Exhibit 10.2

 

FORM OF RECEIVABLE PURCHASE AGREEMENT

 

by and among

 

[TORO CREDIT COMPANY],

 

[TORO INTERNATIONAL COMPANY],

 

[EXMARK MANUFACTURING COMPANY INCORPORATED]

 

and

 

THE TORO COMPANY,

 

 

as Sellers,

 

and

 

RED IRON ACCEPTANCE, LLC

 

as Buyer

 

Dated as of [                              , 2009]

 

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Table of Contents

 

 

 

Page

 

 

ARTICLE I DEFINITIONS

1

1.1

Definitions

1

1.2

Other Interpretive Matters

7

 

 

 

ARTICLE II SALE

8

2.1

Sale

8

2.2

Acceptance by Buyer

9

2.3

Purchase Price

9

2.4

Additional Receivables

9

 

 

 

ARTICLE III CONDITIONS PRECEDENT

9

3.1

Conditions to Transfer

9

 

 

 

ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS

10

4.1

Representations and Warranties of Seller

10

4.2

Covenants of Seller

14

4.3

Negative Covenants of Seller

15

 

 

 

ARTICLE V MISCELLANEOUS

16

5.1

Notices

16

5.2

No Waiver; Remedies

18

5.3

Successors and Assigns

18

5.4

No Buyer Liability for Contracts

18

5.5

Survival

19

5.6

Complete Agreement; Modification of Agreement

19

5.7

Dispute Resolution

19

5.8

Jury Trial

19

5.9

Submission to Jurisdiction

19

5.10

Counterparts

19

5.11

Severability

20

5.12

Section Titles

20

5.13

No Setoff

20

5.14

Further Assurances

20

5.15

No Indirect or Consequential Damages

20

5.16

No Assumption in Drafting

21

5.17

Headings; Section and Article References

21

 

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FORM OF RECEIVABLE PURCHASE AGREEMENT

 

This RECEIVABLE PURCHASE AGREEMENT, dated as of [                              ,
2009] (this “Agreement”), is entered into by and between [TORO CREDIT COMPANY, a
Minnesota corporation (“Toro Credit”)], [TORO INTERNATIONAL COMPANY, a Minnesota
corporation (“Toro International”)], [EXMARK MANUFACTURING COMPANY INCORPORATED,
a Nebraska corporation (“Exmark”)]. THE TORO COMPANY, a Delaware corporation 
(“Toro” and together with [Toro Credit], [Toro International] and [Exmark], each
a “Seller” and collectively the “Sellers”) and RED IRON ACCEPTANCE, LLC, a
Delaware limited liability company (“Buyer”).

 

In consideration of the premises and the mutual covenants hereinafter contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

1.1           DEFINITIONS.

 

“Account Debtor” means an obligor on a Receivable.

 

“Additional Receivables” means those Receivables described on Schedule 2 that
Buyer has agreed to purchase notwithstanding that such Receivables are not
Eligible Receivables.

 

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.  For purposes of this
definition, “Control” means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

 

“Aggregate Repurchase Amount” means, for any repurchase of an Ineligible
Receivable pursuant to Section 4.1(d), the Purchase Price paid for such
Ineligible Receivable, less any Principal Collections received by Buyer in
respect of such Ineligible Receivable from the Closing Date.

 

“Agreement” is defined in the preamble.

 

“Authorized Officer” means (a) with respect to Toro, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Financial Officer, the
General Counsel, the Secretary, the Treasurer, the Corporate Controller and each
other officer or employee of Toro specifically authorized in resolutions of the
Board of Directors of such corporation to sign agreements, instruments or other
documents on behalf of such corporation in connection with the transactions
contemplated by this Agreement and the Related Documents; (b) with respect to
Toro Credit, the President, the Secretary, the Treasurer and each other officer
or employee of Toro Credit specifically authorized in resolutions of the Board
of Directors of such corporation to sign agreements, instruments or other
documents on behalf of such corporation in connection

 

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with the transactions contemplated by this Agreement and the Related Documents;
(c) with respect to Toro International, the President, the Secretary, the
Treasurer and each other officer or employee of Toro International specifically
authorized in resolutions of the Board of Directors of such corporation to sign
agreements, instruments or other documents on behalf of such corporation in
connection with the transactions contemplated by this Agreement and the Related
Documents; and (d) with respect to Buyer, its General Manager.

