Exhibit 10(i)A(18)

AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

DATED AS OF OCTOBER 19, 2007

AMONG

ACUITY UNLIMITED INC., AS BORROWER,

ACUITY BRANDS LIGHTING, INC., AS SERVICER,

VARIABLE FUNDING CAPITAL COMPANY,

THE LIQUIDITY BANKS FROM TIME TO TIME PARTY HERETO

AND

WACHOVIA BANK, NATIONAL ASSOCIATION, AS AGENT

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SCHEDULE B

DOCUMENTS TO BE DELIVERED TO THE AGENT

ON OR PRIOR TO THE INITIAL PURCHASE

 

I. Parties.

 

VFCC =   

Variable Funding Capital Company LLC

Wachovia =   

Wachovia Bank, National Association

ABI =   

Acuity Brands, Inc.

ABL =   

Acuity Brands Lighting, Inc.

AUI =   

Acuity Unlimited, Inc.

 

II. Closing Documents.

 

1. Amendment to Amended and Restated Receivables Sale and Contribution Agreement
dated as of October 19, 2007 between ALG and AUI.

 

2. Amended and Restated Credit and Security Agreement among AUI, ABL as
Servicer, VFCC and Wachovia.

 

3. Performance Undertaking by ABI in favor of AUI.

 

4. Amended and Restated Fee Letter between Agent and AUI.

 

5. A certificate of the [Assistant] Secretary of each of ABI, ABL and AUI
(collectively, the “Companies”) certifying:

(a) A copy of the Resolutions of its Board of Directors authorizing its
execution, delivery and performance of the Transaction Documents to which it is
a party;

(b) A copy of its certificate/articles of incorporation (also certified by the
Secretary of State of its State of Incorporation on or within thirty (30) days
prior to closing)[, as amended and/or restated through the closing date];

(c) A copy of its by-laws, as amended)[, as amended and/or restated through the
closing date];

(d) A copy of a good standing certificate issued by the Secretaries of State of
(i) its state of incorporation, and (ii), if different, that state where it
maintains its principal place of business; and

(e) The names, titles and signatures of its officers authorized to execute the
Transaction Documents.

 

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6. Pre-filing state and federal tax lien, judgment lien and UCC lien searches in
the following locations against the Borrower:

UCC Lien Search Jurisdictions: Delaware

Federal and State Tax Lien and Judgment Lien Jurisdictions: Delaware, Georgia
and Fulton County (Georgia)

 

7. UCC Financing Statement

 

8. A favorable opinion of in-house counsel to ABI as to certain matters.

 

9. A favorable opinion of Kilpatrick Stockton as to certain corporate matters.

 

10. A favorable opinion of Kilpatrick Stockton as to certain UCC matters.

 

11. [Reserved] [ELIGIBLE LIQUIDITY AGREEMENT NOTICE.]

 

12. Liquidity Agreement by and between VFCC and Wachovia.

 

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TABLE OF CONTENTS

 

          Page

ARTICLE I. THE ADVANCES

   2

Section 1.1

   Credit Facility    2

Section 1.2

   Increases    2

Section 1.3

   Decreases    3

Section 1.4

   Deemed Collections; Borrowing Base    3

Section 1.5

   Payment Requirements    4

Section 1.6

   Ratable Loans; Funding Mechanics; Liquidity Fundings    4

ARTICLE II. PAYMENTS AND COLLECTIONS

   5

Section 2.1

   Payments    5

Section 2.2

   Collections Prior to Amortization; Repayment of Certain Demand Advances    5

Section 2.3

   Repayment of Demand Advances on the Amortization Date; Collections Following
Amortization    6

Section 2.4

   Payment Rescission    7

ARTICLE III. VFCC FUNDING

   7

Section 3.1

   CP Costs    7

Section 3.2

   Calculation of CP Costs    7

Section 3.3

   CP Costs Payments    7

Section 3.4

   Default Rate    7

ARTICLE IV. LIQUIDITY BANK FUNDING

   7

Section 4.1

   Liquidity Bank Funding    7

Section 4.2

   Interest Payments    8

Section 4.3

   Selection and Continuation of Interest Periods    8

Section 4.4

   Liquidity Bank Interest Rates    8

Section 4.5

   Suspension of the LIBO Rate    8

Section 4.6

   Default Rate    9

ARTICLE V. REPRESENTATIONS AND WARRANTIES

   9

Section 5.1

   Representations and Warranties of the Loan Parties    9

Section 5.2

   Liquidity Bank Representations and Warranties    12

ARTICLE VI. CONDITIONS OF ADVANCES

   13

Section 6.1

   Conditions Precedent to Initial Advance    13

Section 6.2

   Conditions Precedent to All Advances    13

ARTICLE VII. COVENANTS

   13

Section 7.1

   Affirmative Covenants of the Loan Parties    13

Section 7.2

   Negative Covenants of the Loan Parties    21

ARTICLE VIII. ADMINISTRATION AND COLLECTION

   23

Section 8.1

   Designation of Servicer    23

Section 8.2

   Duties of Servicer    23

Section 8.3

   Collection Notices    25

Section 8.4

   Responsibilities of Borrower    25

Section 8.5

   Monthly Reports    25

Section 8.6

   Servicing Fee    25

 

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ARTICLE IX. AMORTIZATION EVENTS    25 Section 9.1    Amortization Events    25
Section 9.2    Remedies    27 ARTICLE X. INDEMNIFICATION    28 Section 10.1   
Indemnities by the Loan Parties    28 Section 10.2    Increased Cost and Reduced
Return    30 Section 10.3    Other Costs and Expenses    31 Section 10.4   
Allocations    32 ARTICLE XI. THE AGENT    32 Section 11.1    Authorization and
Action    32 Section 11.2    Delegation of Duties    32 Section 11.3   
Exculpatory Provisions    32 Section 11.4    Reliance by Agent    33
Section 11.5    Non-Reliance on Agent and Other Lenders    33 Section 11.6   
Reimbursement and Indemnification    34 Section 11.7    Agent in its Individual
Capacity    34 Section 11.8    Successor Agent    34 ARTICLE XII. ASSIGNMENTS;
PARTICIPATIONS    34 Section 12.1    Assignments    34 Section 12.2   
Participations    36 ARTICLE XIII. SECURITY INTEREST    36 Section 13.1    Grant
of Security Interest    36 Section 13.2    Termination after Final Payout Date
   36 ARTICLE XIV. MISCELLANEOUS    36 Section 14.1    Waivers and Amendments   
36 Section 14.2    Notices    37 Section 14.3    Ratable Payments    38
Section 14.4    Protection of Agent’s Security Interest    38 Section 14.5   
Confidentiality    39 Section 14.6    Bankruptcy Petition    40 Section 14.7   
Limitation of Liability    40 Section 14.8    CHOICE OF LAW    40 Section 14.9
   CONSENT TO JURISDICTION    40 Section 14.10    WAIVER OF JURY TRIAL    41
Section 14.11    Integration; Binding Effect; Survival of Terms    41
Section 14.12    Counterparts; Severability; Section References    41
Section 14.13    Wachovia Roles    42 Section 14.14    Interest    42
Section 14.15    Source of Funds — ERISA    43

 

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EXHIBITS AND SCHEDULES

 

Exhibit I    Definitions Exhibit II    Form of Borrowing Notice Exhibit III   
Places of Business of the Loan Parties; Locations of Records; Federal Employer
and Organizational Identification Number(s); Prior Names Exhibit IV    Names of
Collection Banks; Collection Accounts Exhibit V    Form of Compliance
Certificate Exhibit VI    Form of Collection Account Agreement Exhibit VII   
Form of Assignment Agreement Exhibit VIII    Form of Monthly Report Exhibit IX
   Form of Performance Undertaking Schedule A    Commitments Schedule B   
Closing Documents

 

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AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT, dated as of October 19,
2007 is entered into by and among:

(a) Acuity Unlimited, Inc. (“AUI”), a Delaware corporation (the “Borrower”),

(b) Acuity Brands Lighting, Inc., a Delaware corporation (formerly known as
Acuity Lighting Group, Inc.) (“ABL”), as initial Servicer (the Servicer,
together with the Borrower, the “Loan Parties” and each, a “Loan Party”),

(c) The entities listed on Schedule A to this Agreement (together with any of
their respective successors and assigns hereunder, the “Liquidity Banks”),

(d) Variable Funding Capital Company LLC, a Delaware limited liability company
(“VFCC”), and

(e) Wachovia Bank, National Association, as agent for the Lenders hereunder or
any successor agent hereunder (together with its successors and assigns
hereunder, the “Agent”).

Unless defined elsewhere herein, capitalized terms used in this Agreement shall
have the meanings assigned to such terms in Exhibit I. This agreement amends and
restates in its entirety that certain Credit and Security Agreement dated as of
September 2, 2003 by and among Acuity Enterprise, Inc., AUI, ABL, Acuity
Specialty Products Group, Inc., VFCC (as assignee of Blue Ridge Funding
Corporation), Wachovia and the Agent, as amended from time to time prior to the
date hereof (the “Existing Agreement”).

PRELIMINARY STATEMENTS

The Borrower desires to borrow from the Lenders from time to time.

VFCC may, in its absolute and sole discretion, make Advances to the Borrower
from time to time.

In the event that VFCC declines to make any Advance, the Liquidity Banks shall,
at the request of the Borrower, make Advances from time to time.

Wachovia Bank, National Association has been requested and is willing to act as
Agent on behalf of VFCC and the Liquidity Banks in accordance with the terms
hereof.

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ARTICLE I.

THE ADVANCES

Section 1.1 Credit Facility.

(a) Upon the terms and subject to the conditions hereof, from time to time prior
to the Facility Termination Date:

(i) The Borrower may, at its option, request Advances from the Lenders in an
aggregate principal amount at any one time outstanding not to exceed the
Borrowing Base and provided that the aggregate principal amount of the Advances
outstanding at any one time shall not exceed the Aggregate Commitment; and

(ii) VFCC may, at its option, make the requested Advance, or if VFCC shall
decline to make any Advance, except as otherwise provided in Section 1.2, the
Liquidity Banks severally agree to make Loans in an aggregate principal amount
equal to the requested Advance.

Each of the Advances, and all other Obligations, shall be secured by the
Collateral as provided in Article XIII. It is the intent of VFCC to fund all
Advances by the issuance of Commercial Paper.

(b) The Borrower may, at its option, upon at least 5 Business Days’ notice to
the Agent, terminate in whole or reduce in part, ratably among the Liquidity
Banks, the unused portion of the Aggregate Commitment; provided that each
partial reduction of the Aggregate Commitment shall be in an amount equal to
$5,000,000 (or a larger integral multiple of $1,000,000 if in excess thereof)
and shall reduce the Commitments of the Liquidity Banks ratably in accordance
with their respective Pro Rata Shares.

(c) On the date hereof, all loans outstanding to the Borrower under the Existing
Agreement shall be refinanced with the initial Loans under this Agreement except
that no Broken Funding Costs shall be payable as a result of such refinancing.

Section 1.2 Increases. The Borrower (or the Servicer on its behalf) shall
provide the Agent with at least two (2) Business Days’ prior notice in a form
set forth as Exhibit II hereto of each requested Advance (each, a “Borrowing
Notice”). Each Borrowing Notice shall be subject to Section 6.2 hereof and,
except as set forth below, shall be irrevocable and shall specify the aggregate
principal amount requested by the Borrower (which shall not be less than
$1,000,000 or a larger integral multiple of $100,000) and the Borrowing Date
(which, in the case of any Advance after the initial Advance hereunder, shall
only be on a Settlement Date) and, in the case of an Advance to be funded by the
Liquidity Banks, the requested Interest Rate and Interest Period. Following
receipt of a Borrowing Notice, the Agent will determine whether VFCC agrees to
make each requested Advance. If VFCC declines to make a proposed Advance, the
Borrower may cancel the Borrowing Notice or, in the absence of such a
cancellation, the requested Advance will be made by the Liquidity Banks. On the
date of each Advance, upon satisfaction of the applicable conditions precedent
set forth in Article VI, VFCC or the Liquidity Banks, as applicable, shall wire
transfer to the Borrower’s account specified in the applicable Borrowing Notice,
in immediately available funds, no later than 2:00 p.m. (New York time), an
aggregate amount equal to (i) in the case of VFCC, the principal amount of the
requested Advances or (ii) in the case of a Liquidity Bank, such Liquidity
Bank’s Pro Rata Share of the principal amount of the requested Advances.

 

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Section 1.3 Decreases. Except as provided in Section 1.4, the Borrower shall
provide the Agent with prior written notice in conformity with the Required
Notice Period (a “Reduction Notice”) of any proposed reduction of the aggregate
principal balance of the Advances outstanding. Such Reduction Notice shall
designate (i) the date (the “Proposed Reduction Date”) upon which any such
principal reduction shall occur (which date shall give effect to the applicable
Required Notice Period), and (ii) the principal amount owing from the Borrower
to be reduced which shall be applied ratably to the Borrower’s Loans from VFCC
and the Liquidity Banks in accordance with the amount of principal (if any)
owing to VFCC, on the one hand, and the amount of principal (if any) owing to
the Liquidity Banks (ratably, based on their respective Pro Rata Shares), on the
other hand (the “Aggregate Reduction”). Only one (1) Reduction Notice shall be
outstanding at any time.

Section 1.4 Deemed Collections; Borrowing Base.

(a) If on any day:

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

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

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

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

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

then, on such day, the Borrower shall be deemed to have received a Collection of
such Receivable (A) in the case of clauses (i)-(iv) above, in the amount of such
reduction or cancellation or the difference between the actual Outstanding
Balance and the amount included in calculating such Net Pool Balance, as
applicable; and (B) in the case of clause (v) above, in the amount of the
Outstanding Balance of such Receivable and, effective as of the date on which
the next succeeding Monthly Report is required to be delivered, the Borrowing
Base of the Borrower shall be reduced by the amount of such Deemed Collection.

(b) The Borrower shall ensure that the aggregate principal balance of the
Advances outstanding at no time exceeds the Borrowing Base and that the
Aggregate Principal outstanding at no time exceeds the Aggregate Commitment. If
at any time the aggregate

 

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principal balance of the Advances outstanding to the Borrower exceeds the
Borrowing Base, the Borrower agrees pay to the Agent not later than the next
succeeding Settlement Date an amount to be applied to reduce such outstanding
principal balance (as allocated by the Agent), such that after giving effect to
such payment the aggregate principal balance of the Advances outstanding is less
than or equal to the Borrowing Base. If at any time the Aggregate Principal
exceeds the Aggregate Commitment, the Borrower agrees to pay to the Agent not
later than the next succeeding Settlement Date an amount to be applied to reduce
Aggregate Principal (as allocated by the Agent), such that after giving effect
to such payment, the Aggregate Principal is less than or equal to the Aggregate
Commitment.

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

Section 1.6 Ratable Loans; Funding Mechanics; Liquidity Fundings.

(a) Each Advance hereunder shall consist of one or more Loans made by VFCC
and/or the Liquidity Banks.

(b) Each Lender funding any Loan shall wire transfer the principal amount of its
Loan to the Agent in immediately available funds not later than 12:00 noon (New
York City time) on the applicable Borrowing Date and, subject to its receipt of
such Loan proceeds, the Agent shall wire transfer such funds to the Borrower’s
account specified in the applicable Borrowing Request not later than 2:00 p.m.
(New York City time) on such Borrowing Date.

(c) While it is the intent of VFCC to fund each requested Advance through the
issuance of its Commercial Paper, the parties acknowledge that if VFCC is
unable, or determines in good faith that it is undesirable, to issue Commercial
Paper to fund all or any portion of its Loans, or is unable to repay such
Commercial Paper upon the maturity thereof, VFCC may put all or any portion of
its Loans to the Liquidity Banks at any time pursuant to the Liquidity Agreement
to finance or refinance the necessary portion of its Loans through a Liquidity
Funding to the extent available. The Liquidity Fundings may be Alternate Base
Rate Loans or LIBO Rate Loans, or a combination thereof, selected by the
Borrower in accordance with Article IV. Regardless of whether a Liquidity
Funding constitutes the direct funding of a Loan, an assignment of a Loan made
by VFCC or the sale of one or more participations in a Loan made by VFCC, each
Liquidity Bank participating in a Liquidity Funding shall have the rights of a
“Lender” hereunder with the same force and effect as if it had directly made a
Loan to the Borrower in the amount of its Liquidity Funding.

 

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(d) Nothing herein shall be deemed to commit VFCC to make Loans.

ARTICLE II.

PAYMENTS AND COLLECTIONS

Section 2.1 Payments. The Borrower hereby promises to pay:

(a) the Aggregate Principal on and after the Facility Termination Date as and
when Collections are received;

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

(c) all accrued and unpaid Interest on the Alternate Base Rate Loans on each
Settlement Date applicable thereto;

(d) all accrued and unpaid Interest on the LIBO Rate Loans on the last day of
each Interest Period applicable thereto;

(e) all accrued and unpaid CP Costs on the CP Rate Loans on each Settlement
Date; and

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

Section 2.2 Collections Prior to Amortization; Repayment of Certain Demand
Advances. Without limiting recourse to the Borrower for the Obligations under
Section 2.1:

(a) On each Settlement Date prior to the Amortization Date, the Servicer shall
deposit to the Agent’s Account, for distribution to the Lenders, a portion of
the Collections received by the Servicer during the preceding Settlement Period
(after deduction of the accrued and unpaid Servicing Fee for such Settlement
Period) equal to the sum of the following amounts for application to the
Obligations in the order specified:

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

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

third, if required under Section 1.3 or 1.4, to the ratable reduction of
Aggregate Principal, and

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

The balance, if any, shall be paid to the Borrower or otherwise in accordance
with the Borrower’s instructions. Collections applied to the payment of
Obligations shall be distributed in accordance with the aforementioned
provisions, and, giving effect to each of the priorities set

 

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forth above in this Section 2.2(a), shall be shared ratably (within each
priority) among the Agent and the Lenders in accordance with the amount of such
Obligations owing to each of them in respect of each such priority.

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

Section 2.3 Repayment of Demand Advances on the Amortization Date; Collections
Following Amortization.

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

(b) Without limiting recourse to the Borrower for the Obligations under
Section 2.1, on the Amortization Date and on each day thereafter, the Servicer
shall set aside and hold in trust for the Secured Parties, all Collections
received by the Servicer on such day. On and after the Amortization Date, the
Servicer shall, on each Settlement Date and on each other Business Day specified
by the Agent (after deduction of the accrued and unpaid Servicing Fee as of such
date): (i) remit to the Agent’s Account the amounts set aside pursuant to the
preceding two sentences, and (ii) apply such amounts to reduce the Obligations
as follows:

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

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

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

fourth, to the ratable reduction of Aggregate Principal, and

fifth, for the ratable payment of all other unpaid Obligations.

After the Obligations have been indefeasibly reduced to zero, all Collections
shall be paid to the Borrower or otherwise in accordance with the Borrower’s
instructions. Collections applied to the payment of Obligations shall be
distributed in accordance with the aforementioned provisions, and, giving effect
to each of the priorities set forth above in this Section 2.3(b), shall be
shared ratably (within each priority) among the Agent and the Lenders in
accordance with the amount of such Obligations owing to each of them in respect
of each such priority.

 

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Section 2.4 Payment Rescission. No payment of any of the Obligations shall be
considered paid or applied hereunder to the extent that, at any time, all or any
portion of such payment or application is rescinded by application of law or
judicial authority, or must otherwise be returned or refunded for any reason.
The Borrower shall remain obligated for the amount of any payment or application
so rescinded, returned or refunded, and shall promptly pay to the Agent (for
application to the Person or Persons who suffered such rescission, return or
refund) the full amount thereof, plus Interest on such amount at the Default
Rate from the date of any such rescission, return or refunding.

