to this Agreement,
the other Loan Documents, or the transactions contemplated herein and therein,
it has not relied on any representations made, consultation provided by, or
advice given or rendered by Administrative Agent or any Lender or any of their
representatives, agents, or employees, and, instead, Borrower has sought, and
relied upon, the advice of its own tax and accounting professionals with respect
to all such matters.

[Signatures on following pages]

 

56

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed under seal as of the day and year first above written.

 

ACUITY ENTERPRISE, INC., as Borrower

By:

 

/s/ Mark R. Bachmann

Name:

 

Mark R. Bachmann

Title:

 

Executive Vice President and CFO

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

ACUITY SPECIALTY PRODUCTS, INC., as

Servicer

By:

 

/s/ Mark R. Bachmann

Name:

 

Mark R. Bachmann

Title:

 

Executive Vice President and CFO

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

REGIONS BANK, as Administrative Agent and

as a Lender

By:

 

/s/ Linda M. Harris

Name:

 

Linda M. Harris

Title:

 

Senior Vice President

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

EXHIBIT A

FORM OF REVOLVING NOTE

 

$40,000,000

   October 14, 2009

FOR VALUE RECEIVED, ACUITY ENTERPRISE, INC., a Delaware corporation
(“Borrower”), promises to pay to the order of Administrative Agent, on behalf of
the Lenders at the place and times provided in the Loan and Security Agreement
referred to below, the principal sum of FORTY MILLION DOLLARS ($40,000,000) or
the principal amounts of the Loans evidenced hereby to the Administrative Agent
on behalf of the Lenders as their respective interests appear in the records of
the Administrative Agent, which Loans were made pursuant to that certain Loan
and Security Agreement dated as of October 14, 2009, by and among Borrower,
Acuity Specialty Products, Inc., a Georgia corporation, as initial servicer,
Administrative Agent and the Lenders party thereto from time to time (as the
same may be amended, restated, supplemented, or otherwise modified from time to
time, the “Loan Agreement”). Capitalized terms used herein and not defined
herein shall have the meanings assigned thereto in the Loan Agreement.

The unpaid principal amount of this Revolving Note from time to time outstanding
is subject to mandatory repayment from time to time as provided in the Loan
Agreement and shall bear interest as provided in the Loan Agreement. All
payments of principal and interest on this Revolving Note shall be payable to
Administrative Agent on behalf of Lenders as their respective interests appear
in the records of the Administrative Agent in lawful currency of the United
States of America in immediately available funds in the manner and location
indicated in the Loan Agreement or wherever else Administrative Agent may
specify in writing in accordance with the terms of the Loan Agreement.

This Revolving Note is entitled to the benefits of, and evidences Obligations
incurred under, the Loan Agreement, to which reference is made for a description
of the security for this Revolving Note and for a statement of the terms and
conditions on which Borrower is permitted and required to make prepayments and
repayments of principal of the Obligations evidenced by this Revolving Note and
on which such Obligations may be declared to be immediately due and payable.

This Revolving Note shall be governed, construed and enforced in accordance with
the laws of the State of Georgia, without reference to the conflicts or choice
of law principles thereof.

Borrower hereby waives all requirements as to diligence, presentment, demand of
payment, protest, and (except as required by the Loan Agreement) notice of any
kind with respect to this Revolving Note.

[Signature on following page.]

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

IN WITNESS WHEREOF, the undersigned has executed this Revolving Note under seal
as of the day and year first written above.

 

ACUITY ENTERPRISE, INC.

By:

   

Name:

   

Title:

   

(SEAL)

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EXHIBIT B

FORM OF NOTICE OF BORROWING

[                     ], [20__]

REGIONS BANK

191 Peachtree Street, N.E.

Suite 3800

Atlanta, Georgia 30303

Attn: Linda Harris

Ladies and Gentlemen:

This Notice of Borrowing is delivered pursuant to Section 2.4 of that certain
Loan and Security Agreement dated as of October 14, 2009 (as the same may be
amended, restated, supplemented, or otherwise modified from time to time, the
“Loan Agreement”), by and among Acuity Enterprise, Inc., a Delaware corporation
(“Borrower”), Acuity Specialty Products, Inc., a Georgia corporation
(“Servicer”), Regions Bank (“Administrative Agent”) and the Lenders party
thereto from time to time. Capitalized terms used herein shall have the meanings
given such terms in the Loan Agreement.

Borrower hereby gives you notice, irrevocably, pursuant to Section 2.4 of the
Loan Agreement, that Borrower hereby requests the following Loan(s) be made
under the Loan Agreement and, in that regard, sets forth below the information
relating to such Loan (the “Proposed Borrowing”), as required by Section 2.4 of
the Loan Agreement:

 

  FOR A REVOLVING LOAN:

     

  Type of Loan

     

  (Base Rate Loan, LIR Loan)

   Principal Amount    Date Loan to Be Made      

  [NOTE: REMOVE THIS SECTION IF YOU ARE USING A MODIFIED FORM OF THIS NOTICE FOR

  THE INITIAL LOANS.]