 

“Business Day” shall mean any day on which commercial banks are not authorized
or required to close in either Minneapolis, Minnesota or Chicago, Illinois.

 

“Buyer” is defined in the preamble.

 

“Closing Date” means [                              , 2009].

 

“Collateral Security” means, with respect to any Receivable, (i) any security
interest, granted by or on behalf of the related Account Debtor with respect
thereto, including a security interest in the related Products or assets,
(ii) all other security interests or liens and property subject thereto from
time to time purporting to secure payment of such Receivable, whether pursuant
to the agreement giving rise to such Receivable or otherwise, together with all
financing statements filed against an Account Debtor describing any collateral
securing such Receivable, (iii) all guarantees, insurance and other agreements
(including Financing Agreements and subordination agreements with other lenders)
or arrangements of whatever character from time to time supporting or securing
payment of such Receivable whether pursuant to the agreement giving rise to such
Receivable or otherwise, and (iv) all Records in respect of such Receivable.

 

“Collections” means, without duplication, all payments by or on behalf of
Account Debtors received in respect of the Receivables (including insurance
proceeds and proceeds from the realization upon any Collateral Security) in the
form of cash, checks, wire transfers or any other form of payment.

 

“Cure Period” is defined in Section 4.1(c).

 

“Debtor Relief Laws” means Title 11 of the United States Code and all other
applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, suspension of payments, readjustment
of debt, marshalling of assets or similar debtor relief laws of the United
States, any state or any foreign country from time to time in effect, affecting
the rights of creditors generally.

 

“Eligible Receivable” means a Receivable:

 

(A)           THAT WAS CREATED PURSUANT TO GENUINE AND BONA FIDE TRANSACTIONS IN
THE ORDINARY COURSE OF A SELLER’S BUSINESS AND IN COMPLIANCE WITH ALL APPLICABLE
REQUIREMENTS OF LAW, OTHER THAN THOSE REQUIREMENTS OF LAW THE FAILURE WITH WHICH
TO COMPLY COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON
BUYER OR ANY ASSIGNS, AND PURSUANT TO A FINANCING AGREEMENT THAT COMPLIES WITH
ALL APPLICABLE REQUIREMENTS OF LAW, OTHER THAN THOSE REQUIREMENTS OF LAW THE
FAILURE WITH WHICH TO COMPLY COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT ON BUYER OR ANY OF ITS CREDITORS OR ASSIGNS;

 

2

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(B)           WITH RESPECT TO WHICH ALL CONSENTS, LICENSES, APPROVALS OR
AUTHORIZATIONS OF, OR REGISTRATIONS WITH, ANY GOVERNMENTAL AUTHORITY REQUIRED TO
BE OBTAINED OR MADE BY SUCH SELLER IN CONNECTION WITH THE CREATION OF SUCH
RECEIVABLE OR THE EXECUTION, DELIVERY AND PERFORMANCE BY SUCH SELLER OF THE
RELATED FINANCING AGREEMENT, HAVE BEEN DULY OBTAINED OR MADE AND ARE IN FULL
FORCE AND EFFECT AS OF THE DATE OF CREATION OF SUCH RECEIVABLE, BUT FAILURE TO
COMPLY WITH THIS CLAUSE (B) SHALL NOT CAUSE A RECEIVABLE NOT TO BE AN ELIGIBLE
RECEIVABLE IF, AND TO THE EXTENT THAT, THE FAILURE TO SO OBTAIN OR MAKE ANY SUCH
CONSENT, LICENSE, APPROVAL, AUTHORIZATION OR REGISTRATION COULD NOT REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON BUYER OR ITS ASSIGNS;

 

(C)           THAT IS NOT THE SUBJECT OF ANY LITIGATION THAT IS PENDING OR HAS
BEEN THREATENED IN WRITING;

 

(D)           AS TO WHICH, AT THE TIME OF ITS TRANSFER TO BUYER, SUCH SELLER
WILL HAVE GOOD AND  MARKETABLE TITLE FREE AND CLEAR OF ALL LIENS (OTHER THAN
PERMITTED ENCUMBRANCES);

 

(E)           THAT IS FREELY ASSIGNABLE AND IS THE SUBJECT OF A VALID TRANSFER
AND ASSIGNMENT FROM SUCH SELLER TO BUYER OF ALL OF SUCH SELLER’S RIGHT, TITLE
AND INTEREST THEREIN;

 