ARTICLE III.

VFCC FUNDING

Section 3.1 CP Costs. The Borrower agrees to pay CP Costs with respect to the
principal balance of each of VFCC’s Loans from time to time outstanding. Each
Loan of VFCC that is funded substantially with Pooled Commercial Paper will
accrue CP Costs each day on a pro rata basis, based upon the percentage share
that the principal in respect of such Loan represents in relation to all assets
held by VFCC and funded substantially with related Pooled Commercial Paper.

Section 3.2 Calculation of CP Costs. Not later than the 3rd Business Day
immediately preceding each Monthly Reporting Date, VFCC shall calculate the
aggregate amount of CP Costs applicable to its CP Rate Loans for the Calculation
Period then most recently ended and shall notify the Borrower of such aggregate
amount.

Section 3.3 CP Costs Payments. On each Settlement Date, the Borrower agrees to
pay to the Agent (for the benefit of VFCC) an aggregate amount equal to all
accrued and unpaid CP Costs in respect of the principal associated with all CP
Rate Loans for the Calculation Period then most recently ended in accordance
with Article II.

Section 3.4 Default Rate. From and after the occurrence and during the
continuation of an Amortization Event, all Loans of VFCC shall accrue Interest
at the Default Rate and shall cease to be CP Rate Loans.

ARTICLE IV.

LIQUIDITY BANK FUNDING

Section 4.1 Liquidity Bank Funding. Prior to the occurrence of an Amortization
Event, the outstanding principal balance of each Liquidity Funding shall accrue
interest for each day during its Interest Period at either the LIBO Rate or the
Alternate Base Rate in accordance with the terms and conditions hereof. Until
the Borrower gives notice to the Agent of another Interest Rate in accordance
with Section 4.4, the initial Interest Rate for any Loan transferred to the
Liquidity Banks by VFCC pursuant to the Liquidity Agreement shall be the
Alternate Base Rate (unless the Default Rate is then applicable). If the
Liquidity Banks acquire by assignment from VFCC any Loan pursuant to the
Liquidity Agreement, each Loan so assigned shall each be deemed to have an
Interest Period commencing on the date of any such assignment.

 

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Section 4.2 Interest Payments. On the Settlement Date for each Liquidity
Funding, the Borrower agrees to pay to the Agent (for the benefit of the
Liquidity Banks) an aggregate amount equal to the accrued and unpaid Interest
for the entire Interest Period of each such Liquidity Funding in accordance with
Article II.

Section 4.3 Selection and Continuation of Interest Periods.

(a) With consultation from (and approval by) the Agent (which approval shall not
be unreasonably withheld or delayed), the Borrower shall from time to time
request Interest Periods for the Liquidity Fundings, provided that if at any
time any Liquidity Funding is outstanding, the Borrower shall always request
Interest Periods such that at least one Interest Period shall end on the date
specified in clause (A) of the definition of Settlement Date.

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

Section 4.4 Liquidity Bank Interest Rates. The Borrower may select the LIBO Rate
or the Alternate Base Rate for each Liquidity Funding. The Borrower shall by
12:00 noon (New York time): (i) at least three (3) Business Days prior to the
expiration of any Terminating Tranche with respect to which the LIBO Rate is
being requested as a new Interest Rate and (ii) at least one (1) Business Day
prior to the expiration of any Terminating Tranche with respect to which the
Alternate Base Rate is being requested as a new Interest Rate, give the Agent
irrevocable notice of the new Interest Rate for the Liquidity Funding associated
with such Terminating Tranche. Until the Borrower gives notice to the Agent of
another Interest Rate, the initial Interest Rate for any Loan transferred to the
Liquidity Banks pursuant to the Liquidity Agreement shall be the Alternate Base
Rate (unless the Default Rate is then applicable).

Section 4.5 Suspension of the LIBO Rate.

(a) If any Liquidity Bank notifies the Agent that it has reasonably determined
that funding its Pro Rata Share of the Liquidity Fundings at a LIBO Rate would
violate any applicable law, rule, regulation, or directive of any governmental
or regulatory authority, whether or not having the force of law, or that
(i) deposits of a type and maturity appropriate to match fund its Liquidity
Funding at such LIBO Rate are not available or (ii) such LIBO Rate does not
accurately reflect the cost of acquiring or maintaining a Liquidity Funding at
such LIBO Rate, then the Agent shall suspend the availability of such LIBO Rate
and require the Borrower to select the Alternate Base Rate for any Liquidity
Funding accruing Interest at such LIBO Rate.

(b) If less than all of the Liquidity Banks give a notice to the Agent pursuant
to Section 4.5(a), each Liquidity Bank which gave such a notice shall be
obliged, at the request of the Borrower, VFCC or the Agent, to assign all of its
rights and obligations hereunder to (i)

 

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another Liquidity Bank or (ii) another funding entity nominated by the Borrower
or the Agent that is an Eligible Assignee willing to participate in this
Agreement through the Liquidity Termination Date in the place of such notifying
Liquidity Bank; provided that (i) the notifying Liquidity Bank receives payment
in full, pursuant to an Assignment Agreement, of all Obligations owing to it
(whether due or accrued), and (ii) the replacement Liquidity Bank otherwise
satisfies the requirements of Section 12.1(b).

Section 4.6 Default Rate. From and after the occurrence and during the
continuation of an Amortization Event, all Liquidity Fundings shall accrue
Interest at the Default Rate.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

Section 5.1 Representations and Warranties of the Loan Parties. Each Loan Party
hereby represents and warrants to the Agent and the Lenders, as to itself, as of
the date hereof and except for such representations or warranties that are
limited to a certain date or period, as of the date of each Advance and as of
each Settlement Date that:

(a) Existence and Power. Such Loan Party is a corporation duly organized,
validly existing and in good standing under the laws of the state indicated in
the preamble to this Agreement, is duly qualified to transact business in every
jurisdiction where, by the nature of its business, such qualification is
necessary, and where the failure to qualify would have or could reasonably be
expected to cause a Material Adverse Effect, and has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.

(b) Power and Authority; Due Authorization, Execution and Delivery. The
execution, delivery and performance by such Loan Party of the Transaction
Documents to which it is a party (i) are within such Loan Party’s corporate
powers, (ii) have been duly authorized by all necessary corporate action,
(iii) require no action by or in respect of or filing with, any governmental
body, agency or official, (iv) do not contravene, or constitute a default under,
any provision of applicable law or regulation or of the certificate of
incorporation or by-laws of such Loan Party or of any agreement, judgment,
injunction, order, decree or other instrument binding upon such Loan Party or
any of its Subsidiaries, and (v) do not result in the creation or imposition of
any Adverse Claim on any asset of such Loan Party (except as created hereunder).
This Agreement and each other Transaction Document to which such Loan Party is a
party has been duly executed and delivered by such Loan Party.

(c) No Bulk Sale. No transaction contemplated hereby requires compliance with
any bulk sales act or similar law.

(d) 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 such Loan Party of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder.

 

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(e) Actions, Suits. There is no action, suit or proceeding pending, or to the
knowledge of such Loan Party overtly threatened in writing, against or affecting
such Loan Party or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which has had or is likely to have a
Material Adverse Effect.

(f) Binding Effect. This Agreement constitutes and, when executed and delivered
in accordance with this Agreement, each other Transaction Document to which such
Loan Party is a party, will constitute valid and binding obligations of such
Loan Party enforceable in accordance with their respective terms, provided that
the enforceability hereof and thereof is subject in each case to general
principles of equity and to bankruptcy, insolvency and similar laws affecting
the enforcement of creditors’ rights generally and by general equitable
principles.

(g) Accuracy of Information. All information heretofore furnished by such Loan
Party to the Agent or any of the Lenders for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by such Loan Party to the Agent or any of the
Lenders will be, true and accurate in every material respect or based on
reasonable estimates on the date as of which such information is stated or
certified. Such Loan Party has disclosed to the Agent in writing any and all
facts known to its Executive Officers which would have or reasonably would be
expected to cause a Material Adverse Effect.

(h) Use of Proceeds. The Borrower is not engaged principally, or as one of its
important activities, in the business of purchasing or carrying any Margin
Stock, and no part of the proceeds of any Advance will be used to purchase or
carry any Margin Stock (except to the extent expressly permitted under the
proviso to Section 7.1(i)(L)) or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock, or be used for any purpose which
violates, or which is inconsistent with, the provisions of Regulation T, U or X.

(i) Good Title. The Borrower (i) is the legal and beneficial owner of the
Receivables and (ii) is the legal and beneficial owner of the Related Security
with respect thereto or possesses a valid and perfected security interest
therein, in each case, free and clear of any Adverse Claim, except for 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 the Borrower’s ownership interest in
each such Receivable, its Collections and the Related Security and the Agent’s
security interest therein.

(j) Perfection. This Agreement, together with the filing of the financing
statements contemplated hereby, is effective to create in favor of the Agent,
for the benefit of the Lenders, a valid and perfected security interest in all
of the Borrower’s right, title and interest in and to each Receivable pledged by
it existing and hereafter arising, together with all Collections and Related
Security with respect thereto, in each case, free and clear of any Adverse
Claim, except for Permitted Encumbrances.

(k) Places of Business and Locations of Records. The principal places of
business and chief executive office of each Loan Party and the offices where it
keeps all of its

 

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Records are located at the address(es) listed on Exhibit III or such other
locations of which the Agent has been notified in accordance with Section 7.2(a)
in jurisdictions where all action required by Section 7.2(a) has been taken and
completed. The Borrower’s Federal Employer Identification Number and
Organization Identification Number is correctly set forth on Exhibit III.

(l) Collections. The conditions and requirements set forth in Section 7.1(j)
have at all times been satisfied and duly performed. The names and addresses of
all Collection Banks, together with the account numbers of the Collection
Accounts at each Collection Bank and the post office box number of each
Lock-Box, are listed on Exhibit IV. The Borrower has not granted any Person,
other than the Agent under Section 8.3 hereof and the Collection Account
Agreements dominion and control of any Lock-Box or Collection Account, or the
right to take dominion and control of any such Lock-Box or Collection Account at
a future time or upon the occurrence of a future event.

(m) Material Adverse Effect. During the period May 31, 2007 through and
including the date of this Agreement, in the good faith judgment of the
Executive Officers, no event has occurred that has had or could reasonably be
expected to have a Material Adverse Effect.

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

(o) Not an Investment Company. The Borrower is not an “investment company”
within the meaning of the Investment Company Act of 1940, as amended, or any
successor statute.

(p) Compliance with Law. The 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 not reasonably be expected to have a Material Adverse Effect. Each
Receivable, together with the Contract related thereto, does not contravene any
laws, rules or regulations applicable thereto (including, without limitation,
laws, rules and regulations relating to truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices
and privacy), and no part of such Contract is in violation of any such law, rule
or regulation, except where such contravention or violation could not reasonably
be expected to have a Material Adverse Effect.

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

 

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

(s) Accounting. The manner in which the 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.

(t) Eligible Receivables. Each Receivable reflected in any Monthly Report as an
Eligible Receivable was an Eligible Receivable on the date of such Monthly
Report.

(u) Borrowing Limitations. Immediately after giving effect to each Advance and
each settlement on any Settlement Date hereunder, the aggregate principal
balance of the Advances outstanding is less than or equal to the Borrowing Base,
and the Aggregate Principal outstanding is less than or equal to the Aggregate
Commitment.

Section 5.2 Liquidity Bank Representations and Warranties. Each Liquidity Bank
hereby represents and warrants to the Agent, VFCC and the Loan Parties that:

(a) Existence and Power. Such Liquidity Bank is a banking association duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has all organizational power to perform its
obligations hereunder and under the Liquidity Agreement.

(b) No Conflict. The execution and delivery by such Liquidity Bank of this
Agreement and the Liquidity Agreement and the performance of its obligations
hereunder and thereunder are within its corporate powers, have been duly
authorized by all necessary corporate action, do not contravene or violate
(i) its certificate or articles of incorporation or association or by-laws,
(ii) any law, rule or regulation applicable to it, (iii) any restrictions under
any agreement, contract or instrument to which it is a party or any of its
property is bound, or (iv) any order, writ, judgment, award, injunction or
decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on its assets. This Agreement and
the Liquidity Agreement have been duly authorized, executed and delivered by
such Liquidity Bank.

(c) Governmental Authorization. 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 such Liquidity Bank of this
Agreement or the Liquidity Agreement and the performance of its obligations
hereunder or thereunder.

(d) Binding Effect. Each of this Agreement and the Liquidity Agreement
constitutes the legal, valid and binding obligation of such Liquidity Bank
enforceable against such Liquidity Bank in accordance with its terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors’ rights
generally and by general principles of equity (regardless of whether such
enforcement is sought in a proceeding in equity or at law).

 

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ARTICLE VI.

CONDITIONS OF ADVANCES

Section 6.1 Conditions Precedent to Initial Advance. The initial Advance under
this Agreement is subject to the conditions precedent that (a) the Agent shall
have received on or before the date of such Advance those documents listed on
Schedule A to the Receivables Sale Agreement and those documents listed on
Schedule B to this Agreement, and (b) the Agent shall have received all fees and
expenses required to be paid on such date pursuant to the terms of this
Agreement and the Fee Letter.

Section 6.2 Conditions Precedent to All Advances. Each Advance and each rollover
or continuation of any Advance shall be subject to the further conditions
precedent that (a) the Servicer shall have delivered to the Agent on or prior to
the date thereof, in form and substance satisfactory to the Agent, all Monthly
Reports as and when due under Section 8.5; (b) the Facility Termination Date
shall not have occurred; (c) the Agent shall have received such other approvals,
opinions or documents as it may reasonably request; and (d) on the date thereof,
the following statements shall be true (and acceptance of the proceeds of such
Advance shall be deemed a representation and warranty by the Borrower that such
statements are then true):

(i) the representations and warranties set forth in Section 5.1 are true and
correct in all material respects on and as of the date of such Advance (or such
Settlement Date, as the case may be) as though made on and as of such date;

(ii) no event has occurred and is continuing, or would result from such Advance
(or the continuation thereof), that will constitute an Amortization Event, and
no event has occurred and is continuing, or would result from such Advance (or
the continuation thereof), that would constitute an Unmatured Amortization
Event; and

(iii) after giving effect to such Advance (or the continuation thereof), the
aggregate principal balance of the Advances outstanding to will not exceed the
Borrowing Base and the Aggregate Principal outstanding is less than or equal to
the Aggregate Commitment.

ARTICLE VII.

COVENANTS

Section 7.1 Affirmative Covenants of the Loan Parties. Until the Final Payout
Date, each Loan Party hereby covenants, as to itself, as set forth below:

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

(i) Annual Reporting. As soon as available and in any event within 90 days (or
such longer period as may be the subject of an extension granted by the
Securities and Exchange Commission) after the end of each Fiscal Year, (A) a
consolidated balance sheet of the Performance Guarantor and its Consolidated
Subsidiaries as of the end of such Fiscal Year and the related consolidated
statements of income, stockholders’ equity and cash flows for such Fiscal Year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all certified by Ernst & Young, LLP or other independent public
accountants of nationally recognized standing, with such certification to be
free of exceptions and qualifications not acceptable to the Agent, and (B) an
unaudited balance sheet and income statement for the Borrower for such Fiscal
Year, certified in a manner acceptable to the Agent by the Borrower’s chief
financial officer.

 

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(ii) Quarterly Reporting. As soon as available and in any event within 45 days
(or such longer period as may be the subject of an extension granted by the
Securities and Exchange Commission) after the end of each of the first 3 Fiscal
Quarters of each Fiscal Year, (A) a consolidated balance sheet of the
Performance Guarantor and its Consolidated Subsidiaries as of the end of such
Fiscal Quarter and the related statement of income and statement of cash flows
for the portion of the Fiscal Year ended at the end of such Fiscal Quarter,
setting forth in each case in comparative form the figures for the corresponding
Fiscal Quarter and the corresponding portion of the previous Fiscal Year, all
certified (subject to normal year-end adjustments) as to fairness of
presentation, GAAP and consistency by the chief financial officer or the chief
accounting officer of the Performance Guarantor, and (B) an unaudited balance
sheet and income statement for the Borrower for such Fiscal Quarter, certified
in a manner acceptable to the Agent by the Borrower’s chief financial officer.

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

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

(v) 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
Performance Guarantor shall have filed with the Securities and Exchange
Commission.

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

 

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

(viii) Other Information. Promptly, from time to time, such other information,
documents, records or reports relating to the Receivables or the condition or
operations, financial or otherwise, of such Loan Party as the Agent may from
time to time reasonably request in order to protect the interests of the Agent,
for the benefit of VFCC, under or as contemplated by this Agreement.

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

(i) Amortization Events or Unmatured Amortization Events. Within one
(1) Business Day after any Responsible Officer learns thereof, the occurrence of
each Amortization Event and each Unmatured Amortization Event, by a statement of
an Authorized Officer of such Loan Party.

(ii) Termination Events or Unmatured Termination Events. Within one (1) Business
Day after any Responsible Officer learns thereof, the occurrence of each
Termination Event and each Unmatured Termination Event, by a statement of an
Authorized Officer of ABL.

(iii) Defaults Under Other Agreements. Within one (1) Business Day after any
Responsible Officer learns thereof, the occurrence of a default or an event of
default under any other financing arrangement pursuant to which any Loan Party
is a debtor or an obligor which relates to debt in excess of $25,000,000.

(iv) ERISA Events. If and when any member of the Controlled Group (i) gives or
is required to give notice to the PBGC of any “reportable event” (as defined in
Section 4043 of ERISA) with respect to any Plan which could reasonably be
expected to constitute grounds for a termination of such Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is required
to give notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii) receives notice
of complete or partial withdrawal liability under Title IV of ERISA, a copy of
such notice; or (iii) receives notice from the PBGC under Title IV of ERISA of
an intent to terminate or appoint a trustee to administer any Plan, a copy of
such notice; provided, however, that each of the foregoing notices shall not be
required to be given unless the reportable event, withdrawal liability, plan
termination or trustee appointment involved could reasonably be expected to give
rise to a liability of more than $1,000,000 on the part of the Performance
Guarantor or any of its Subsidiaries.

 

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(v) Termination Date. Within one (1) Business Day after any Responsible Officer
learns thereof, the occurrence of the “Termination Date” under and as defined in
the Receivables Sale Agreement.

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

(c) Compliance with Laws and Preservation of Corporate Existence.

(i) Such Loan Party will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. Such Loan Party will preserve and
maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where its business is
conducted, except (A) where the failure to so preserve and maintain or qualify
could not reasonably be expected to have a Material Adverse Effect, and (B) to
the extent permitted under Section 7.1(c)(ii) below.

(ii) Notwithstanding anything herein or in any of the other Transaction
Documents to the contrary:

(A) ABL or the Parent may merge or consolidate with any other Person provided
that (1) the surviving corporation is the Parent or a wholly-owned Subsidiary of
the Parent, (2) the survivor executes and delivers such Uniform Commercial Code
financing statements and other documents as the Administrative Agent may
reasonably request in order to maintain the perfection of the interests conveyed
under the Transaction Documents and (3) no Amortization Event or Unmatured
Amortization Event has occurred and is continued after giving effect to such
transaction, and

(B) ABL may merge or consolidate with the Parent provided that (1) the Parent is
the corporation surviving such merger, (2) the Parent executes and delivers such
Uniform Commercial Code financing statements and other documents as the
Administrative Agent may reasonably request in order to maintain the perfection
of the interests conveyed under the Transaction Documents and (3) no
Amortization Event or Unmatured Amortization Event has occurred and is continued
after giving effect to such transaction.