 

  Apply the proceeds of this Loan as follows:

 

  Name of Bank: [__________________]

  Account Name: [__________________]

  Account Number: [__________________]

  ABA Routing Number: [__________________]

  Reference: [__________________]

 

[Borrower requests that the proceeds of the Proposed Borrowing be applied in the
manner set forth on Exhibit A, attached hereto and made a part hereof.]

Borrower hereby certifies that the following statements are true on the date
hereof, and will be true on the date of the Proposed Borrowing:

(a)        No Default. No Default, Event of Default or Servicer Event of Default
has occurred and is continuing or would result from the making or issuance of
the Proposed Borrowing;

(b)        Correctness of Representations. All representations and warranties
made to Administrative Agent and/or Lenders by any Credit Party in any Loan
Document to which it is a party or otherwise in writing by such Person are true
and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of date of the Proposed
Borrowing except to the extent that they expressly relate to an earlier date;

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(c)        Limitations Not Exceeded. No Borrowing Base Deficit exists and the
making or issuance of the Proposed Borrowing would not cause a Borrowing Base
Deficit to exist;

(d)        Termination Date. The Termination Date has not occurred;

(e)        Field Examination. Within the last six months, Administrative Agent
has received the results of a field examination (conducted at Borrower’s expense
and of the type and nature described in Section 6.10 of the Loan Agreement); and

(f)        Accounts. Each of the Lock Box Accounts is subject to a valid and
perfected first priority security interest in favor of Administrative Agent for
the benefit of the Secured Parties.

(g)        [NOTE: THIS LANGUAGE TO BE USED TO DOCUMENT THE INITIAL LOANS UNDER
THE LOAN AGREEMENT:] [all of the conditions to the Proposed Borrowings set forth
in Sections 4.1 of the Loan Agreement have been satisfied (or waived in
accordance with the terms of the Loan Agreement);] [and]

 

ACUITY ENTERPRISE, INC.

By:

   

Name:

   

Title:

   

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[Exhibit A to Notice of Borrowing]

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EXHIBIT C

COMPLIANCE AND NO DEFAULT CERTIFICATE

In accordance with Section 6.4(a) of the Loan and Security Agreement dated
October 14, 2009 (as the same may be amended, restated, supplemented, or
otherwise modified from time to time, the “Loan Agreement”; capitalized terms
used herein and not defined herein shall have the meanings assigned thereto in
the Loan Agreement) by and between Acuity Enterprises, Inc. (“Borrower”), Acuity
Specialty Products, Inc., as initial Servicer (“Servicer” or “Originator”), the
other Lenders party thereto from time to time, and Regions Bank, as
Administrative Agent and a Lender, I hereby certify, in my capacity as an
officer of [Borrower] [Originator] [Servicer] [Parent] and not individually,
that:

1.        I am the [____________________] of [Borrower] [Originator / Servicer]
[Zep Inc. (“Parent”)]

[SELECT FROM THE FOLLOWING:]

[FOR BORROWER’S ANNUAL FINANCIAL STATEMENTS]

 

 

2.

The enclosed balance sheet and statement of earnings fairly present the
financial condition and results of operations of Borrower for the Fiscal Year
ending [______________ ____], 200[__], in accordance with GAAP except for the
absence of footnotes.

 

 

3.

[I have obtained no knowledge that an Event of Default or Default has occurred
and is continuing.] [I [am of the opinion that] the following Event of Default
or Default has occurred and is continuing: [List Default / Event of Default]].

[FOR ORIGINATOR’S ANNUAL FINANCIAL STATEMENTS]

 

 

2.

The enclosed balance sheet and statement of earnings fairly present the
financial condition and results of operations of Acuity Specialty Products,
Inc., for the Fiscal Year ending [______________ ____], 200[__], in accordance
with GAAP except for the absence of footnotes.

 

 

3.

[I have obtained no knowledge that an Event of Default or Default has occurred
and is continuing.] [I [am of the opinion that] the following Event of Default
or Default has occurred and is continuing: [List Default / Event of Default]].

[FOR SERVICER’S ANNUAL FINANCIAL STATEMENTS—DELIVER ONLY IF SERVICER IS AN
AFFILIATE OF BORROWER]

 

 

2.

The enclosed balance sheet and statement of earnings fairly present the
financial condition and results of operations of Servicer for the Fiscal Year
ending [______________ ____], 200[__], in accordance with GAAP except for the
absence of footnotes.

 

 

3.

[I have obtained no knowledge that an Event of Default or Default has occurred
and is continuing.] [I [am of the opinion that] the following Event of Default
or Default has occurred and is continuing: [List Default / Event of Default]].