(F)            THAT AT AND AFTER THE TIME OF TRANSFER TO BUYER IS, AND THE
FINANCING AGREEMENT WITH RESPECT THERETO IS, THE LEGAL, VALID AND BINDING
PAYMENT OBLIGATION OF THE ACCOUNT DEBTOR THEREOF, LEGALLY ENFORCEABLE AGAINST
SUCH ACCOUNT DEBTOR IN ACCORDANCE WITH ITS TERMS, EXCEPT AS ENFORCEABILITY MAY
BE LIMITED BY APPLICABLE DEBTOR RELIEF LAWS, AND BY GENERAL PRINCIPLES OF EQUITY
(WHETHER CONSIDERED IN A SUIT AT LAW OR IN EQUITY);

 

(G)           THAT CONSTITUTES AN “ACCOUNT”, “CHATTEL PAPER” OR “GENERAL
INTANGIBLE” WITHIN THE MEANING OF UCC SECTION 9-102;

 

(H)           AS TO WHICH, AT THE TIME OF ITS TRANSFER TO BUYER, SUCH SELLER HAS
NOT TAKEN ANY ACTION WHICH, OR FAILED TO TAKE ANY ACTION THE OMISSION OF WHICH,
WOULD, AT THE TIME OF TRANSFER TO BUYER, IMPAIR BUYER’S RIGHTS THEREIN;

 

(I)            THE OBLIGATIONS WITH RESPECT TO WHICH, AT THE TIME OF ITS
TRANSFER TO BUYER, HAVE NOT BEEN WAIVED OR MODIFIED EXCEPT AS PERMITTED BY THIS
AGREEMENT;

 

(J)            THAT, AT THE TIME OF ITS TRANSFER TO BUYER, EXCEPT AS
CONTEMPLATED BY SECTION 4.2(C), IS NOT SUBJECT TO ANY RIGHT OF RESCISSION,
SETOFF, COUNTERCLAIM OR ANY OTHER DEFENSE OF AN ACCOUNT DEBTOR (INCLUDING THE
DEFENSE OF USURY), OTHER THAN DEFENSES ARISING OUT OF DEBTOR RELIEF LAWS AND
EXCEPT AS THE ENFORCEABILITY OF SUCH RECEIVABLE MAY BE LIMITED BY GENERAL
PRINCIPLES OF EQUITY (WHETHER CONSIDERED IN A SUIT AT LAW OR EQUITY);

 

(K)           WHICH, AT THE TIME OF TRANSFER TO BUYER IS SECURED BY, INTER ALIA,
A FIRST PRIORITY PERFECTED SECURITY INTEREST (WHETHER BY PRIOR FILING, PURCHASE
MONEY SECURITY INTEREST, SUBORDINATION AGREEMENT FROM PRIOR FILERS OR OTHERWISE)
IN ANY RELATED PRODUCT OTHER THAN WITH RESPECT TO RECEIVABLES DUE ON AN
UNSECURED OPEN ACCOUNT BASIS FROM ACCOUNT DEBTORS IN AN AGGREGATE AMOUNT NOT TO
EXCEED $4,000,000 WHETHER ACQUIRED BY BUYER UNDER THE TERMS OF THIS AGREEMENT OR
ANY OTHER AGREEMENT WITH SELLER OR SELLER’S

 

3

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AFFILIATES; PROVIDED, THAT WITH RESPECT TO RECEIVABLES RELATING TO EXTENDED
SERVICE CONTRACTS, SUCH RECEIVABLES SHALL ONLY BE “ELIGIBLE RECEIVABLES” WITHIN
THE SCOPE OF THIS CLAUSE (K) TO THE EXTENT SELLER OR SELLER’S AFFILIATE HAS
PROVIDED RECOURSE OR OTHER CREDIT SUPPORT UPON SUCH TERMS AS SELLER AND BUYER
SHALL AGREE PRIOR TO TRANSFER;

 

provided, however, that a Receivable shall not be an “Eligible Receivable”:

 

(L)            IF IT IS AN OPEN ACCOUNT RECEIVABLE THAT IS DUE OR UNPAID MORE
THAN NINETY (90) DAYS AFTER THE ORIGINAL DUE DATE UNLESS SUCH PAST DUE OR UNPAID
AMOUNT IS THE SUBJECT OF A BONA FIDE DISPUTE OR REPRESENTS LESS THAN FIVE
PERCENT (5%) OF THE ORIGINAL INVOICE AMOUNT FOR SUCH RECEIVABLE;

 