(d) Audits. Such Loan Party will furnish to the Agent from time to time such
information with respect to it and the Receivables as the Agent may reasonably
request. Such Loan Party will, at the sole cost of such Loan Party from time to
time upon prior written request of the Agent given (unless an Amortization Event
shall have occurred and be continuing) not less than three (3) Business Days
prior to a requested visit, permit the Agent, or its agents or representatives
(and shall cause each Originator to permit the Agent or its agents or
representatives) during normal business hours: (i) to examine and make copies of
and abstracts from all Records in the possession or under the control of such
Person relating to the Collateral,

 

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including, without limitation, the related Contracts, and (ii) to visit the
offices and properties of such Person for the purpose of examining such
materials described in clause (i) above, and to discuss matters relating to such
Person’s financial condition or the Collateral or any Person’s performance under
any of the Transaction Documents or any Person’s performance under the Contracts
and, in each case, with any of the officers or employees of the Borrower or the
Servicer having knowledge of such matters (each of the foregoing examinations
and visits, a “Review”); provided, however, that, so long as no Amortization
Event has occurred and is continuing, (A) the Loan Parties shall only be
responsible for the costs and expenses of one (1) Review in any one calendar
year, and (B) the Agent will not request more than four (4) Reviews in any one
calendar year. To the extent that Agent, in the course of any Review, obtains
possession of any Proprietary Information pertaining to any Loan Party or any of
its Affiliates, Agent shall handle such information in accordance with the
requirements of Section 14.5 hereof.

(e) Keeping and Marking of Records and Books.

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

(ii) Such Loan Party will (and will cause each Originator to): (A) on or prior
to the date hereof, mark its master data processing records and other books and
records relating to the Receivables with a legend, acceptable to the Agent,
describing the Agent’s security interest in the Collateral and (B) upon the
request of the Agent following the occurrence and during the continuance of an
Amortization Event: (x) mark each Contract with a legend describing the Agent’s
security interest and (y) deliver to the Agent all Contracts (including, without
limitation, all multiple originals of any such Contract constituting an
instrument, a certificated security or chattel paper) relating to the
Receivables.

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

(g) Performance and Enforcement of Receivables Sale Agreement. The Borrower
will, and will require each Originator to, perform each of their respective
obligations and undertakings under and pursuant to the Receivables Sale
Agreement, will purchase Receivables thereunder in strict compliance with the
terms of the Receivables Sale Agreement and will vigorously enforce the rights
and remedies accorded to the Borrower under the

 

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Receivables Sale Agreement. The Borrower will take all actions to perfect and
enforce its rights and interests (and the rights and interests of the Agent, as
the Borrower’s assignee) under the Receivables Sale Agreement as the Agent may
from time to time reasonably request, including, without limitation, making
claims to which it may be entitled under any indemnity, reimbursement or similar
provision contained in the Receivables Sale Agreement.

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

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

(A) conduct its own business in its own name;

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

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

 

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

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

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

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

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

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

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

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

(L) operate its business and activities such that: it does not engage in any
business or activity of any kind, or enter into any transaction or indenture,
mortgage, instrument, agreement, contract, lease or other undertaking, other
than the transactions contemplated and authorized by this Agreement and the
Receivables Sale Agreement; and does not create, incur, guarantee, assume or
suffer to exist any indebtedness or other liabilities, whether direct or
contingent, other than (1) as a result of the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business,

 

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(2) the incurrence of obligations under this Agreement, (3) the incurrence of
obligations, as expressly contemplated in the Receivables Sale Agreement, to
make payment to the applicable Originator thereunder for the purchase of
Receivables from the Originator under the Receivables Sale Agreement, and
(4) the incurrence of operating expenses in the ordinary course of business of
the type otherwise contemplated by this Agreement;

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

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

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

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

(Q) take such other actions as are necessary on its part to ensure that the
facts and assumptions set forth in the opinion issued by Kilpatrick Stockton
LLP, as counsel for the Borrower, in connection with the closing or initial
Advance 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.

(j) Collections. Such Loan Party will cause (1) all proceeds from all Lock-Boxes
to be directly deposited by a Collection Bank into a Collection Account and
(2) each Lock-Box and Collection Account to be subject at all times to a
Collection Account Agreement that is in full force and effect. In the event any
payments relating to the Collateral are remitted directly to the Borrower or any
Affiliate of the Borrower, the Borrower will remit (or will cause all such
payments to be remitted) directly to a Collection Bank and deposited into a
Collection Account within two (2) Business Days following receipt thereof, and,
at all times prior to such remittance, the Borrower will itself hold or, if
applicable, will cause such payments to be held in trust for the exclusive
benefit of the Agent and VFCC. The Borrower will maintain exclusive ownership,
dominion and control (subject to the terms of this Agreement) of each Lock-Box
and

 

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Collection Account into which Collections on the Receivables pledged by it are
deposited and shall not grant the right to take dominion and control of any such
Lock-Box or Collection Account at a future time or upon the occurrence of a
future event to any Person, except to the Agent as contemplated by this
Agreement.

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

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

Section 7.2 Negative Covenants of the Loan Parties. Until the Final Payout Date,
each Loan Party hereby covenants, as to itself, that:

(a) Name Change, Offices and Records. Such Loan Party will not change its name,
identity or structure (within the meaning of any applicable enactment of the
UCC), relocate its chief executive office at any time while the location of its
chief executive office is relevant to perfection of the Agent’s security
interest, for the benefit of the Secured Parties, in the Receivables, Related
Security and Collections, or change any office where Records are kept unless it
shall have: (i) given the Agent at least ten (10) days’ prior written notice
thereof and (ii) delivered to the Agent all financing statements, instruments
and other documents reasonably requested by the Agent in connection with such
change or relocation.

(b) Change in Payment Instructions to Obligors. Except as may be required by the
Agent pursuant to Section 8.2(b), such Loan Party will not add or terminate any
bank as a Collection Bank, or make any change in the instructions to Obligors
regarding payments to be made to any Lock-Box or Collection Account, unless the
Agent shall have received, at least ten (10) days before the proposed effective
date therefor, (i) written notice of such addition, termination or change and
(ii) with respect to the addition of a Collection Bank or a Collection Account
or Lock-Box, an executed Collection Account Agreement with respect to the new
Collection Account or Lock-Box; provided, however, that the Servicer may make
changes in instructions to Obligors regarding payments if such new instructions
require such Obligor to make payments to another existing Collection Account.

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

 

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(d) Sales, Liens. The Borrower will not sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with respect to, or
create or suffer to exist any Adverse Claim upon (including, without limitation,
the filing of any financing statement) or with respect to, any of the
Collateral, or assign any right to receive income with respect thereto (other
than Permitted Encumbrances), and the Borrower will defend the right, title and
interest of the Secured Parties in, to and under any of the foregoing property,
against all claims of third parties claiming through or under the Borrower or
Originator (other than Permitted Encumbrances). The Borrower will not create or
suffer to exist any mortgage, pledge, security interest, encumbrance, lien,
charge or other similar arrangement on any of its inventory.

(e) Use of Proceeds. The Borrower will not use the proceeds of the Advances for
any purpose other than (i) paying for Receivables and Related Security under and
in accordance with the Receivables Sale Agreement, (ii) making Demand Advances
to the Originator at any time prior to the Facility Termination Date while the
Originator is acting as a Servicer and no Amortization Event or Unmatured
Amortization Event exists and is continuing, (iii) paying its ordinary and
necessary operating expenses when and as due, (iv) making Restricted Junior
Payments to the extent permitted under this Agreement.

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

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

(h) Borrower Indebtedness. The Borrower will not incur or permit to exist any
Indebtedness or liability on account of deposits except: (i) the Obligations,
and (ii) other current accounts payable arising in the ordinary course of
business and not overdue.

(i) Prohibition on Additional Negative Pledges. No Loan Party will enter into or
assume any agreement (other than this Agreement, the other Transaction Documents
and the Acuity Credit Agreements) prohibiting the creation or assumption of any
Adverse Claim upon the Collateral except as contemplated by the Transaction
Documents, or otherwise prohibiting or restricting any transaction contemplated
hereby or by the other Transaction Documents.

 

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ARTICLE VIII.

ADMINISTRATION AND COLLECTION

Section 8.1 Designation of Servicer.

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

(b) Without the prior written consent of the Agent and the Required Liquidity
Banks, ABL shall not be permitted to delegate any of its duties or
responsibilities as Servicer to any Person other than, with respect to certain
Defaulted Receivables, outside collection agencies in accordance with its
customary practices.

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

Section 8.2 Duties of Servicer.

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

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

 

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

(d) The Servicer may, in accordance with the Credit and Collection Policy,
extend the maturity of any Receivable for which the Servicer is responsible or
adjust the Outstanding Balance of any such Receivable as the Servicer determines
to be appropriate to maximize Collections thereof; provided, however, that such
extension or adjustment shall not alter the status of such Receivable as a
Delinquent Receivable or Defaulted Receivable or limit the rights of the Agent
or the Lenders under this Agreement. Notwithstanding anything to the contrary
contained herein, from and after the occurrence of an Amortization Event, the
Agent shall have the absolute and unlimited right to direct the applicable
Servicer to commence or settle any legal action with respect to any Receivable
or to foreclose upon or repossess any Related Security; provided that (i) in
lieu of commencing any such action or taking other enforcement action, the
Servicer may, at its option, elect to pay to the Agent an amount equal to the
Outstanding Balance of such Receivable and (ii) no Servicer shall, unless
indemnified to its satisfaction by the Lenders, be obligated to commence or take
any legal action that is in contravention of applicable law or regulation, or to
settle any action that would entail an admission by any Servicer, Borrower or
Originator of legal wrongdoing or culpability or require the payment of damages
by Originator or Servicer to any third party.

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

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

 

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

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

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

Section 8.6 Servicing Fee. As compensation for the Servicer’s servicing
activities on their behalf, the Borrower hereby agrees to pay the Servicer the
Servicing Fee in arrears on each Settlement Date. Notwithstanding the fact that
Sections 2.2 and 2.3 authorize the Servicer to deduct the Servicing Fee from
Collections, the Borrower is and shall remain the Persons ultimately responsible
for paying the Servicing Fee and other costs of servicing the Receivables.

ARTICLE IX.

AMORTIZATION EVENTS

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

(a) Any Loan Party or Performance Guarantor shall fail to make any payment or
deposit required to be made by it under the Transaction Documents when due and,
for any such payment or deposit which is not in respect of principal, such
failure continues for two (2) consecutive Business Days.

 

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(b) Any representation, warranty, certification or statement made by Performance
Guarantor or any Loan Party in any Transaction Document to which it is a party
or in any other document delivered pursuant thereto shall prove to have been
incorrect in any material respect when made or deemed made (it being understood
and agreed that any error or omission which results in the aggregate principal
balance of the Advances outstanding exceeding the Borrowing Base or the
Aggregate Principal outstanding to exceed the Aggregate Commitment shall per se
constitute a material error).

(c) Any Loan Party or Performance Guarantor shall fail to perform or observe any
covenant contained in Section 7.1(b), 7.1(j), 7.2 or 8.5 when due.

(d) Any Loan Party or Performance Guarantor shall fail to perform or observe any
other term, covenant or agreement hereunder or any other Transaction Document
(other than a term, covenant or agreement covered by another clause of this
Section 9.1) to which it is a party and such failure shall continue for and such
failure shall not have been cured within 30 days after the earlier to occur of
(i) written notice thereof has been given by such Loan Party or Performance
Guarantor to Agent or (ii) an Executive Officer of such Loan Party or
Performance Guarantor otherwise becomes aware of any such failure; provided,
however, that, except in the case of a failure to perform or observe
Section 7.1(a)(vii), such cure period shall be extended for a period of time,
not to exceed an additional 30 days, reasonably sufficient to permit such Loan
Party or Performance Guarantor to cure such failure if such failure cannot be
cured within the initial 30-day period but reasonably could be expected to be
capable of cure within such additional 30 days, such Loan Party or Performance
Guarantor has commenced efforts to cure such failure during the initial 30-day
period and such Loan Party or Performance Guarantor is diligently pursuing such
cure.

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

(f) An Event of Bankruptcy shall occur with respect to Parent or any of its
Material Subsidiaries.

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

(i) the three-month rolling average Delinquency Ratio shall exceed 4.25%,

 

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(ii) the three-month rolling average Default Ratio shall exceed 2.55%, or

(iii) the three-month rolling average Dilution Ratio shall exceed 8.00%.

(h) A Change of Control shall occur.

(i) One or more final judgments for the payment of money in an aggregate amount
of $11,600 or more shall be entered against Borrower.

(j) The occurrence of any “Termination Event” or of the “Termination Date” (as
each of the foregoing is defined in the Receivables Sale Agreements).

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

(l) The Internal Revenue Service shall commence enforcement of any federal tax
lien under Section 6323 of the Tax Code against any of the Collateral, or the
PBGC shall commence enforcement any lien under Section 4068 of ERISA against any
of the Collateral.

(m) Any event shall occur which materially and adversely impairs (i) the ability
of the Originators to originate Receivables of a credit quality that is at least
equal to the credit quality of the Receivables sold or contributed to the
Borrower on the date of this Agreement or (ii) the legality, validity or
enforceability of this Agreement or any other Transaction Document, (iii) the
Agent’s security interest, for the benefit of the Secured Parties, in the
Receivables generally or in any significant portion of the Receivables, the
Related Security or the Collections with respect thereto.

(n) On any Settlement Date, after giving effect to the turnover of Collections
by the Servicer on such date and the application thereof to the Obligations in
accordance with this Agreement, the aggregate principal balance of the Advances
outstanding to the Borrower shall exceed the Borrowing Base or the Aggregate
Principal shall exceed the Aggregate Commitment.

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

Section 9.2 Remedies. Upon the occurrence and during the continuation of an
Amortization Event, the Agent may, or upon the direction of the Required
Liquidity Banks shall, upon notice to the Borrower and the Servicer, take any of
the following actions: (i) replace each Person then acting as a Servicer
(ii) declare the Amortization Date to have occurred, whereupon

 

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the Aggregate Commitment shall immediately terminate and the Amortization Date
shall forthwith occur, all without demand, protest or further notice of any
kind, all of which are hereby expressly waived by each Loan Party; provided,
however, that upon the occurrence of an Event of Bankruptcy with respect to any
Loan Party, the Amortization Date shall automatically occur, without demand,
protest or any notice of any kind, all of which are hereby expressly waived by
each Loan Party, (iii) deliver the Collection Notices to the Collection Banks,
(iv) exercise all rights and remedies of a secured party upon default under the
UCC and other applicable laws, and (v) notify Obligors of the Agent’s security
interest in the Receivables and other Collateral. The aforementioned rights and
remedies shall be without limitation, and shall be in addition to all other
rights and remedies of the Agent and the Lenders otherwise available under any
other provision of this Agreement, by operation of law, at equity or otherwise,
all of which are hereby expressly preserved, including, without limitation, all
rights and remedies provided under the UCC, all of which rights shall be
cumulative.

ARTICLE X.

INDEMNIFICATION

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

(a) Indemnified Amounts to the extent a final judgment of a court of competent
jurisdiction holds that such Indemnified Amounts resulted from gross negligence
or willful misconduct on the part of any Indemnified Party seeking
indemnification or by reason of such Indemnified Party’s breach of its
obligations hereunder or other legal duty;

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

(c) taxes imposed by the jurisdiction in which such Indemnified Party’s
principal executive office is located (including, without limitation, in the
case of the Agent or VFCC, the States of North Carolina and Georgia), on or
measured by the overall net income of such Indemnified Party to the extent that
the computation of such taxes is

 

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consistent with the characterization for income tax purposes of the acquisition
by the Lenders of Loans as a loan or loans by the Lenders to the Borrower
secured by the Receivables, the Related Security, the Collection Accounts and
the Collections;

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

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

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

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

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

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

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

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

 

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

(ix) any Amortization Event;

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

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

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

(xiii) any action or omission by any Loan Party which reduces or impairs the
rights of the Agent or the Lenders with respect to any Collateral or the value
of any Collateral (for any reason other than the application of Collections
thereto or charge-off of any Receivable as uncollectible);

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

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

Section 10.2 Increased Cost and Reduced Return.

(a) If after the date hereof, any Funding Source shall be charged any fee,
expense or increased cost on account of any Regulatory Change: (i) that subjects
any Funding Source to any charge or withholding on or with respect to any
Funding Agreement or a Funding Source’s obligations under a Funding Agreement,
or on or with respect to the Receivables, or changes the basis of taxation of
payments to any Funding Source of any amounts payable under any Funding
Agreement (except for changes in the rate of tax on the overall net income of a
Funding Source or taxes excluded by Section 10.1) or (ii) that imposes, modifies
or deems applicable any reserve, assessment, insurance charge, special deposit
or similar requirement against assets of, deposits with or for the account of a
Funding Source, or credit extended by a Funding Source pursuant to a Funding
Agreement or (iii) that imposes any other condition the

 

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result of which is to increase the cost to a Funding Source of performing its
obligations under a Funding Agreement, or to reduce the rate of return on a
Funding Source’s capital as a consequence of its obligations under a Funding
Agreement, or to reduce the amount of any sum received or receivable by a
Funding Source under a Funding Agreement or to require any payment calculated by
reference to the amount of interests or loans held or interest received by it,
then, upon written demand by the Agent no later than ninety (90) days after the
adoption of such Regulatory Change, the Borrower agrees to pay to the Agent, for
the benefit of the relevant Funding Source, such amounts charged to such Funding
Source or such amounts to otherwise compensate such Funding Source for such
increased cost or such reduction. In the event that the Agent fails to give the
Borrower notice within the ninety (90) day time limitation prescribed above, the
Borrower shall have no obligation to pay such claim for compensation hereunder.
The Borrower shall have no obligation to pay any amount with respect to claims
accruing under this Section 10.2(a) prior to the 90th day preceding written
demand therefor from Agent.

(b) The Agent and each Funding Source agrees, if requested by the Borrower, it
will use reasonable efforts (subject to the overall policy considerations of
such Funding Source) to designate an alternate lending office with respect to
Loans affected by any of the matters or circumstances prescribed in
Section 10.2(a) hereof in order to reduce the liability of the Borrower or avoid
the results provided thereunder, so long as such designation is not
disadvantageous to such Funding Source as determined by such Funding Source,
which determination, if made in good faith, shall be conclusive and binding on
all parties hereto. Nothing in this Section 10.2(b) shall affect or postpone any
of the obligation of the Borrower hereunder or any right of any Funding Source
hereunder

Section 10.3 Other Costs and Expenses. The Borrower agrees to pay to the Agent
and VFCC on demand all reasonable costs and out-of-pocket expenses actually
incurred in connection with the preparation, execution, delivery and
administration of this Agreement, the transactions contemplated hereby and the
other documents to be delivered hereunder, including without limitation, the
cost of VFCC’s auditors auditing the books, records and procedures of the
Borrower, reasonable fees and out-of-pocket expenses of legal counsel for VFCC
and the Agent (which such counsel may be employees of VFCC or the Agent) with
respect thereto and with respect to advising VFCC and the Agent as to their
respective rights and remedies under this Agreement. The Borrower agrees to pay
to the Agent on demand any and all reasonable costs and expenses of the Agent
and the Lenders, if any, including reasonable counsel fees and expenses,
actually incurred in connection with the amendment, waiver or enforcement of
this Agreement and the other documents delivered hereunder and in connection
with any restructuring or workout of this Agreement or such documents, or the
administration of this Agreement following an Amortization Event. The Borrower
agrees to reimburse VFCC on demand for all other reasonable costs and expenses
actually incurred by VFCC (“Other Costs”), including, without limitation, the
cost of auditing VFCC’s books by certified public accountants, the cost of
rating the Commercial Paper by independent financial rating agencies, and the
reasonable fees and out-of-pocket expenses of counsel for VFCC or any counsel
for any shareholder of VFCC with respect to advising VFCC or such shareholder as
to matters relating to VFCC’s operations.