[FOR BORROWER’S QUARTERLY FINANCIAL STATEMENTS]

 

 

2.

The enclosed financial statements fairly present in all material respects the
financial condition of Borrower and its Subsidiaries as at the end of the Fiscal
Quarter ending [______________ ____], 200[__], on a consolidated basis, and the
results of operations and statements of cash flows of Borrower and its
Subsidiaries for such Fiscal Quarter and such portion of Borrower’s Fiscal Year,
in accordance with GAAP consistently applied (subject to normal year-end audit
adjustments and the absence of certain footnotes).

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[FOR PARENT’S QUARTERLY FINANCIAL STATEMENTS]

2.        The enclosed financial statements fairly present in all material
respects the financial condition of Parent and its Subsidiaries as at the end of
the Fiscal Quarter ending [______________ ____], 200[__],on a consolidated
basis, and the results of operations and statements of cash flows of Parent and
its Subsidiaries for such Fiscal Quarter and such portion of Parent’ Fiscal
Year, in accordance with GAAP consistently applied (subject to normal year-end
audit adjustments and the absence of certain footnotes).

 

[ACUITY ENTERPRISES, INC.]

[ACUITY SPECIALTY PRODUCTS, INC.]

[ZEP INC.]

By:

   

Name:

   

Title:

   

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EXHIBIT D

FORM OF ASSIGNMENT AND ACCEPTANCE

Dated                     , 20    

Reference is made to the Loan and Security Agreement dated as of October 14,
2009 (the “Loan and Security Agreement”) among Acuity Enterprise, Inc., a
Delaware corporation, as Borrower, Acuity Specialty Products, Inc., a Georgia
corporation, as initial Servicer, Regions Bank, as a Lender and as
Administrative Agent, and the other Lenders party thereto from time to time.
Terms defined in the Loan and Security Agreement are used herein with the same
meaning.

___________________________________ (the “Assignor”) and
_________________________________ (the “Assignee”) hereby agree as follows:

1.        The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, as of the Effective
Date (as defined below) a         % interest in and to all of the Assignor’s
rights and obligations under the Loan and Security Agreement and any other
documents or instruments delivered pursuant to the Loan and Security Agreement,
including, without limitation, such percentage interest in the Commitment of the
Assignor as in effect on the Effective Date and the Loans, if any, owing to the
Assignor on the Effective Date.

2.        The Assignor: (i) represents and warrants that as of the date hereof
(A) its Commitment is $                    , (B) the aggregate outstanding
principal amount of Loans made by it under the Loan and Security Agreement that
have not been repaid is $                     and a description of the interest
rates for such Loans is attached as Schedule 1 hereto and (C) it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim, lien, or encumbrance of
any kind; and (ii) makes no representation or warranty and assumes no
responsibility with respect to (A) any statements, warranties or representations
made in or in connection with the Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any other instrument or document furnished pursuant thereto and
(B) the financial condition of the Borrower, the Servicer or the Originator or
the performance or observance by any Borrower, the Servicer or the Originator of
any of their respective obligations under the Loan and Security Agreement, Loan
Documents or any other instrument or document furnished pursuant thereto.

3.        The Assignee: (i) confirms that it has received copies of the Loan and
Security Agreement, together with copies of the most recent financial statements
delivered to the Administrative Agent and each Lender pursuant to Section 6.4(a)
thereof and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance upon
any Lender or the Administrative Agent and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan and Security
Agreement; (iii) agrees that it will perform in accordance with their terms all
of the obligations which by the terms of the Loan and Security Agreement are
required to be performed by it as a Lender and/or Assignee; and (iv) specifies
as its lending offices (and address for notices) the offices set forth beneath
its name on the signature pages hereof.

4.        As consideration for the assignment and sale contemplated in Section 1
hereof, the Assignee shall pay to the Assignor on the Effective Date in
immediately available funds an amount equal to the percentage specified in
Section 1 of the balance of Loans outstanding on such date. It is understood
that fees accrued to the date hereof with respect to the interest assigned
hereby are for the account of the Assignor and such fees accruing from and
including the date hereof are for the account of the Assignee. Each of the
Assignor and the Assignee hereby agrees that if it receives any amount under the
Loan and Security Agreement which is for the account of the other party hereto,
it shall receive the same for the account of such other party to the extent of
such other party’s interest therein and shall promptly pay the same to such
other party.

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5.        The effective date for this Assignment and Acceptance shall be
______________, 2       (the “Effective Date”). [TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF
TRANSFER IN THE REGISTER THEREFOR.]

6.        Upon such acceptance and recording, as of the Effective Date, the
Assignee shall be a party to the Loan and Security Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Lender and/or Assignee thereunder.

7.        This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of Georgia, without reference to the
conflicts or choice of law principles thereof.