 

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Section 10.4 Allocations. VFCC shall allocate the liability for (a) increased
costs covered by Section 10.2 arising under Funding Agreements that are not
specifically related solely to this Agreement (“Shared Increased Costs”) and
(b) Other Costs among the Borrower and other Persons with whom VFCC has entered
into agreements to purchase interests in or finance receivables and other
financial assets (“Other Customers”). If any Other Costs are attributable to the
Borrower and not attributable to any Other Customer or any Shared Increased
Costs are attributable to the facility evidenced by this Agreement and not to
any Other Customers’ facilities, the Borrower shall be solely liable for such
Other Costs or Shared Increased Costs. However, if Other Costs or Shared
Increased Costs are attributable to Other Customers and their facilities but not
attributable to Borrower or the facility evidenced hereby, such Other Customer
shall be solely liable for such Other Costs or Shared Increased Costs, as the
case may be. All allocations to be made pursuant to the foregoing provisions of
this Article X shall be made by VFCC in its sole discretion and shall be binding
on the Borrower and the Servicer.

ARTICLE XI.

THE AGENT

Section 11.1 Authorization and Action. Each Lender hereby designates and
appoints Wachovia to act as its agent under the Transaction Documents and under
the Liquidity Agreement, and authorizes the Agent to take such actions as agent
on its behalf and to exercise such powers as are delegated to the Agent by the
terms of the Liquidity Agreement or the Transaction Documents, together with
such powers as are reasonably incidental thereto. The Agent shall not have any
duties or responsibilities, except those expressly set forth in the Liquidity
Agreement or in any Transaction Document, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities on the part of the Agent shall be read into the
Liquidity Agreement or any Transaction Document or otherwise exist for the
Agent. In performing its functions and duties under the Liquidity Agreement and
the Transaction Documents, the Agent shall act solely as agent for the Lenders
and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for any Loan Party or any of such Loan
Party’s successors or assigns. The Agent shall not be required to take any
action that exposes the Agent to personal liability or that is contrary to the
Liquidity Agreement or any Transaction Document or applicable law. The
appointment and authority of the Agent hereunder shall terminate upon the
indefeasible payment in full of all Obligations. Each Lender hereby authorizes
the Agent to execute each of the UCC financing statements, each Collection
Account Agreement on behalf of such Lender (the terms of which shall be binding
on such Lender).

Section 11.2 Delegation of Duties. The Agent may execute any of its duties under
the Liquidity Agreement and each Transaction Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.

Section 11.3 Exculpatory Provisions. Neither the Agent nor any of its directors,
officers, agents or employees shall be (i) liable for any action lawfully taken
or omitted to be taken by it or them under or in connection with the Liquidity
Agreement or any Transaction Document (except for its, their or such Person’s
own gross negligence or willful misconduct), or

 

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(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party contained in
the Liquidity Agreement, any Transaction Document or any certificate, report,
statement or other document referred to or provided for in, or received under or
in connection with, any Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of the Liquidity
Agreement or any Transaction Document or any other document furnished in
connection therewith, or for any failure of any Loan Party to perform its
obligations under any Transaction Document, or for the satisfaction of any
condition specified in Article VI, or for the perfection, priority, condition,
value or sufficiency of any collateral pledged in connection herewith. The Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements or covenants contained
in, or conditions of, any Transaction Document, or to inspect the properties,
books or records of the Loan Parties. The Agent shall not be deemed to have
knowledge of any Amortization Event or Unmatured Amortization Event unless the
Agent has received notice from a Loan Party or a Lender.

Section 11.4 Reliance by Agent. The Agent shall in all cases be entitled to
rely, and shall be fully protected in relying, upon any document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Agent. The Agent shall in all
cases be fully justified in failing or refusing to take any action under the
Liquidity Agreement or any Transaction Document unless it shall first receive
such advice or concurrence of VFCC or the Required Liquidity Banks or all of the
Lenders, as applicable, as it deems appropriate and it shall first be
indemnified to its satisfaction by the Lenders, provided that unless and until
the Agent shall have received such advice, the Agent may take or refrain from
taking any action, as the Agent shall deem advisable and in the best interests
of the Lenders. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, in accordance with a request of VFCC or the Required
Liquidity Banks or all of the Lenders, as applicable, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders.

Section 11.5 Non-Reliance on Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Agent, nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates has made any representations
or warranties to it and that no act by the Agent hereafter taken, including,
without limitation, any review of the affairs of any Loan Party, shall be deemed
to constitute any representation or warranty by the Agent. Each Lender
represents and warrants to the Agent that it has and will, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, prospects, financial and
other conditions and creditworthiness of the Borrower and made its own decision
to enter into the Liquidity Agreement, the Transaction Documents and all other
documents related thereto.

 

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Section 11.6 Reimbursement and Indemnification. The Liquidity Banks agree to
reimburse and indemnify the Agent and its officers, directors, employees,
representatives and agents ratably according to their Pro Rata Shares, to the
extent not paid or reimbursed by the Loan Parties (i) for any amounts for which
the Agent, acting in its capacity as Agent, is entitled to reimbursement by the
Loan Parties hereunder and (ii) for any other expenses incurred by the Agent, in
its capacity as Agent and acting on behalf of the Lenders, in connection with
the administration and enforcement of the Liquidity Agreement and the
Transaction Documents.

Section 11.7 Agent in its Individual Capacity. The Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrower or any Affiliate of the Borrower as though the Agent were not
the Agent hereunder. With respect to the making of Loans pursuant to this
Agreement, the Agent shall have the same rights and powers under the Liquidity
Agreement and this Agreement in its individual capacity as any Lender and may
exercise the same as though it were not the Agent, and the terms “Liquidity
Bank,” “Lender,” “Liquidity Banks” and “Lenders” shall include the Agent in its
individual capacity.

Section 11.8 Successor Agent. The Agent, upon five (5) days’ notice to the Loan
Parties and the Lenders, may voluntarily resign and may be removed at any time,
with or without cause, by the Required Liquidity Banks; provided, however, that
Wachovia shall not voluntarily resign as the Agent so long as any of the
Liquidity Commitments remain in effect or VFCC has any outstanding Loans. If the
Agent (other than Wachovia) shall voluntarily resign or be removed as Agent
under this Agreement, then the Required Liquidity Banks during such five-day
period shall appoint, with the consent of the Borrower from among the remaining
Liquidity Banks, a successor Agent, whereupon such successor Agent shall succeed
to the rights, powers and duties of the Agent and the term “Agent” shall mean
such successor agent, effective upon its appointment, and the former Agent’s
rights, powers and duties as Agent shall be terminated, without any other or
further act or deed on the part of such former Agent or any of the parties to
this Agreement. Upon resignation or replacement of any Agent in accordance with
this Section 11.8, the retiring Agent shall execute such UCC-3 assignments and
amendments, and assignments and amendments of the Liquidity Agreement and the
Transaction Documents, as may be necessary to give effect to its replacement by
a successor Agent. After any retiring Agent’s resignation hereunder as Agent,
the provisions of this Article XI and Article X shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under this
Agreement.

ARTICLE XII.

ASSIGNMENTS; PARTICIPATIONS

Section 12.1 Assignments.

(a) Each of the Agent, the Loan Parties and the Liquidity Banks hereby agrees
and consents to the complete or partial assignment by VFCC of all or any portion
of its rights under, interest in, title to and obligations under this Agreement
to the Liquidity Banks pursuant to the Liquidity Agreement.

 

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(b) Any Liquidity Bank may at any time and from time to time assign to one or
more Eligible Assignees (each, a “Purchasing Liquidity Bank”) all or any part of
its rights and obligations under this Agreement pursuant to an assignment
agreement substantially in the form set forth in Exhibit VII hereto (an
“Assignment Agreement”) executed by such Purchasing Liquidity Bank and such
selling Liquidity Bank; provided, however, that any assignment of a Liquidity
Bank’s rights and obligations hereunder shall include a pro rata assignment of
its rights and obligations under the Liquidity Agreement. The consent of VFCC
(and, if no Amortization Event then exists, the Borrower, which consent shall
not be unreasonably withheld or delayed) shall be required prior to the
effectiveness of any such assignment. Each assignee of a Liquidity Bank must
(i) be an Eligible Assignee and (ii) agree to deliver to the Agent, promptly
following any request therefor by the Agent or VFCC, an enforceability opinion
in form and substance satisfactory to the Agent and VFCC. Upon delivery of an
executed Assignment Agreement to the Agent, such selling Liquidity Bank shall be
released from its obligations hereunder and under the Liquidity Agreement to the
extent of such assignment. Thereafter the Purchasing Liquidity Bank shall for
all purposes be a Liquidity Bank party to this Agreement and the Liquidity
Agreement and shall have all the rights and obligations of a Liquidity Bank
hereunder and thereunder to the same extent as if it were an original party
hereto and thereto and no further consent or action by the Borrower, the Lenders
or the Agent shall be required. The Agent shall give the Borrower and the
Servicer prior notice of each assignment made under this Section.

(c) Each of the Liquidity Banks agrees that in the event that it shall suffer a
Downgrading Event, such Downgraded Liquidity Bank shall be obliged to notify the
Agent, the Borrower and the Servicer thereof and shall be obliged, at the
request of VFCC or the Agent, to (i) collateralize its Commitment and its
Liquidity Commitment in a manner acceptable to the Agent, or (ii) assign all of
its rights and obligations hereunder and under the Liquidity Agreement to an
Eligible Assignee nominated by the Agent or a Loan Party and acceptable to VFCC
(and, if no Amortization Event then exists, the Borrower, which consent shall
not be unreasonably withheld or delayed) and willing to participate in this
Agreement and the Liquidity Agreement through the Liquidity Termination Date in
the place of such Downgraded Liquidity Bank; provided that the Downgraded
Liquidity Bank receives payment in full, pursuant to an Assignment Agreement, of
an amount equal to such Liquidity Bank’s Pro Rata Share of the Obligations owing
to the Liquidity Banks.

(d) No Loan Party may assign any of its rights or obligations under this
Agreement without the prior written consent of the Agent and each of the Lenders
and without satisfying the Rating Agency Condition.

 

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Section 12.2 Participations. Any Liquidity Bank may, in the ordinary course of
its business at any time sell to one or more Persons (each, a “Participant”)
participating interests in its Pro Rata Share of the Aggregate Commitment, its
Loans, its Liquidity Commitment or any other interest of such Liquidity Bank
hereunder or under the Liquidity Agreement. Notwithstanding any such sale by a
Liquidity Bank of a participating interest to a Participant, such Liquidity
Bank’s rights and obligations under this Agreement and the Liquidity Agreement
shall remain unchanged, such Liquidity Bank shall remain solely responsible for
the performance of its obligations hereunder and under the Liquidity Agreement,
and the Loan Parties, VFCC and the Agent shall continue to deal solely and
directly with such Liquidity Bank in connection with such Liquidity Bank’s
rights and obligations under this Agreement and the Liquidity Agreement. Each
Liquidity Bank agrees that any agreement between such Liquidity Bank and any
such Participant in respect of such participating interest shall not restrict
such Liquidity Bank’s right to agree to any amendment, supplement, waiver or
modification to this Agreement, except for any amendment, supplement, waiver or
modification described in Section 14.1(b)(i).

ARTICLE XIII.

SECURITY INTEREST

Section 13.1 Grant of Security Interest. To secure the due and punctual payment
of the Obligations, whether now or hereafter existing, due or to become due,
direct or indirect, or absolute or contingent, including, without limitation,
all Indemnified Amounts, in each case pro rata according to the respective
amounts thereof, the Borrower hereby grants to the Agent, for the benefit of the
Secured Parties, a security interest in, all of the Borrower’s right, title and
interest, whether now owned and existing or hereafter arising in and to all of
the Receivables, the Related Security, the Collections and all proceeds of the
foregoing (collectively, the “Collateral”).

Section 13.2 Termination after Final Payout Date. Each of the Secured Parties
hereby authorizes the Agent, and the Agent hereby agrees, promptly after the
Final Payout Date to deliver to the Borrower authorization to file such UCC
termination statements as may be necessary to terminate the Agent’s security
interest in and Lien upon the Collateral, all at Borrower’s expense. Upon the
Final Payout Date, all right, title and interest of the Agent and the other
Secured Parties in and to the Collateral shall terminate.

ARTICLE XIV.

MISCELLANEOUS

Section 14.1 Waivers and Amendments.

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

 

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(b) No provision of this Agreement may be amended, supplemented, modified or
waived except in writing in accordance with the provisions of this
Section 14.1(b). VFCC, the Borrower and the Agent, at the direction of the
Required Liquidity Banks, may enter into written modifications or waivers of any
provisions of this Agreement, provided, however, that no such modification or
waiver shall:

(i) without the consent of each affected Lender, (A) extend the Liquidity
Termination Date or the date of any payment or deposit of Collections by the
Borrower or the Servicer, (B) reduce the rate or extend the time of payment of
Interest or any CP Costs (or any component of Interest or CP Costs), (C) reduce
any fee payable to the Agent for the benefit of the Lenders, (D) except pursuant
to Article XII hereof, change the amount of the principal of any Lender, any
Liquidity Bank’s Pro Rata Share or any Liquidity Bank’s Commitment, (E) amend,
modify or waive any provision of the definition of Required Liquidity Banks or
this Section 14.1(b), (F) consent to or permit the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement, (G) change
the definition of “Eligible Receivable,” “Loss Reserve,” “Dilution Reserve,”
“Yield Reserve,” “Servicing Reserve,” “Servicing Fee Rate,” “Required Reserve”
or “Required Reserve Factor Floor” or (H) amend or modify any defined term (or
any defined term used directly or indirectly in such defined term) used in
clauses (A) through (G) above in a manner that would circumvent the intention of
the restrictions set forth in such clauses; or

(ii) without the written consent of the then Agent, amend, modify or waive any
provision of this Agreement if the effect thereof is to affect the rights or
duties of such Agent,

and any material amendment, waiver or other modification of this Agreement shall
require satisfaction of the Rating Agency Condition. Notwithstanding the
foregoing, (i) without the consent of the Liquidity Banks, but with the consent
of the Borrower, the Agent may amend this Agreement solely to add additional
Persons as Liquidity Banks hereunder and (ii) the Agent, the Required Liquidity
Banks and VFCC may enter into amendments to modify any of the terms or
provisions of Article XI, Article XII, Section 14.13 or any other provision of
this Agreement without the consent of the Borrower, provided that such amendment
has no negative impact upon the Borrower. Any modification or waiver made in
accordance with this Section 14.1 shall apply to each of the Lenders equally and
shall be binding upon the Borrower, the Servicer, the Lenders and the Agent.

Section 14.2 Notices. Except as provided in this Section 14.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or
(iii) if

 

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given by any other means, when received at the address specified in this
Section 14.2. The Borrower hereby authorizes the Agent to effect Advances and
Interest Period and Interest Rate selections based on telephonic notices made by
any Person whom the Agent in good faith believes to be acting on behalf of the
Borrower. The Borrower agrees to deliver promptly to the Agent a written
confirmation of each telephonic notice signed by an authorized officer of the
Borrower; provided, however, the absence of such confirmation shall not affect
the validity of such notice. If the written confirmation differs from the action
taken by the Agent, the records of the Agent shall govern absent manifest error.

Section 14.3 Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it with respect to any portion of the Obligations owing to
such Lender (other than payments received pursuant to Section 10.2 or 10.3) in a
greater proportion than that received by any other Lender entitled to receive a
ratable share of such Obligations, such Lender agrees, promptly upon demand, to
purchase for cash without recourse or warranty a portion of such Obligations
held by the other Lenders so that after such purchase each Lender will hold its
ratable proportion of such Obligations; provided that if all or any portion of
such excess amount is thereafter recovered from such Lender, such purchase shall
be rescinded and the purchase price restored to the extent of such recovery, but
without interest.

Section 14.4 Protection of Agent’s Security Interest.

(a) The Borrower agrees that from time to time, at its expense, it will promptly
deliver and, as applicable, authorize the filing of all instruments and
documents, and take all actions, that may be necessary or desirable, or that the
Agent may reasonably request, to perfect, protect or more fully evidence the
Agent’s security interest in the Collateral, or to enable the Agent or the
Lenders to exercise and enforce their rights and remedies hereunder. At any time
after the occurrence and during the continuation of an Amortization Event, the
Agent may, or the Agent may direct the Borrower and/or Servicer to, notify the
Obligors of Receivables, at the Borrower’s expense, of the security interests of
the Agent on behalf of the Lenders under this Agreement and may also direct that
payments of all amounts due or that become due under any or all Receivables be
made directly to the Agent or its designee. The Borrower or Servicer (as
applicable) shall, at any Lender’s request, withhold the identity of such Lender
in any such notification.

(b) If any Loan Party fails to perform any of its obligations hereunder, the
Agent or any Lender may (but shall not be required to) perform, or cause
performance of, such obligations, and the Agent’s or such Lender’s actual and
reasonable costs and expenses incurred in connection therewith shall be payable
by the Borrower as provided in Section 10.3. Each Loan Party irrevocably
authorizes the Agent at any time and from time to time in the sole discretion of
the Agent, and appoints the Agent as its attorney-in-fact, to act on behalf of
such Loan Party (i) to execute on behalf of the Borrower as debtor (if execution
is required) and to file financing statements necessary or desirable in the
Agent’s reasonable opinion to perfect and to maintain the perfection and
priority of the interest of the Lenders in the Receivables (including, without
limitation, financing statements naming the Borrower as debtor that describe the
collateral as “all assets whether now existing or hereafter arising” or “all
personal property now owned or hereafter acquired” or words of similar effect)
and (ii) to file a carbon, photographic or other reproduction of this Agreement
or any financing statement with respect to the Receivables

 

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as a financing statement in such offices as the Agent in its reasonable opinion
deems necessary or desirable to perfect and to maintain the perfection and
priority of the Agent’s security interest in the Collateral, for the benefit of
the Secured Parties. This appointment is coupled with an interest and is
irrevocable.

Section 14.5 Confidentiality.

(a) Each Loan Party and each Lender shall maintain and shall cause each of its
employees, officers and Affiliates to maintain the confidentiality of the Fee
Letter and the other confidential or proprietary information with respect to the
Agent and VFCC and their respective businesses obtained by it or them in
connection with the structuring, negotiating and execution of the transactions
contemplated herein, except that such Loan Party and such Lender and its
officers and employees may disclose such information to such Loan Party’s and
such Lender’s external consultants, accountants and attorneys and as required by
any applicable law, rule or regulation or order of any judicial or
administrative proceeding or to enforce its rights under the Transaction
Documents.

(b) Unless otherwise agreed to in writing by the Parent, each Lender and the
Agent hereby agrees to keep all Proprietary Information confidential and not to
disclose or reveal any Proprietary Information to any Person other than its (or
its Affiliates’) directors, officers, employees, agents, attorneys, auditors,
advisors, consultants or other representatives who reasonably require such
information in connection with their activities concerning this Agreement or the
transactions contemplated hereby and to actual or potential Participants or
Purchasing Liquidity Banks, and then only upon a confidential basis in any such
case; provided, however, that Proprietary Information may be disclosed: (i) to
the Agent or any other Lender, (ii) to any provider of credit or liquidity
enhancement to VFCC (each, an “Enhancer”), (iii) to the extent reasonably
required in connection with any litigation to which the Agent, any Lender, any
Enhancer or their respective Affiliates may be a party, (iv) to the extent
reasonably required in connection with the exercise of any remedy hereunder,
(v) as required by law, rule, regulation, direction, request or order of any
judicial, administrative or regulatory authority or proceedings (whether or not
having the force or effect of law), (vi) to bank regulatory authorities or other
governmental authorities, (vii) to any rating agency that rates the commercial
paper or other debt securities of any Lender or any Enhancer, (viii) to any
commercial paper dealer of any Lender or Enhancer which has agreed in writing to
be bound by the provisions of this Section 14.5, and (ix) to any directors,
officers, employees, agents, attorneys, auditors, advisors, consultants or other
representatives of the entities described in subsections (i), (ii) , (vi),
(vii) or (viii) above who reasonably require such information in connection with
their activities concerning this Agreement or the transactions contemplated
hereby (but only upon a confidential basis).

 

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Section 14.6 Bankruptcy Petition. The Borrower, the Servicer, the Agent and each
Liquidity Bank hereby covenants and agrees that, prior to the date that is one
year and one day after the payment in full of all outstanding senior
indebtedness of VFCC, it will not institute against, or join any other Person in
instituting against, VFCC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of the United States or any state of the United States.

Section 14.7 Limitation of Liability. Except with respect to any claim arising
out of the willful misconduct or gross negligence of VFCC, the Agent or any
Liquidity Bank, no claim may be made by any Loan Party or any other Person
against VFCC, the Agent or any Liquidity Bank or their respective Affiliates,
directors, officers, employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect of any claim for breach of contract
or any other theory of liability arising out of or related to the transactions
contemplated by this Agreement, or any act, omission or event occurring in
connection therewith; and each Loan Party hereby waives, releases, and agrees
not to sue upon any claim for any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor. Notwithstanding any
other provision of this Agreement, the obligations of Borrower hereunder shall
be payable solely from Collections, other proceeds of Receivables and Related
Security and the other Assets of Borrower, and following realization of such
Collections, other proceeds of Receivables and Related Security and the other
Assets of Borrower, any claims of any Purchaser or Agent hereunder shall be
extinguished.

Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF (EXCEPT IN THE CASE OF THE OTHER
TRANSACTION DOCUMENTS, TO THE EXTENT OTHERWISE EXPRESSLY STATED THEREIN) AND
EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE OWNERSHIP INTERESTS OF THE
BORROWER OR THE SECURITY INTERESTS OF THE AGENT, FOR THE BENEFIT OF THE SECURED
PARTIES, IN ANY OF THE COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF GEORGIA.

Section 14.9 CONSENT TO JURISDICTION. EACH PARTY TO THIS AGREEMENT HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR GEORGIA STATE COURT SITTING IN FULTON COUNTY, GEORGIA, IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT
EXECUTED BY SUCH PERSON PURSUANT TO THIS AGREEMENT, AND EACH SUCH PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING
PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY ANY LOAN PARTY AGAINST THE AGENT OR ANY LENDER OR ANY
AFFILIATE OF THE

 

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AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT
EXECUTED BY SUCH LOAN PARTY PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN
A COURT IN FULTON COUNTY, GEORGIA.

Section 14.10 WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY LOAN PARTY PURSUANT TO THIS
AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.

Section 14.11 Integration; Binding Effect; Survival of Terms.

(a) This Agreement and each other Transaction Document contain the final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof superseding all prior
oral or written understandings, including without limitation the Existing
Agreeement.

(b) This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns (including any
trustee in bankruptcy). This Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with its terms and
shall remain in full force and effect until terminated in accordance with its
terms; provided, however, that the rights and remedies with respect to (i) any
breach of any representation and warranty made by any Loan Party pursuant to
Article V, (ii) the indemnification and payment provisions of Article X, and
Sections 14.5, 14.6 and 14.7 shall be continuing and shall survive any
termination of this Agreement.

Section 14.12 Counterparts; Severability; Section References. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of a signature page to this Agreement. Any provisions of this
Agreement which are prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. Unless otherwise
expressly indicated, all references herein to “Article,” “Section,” “Schedule”
or “Exhibit” shall mean articles and sections of, and schedules and exhibits to,
this Agreement.

 

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Section 14.13 Wachovia Roles. Each of the Liquidity Banks acknowledges that
Wachovia acts, or may in the future act: (i) as administrative agent for VFCC or
any Liquidity Bank, (ii) as an issuing and paying agent for the Commercial
Paper, (iii) to provide credit or liquidity enhancement for the timely payment
for the Commercial Paper, and/or (iv) to provide other services from time to
time for VFCC or any Liquidity Bank (collectively, the “Wachovia Roles”).
Without limiting the generality of this Section 14.13, each Liquidity Bank
hereby acknowledges and consents to any and all Wachovia Roles and agrees that
in connection with any Wachovia Role, Wachovia may take, or refrain from taking,
any action that it, in its discretion, deems appropriate, including, without
limitation, in its role as administrative agent for VFCC, and the giving of
notice of a mandatory purchase pursuant to the Liquidity Agreement.

Section 14.14 Interest. In no event shall the amount of interest, and all
charges, amounts or fees contracted for, charged or collected pursuant to this
Agreement or the other Transaction Documents and deemed to be interest under
applicable law (collectively, “Interest Amounts” ) exceed the highest rate of
interest allowed by applicable law (the “Maximum Rate”), and in the event any
such payment is inadvertently received by VFCC or any Liquidity Bank, then the
excess sum (the “Excess”) shall be credited as a payment of principal, unless
the relevant Borrower shall notify the applicable recipient in writing that it
elects to have the Excess returned forthwith. It is the express intent hereof
that the Borrower not pay and VFCC and the Liquidity Banks not receive, directly
or indirectly in any manner whatsoever, interest in excess of that which may
legally be paid by the Borrower under applicable law. The right to accelerate
maturity of any of the Loans does not include the right to accelerate any
interest that has not otherwise accrued on the date of such acceleration, and
the Agent and the Liquidity Banks do not intend to collect any unearned interest
in the event of any such acceleration. All monies paid to the Agent or the
Liquidity Banks hereunder or under any of the other Transaction Documents,
whether at maturity or by prepayment, shall be subject to rebate of unearned
interest as and to the extent required by applicable law. By the execution of
this Agreement, the Borrower covenants, to the fullest extent permitted by law,
that (i) the credit or return of any Excess shall constitute the acceptance by
the Borrower of such Excess, and (ii) the Borrower shall not seek or pursue any
other remedy, legal or equitable, against the Agent or any Liquidity Bank, based
in whole or in part upon contracting for charging or receiving any Interest
Amounts in excess of the Maximum Rate. For the purpose of determining whether or
not any Excess has been contracted for, charged or received by the Agent or any
Liquidity Bank, all interest at any time contracted for, charged or received
from the Borrower in connection with this Agreement or any of the other
Transaction Documents shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread in equal parts throughout the full
term of the Commitments. The Borrower, the Agent and each Lender shall, to the
maximum extent permitted under applicable law, (i) characterize any
non-principal payment as an expense, fee or premium rather than as Interest
Amounts and (ii) exclude voluntary prepayments and the effects thereof. The
provisions of this Section shall be deemed to be incorporated into each of the
other Transaction Documents (whether or not any provision of this Section is
referred to therein). All such Transaction Documents and communications relating
to any Interest Amounts owed by the Borrower and all figures set forth therein
shall, for the sole purpose of computing the extent of the obligations hereunder
and under the other Transaction Documents be automatically recomputed by the
Borrower, and by any court considering the same, to give effect to the
adjustments or credits required by this Section.

 

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Section 14.15 Source of Funds — ERISA. Each of VFCC and the Liquidity Banks
hereby severally (and not jointly) represents to the Borrower that no part of
the funds to be used by it to fund the Loans hereunder from time to time
constitutes (i) assets allocated to any separate account maintained by it in
which any employee benefit plan (or its related trust) has any interest nor
(ii) any other assets of any employee benefit plan. As used in this Section, the
terms “employee benefit plan” and “separate account” shall have the respective
meanings assigned to such terms in Section 3 of ERISA.

<signature pages follow>

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
Credit and Security Agreement to be executed and delivered by their duly
authorized officers as of the date hereof.

 

ACUITY UNLIMITED, INC. By:  

/s/ Kenyon W. Murphy

Name:   Kenyon W. Murphy Title:   Executive Vice President Address:

Acuity Unlimited, Inc.

One Lithonia Way

Conyers, GA 30012

Attention: General Counsel Phone: (770) 922-9000 Fax:    (770) 785-9511 ACUITY
BRANDS LIGHTING, INC., AS A SERVICER

By:

 

/s/ Kenyon W. Murphy

Name:

  Kenyon W. Murphy

Title:

  Executive Vice President Address:

Acuity Brands Lighting, Inc.

One Lithonia Way

Conyers, GA 30012

Attention: General Counsel Phone: (770) 922-9000 Fax:    (770) 785-9511

 

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VARIABLE FUNDING CAPITAL COMPANY LLC

BY: WACHOVIA CAPITAL MARKETS, LLC, ITS ATTORNEY-IN-FACT

 

By:  

/s/ Douglas R. Wilson, Sr.

  Name: Douglas R. Wilson, Sr.   Title: Director

Address:

Variable Funding Capital Company LLC

c/o Wachovia Bank, National Association

301 S. College St.,

FLR TRW 10 NC0610

Charlotte, NC 28288-0610

Attention: Douglas R. Wilson, Sr.

Phone: (704) 374-2520

Fax:     (704) 383-9579

With a copy to:

Variable Funding Capital Company LLC

c/o AMACAR Group, L.L.C.

6525 Morrison Blvd., Suite 318

Charlotte, North Carolina 28211

Attention: Douglas K. Johnson

Phone: (704) 365-0569

Fax:     (704) 365-1362

 

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WACHOVIA BANK, NATIONAL ASSOCIATION, as a Liquidity Bank and as Agent

 

By:

 

/s/ Michael J. Landry

Name:

  Michael J. Landry

Title:

  Vice President

Address:

Wachovia Bank, National Association

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

Mail-stop GA4524

Atlanta, GA 30363

Attention: Michael Landry

Phone: (404) 214-6388

Fax:     (404) 214-5481

 

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EXHIBIT I

DEFINITIONS

Capitalized terms used and not otherwise defined herein shall have the meanings
attributed thereto in the Receivables Sale Agreement (hereinafter defined).

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

“Acuity Credit Agreements” means that certain (i) 5-Year Revolving Credit
Agreement, dated as of April 2, 2004, among Acuity Brands, Inc., a Delaware
corporation (its successor now known as Old ABI, LLC, a Georgia limited
liability company), the other borrowers party thereto, Bank One, NA (Main Office
Chicago), as Administrative Agent, and Wachovia Bank, National Association, as
Syndication Agent, LaSalle Bank National Association and Key Bank National
Association, as Co-Documentation Agents, the lenders party thereto as amended,
supplemented and modified (as so amended, supplemented and modified, the
“Existing Bank Credit Agreement”), and (ii) that certain 5-Year Revolving Credit
Agreement to be entered into on or after the date hereof among Performance
Guarantor, the other borrowers party thereto, JP Morgan Chase Bank, National
Association as Administrative Agent and the other lenders party thereto,
pursuant to which all or a portion of the credit facilities provided under the
Existing Bank Credit Agreement will be replaced or refinanced, as the same may
be amended, restated or replaced from time to time.

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

“Advance” means a borrowing hereunder consisting of the aggregate amount of the
several Loans made on the same Borrowing Date.

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

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person or any Subsidiary of such Person. A Person shall be
deemed to control another Person if the controlling Person owns 20% or more of
any class of voting securities of the controlled Person or possesses, directly
or indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.

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

“Agent’s Account” means account #2000010384921 at Wachovia Bank, National
Association, ABA #053000219.

 

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“Aggregate Commitment” means, on any date of determination, the aggregate amount
of the Liquidity Banks’ Commitments to make Loans hereunder. As of the date
hereof, the Aggregate Commitment is $75,000,000.

“Aggregate Principal” means, on any date of determination, the aggregate
outstanding principal amount of all Advances (regardless of the Borrower)
outstanding on such date.

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

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

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

“Alternate Base Rate Loan” means a Loan which bears interest at the Alternate
Base Rate or the Default Rate.

“Amortization Date” means the earliest to occur of (i) the Business Day
immediately prior to the occurrence of an Event of Bankruptcy with respect to
any Loan Party, (ii) the Business Day specified in a written notice from the
Agent following the occurrence and during the continuation of any other
Amortization Event, (iii) the date which is 10 Business Days after the Agent’s
receipt of written notice from the Borrower that it wishes to terminate the
facility evidenced by this Agreement, and (iv) October 17, 2008.

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

“Applicable Margin” means, for each Interest Period applicable to any Loan for
which Interest is calculated on the basis of the LIBO Rate, the greater of the
following on the first day of such Interest Period:

(a) two times the sum of (i) the Usage Fee plus (ii) the Program Fee; or

(b) the margin then applicable to borrowings under the Acuity Credit Agreements
at a London interbank offered rate or Eurodollar rate, as the case may be (and
if more than one such margin is then applicable, the greater of the two
applicable margins).

“Assignment Agreement” has the meaning set forth in Section 12.1(b).

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

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

 

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“Borrowing Base” means, on any date of determination, the Net Pool Balance as of
the last day of the period covered by the most recent Monthly Report, minus the
Required Reserve as of the last day of the period covered by the most recent
Monthly Report, and minus Deemed Collections that have occurred since the most
recent Cut-Off Date to the extent that such Deemed Collections exceed the
Dilution Reserve, and minus the FX Reserve.

“Borrowing Date” means a Business Day on which an Advance is made hereunder.

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

“Broken Funding Costs” means for any CP Rate Loan or LIBO Rate Loan which:
(a) in the case of a CP Rate Loan, has its principal reduced without compliance
by the Borrower with the notice requirements hereunder, (b) in the case of a CP
Rate Loan or a LIBO Rate Loan, does not become subject to an Aggregate Reduction
following the delivery of any Reduction Notice, (c) in the case of a CP Rate
Loan, is assigned under the Liquidity Agreement, or (d) in the case of a LIBO
Rate Loan, is terminated or reduced prior to the last day of its Interest
Period, an amount equal to the excess, if any, of (i) the CP Costs or Interest
(as applicable) that would have accrued during the remainder of the Interest
Periods or the tranche periods for Commercial Paper determined by the Agent to
relate to such Loan (as applicable) subsequent to the date of such reduction,
assignment or termination (or in respect of clause (b) above, the date such
Aggregate Reduction was designated to occur pursuant to the Reduction Notice) of
the principal of such Loan if such reduction, assignment or termination had not
occurred or such Reduction Notice had not been delivered, over (ii) the sum of
(x) to the extent all or a portion of such principal is allocated to another
Loan, the amount of CP Costs or Interest actually accrued during the remainder
of such period on such principal for the new Loan, and (y) to the extent such
principal is not allocated to another Loan, the income, if any, actually
received during the remainder of such period by the holder of such Loan from
investing the portion of such principal not so allocated. In the event that the
amount referred to in clause (B) exceeds the amount referred to in clause (A),
the relevant Lender or Lenders agree to pay to the Borrower the amount of such
excess. All Broken Funding Costs shall be due and payable hereunder upon demand.

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

“Calculation Period” means a Fiscal Month.

“Capital Leases” means leases which are required to be capitalized in accordance
with GAAP.

“Change of Control” means (a) a “Change of Control” under and as defined in the
Receivables Sale Agreement shall occur (other than any Change in Control
resulting from the Spin-Off Transaction), or (b) the Originator ceases to own
100% of the outstanding shares of voting stock of the Borrower.

 

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“Collateral” has the meaning set forth in Section 13.1.

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

“Collection Account Agreement” means an agreement among one or both Originators,
the Borrower, the Agent and a Collection Bank with respect to a Lock-Box and/or
Collection Account, in a form reasonably acceptable to the Loan Parties and the
Agent.

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

“Collection Notice” means a notice, in substantially the form of Annex A to
Exhibit VI, from the Agent to a Collection Bank.

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

“Commercial Paper” means promissory notes of VFCC issued by VFCC in the
commercial paper market.

“Commitment” means, for each Liquidity Bank, the commitment of such Liquidity
Bank to make Loans to the Borrower hereunder in the event the VFCC elects not to
fund any Advance in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Liquidity Bank’s name on
Schedule A to this Agreement.

“Consolidated Operating Profits” means, for any period, the Operating Profits of
the Parent and its Consolidated Subsidiaries.

“Consolidated Subsidiary” means at any date any Subsidiary or other entity the
accounts of which, in accordance with GAAP, would be consolidated with those of
the Parent in its consolidated financial statements as of such date.

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

 

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“Contract” means, with respect to any Receivable, any and all instruments,
agreements, invoices or other writings pursuant to which such Receivable arises
or which evidences such Receivable.

“CP Costs” means, for each day, the sum of (i) discount or interest accrued on
Pooled Commercial Paper on such day, plus (ii) any and all accrued commissions
in respect of placement agents and Commercial Paper dealers, and issuing and
paying agent fees incurred, in respect of such Pooled Commercial Paper for such
day, plus (iii) other costs associated with funding small or odd-lot amounts
with respect to all receivable purchase facilities which are funded by Pooled
Commercial Paper for such day, minus (iv) any accrual of income net of expenses
received on such day from investment of collections received under all
receivable purchase or financing facilities funded substantially with Pooled
Commercial Paper, minus (v) any payment received on such day net of expenses in
respect of Broken Funding Costs (or similar costs) related to the prepayment of
any investment of VFCC pursuant to the terms of any receivable purchase or
financing facilities funded substantially with Pooled Commercial Paper. In
addition to the foregoing costs, if the Borrower shall request any Advance
during any period of time determined by the Agent in its sole discretion to
result in incrementally higher CP Costs applicable to such Advance, the
principal associated with any such Advance shall, during such period, be deemed
to be funded by VFCC in a special pool (which may include capital associated
with other receivable purchase or financing facilities) for purposes of
determining such additional CP Costs applicable only to such special pool and
charged each day during such period against such principal.

“CP Rate Loan” means, for each Loan of VFCC prior to the time, if any, when
(i) it is refinanced with a Liquidity Funding pursuant to the Liquidity
Agreement, or (ii) the occurrence of an Amortization Event and the commencement
of the accrual of Interest thereon at the Default Rate.

“Credit and Collection Policy” means each Originator’s credit and collection
policies and practices relating to Contracts and Receivables existing on the
date hereof and summarized in the Exhibits to the Receivables Sale Agreement, as
modified from time to time in accordance with this Agreement.

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

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

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

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

 

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

“Default Ratio” means, as of any Cut-Off Date, the ratio (expressed as a
percentage) computed by dividing (x) the total amount of Receivables which
became Defaulted Receivables during the Calculation Period that includes such
Cut-Off Date, by (y) the aggregate amount of Receivables generated by the
Originators during the Calculation Period occurring 5 months prior to the
Calculation Period ending on such Cut-Off Date.

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

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

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

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

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

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

“Dilution Ratio” means, as of any Cut-Off Date, a ratio (expressed as a
percentage), computed by dividing (i) the total amount of decreases in
Outstanding Balances due to Dilutions during the Calculation Period ending on
such Cut-Off Date, by (ii) the aggregate dollar amount of Receivables generated
by the Originators during the Calculation Period ending 1-month prior to the
Calculation Period ending on such Cut-Off Date.

 

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

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

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

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

“Downgraded Liquidity Bank” means a Liquidity Bank which has been the subject of
a Downgrading Event.

“Downgrading Event” with respect to any Person means the lowering of the rating
with regard to the short-term securities of such Person to below (i) A-1+ by
S&P, or (ii) P-1 by Moody’s.