 

[ASSIGNOR LENDER]

By:

   

Title:

   

[ASSIGNEE LENDER]

By:

   

Title:

   

Lending Office (and address for notices):

[_______________]

[_______________]

[Attn:                    ]

[Fax:                    ]

 

Acknowledged and Agreed to by:

 

REGIONS BANK, as Administrative Agent

By:

   

Name:

   

Title:

   

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[INCLUDE, IF APPLICABLE:]

 

[ACUITY ENTERPRISE, INC.]

By:

   

Name:

   

Title:

   

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EXHIBIT E

[RESERVED]

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EXHIBIT F

[RESERVED]

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EXHIBIT G

FORM OF TELEPHONE INSTRUCTION LETTER

[______________ ___], 2[        ]

Regions Bank

191 Peachtree Street, N.E.

Suite 3800

Atlanta, Georgia 30303

 

 

Re:

That certain Loan and Security Agreement, dated as of October 14, 2009, by and
among Acuity Enterprise, Inc., a Delaware corporation (“Borrower”), Acuity
Specialty Products, Inc., a Georgia corporation (in its capacity as initial
servicer, “Servicer”), Regions Bank (“Administrative Agent”) and the Lenders
party thereto from time to time (such agreement, as the same may be amended,
restated, supplemented, or otherwise modified from time to time, the “Loan
Agreement”)

Ladies and Gentlemen:

Terms used but not defined in this letter shall have the meanings given such
terms in the Loan Agreement.

Borrower hereby authorizes Lenders to make Loans from time to time upon receipt
of telephone instructions from any of the following designated Persons (and the
satisfaction of all applicable conditions precedent to such Loan set forth in
the Loan Agreement):

 

Name

  

Title

    

Ann Watkins

  

Treasury Manager

  

Clay Miller

  

Corporate Controller

  

Shannon Hamilton

  

Treasury Analyst

  

Jennifer Loveridge

  

Disbursement Manager

  

Lenders shall have no liability to Borrower whatsoever for acting upon any such
telephone instructions which Administrative Agent, in good faith, believes were
given by any of such designated Persons (or his or her designee), and
Administrative Agent and Lenders shall have no duty to inquire as to the
propriety of any requested Loan or the disbursement of any of the proceeds
thereof.

Administrative Agent shall have the right to accept the telephone instructions
of any of the above designated Persons (or his or her designee) until actual
receipt by Administrative Agent of written notice (delivered to Administrative
Agent in accordance with the notice provisions of the Loan Agreement) of
termination of the authority of any such designated Persons (or his or her
designee). Borrower may change the persons designated to give Administrative
Agent telephone instructions only by delivering to Administrative Agent notice
of such change in accordance with the notice provisions of the Loan Agreement.

If required by Administrative Agent in accordance with the Loan Agreement,
Borrower shall confirm all telephone instructions for the making of a Loan by
delivering to Administrative Agent a duly completed Notice of Borrowing.

[Signature on following page.]

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Very truly yours,

 

ACUITY ENTERPRISE, INC.

By:

   

Name:

   

Title:

   

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EXHIBIT H

[RESERVED]

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EXHIBIT I

[RESERVED]

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EXHIBIT J

[RESERVED]

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EXHIBIT K

FORM OF BORROWING BASE CERTIFICATE

[ADMINISTRATIVE AGENT TO PREPARE SEPARATELY]

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EXHIBIT L

[PREPARED SEPERATELY]

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SCHEDULES TO

LOAN AND SECURITY AGREEMENT

by and among

ACUITY ENTERPRISE, INC.

as “Borrower”

ACUITY SPECIALTY PRODUCTS, INC.

as the initial “Servicer”

REGIONS BANK

as a “Lender” and as “Administrative Agent”

and

The Other LENDERS

From Time to Time Party Hereto

as “Lenders”

October 14, 2009

 

 

 

Capitalized terms not defined herein shall have the meaning ascribed to such
terms in the Loan and Security Agreement referred to above.

Loan and Security Agreement Schedules

28557473

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SCHEDULE 5.9

Non-Collateral Property

None.

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SCHEDULE 5.11

Places of Business

Borrower: 1310 Seaboard Industrial Boulevard, Atlanta, GA 30318

350 Joe Frank Harris Parkway, Emerson, GA 30137

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SCHEDULE 5.12

Lock Boxes, Lock Box Accounts, and Other Deposit Accounts

 

Depository

Institution

  

Account Holder

  

Account Number

  

Type of Account

Wachovia Bank

   Borrower    2000016946729    Miscellaneous

Bank of America

   Borrower    3756337286 (Lockbox    Lockbox       Numbers: 013237, 404628,   
      841508, 50188, 3338)   

Bank of America

   Borrower    3751911681 (Lockbox    Lockbox       Number: 012118)   

Bank of America

   Borrower    4426570466    Lockbox