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

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

(i) the Obligor of which (a) if a natural person, is a resident of the United
States or Puerto Rico or, if a corporation or other business organization, is
organized under the laws of the United States, Puerto Rico or any political
subdivision of the United States or Puerto Rico and has its chief executive
office in the United States or Puerto Rico; (b) is not an Affiliate of any of
the Loan Parties; and (c) is not a government or a governmental subdivision or
agency; provided, however, that not more than 1% of total Receivables may be
comprised of Receivables owing from Obligors organized under the laws of or
resident in Puerto Rico;

(ii) which is not a Defaulted Receivable,

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

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

 

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(v) which by its terms is due and payable within 60 days of the original billing
date therefor and has not had its payment terms extended more than once (except
that up to 5% of the aggregate Outstanding Balance of all Receivables may have
terms payable within 61-90 days of the original billing date therefor and up to
4% of the aggregate Outstanding Balance of all Eligible Receivables may arise
from progress billings to The Home Depot, Inc. or one of its Affiliates),

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

(vii) which is denominated and payable only in (A) United States dollars in the
United States, or (B) in the case of Receivables on which The Home Depot, Inc.
or one of its Affiliates is the Obligor, Canadian dollars in the United States,

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

(ix) which arises under a Contract which does not contain a confidentiality
provision that purports to restrict the ability of VFCC to exercise its rights
under this Agreement, including, without limitation, its right to review the
Contract,

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

(xi) 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,

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

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

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

(xv) which is not subject to any dispute, counterclaim, right of rescission,
set-off, counterclaim or any other defense (including defenses arising out of
violations of usury laws) of the applicable Obligor against the applicable
Originator or any other Adverse Claim, and the Obligor thereon holds no right as
against the Originator to cause the Originator to repurchase the goods or

 

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merchandise the sale of which shall have given rise to such Receivable (except
with respect to sale discounts effected pursuant to the Contract, or defective
goods returned in accordance with the terms of the Contract); provided, however,
that if such dispute, offset, counterclaim or defense affects only a portion of
the Outstanding Balance of such Receivable, then such Receivable may be deemed
an Eligible Receivable to the extent of the portion of such Outstanding Balance
which is not so affected, and provided, further, that (A) Receivables of any
Obligor which has any accounts payable by the applicable Originator or by a
wholly-owned Subsidiary of the Originator (thus giving rise to a potential
offset against such Receivables) may be treated as Eligible Receivables to the
extent that the Obligor of such Receivables has agreed pursuant to a written
agreement in form and substance satisfactory to the Agent, that such Receivables
shall not be subject to such offset, and (B) the Agent, in its sole discretion,
may chose to allow certain disputed receivables to be counted as Eligible
Receivables,

(xvi) as to which the applicable Originator has satisfied and fully performed
all obligations on its part with respect to such Receivable required to be
fulfilled by it, and no further action is required to be performed by any Person
with respect thereto other than payment thereon by the applicable Obligor
(excluding (A) warranty obligations for which no claim exists, and (B) progress
billings to The Home Depot, Inc. or one of its Affiliates to the extent
permitted under clause (v) above),

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

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

“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
(other than a trustee under a deed of trust, indenture or similar instrument),
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 be adjudicated insolvent, 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.

“Executive Officer” means any of the chief executive officer, president,
executive vice president or senior vice president of the Parent.

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

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

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

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

“Fee Letter” means that certain letter agreement dated as of October 19, 2007
between the Borrower and the Agent, as it may be amended, restated or otherwise
modified and in effect from time to time.

“Final Payout Date” means the date on which all Obligations have been paid in
full and the Aggregate Commitment has been terminated.

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

“Fiscal Month” means any fiscal month of the Performance Guarantor.

“Fiscal Quarter” means any fiscal quarter of the Performance Guarantor.

“Fiscal Year” means any fiscal year of the Performance Guarantor.

 

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“Funding Agreement” means (i) this Agreement, (ii) the Liquidity Agreement and
(iii) any other agreement or instrument executed by any Funding Source with or
for the benefit of VFCC.

“Funding Source” means (i) any Liquidity Bank or (ii) any insurance company,
bank or other funding entity providing liquidity, credit enhancement or back-up
purchase support or facilities to VFCC.

“FX Reserve” means, at any time, an amount equal to 10% of the aggregate
Outstanding Balance of all Eligible Receivables on which The Home Depot, Inc. or
one of its Affiliates is the Obligor that are denominated in Canadian dollars.

“GAAP” means generally accepted accounting principles in effect in the United
States of America as of the date of this Agreement.

“Guarantee” by any Person means any obligation, contingent or otherwise, of such
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
secure, purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to provide collateral security, to take-or-pay, or to
maintain financial statement conditions or otherwise) or (ii) entered into for
the purpose of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term “Guarantee” used as a verb has a corresponding meaning.

“Indebtedness” of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee under Capital
Leases, (v) all obligations of such Person to reimburse any bank or other Person
in respect of amounts payable under a banker’s acceptance, (vi) all Redeemable
Preferred Stock of such Person (in the event such Person is a corporation),
(vii) all obligations of such Person to reimburse any bank or other Person in
respect of amounts paid or to be paid under a letter of credit or similar
instrument, (viii) all Indebtedness of others secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person, and
(ix) all Indebtedness of others Guaranteed by such Person.

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

 

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the Borrower, Originator, or any of their respective Subsidiaries or Affiliates,
having general voting rights (excepting immaterial beneficial interests in
mutual funds or similar managed investment accounts which in no case shall
exceed 5% of any class of such shares).

“Initial Cutoff Date” means the Business Day immediately prior to the date
hereof.

“Interest” means for each respective Interest Period relating to Loans of the
Liquidity Banks, an amount equal to the product of the applicable Interest Rate
for each Loan multiplied by the principal of such Loan for each day elapsed
during such Interest Period, annualized on a 360 day basis.

“Interest Period” means, with respect to any Loan held by a Liquidity Bank:

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

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

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

“Interest Rate” means, with respect to each Loan of the Liquidity Banks, the
LIBO Rate, the Alternate Base Rate or the Default Rate, as applicable.

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

“Lender” means VFCC and each Liquidity Bank.

“LIBO Rate” means, for any Interest Period, the rate per annum determined on the
basis of the offered rate for deposits in U.S. dollars of amounts equal or
comparable to the

 

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principal amount of the related Loan offered for a term comparable to such
Interest Period, which rates appear on a Bloomberg L.P. terminal, displayed
under the address “US0001M <Index> Q <Go>“ effective as of 11:00 A.M., London
time, two Business Days prior to the first day of such Interest Period, provided
that if no such offered rates appear on such page, the LIBO Rate for such
Interest Period will be the arithmetic average (rounded upwards, if necessary,
to the next higher 1/100th of 1%) of rates quoted by not less than two major
banks in New York, New York, selected by the Agent, at approximately 10:00
a.m.(New York time), two Business Days prior to the first day of such Interest
Period, for deposits in U.S. dollars offered by leading European banks for a
period comparable to such Interest Period in an amount comparable to the
principal amount of such Loan, divided by (b) one minus the maximum aggregate
reserve requirement (including all basic, supplemental, marginal or other
reserves) which is imposed against the Agent in respect of Eurocurrency
liabilities, as defined in Regulation D of the Board of Governors of the Federal
Reserve System as in effect from time to time (expressed as a decimal),
applicable to such Interest Period plus (ii) the Applicable Margin per annum.
The LIBO Rate shall be rounded, if necessary, to the next higher 1/16 of 1%.

“LIBO Rate Loan” means a Loan which bears interest at the LIBO Rate.

“Lien” shall mean any lien, charge, claim, security interest, mortgage or
encumbrance, or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.

“Liquidity Agreement” means that certain Liquidity Asset Purchase Agreement,
dated as of October 19, 2007 by and among VFCC, the Agent and the banks from
time to time party thereto, as the same may be amended, restated and/or
otherwise modified from time to time in accordance with the terms thereof.

“Liquidity Banks” has the meaning set forth in the preamble in this Agreement.

“Liquidity Commitment” means, as to each Liquidity Bank, its commitment under
the Liquidity Agreement (which shall equal 102% of its Commitment hereunder).

“Liquidity Funding” means (a) a purchase made by any Liquidity Bank pursuant to
its Liquidity Commitment of all or any portion of, or any undivided interest in,
a VFCC Loan, or (b) any Loan made by a Liquidity Bank in lieu of VFCC pursuant
to Section 1.1.

“Liquidity Termination Date” means the earlier to occur of the following:

(a) the date on which the Liquidity Banks’ Liquidity Commitments expire, cease
to be available to VFCC or otherwise cease to be in full force and effect; or

(b) the date on which a Downgrading Event with respect to a Liquidity Bank shall
have occurred and been continuing for not less than 30 days, and either (i) the
Downgraded Liquidity Bank shall not have been replaced by an Eligible Assignee
pursuant to the Liquidity Agreement, or (ii) the Liquidity Commitment of such
Downgraded Liquidity Bank shall not have been funded or collateralized in such a
manner that will avoid a reduction in or withdrawal of the credit rating applied
to the Commercial Paper to which such Liquidity Agreement applies by any of the
rating agencies then rating such Commercial Paper.

 

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“Loan” means any loan made by a Lender pursuant to this Agreement (including,
without limitation, any Liquidity Funding). Each Loan shall either be a CP Rate
Loan, an Alternate Base Rate Loan or a Eurodollar Rate Loan, selected in
accordance with the terms of this Agreement. For purposes of determining
compliance with the Borrowing Bases, each Loan shall be deemed to be made to the
Borrower that receives the proceeds thereof even though the Borrower shall be
liable for the repayment thereof.

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

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

“Loss Reserve” means, for any Calculation Period, the product (expressed as a
percentage) of (a) 2.00, times (b) the highest three-month rolling average
Default Ratio during the 12 Calculation Periods ending on the immediately
preceding Cut-Off Date, times (c) the Default Horizon Ratio as of the
immediately preceding Cut-Off Date.

“Margin Stock” means “margin stock” as defined in Regulations T, U or X.

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

“Material Subsidiary” means (i) each of the Borrower and ABL and (ii) each other
Consolidated Subsidiary, now existing or hereinafter established or acquired,
that at any time prior to the payment in full of all Aggregate Unpaids under
this Agreement either (x) has or acquires total assets in excess of 10% of
Consolidated Total Assets at the end of the most recent Fiscal Quarter, or
(y) contributed more than 10% of Consolidated Operating Profits for the 4 most
recent Fiscal Quarters then ended (or, with respect to any Subsidiary which
existed during the entire 4 Fiscal Quarter period but was acquired by the Parent
during such period, which would have contributed more than 10% of Consolidated
Operating Profits for such period had it been a Subsidiary for the entire
period, as determined on a pro forma basis in accordance with GAAP).

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

 

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“Monthly Reporting Date” means the 15th Business Day of each month after the
date of this Agreement or such other days of each month as the Agent shall
request in connection with Section 8.5 hereof.

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

“Net Pool Balance” means, at any time, the aggregate Outstanding Balance of all
Eligible Receivables at such time reduced by the aggregate amount by which the
Outstanding Balance of all Eligible Receivables of each Obligor and its
Affiliates exceeds the Obligor Concentration Limit for such Obligor.

“Obligations” means, at any time, any and all obligations of either of the Loan
Parties to any of the Secured Parties arising under or in connection with the
Transaction Documents, whether now existing or hereafter arising, due or
accrued, absolute or contingent, including, without limitation, obligations in
respect of Aggregate Principal, CP Costs, Interest, fees under the Fee Letter,
Broken Funding Costs and Indemnified Amounts.

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

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

 

S&P Rating    Moody’s Rating    Allowable % of
Eligible Receivables A-1+    P-1    10% A-1    P-1    8% A-2    P-2    6% A-3   
P-3    5% Below A-3 or Not Rated
by either S&P or
Moody’s    Below P-3 or Not
Rated by either
S&P or Moody’s    5%

; provided, however, that (a) if any Obligor has a split rating, the applicable
rating will be the lower of the two, (b) if any Obligor is not rated by either
S&P or Moody’s, the applicable Obligor Concentration Limit shall be the one set
forth in the last line of the table above, and (c) subject to satisfaction of
the Rating Agency Condition and/or an increase in the percentage set forth in
clause (a)(i) of the definition of “Required Reserve,” upon Borrower’s request
from time to time, the Agent may agree to a higher percentage of Eligible
Receivables for a particular Obligor and its Affiliates (each such higher
percentage, a “Special Concentration Limit”), it being understood that any
Special Concentration Limit may be cancelled by the Agent upon not less than
five (5) Business Days’ written notice to the Loan Parties. As of September 28,
2006, the Special Concentration Limit for all Receivables owing from The Home
Depot, Inc. and its Affiliates is 25% of aggregate Outstanding Balance of all
Eligible Receivables, and the Special

 

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Concentration Limit for all Receivables owing from Rexel, Inc. and its
Affiliates is 8% of aggregate Outstanding Balance of all Eligible Receivables,
provided that not more than 2% of the aggregate Outstanding Balance of the
Eligible Receivables owing from all such special Obligors are denominated in
Canadian dollars.

“Operating Profits” means, as applied to any Person for any period, the sum of
(i) net revenues, less (ii) cost of goods and services sold, less
(iii) operating expenses (including depreciation and amortization) of such
Person for such period, as determined in accordance with GAAP.

“Originator” means ABL in its capacity as seller under the Receivables Sale
Agreement.

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

“Participant” has the meaning set forth in Section 12.2.

“Performance Guarantor” means Acuity Brands, Inc., a Delaware corporation
(formerly known as Acuity Brands Holdings, Inc.), and its successors and
permitted assigns.

“Performance Undertaking” means each Performance Undertaking, dated as of
October 19, 2007, by Performance Guarantor in favor of the Borrower,
substantially in the form of Exhibit IX, as the same may be amended, restated or
otherwise modified from time to time.

“Permitted Encumbrances” shall mean the following: (a) Liens for taxes or
assessments or other governmental charges not yet due and payable; and (b) Liens
created by the Transaction Documents.

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

“Pooled Commercial Paper” means Commercial Paper notes of VFCC subject to any
particular pooling arrangement by VFCC, but excluding Commercial Paper issued by
VFCC for a tenor and in an amount specifically requested by any Person in
connection with any agreement effected by VFCC.

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

“Pro Rata Share” means, for each Liquidity Bank, a percentage equal to the
Commitment of such Liquidity Bank, divided by the Aggregate Commitment.

“Program Fee” has the meaning set forth in the Fee Letter.

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

 

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“Proprietary Information” means all information about the Performance Guarantor
or any of its Subsidiaries which has been furnished to the Agent or any Lender
by or on behalf of the Performance Guarantor or any of its Subsidiaries before
or after the date hereof or which is obtained by any Lender or the Agent in the
course of any Review made pursuant to Section 7.1(d) of the Agreement; provided,
however, that the term “Proprietary Information” does not include information
which (x) is or becomes publicly available (other than as a result of a breach
of Section 14.5 of the Agreement), (y) is possessed by or available to the Agent
or any Lender on a non-confidential basis prior to its disclosure to the Agent
or such Lender by the Borrower or Subsidiary or (z) becomes available to the
Agent or any Lender on a non-confidential basis from a Person which, to the
knowledge of the Agent or such Lender, as the case may be, is not bound by a
confidentiality agreement with the Performance Guarantor or any of its
Subsidiaries and is not otherwise prohibited from transmitting such information
to the Agent or such Lender. In the event the Agent or any Lender is required to
disclose any Proprietary Information by virtue of clause (ii) (but only if and
to the extent such disclosure has not been sought by the Agent or any Lender,
and if neither the Performance Guarantor nor the Borrower is a party to such
litigation), (iv) or (v) above, to the extent such Lender or the Agent (as the
case may be) determines in good faith that it is permissible by law so to do, it
shall promptly notify the Performance Guarantor of same so as to allow the
Performance Guarantor or its Subsidiaries to seek a protective order or to take
other appropriate action; provided, however, neither any Lender nor the Agent
shall be required to delay compliance with any directive to disclose any such
information so as to allow the Performance Guarantor or any of Subsidiaries to
effect any such action.

“Purchasing Liquidity Bank” has the meaning set forth in Section 12.1(b).

“Rating Agency Condition” means that VFCC has received written notice from S&P
and Moody’s that an amendment, a change or a waiver to the Liquidity Agreement,
this Agreement or the Receivables Sale Agreement, will not result in a
withdrawal or downgrade of the then current ratings on VFCC’s Commercial Paper.

“Receivable” means each “Receivable” under and as defined in the Receivables
Sale Agreement in which the Borrower now has or hereafter acquires any interest.
Debt and other rights and obligations arising from any one transaction,
including, without limitation, indebtedness and other rights and obligations
represented by an individual invoice, shall constitute a Receivable separate
from a Receivable consisting of the indebtedness and other rights and
obligations arising from any other transaction; provided further, that any
indebtedness, rights or obligations referred to in the immediately preceding
sentence shall be a Receivable regardless of whether the account debtor or the
Borrower treats such indebtedness, rights or obligations as a separate payment
obligation.

“Receivables Sale Agreement” means that certain Amended and Restated Receivables
Sale and Contribution Agreement dated as of September 2, 2003, between ABL and
the Borrower, as amended as of October 19, 2007, as the same may be further
amended, restated or otherwise modified from time to time.

“Records” means, with respect to any Receivable, all Contracts and other
documents, books, records and other information (including, without limitation,
computer programs, tapes, disks, punch cards, data processing software and
related property and rights) relating to such Receivable, any Related Security
therefor and the related Obligor.

 

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“Redeemable Preferred Stock” of any Person means any preferred stock issued by
such Person which is at any time prior to the Amortization Date either
(i) mandatorily redeemable (by required sinking fund or similar payments or
otherwise) or (ii) redeemable at the option of the holder thereof.

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

“Regulation T” means Regulation T of the Board of Governors of the Federal
Reserve System, as in effect from time to time, together with all official
rulings and interpretations issued thereunder.

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time, together with all official
rulings and interpretations issued thereunder.

“Regulation X” means Regulation X of the Board of Governors of the Federal
Reserve System, as in effect from time to time, together with all official
rulings and interpretations issued thereunder.

“Regulatory Change” means any change after the date of this Agreement in United
States (federal, state or municipal) or foreign laws, regulations (including
Regulation D) or accounting principles or the adoption or making after such date
of any interpretations, directives or requests applying to a class of banks
(including the Liquidity Banks) of or under any United States (federal, state or
municipal) or foreign laws, regulations (whether or not having the force of law)
or accounting principles by any court, governmental or monetary authority, or
accounting board or authority (whether or not part of government) charged with
the establishment, interpretation or administration thereof. For the avoidance
of doubt, any interpretation of Accounting Research Bulletin No. 51 by the
Financial Accounting Standards Board shall constitute a Regulatory Change.

“Related Security” means all of (i) the “Related Security” under and as defined
in the Receivables Sale Agreement, (ii) the Borrower’s right, title and interest
in, to and under the Receivables Sale Agreement, (iii) the Borrower’s right,
title and interest in and to the Demand Advances made by it, and (iv) the
proceeds of any of the foregoing.

“Required Liquidity Banks” means, at any time, Liquidity Banks with Commitments
in excess of 66-2/3% of the Aggregate Commitment.

 

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“Required Notice Period” means the number of days required notice set forth
below applicable to the Aggregate Reduction indicated below:

 

Aggregate Reduction

  

Required Notice Period

less than 25% of the then-current

Aggregate Commitment

   2 Business Days

greater than or equal to

25% but less than 50% of the then-current

Aggregate Commitment

   5 Business Days

greater than or equal to 50% of

the then-current Aggregate Commitment

   10 Business Days

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

“Required Reserve Factor Floor” means, for any Calculation Period, the sum
(expressed as a percentage) of (a) 23% plus (b) the product of the Adjusted
Dilution Ratio and the Dilution Horizon Ratio, in each case, as of the
immediately preceding Cut-Off Date.

“Responsible Officer” means any Executive Officer as well as any other officer
of the Parent who is primarily responsible for the administration of the
transactions contemplated by the Transaction Documents.

“Restricted Junior Payment” means (i) any dividend or other distribution, direct
or indirect, on account of any shares of any class of capital stock of the
Borrower now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock or in any junior class of stock of the Borrower,
(ii) any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
capital stock of the Borrower now or hereafter outstanding, (iii) any payment
made to redeem, purchase, repurchase or retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire shares of any class
of capital stock of the Borrower now or hereafter outstanding, and (iv) any
payment of management fees by the Borrower (except for reasonable management
fees to Originator or its Affiliates in reimbursement of actual management
services performed).

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

“Secured Parties” means the Indemnified Parties.

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

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

(a) an amount equal to (i) the Servicing Fee Rate (or, at any time while ABL or
one of its Affiliates is the Servicer, such lesser percentage as may be agreed
between the

 

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Borrower and the Servicer on an arms’ length basis based on then prevailing
market terms for similar services), times (ii) the aggregate Outstanding Balance
of all Receivables at the close of business on the Cut-Off Date immediately
preceding such Calculation Period, times (iii) 1/360; or

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

“Servicing Fee Rate” means 0.25% per annum (or such higher percentage as the
Agent and the Borrower may from time to time agree upon based upon then
prevailing market conditions).

“Servicing Reserve” means, for any Calculation Period, the product (expressed as
a percentage) of (a) 1.00%, times (b) a fraction, the numerator of which is the
highest Days Sales Outstanding for the most recent 12 Calculation Periods and
the denominator of which is 360.

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

“Settlement Period” means (A) in respect of each Loan of VFCC, the immediately
preceding Calculation Period, and (B) in respect of each Loan of the Liquidity
Banks, the entire Interest Period of such Loan.

“Spin Off Transaction” means the Parent’s plan, authorized by its board of
directors, to separate its lighting equipment business and its specialty
products business by spinning off the business currently known as Zep Inc. (as
well as each of Zep Inc.’ Subsidiaries) into and independent publicly-traded
company pursuant to which the capital stock of Zep Inc will be distributed to
the record holders of the shares of the Parent on or after the date hereof.

“Subsidiary” means, with respect to any Person, any corporation or other entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person.

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

“Termination Date” has the meaning set forth in Section 2.2.

“Termination Percentage” has the meaning set forth in Section 2.2.

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

 

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“Transaction Documents” means, collectively, this Agreement, each Borrowing
Notice, the Receivables Sale Agreement, each Collection Account Agreement, the
Performance Undertakings, the Fee Letter, and all other instruments, documents
and agreements executed and delivered in connection herewith.

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

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

“Usage Fee” has the meaning set forth in the Fee Letter.

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

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

Unless otherwise specified herein, all terms of an accounting character used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared, in accordance with GAAP, applied on a basis consistent (except for
changes concurred in by the Parent’s independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Parent and its Consolidated Subsidiaries delivered
to the Agent unless with respect to any such change concurred in by the Parent’s
independent public accountants or required by GAAP, in determining compliance
with any of the provisions of this Agreement or any of the other Transaction
Documents: (i) the Parent shall have objected to determining such compliance on
such basis at the time of delivery of such financial statements, or (ii) the
Agent shall so object in writing within 30 days after the delivery of such
financial statements, in either of which events such calculations shall be made
on a basis consistent with those used in the preparation of the latest financial
statements as to which such objection shall not have been made.

All terms used in Article 9 of the UCC in the State of Georgia, and not
specifically defined herein, are used herein as defined in such Article 9.

 

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EXHIBIT II

FORM OF BORROWING NOTICE

—

ACUITY UNLIMITED, INC.

BORROWING NOTICE

dated                     , 20__

for Borrowing on                     , 20__

Wachovia Bank, National Association, as Agent

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

Mail-stop GA4524

Atlanta, GA 30363

Attention: Michael Landry

 

Phone: (404) 214-6388

Fax: (404) 214-5481

Ladies and Gentlemen:

Reference is made to the Amended and Restated Credit and Security Agreement
dated as of October 19, 2007 (as amended, supplemented or otherwise modified
from time to time, the “Credit Agreement”) among Acuity Unlimited, Inc. (the
“Borrower”), Acuity Brands Lighting, Inc. as initial Servicer, Variable Funding
Capital Company LLC, and Wachovia Bank, National Association, individually and
as Agent. Capitalized terms defined in the Credit Agreement are used herein with
the same meanings.

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

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

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

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

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

 

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(e) after giving effect to the Advances requested below, the aggregate principal
balance of the Advances outstanding will not exceed the Borrowing Base and the
Aggregate Principal outstanding will not exceed the Aggregate Commitment.

2. The [Servicer, on behalf of the] Borrower hereby requests that VFCC (or its
Liquidity Banks) make Advances on                     , 20     (the “Borrowing
Date”) as follows:

(a) Aggregate Amount of Advances: $                    .

(b) If the Advances are not funded by VFCC, the [Servicer on behalf of the]
Borrower requests that the Liquidity Banks make Alternate Base Rate Loans that
convert into LIBO Rate Loans with an Interest Period of              months on
the third Business Day after the Borrowing Date).

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

[Apply $                     to payment of principal and interest of existing
Loans due on the Borrowing Date]. [Apply $                     to payment of
fees due on the Borrowing Date]. [Wire transfer $                     to account
no.                      at                      Bank, in [city, state], ABA No.
                    , Reference:                     , and $                    
to account no.                      at                      Bank, in [city,
state], ABA No.                     , Reference:                     ].

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

 

[ACUITY BRANDS LIGHTING, INC., AS SERVICER, on behalf of] ACUITY UNLIMITED,
INC., AS BORROWER By:     Name:   Title:  

 

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EXHIBIT III

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

FEDERAL EMPLOYER AND ORGANIZATIONAL IDENTIFICATION NUMBER(S);

PRIOR NAMES

Places of Business and Locations of Records:

One Lithonia Way

Conyers, Georgia 30012

214 Oakwood Avenue

Newark, Ohio 43055

Federal Employer Identification Numbers:

ABL    #58-2633371

AUI    #58-2616706

Organizational Identification Numbers:

ABL    #3409762

AUI    #3384145

Prior Legal Names, Trade and Assumed Names of Borrower: NSI Funding, Inc. and L
& C Funding, Inc.

 

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EXHIBIT IV

NAMES OF COLLECTION BANKS; LOCK-BOXES & COLLECTION ACCOUNTS

 

LOCK-BOX

  

RELATED COLLECTION ACCOUNT

P.O. Box 100863

Atlanta, GA 30384-4628

 

File 57450

Los Angeles, CA 90074-0188

  

Name of Current Account Holder:

Account Number:

Bank Name:

ABA Number:

Contact Person:

Contact’s Tel:

Contact’s Fax:

  

Lithonia Lighting, a division of ABL

Lockbox #100863, DDA#3750249781

Bank of America

111000012

Louvenia Parker

404-607-5441

404-532-3404

 

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EXHIBIT V

FORM OF COMPLIANCE CERTIFICATE

 

To: Wachovia Bank, National Association, as Agent

This Compliance Certificate is furnished pursuant to that certain Amended and
Restated Credit and Security Agreement dated as of October 19, 2007 among Acuity
Unlimited, Inc. (the “Borrower”), Acuity Brands Lighting, Inc. as initial
Servicer, Variable Funding Capital Company LLC, and Wachovia Bank, National
Association, individually and as Agent (the “Agreement”).

THE UNDERSIGNED HEREBY CERTIFIES IN HIS OR HER REPRESENTATIVE CAPACITY ON BEHALF
OF PERFORMANCE GUARANTOR THAT:

1. I am the duly elected                                  of             .

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

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

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

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

 

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The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered by the undersigned in his or her
representative capacity on behalf of                     , all as of
                    , 20__.

 

By:     Name:   Title:  

 

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SCHEDULE I TO COMPLIANCE CERTIFICATE

A. Schedule of Compliance as of                     , 200_ with Section         
of the Agreement. Unless otherwise defined herein, the terms used in this
Compliance Certificate have the meanings ascribed thereto in the Agreement.

This schedule relates to the month ended:                     

 

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EXHIBIT VI

[intentionally omitted]

 

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EXHIBIT VII

FORM OF ASSIGNMENT AGREEMENT

THIS ASSIGNMENT AGREEMENT (this “Assignment Agreement”) is entered into as of
the          day of                     ,         , by and between
                         (“Assignor”) and                          (“Assignee”).

PRELIMINARY STATEMENTS

A. This Assignment Agreement is being executed and delivered in accordance with
Section 12.1(b) of that certain Amended and Restated Credit and Security
Agreement dated as of October 19, 2007 by and among Acuity Unlimited, Inc. (the
“Borrower”), Acuity Brands Lighting, Inc. as initial Servicer, Variable Funding
Capital Company LLC, and Wachovia Bank, National Association, as Agent, and the
Liquidity Banks party thereto (as amended, modified or restated from time to
time, the “Credit and Security Agreement”) and that certain Liquidity Asset
Purchase Agreement dated as of October __, 2007 by and among VFCC, the Liquidity
Banks from time to time party thereto and Wachovia Bank, National Association,
as Agent (as amended, modified or restated from time to time, the “Liquidity
Agreement”). Capitalized terms used and not otherwise defined herein are used
with the meanings set forth or incorporated by reference in the Credit and
Security Agreement.

B. Assignor is a Liquidity Bank party to the Credit and Security Agreement and
the Liquidity Agreement, and Assignee wishes to become a Liquidity Bank
thereunder; and

C. Assignor is selling and assigning to Assignee an undivided
                    % (the “Transferred Percentage”) interest in all of
Assignor’s rights and obligations under the Transaction Documents and the
Liquidity Agreement, including, without limitation, Assignor’s Commitment,
Assignor’s Liquidity Commitment and (if applicable) Assignor’s Loans to the
Borrower as set forth herein.

AGREEMENT

The parties hereto hereby agree as follows:

1. The sale, transfer and assignment effected by this Assignment Agreement shall
become effective (the “Effective Date”) two (2) Business Days (or such other
date selected by the Agent in its sole discretion) following the date on which a
notice substantially in the form of Schedule II to this Assignment Agreement
(“Effective Notice”) is delivered by the Agent to VFCC, Borrower, Servicer,
Assignor and Assignee. From and after the Effective Date, Assignee shall be a
Liquidity Bank party to the Credit and Security Agreement for all purposes
thereof as if Assignee were an original party thereto and Assignee agrees to be
bound by all of the terms and provisions contained therein.

2. If Assignor has no outstanding principal under the Credit and Security
Agreement or the Liquidity Agreement, on the Effective Date, Assignor shall be
deemed to have hereby transferred and assigned to Assignee, without recourse,
representation or warranty

 

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(except as provided in paragraph 6 below), and the Assignee shall be deemed to
have hereby irrevocably taken, received and assumed from Assignor, the
Transferred Percentage of Assignor’s Commitment and Liquidity Commitment and all
rights and obligations associated therewith under the terms of the Credit and
Security Agreement and the Liquidity Agreement, including, without limitation,
the Transferred Percentage of Assignor’s future funding obligations under the
Credit and Security Agreement and the Liquidity Agreement.

3. If Assignor has any outstanding principal under the Credit and Security
Agreement and Liquidity Agreement, at or before 12:00 noon, local time of
Assignor, on the Effective Date Assignee shall pay to Assignor, in immediately
available funds, an amount equal to the sum of (i) the Transferred Percentage of
the outstanding principal of Assignor’s Loans and, without duplication,
Assignor’s Percentage Interests (as defined in the Liquidity Agreement) (such
amount, being hereinafter referred to as the “Assignee’s Principal”); (ii) all
accrued but unpaid (whether or not then due) Interest attributable to Assignee’s
Principal; and (iii) accruing but unpaid fees and other costs and expenses
payable in respect of Assignee’s Principal for the period commencing upon each
date such unpaid amounts commence accruing, to and including the Effective Date
(the “Assignee’s Acquisition Cost”); whereupon, Assignor shall be deemed to have
sold, transferred and assigned to Assignee, without recourse, representation or
warranty (except as provided in paragraph 6 below), and Assignee shall be deemed
to have hereby irrevocably taken, received and assumed from Assignor, the
Transferred Percentage of Assignor’s Commitment, Liquidity Commitment, Loans (if
applicable) and Percentage Interests (if applicable) and all related rights and
obligations under the Transaction Documents and the Liquidity Agreement,
including, without limitation, the Transferred Percentage of Assignor’s future
funding obligations under the Credit and Security Agreement and the Liquidity
Agreement.

4. Concurrently with the execution and delivery hereof, Assignor will provide to
Assignee copies of all documents requested by Assignee which were delivered to
Assignor pursuant to the Credit and Security Agreement or the Liquidity
Agreement.

5. Each of the parties to this Assignment Agreement agrees that at any time and
from time to time upon the written request of any other party, it will execute
and deliver such further documents and do such further acts and things as such
other party may reasonably request in order to effect the purposes of this
Assignment Agreement.

6. By executing and delivering this Assignment Agreement, Assignor and Assignee
confirm to and agree with each other, the Agent and the Liquidity Banks as
follows: (a) other than the representation and warranty that it has not created
any Adverse Claim upon any interest being transferred hereunder, Assignor makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made by any other Person in or in
connection with any of the Transaction Documents or the Liquidity Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of Assignee, the Credit and Security Agreement, the Liquidity Agreement or
any other instrument or document furnished pursuant thereto or the perfection,
priority, condition, value or sufficiency of any Collateral; (b) Assignor makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any Obligor, any Affiliate of the Borrower
or the performance or observance by the Borrower, any Obligor, any Affiliate of
the

 

77

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Borrower of any of their respective obligations under the Transaction Documents
or any other instrument or document furnished pursuant thereto or in connection
therewith; (c) Assignee confirms that it has received a copy of each of the
Transaction Documents and the Liquidity Agreement, and other documents and
information as it has requested and deemed appropriate to make its own credit
analysis and decision to enter into this Assignment Agreement; (d) Assignee
will, independently and without reliance upon the Agent, VFCC, Borrower or any
other Liquidity Bank or Lender 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 Transaction Documents and the Liquidity
Agreement; (e) Assignee appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under the Transaction Documents
and the Liquidity Agreement as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; and (f) Assignee
agrees that it will perform in accordance with their terms all of the
obligations which, by the terms of the Liquidity Agreement, the Credit and
Security Agreement and the other Transaction Documents, are required to be
performed by it as a Liquidity Bank or, when applicable, as a Lender.

7. Each party hereto represents and warrants to and agrees with the Agent that
it is aware of and will comply with the provisions of the Credit and Security
Agreement, including, without limitation, Sections 14.5 and 14.6 thereof.

8. Schedule I hereto sets forth the revised Commitment and Liquidity Commitment
of Assignor and the Commitment and Liquidity Commitment of Assignee, as well as
administrative information with respect to Assignee.

9. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

10. Assignee hereby covenants and agrees that, prior to the date which is one
year and one day after the payment in full of all senior indebtedness for
borrowed money of VFCC, it will not institute against, or join any other Person
in instituting against, VFCC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of the United States or any state of the United States.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement to
be executed by their respective duly authorized officers of the date hereof.

 

[ASSIGNOR] By:     Title:   [ASSIGNEE] By:     Title:  

 

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SCHEDULE I TO ASSIGNMENT AGREEMENT

LIST OF LENDING OFFICES, ADDRESSES

FOR NOTICES AND COMMITMENT AMOUNTS

Date:                     ,             

Transferred Percentage:                     %

 

     

A-1

   A-2    B-1    B-2    C-1    C-2

Assignor

  

Commitment
(prior to

giving effect

to the

Assignment
Agreement)

   Commitment
(after giving
effect to the
Assignment
Agreement)    Outstanding
principal (if
any)   

Ratable Share

of

Outstanding
principal

  

Liquidity
Commitment
(prior to

giving effect

to the
Assignment
Agreement)

   Liquidity
Commitment
(after giving
effect to the
Assignment
Agreement)                  

 

     

A-1

   A-2    B-1    B-2    C-1    C-2

Assignee

  

Commitment
(prior to

giving effect

to the

Assignment
Agreement)

   Commitment
(after giving
effect to the
Assignment
Agreement)    Outstanding
principal (if
any)   

Ratable Share

of

Outstanding
principal

  

Liquidity
Commitment
(prior to

giving effect

to the
Assignment
Agreement)

   Liquidity
Commitment
(after giving
effect to the
Assignment
Agreement)                  

Address for Notices

_________________

_________________

Attention:

Phone:

Fax:

 

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SCHEDULE II TO ASSIGNMENT AGREEMENT

EFFECTIVE NOTICE

 

TO:

      , Assignor                              

 

TO:

      , Assignee                              

The undersigned, as Agent under the Amended and Restated Credit and Security
Agreement dated as of October 19, 2007 by and among Acuity Unlimited, Inc., as
Borrower and Acuity Brands Lighting, Inc., as initial Servicer, Variable Funding
Capital Company LLC, Wachovia Bank, National Association, as Agent, and the
Liquidity Banks party thereto, hereby acknowledges receipt of executed
counterparts of a completed Assignment Agreement dated as of
                    , 200_ between                     , as Assignor, and
                    , as Assignee. Terms defined in such Assignment Agreement
are used herein as therein defined.

1. Pursuant to such Assignment Agreement, you are advised that the Effective
Date will be                     ,         .

2. Each of the undersigned hereby consents to the Assignment Agreement as
required by Section 12.1(b) of the Credit and Security Agreement.

[3. Pursuant to such Assignment Agreement, the Assignee is required to pay
$                     to Assignor at or before 12:00 noon (local time of
Assignor) on the Effective Date in immediately available funds.]

 

Very truly yours, WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent By:     Title:  
 

 

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VARIABLE FUNDING CAPITAL COMPANY LLC BY: WACHOVIA CAPITAL MARKETS, LLC, ITS
ATTORNEY-IN-FACT By:     Name:   Title:  

***[The Borrower hereby consents to the foregoing assignment:

 

ACUITY UNLIMITED, INC. By:       Name:   Title:]****

 

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EXHIBIT VIII

FORM OF MONTHLY REPORT

[attached]

Acuity Unlimited Inc. Monthly Servicer Report

For the Month Ended:

8/31/07

(Page 1)

($ )

 

Borrowing Base

     

A/R ROLLFORWARD

  

Beginning Balance

  

Add: Sales

  

Less: Credit Memos (-)

  

Add: Debits/Chargebacks (+)

  

Less: Bad Debt Write-offs

  

Less: Collections (-)

  

Less: Discounts (-)

  

Less: Roll Forward Adjustments (-)

  

EOM AR Balance

  

AGING SCHEDULE

  

Current

  

1-30 DPD

  

31-60 DPD

  

61-90 DPD

  

91-120 DPD

  

121+ Days Past Due

  

Total Aging

  

A/R RECONCILIATIONS

  

Calculated Ending A/R

  

Reported Ending A/R

  

Difference

  

Calculated Ending A/R

  

Total Aging

  

Difference

  

INELIGIBLES

  

Defaulted Receivables

  

Unapplied Cash and Credits in 91-120 DPD bucket

  

Unapplied Cash and Credits in 121+ DPD bucket

  

Gov’t

   Not Ineligible

Foreign

  

Contra or Intercompany

  

Bankrupt

  

Terms > 60 Days

   Not Ineligible

>90 day terms

   Not Ineligible

Cross-aged and Installment

  

Home Depot Progress Billed Receivables

   Not Ineligible

Ineligible Terms

  

Ineligible Govt Receivables

  

Total Ineligibles

  

Eligible Receivables

  

 

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EXHIBIT IX

[FORM OF] PERFORMANCE UNDERTAKING

THIS PERFORMANCE UNDERTAKING (this “Undertaking”), dated as of October 19, 2007,
is executed by Acuity Brands, Inc., a Delaware corporation (formerly known as
Acuity Brands Holdings, Inc.) (the “Performance Guarantor”) in favor of Acuity
Unlimited, Inc., a Delaware corporation (together with its successors and
assigns, “Recipient”).

RECITALS

 

1. Acuity Brands Lighting, Inc., a Delaware corporation (“Originator”), and
Recipient are parties to an Second Amended and Restated Receivables Sale and
Contribution Agreement, dated as of October 19, 2007 (as amended, restated or
otherwise modified from time to time, the “Sale and Contribution Agreement”),
pursuant to which Originator, subject to the terms and conditions contained
therein, is selling its right, title and interest in its accounts receivable and
certain related assets to Recipient.

 

2. Recipient intends to finance its purchases under the Sale and Contribution
Agreement in part by borrowing under an Amended and Restated Credit and Security
Agreement dated as of October 19, 2007 (as the same may from time to time
hereafter be amended, supplemented, restated or otherwise modified, the “Credit
and Security Agreement” and, together with the Sale and Contribution Agreement,
the “Agreements”) among Recipient, as Borrower, Acuity Brands Lighting, Inc., as
initial servicer (in such capacity, the “Initial Servicer”), Variable Funding
Capital Company LLC (“VFCC”), the banks and other financial institutions from
time to time party thereto as “Liquidity Banks” (together with VFCC, the
“Lenders”) and Wachovia Bank, National Association or any successor agent
appointed pursuant to the terms of the Credit and Security Agreement, as agent
for the Lenders (in such capacity, the “Agent”).

 

3. Performance Guarantor owns, directly or indirectly, one hundred percent
(100%) of the capital stock of Originator, the other Initial Servicer and
Recipient, and Originator (and accordingly, Performance Guarantor) is expected
to receive substantial direct and indirect benefits from its sale and
contribution of receivables pursuant to the Sale and Contribution Agreement
(which benefits are hereby acknowledged).

 

4. As an inducement for Recipient to acquire Originator’s accounts receivable
pursuant to the Sale and Contribution Agreement, Performance Guarantor has
agreed to guaranty (a) the due and punctual performance by Originator of its
obligations under the Sale and Contribution Agreement, and (b) the due and
punctual performance by the Initial Servicer of its servicing duties under the
Credit and Security Agreement.

 

5. Performance Guarantor wishes to guaranty the due and punctual performance by
Originator and the Initial Servicer of the aforesaid obligations as provided
herein.

 

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AGREEMENT

NOW, THEREFORE, Performance Guarantor hereby agrees as follows:

Section 1. Definitions. Capitalized terms used herein and not defined herein
shall the respective meanings assigned thereto in the Agreements. In addition:

“Guaranteed Obligations” means, collectively, (a) all covenants, agreements,
terms, conditions and indemnities to be performed and observed by Originator as
seller and contributor under the Sale and Contribution Agreement, including,
without limitation, the due and punctual payment of all sums which are or may
become due and owing by Originator in its capacity as a seller or seller and
contributor under the Sale and Contribution Agreement, whether for fees,
expenses (including actual and reasonable counsel fees), indemnified amounts or
otherwise, whether upon any termination or for any other reason, and (b) all
Servicing-Related Obligations.

“Servicing Related Obligations” means all covenants, agreements, terms,
conditions and indemnities to be performed and observed by the Initial Servicer
in its capacity as such under the Credit and Security Agreement.

Section 2. Guaranty of Performance of Guaranteed Obligations. Performance
Guarantor hereby guarantees to Recipient, the full and punctual payment and
performance by Originator and the Initial Servicer of their respective
Guaranteed Obligations. This Undertaking is an absolute, unconditional and
continuing guaranty of the full and punctual performance of all Guaranteed
Obligations and is in no way conditioned upon any requirement that Recipient
first attempt to collect any amounts owing by Originator or either Initial
Servicer, as the case may be, to Recipient, the Agent or VFCC from any other
Person or resort to any collateral security, any balance of any deposit account
or credit on the books of Recipient, the Agent or VFCC in favor of Originator,
the Initial Servicer or any other Person or other means of obtaining payment.
Should Originator or the Initial Servicer default in the payment or performance
of any of its Guaranteed Obligations, Recipient (or its assigns) may cause the
immediate performance by Performance Guarantor of such Guaranteed Obligations
and cause any such payment Guaranteed Obligations to become forthwith due and
payable to Recipient (or its assigns), without demand or notice of any nature
(other than as expressly provided herein), all of which are hereby expressly
waived by Performance Guarantor. Notwithstanding the foregoing, this Undertaking
is not a guarantee of the payment or collection of any of the Receivables or the
Loans, and Performance Guarantor shall not be responsible for any Guaranteed
Obligations to the extent the failure to perform such Guaranteed Obligations by
Originator or the Initial Servicer results from Receivables being uncollectible
on account of the insolvency, bankruptcy or lack of creditworthiness of the
related Obligor; provided that nothing herein shall relieve Originator or the
Initial Servicer from performing in full its Guaranteed Obligations under the
Agreements or Performance Guarantor of its undertaking hereunder with respect to
the full performance of such duties.

Section 3. Performance Guarantor’s Further Agreements to Pay. Performance
Guarantor further agrees, as the principal obligor and not as a guarantor only,
to pay to Recipient (and its assigns), forthwith upon demand in funds
immediately available to Recipient, all reasonable costs and expenses (including
court costs and reasonable legal expenses) actually

 

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incurred or expended by Recipient in connection with enforcement of the
Guaranteed Obligations and/or this Undertaking, together with interest on
amounts not paid by Performance Guarantor under this Undertaking within two
Business Days after such amounts become due until payment, at a rate of interest
(computed for the actual number of days elapsed based on a 360 day year) equal
to the Prime Rate plus 2% per annum, such rate of interest changing when and as
the Prime Rate changes.

Section 4. Waivers by Performance Guarantor. Performance Guarantor waives notice
of acceptance of this Undertaking, notice of any action taken or omitted by
Recipient (or its assigns) in reliance on this Undertaking, and any requirement
that Recipient (or its assigns) be diligent or prompt in making demands under
this Undertaking, giving notice of any Termination Event, Amortization Event,
other default or omission by Originator or the Initial Servicer or asserting any
other rights of Recipient under this Undertaking. Performance Guarantor warrants
that it has adequate means to obtain from Originator and the Initial Servicer,
on a continuing basis, information concerning the financial condition of such
Person, and that it is not relying on Recipient to provide such information, now
or in the future. Performance Guarantor also irrevocably waives all defenses
(i) that at any time may be available in respect of the Guaranteed Obligations
by virtue of any statute of limitations, valuation, stay, moratorium law or
other similar law now or hereafter in effect or (ii) that arise under the law of
suretyship, including impairment of collateral. Recipient (and its assigns)
shall be at liberty, without giving notice to or obtaining the assent of
Performance Guarantor and without relieving Performance Guarantor of any
liability under this Undertaking, to deal with Originator and the Initial
Servicer and with each other party who now is or after the date hereof becomes
liable in any manner for any of the Guaranteed Obligations, in such manner as
Recipient in its sole discretion deems fit, and to this end Performance
Guarantor agrees that the validity and enforceability of this Undertaking,
including without limitation, the provisions of Section 7 hereof, shall not be
impaired or affected by any of the following: (a) any extension, modification or
renewal of, or indulgence with respect to, or substitutions for, the Guaranteed
Obligations or any part thereof or any agreement relating thereto at any time;
(b) any failure or omission to enforce any right, power or remedy with respect
to the Guaranteed Obligations or any part thereof or any agreement relating
thereto, or any collateral securing the Guaranteed Obligations or any part
thereof; (c) any waiver of any right, power or remedy or of any Termination
Event, Amortization Event, or default with respect to the Guaranteed Obligations
or any part thereof or any agreement relating thereto; (d) any release,
surrender, compromise, settlement, waiver, subordination or modification, with
or without consideration, of any other obligation of any person or entity with
respect to the Guaranteed Obligations or any part thereof; (e) the
enforceability or validity of the Guaranteed Obligations or any part thereof or
the genuineness, enforceability or validity of any agreement relating thereto or
with respect to the Guaranteed Obligations or any part thereof; (f) the
application of payments received from any source to the payment of any payment
obligations of Originator or the Initial Servicer or any part thereof or amounts
which are not covered by this Undertaking even though Recipient (or its assigns)
might lawfully have elected to apply such payments to any part or all of the
payment obligations of such Person or to amounts which are not covered by this
Undertaking; (g) the existence of any claim, setoff or other rights which
Performance Guarantor may have at any time against Originator or the Initial
Servicer in connection herewith or any unrelated transaction; (h) any assignment
or transfer of the Guaranteed Obligations or any part thereof; or (i) any
failure on the part of Originator or the Initial Servicer to perform or comply
with any term of the Agreements or any other document

 

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executed in connection therewith or delivered thereunder, all whether or not
Performance Guarantor shall have had notice or knowledge of any act or omission
referred to in the foregoing clauses (a) through (i) of this Section 4.

Section 5. Unenforceability of Guaranteed Obligations Against Originator and
Initial Servicer. Notwithstanding (a) any change of ownership of Performance
Guarantor, Originator or the Initial Servicer or the insolvency, bankruptcy or
any other change in the legal status of Originator or the Initial Servicer;
(b) the change in or the imposition of any law, decree, regulation or other
governmental act which does or might impair, delay or in any way affect the
validity, enforceability or the payment when due of the Guaranteed Obligations
(unless the same shall be applicable to the Performance Guarantor); (c) the
failure of Originator, the Initial Servicer or Performance Guarantor to maintain
in full force, validity or effect or to obtain or renew when required all
governmental and other approvals, licenses or consents required in connection
with the Guaranteed Obligations or this Undertaking, or to take any other action
required in connection with the performance of all obligations pursuant to the
Guaranteed Obligations or this Undertaking; or (d) if any of the moneys included
in the Guaranteed Obligations have become irrecoverable from Originator or the
Initial Servicer for any other reason other than final payment in full of the
payment obligations in accordance with their terms or lawful setoff of claims
against the Purchasers, this Undertaking shall nevertheless be binding on
Performance Guarantor. This Undertaking shall be in addition to any other
guaranty or other security for the Guaranteed Obligations, and it shall not be
rendered unenforceable by the invalidity of any such other guaranty or security.
In the event that acceleration of the time for payment of any of the Guaranteed
Obligations is stayed upon the insolvency, bankruptcy or reorganization of
Originator or the Initial Servicer or for any other reason with respect to
Originator or the Initial Servicer, all such amounts then due and owing with
respect to the Guaranteed Obligations under the terms of the Agreements, or any
other agreement evidencing, securing or otherwise executed in connection with
the Guaranteed Obligations, shall be immediately due and payable by Performance
Guarantor.

Section 6. Representations and Warranties. Performance Guarantor hereby
represents and warrants to Recipient and its assigns that (a) Performance
Guarantor is a corporation duly organized, validly existing and in good standing
under the laws of Delaware and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted, and (b) this Undertaking has been duly
executed and delivered by Performance Guarantor and constitutes its legally
valid and binding obligation, enforceable against Performance Guarantor in
accordance with its terms, provided that the enforceability hereof is subject to
general principles of equity and to bankruptcy, insolvency and similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles.

Section 7. Subrogation. Notwithstanding anything to the contrary contained
herein, until the Guaranteed Obligations are paid in full Performance Guarantor:
(a) will not enforce or otherwise exercise any right of subrogation to any of
the rights of Recipient, the Agent or VFCC against Originator or the Initial
Servicer, (b) hereby waives all rights of subrogation (whether contractual,
under Section 509 of the United States Bankruptcy Code, at law or in equity or
otherwise) to the claims of Recipient, the Agent and VFCC against Originator or
the Initial Servicer and all contractual, statutory or legal or equitable rights
of contribution,

 

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reimbursement, indemnification and similar rights and “claims” (as that term is
defined in the United States Bankruptcy Code) which Performance Guarantor might
now have or hereafter acquire against Originator or the Initial Servicer that
arise from the existence or performance of Performance Guarantor’s obligations
hereunder, (c) will not claim any setoff, recoupment or counterclaim against
Originator or the Initial Servicer in respect of any liability of Performance
Guarantor to the Originator and (d) waives any benefit of and any right to
participate in any collateral security which may be held by Beneficiaries, the
Agent or VFCC.

Section 8. Termination of Performance Undertaking. Performance Guarantor’s
obligations hereunder shall continue in full force and effect until all
Obligations are finally paid and satisfied in full and the Credit and Security
Agreement is terminated, provided that this Undertaking shall continue to be
effective or shall be reinstated, as the case may be, if at any time payment or
other satisfaction of any of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned upon the bankruptcy, insolvency, or
reorganization of Originator or the Initial Servicer or otherwise, as though
such payment had not been made or other satisfaction occurred, whether or not
Recipient (or its assigns) is in possession of this Undertaking. No invalidity,
irregularity or unenforceability by reason of the federal bankruptcy code or any
insolvency or other similar law, or any law or order of any government or agency
thereof purporting to reduce, amend or otherwise affect the Guaranteed
Obligations shall impair, affect, be a defense to or claim against the
obligations of Performance Guarantor under this Undertaking.

Section 9. Effect of Bankruptcy. This Performance Undertaking shall survive the
insolvency of Originator or the Initial Servicer and the commencement of any
case or proceeding by or against Originator or the Initial Servicer under the
federal bankruptcy code or other federal, state or other applicable bankruptcy,
insolvency or reorganization statutes. No automatic stay under the federal
bankruptcy code with respect to Originator or the Initial Servicer or other
federal, state or other applicable bankruptcy, insolvency or reorganization
statutes to which Originator or the Initial Servicer is subject shall postpone
the obligations of Performance Guarantor under this Undertaking.

Section 10. Setoff. Regardless of the other means of obtaining payment of any of
the Guaranteed Obligations, Recipient (and its assigns) is hereby authorized at
any time and from time to time during the existence of any Amortization Event,
without notice to Performance Guarantor (any such notice being expressly waived
by Performance Guarantor) and to the fullest extent permitted by law, to set off
and apply any deposits and other sums against the obligations of Performance
Guarantor under this Undertaking then past due for more than two Business Days.

Section 11. Taxes. All payments to be made by Performance Guarantor hereunder
shall be made free and clear of any deduction or withholding (except for taxes
excluded under Section 10.1 of the Credit and Security Agreement). If
Performance Guarantor is required by law to make any deduction or withholding on
account of any Taxes or otherwise from any such payment (except for taxes
excluded under Section 10.1 of the Credit and Security Agreement), the sum due
from it in respect of such payment shall be increased to the extent necessary to
ensure that, after the making of such deduction or withholding, Recipient
receive a net sum equal to the sum which they would have received had no
deduction or withholding been made.

 

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Section 12. Further Assurances. Performance Guarantor agrees that it will from
time to time, at the request of Recipient (or its assigns), provide information
relating to the business and affairs of Performance Guarantor as Recipient may
reasonably request.

Section 13. Successors and Assigns. This Performance Undertaking shall be
binding upon Performance Guarantor, its successors and permitted assigns, and
shall inure to the benefit of and be enforceable by Recipient and its successors
and assigns. Without limiting the generality of the foregoing sentence,
Recipient may pledge or assign, and hereby notifies Performance Guarantor that
it has pledged and assigned, this Performance Undertaking to the Agent, for the
benefit of the Lenders, as security for the Obligations, and Performance
Guarantor hereby acknowledges that the Agent may enforce this Performance
Undertaking, on behalf of Recipient and the Lenders, with the same force and
effect as though the Agent were the Recipient hereunder. Subject to
Section 7.1(c)(ii) of the Credit and Security Agreement, Performance Guarantor
may not assign or transfer any of its obligations hereunder without the prior
written consent of each of Recipient and the Agent.

Section 14. Amendments and Waivers. No amendment or waiver of any provision of
this Undertaking nor consent to any departure by Performance Guarantor therefrom
shall be effective unless the same shall be in writing and signed by Recipient,
the Agent and Performance Guarantor. No failure on the part of Recipient to
exercise, and no delay in exercising, any right hereunder 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.

Section 15. Notices. All notices and other communications provided for hereunder
shall be made in writing and shall be addressed as follows: if to Performance
Guarantor, at the address set forth beneath its signature hereto, and if to
Recipient, at the addresses set forth beneath its signature to the Credit and
Security Agreement, or at such other addresses as each of Performance Guarantor
or any Recipient may designate in writing to the other. Each such notice or
other communication shall be effective (a) if given by telecopy, upon the
receipt thereof, (b) if given by mail, five (5) Business Days after the time
such communication is deposited in the mail with first class postage prepaid or
(c) if given by any other means, when received at the address specified in this
Section 15.

Section 16. GOVERNING LAW. THIS UNDERTAKING SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF GEORGIA.

Section 17. CONSENT TO JURISDICTION. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW: (A) EACH OF PERFORMANCE GUARANTOR AND RECIPIENT HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR GEORGIA STATE COURT SITTING IN FULTON COUNTY, GEORGIA IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS UNDERTAKING, THE AGREEMENTS OR

 

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ANY OTHER DOCUMENT EXECUTED IN CONNECTION THEREWITH OR DELIVERED THEREUNDER AND
(B) EACH OF PERFORMANCE GUARANTOR AND RECIPIENT HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.

Section 18. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF PERFORMANCE GUARANTOR AND RECIPIENT HEREBY WAIVES TRIAL BY JURY IN
ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH THIS UNDERTAKING, THE AGREEMENTS OR ANY OTHER DOCUMENT
EXECUTED IN CONNECTION THEREWITH OR DELIVERED THEREUNDER OR THE RELATIONSHIP
ESTABLISHED HEREUNDER OR THEREUNDER

Section 19. Bankruptcy Petition. Performance Guarantor hereby covenants and
agrees that, prior to the date that is one year and one day after the payment in
full of all outstanding senior indebtedness owed by VFCC, it will not institute
against, or join any other Person in instituting against, VFCC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.

Section 20. Miscellaneous. This Undertaking constitutes the entire agreement of
Performance Guarantor with respect to the matters set forth herein and
supersedes and replaces that certain Performance Undertaking dated as of
September 26, 2007, executed by Performance Guarantor in favor of Recipient. The
rights and remedies herein provided are cumulative and not exclusive of any
remedies provided by law or any other agreement, and this Undertaking shall be
in addition to any other guaranty of or collateral security for any of the
Guaranteed Obligations. The provisions of this Undertaking are severable, and in
any action or proceeding involving any state corporate law, or any state or
federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of Performance Guarantor hereunder
would otherwise be held or determined to be avoidable, invalid or unenforceable
on account of the amount of Performance Guarantor’s liability under this
Undertaking, then, notwithstanding any other provision of this Undertaking to
the contrary, the amount of such liability shall, without any further action by
Performance Guarantor or Recipient, be automatically limited and reduced to the
highest amount that is valid and enforceable as determined in such action or
proceeding. Any provisions of this Undertaking which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise specified, references herein to “Section”
shall mean a reference to sections of this Undertaking.

 

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IN WITNESS WHEREOF, Performance Guarantor has caused this Undertaking to be
executed and delivered as of the date first above written.

 

ACUITY BRANDS, INC., A DELAWARE CORPORATION By:     Name:     Title:    

 

Address for Notices:

One Lithonia Way

Conyers, GA 30012

Attention: General Counsel Fax No.:   (770) 785-9511 Telephone No.:   (770)
922-9000

 

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SCHEDULE A

COMMITMENTS OF LIQUIDITY BANKS

 

LIQUIDITY BANK

   COMMITMENT

Wachovia Bank, National Association

   $ 75,000,000

 

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