(M)          IF IT IS A FLOOR PLAN RECEIVABLE (X) THAT IS RELATED TO A PRODUCT
THAT HAS BEEN SOLD OUT OF TRUST FOR MORE THAN NINETY (90) DAYS, (Y) AS TO WHICH
CHARGES OR FEES ARE MORE THAN NINETY (90) DAYS PAST DUE (IN WHICH CASE, NEITHER
SUCH CHARGES OR FEES NOR THE RELATED RECEIVABLE(S) SHALL BE AN ELIGIBLE
RECEIVABLE) OR (Z) AS TO WHICH A SCHEDULED PAYMENT IS MORE THAN NINETY (90) DAYS
PAST DUE;

 

(N)           IF THE ACCOUNT DEBTOR THAT IS OBLIGATED ON SUCH RECEIVABLE SHALL
HAVE (I) APPLIED FOR, SUFFERED, OR CONSENTED TO THE APPOINTMENT OF, OR THE
TAKING OF POSSESSION BY, A RECEIVER, CUSTODIAN, TRUSTEE OR LIQUIDATOR OF ITSELF
OR OF ALL OR A SUBSTANTIAL PART OF ITS PROPERTY; (II) ADMITTED IN WRITING ITS
INABILITY, OR BE GENERALLY UNABLE, TO PAY ITS DEBTS AS THEY BECOME DUE OR CEASE
OPERATIONS OF ITS PRESENT BUSINESS, (III) MADE A GENERAL ASSIGNMENT FOR THE
BENEFIT OF CREDITORS, (IV) SUFFERED A BANKRUPTCY EVENT; OR (V) TAKEN ANY ACTION
FOR THE PURPOSE OF EFFECTING ANY OF THE FOREGOING;

 

(O)           IF THE SALE TO THE ACCOUNT DEBTOR THAT IS OBLIGATED ON SUCH
RECEIVABLE IS OUTSIDE THE UNITED STATES OR CANADA;

 

(P)           IF IT IS SUBJECT TO ANY CLAIM OF OFFSET (UNLESS SUCH SELLER HAS
RECEIVED A LETTER FROM THE APPLICABLE ACCOUNT DEBTOR IN FORM AND SUBSTANCE
SATISFACTORY TO BUYER INDICATING THAT SUCH ACCOUNT DEBTOR SHALL NOT EXERCISE ITS
RIGHT OF OFFSET), DEDUCTION, DEFENSE, DISPUTE, OR COUNTERCLAIM, OR IS OWED BY AN
ACCOUNT DEBTOR THAT IS ALSO A SUPPLIER OF SUCH SELLER (BUT ONLY TO THE EXTENT OF
SUCH SELLER’S OBLIGATIONS TO SUCH ACCOUNT DEBTOR FROM TIME TO TIME) OR THE
RECEIVABLE IS CONTINGENT IN ANY RESPECT FOR ANY REASON;

 

(Q)           IF ANY RETURN, REJECTION OR REPOSSESSION OF THE PRODUCT TO WHICH
THE RECEIVABLE RELATES HAS OCCURRED AND NOT REFLECTED IN THE DETERMINATION OF
THE OUTSTANDING BALANCE OF SUCH RECEIVABLE; OR

 

(R)            IF SUCH RECEIVABLE IS NOT PAYABLE TO SUCH SELLER OR ONE OF ITS
AFFILIATES.

 

“Exmark” is defined in the preamble.

 

“Financing Agreement” means any agreement entered into between a Seller and an
Account Debtor in order to finance Products purchased by such Account Debtor
from such Seller.

 

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“GAAP” means generally accepted accounting principles as in effect in the United
States of America from time to time, consistently applied.

 

“Governmental Authority” means any domestic or foreign national, state or local
government, any political subdivision thereof, any department, agency, authority
or bureau of any of the foregoing, or any other entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

 

“Ineligible Receivable” is defined in Section 4.1(c).

 

“Insurance Proceeds” with respect to Collateral Security means any amounts
received pursuant to any policy of insurance related thereto which are required
to be paid to a Seller with respect thereto.

 

“Joint Venture Agreement” means that certain Agreement to Form Joint Venture
dated as of August 12, 2009 by and between Toro and TCFIF.

 

“Knowledge” with respect to a Seller means the actual knowledge of an Authorized
Officer of such Seller.

 

“Lien” means, with respect to any property, any security interest, mortgage,
pledge, lien, claim, charge or other encumbrance in, of, or on such property or
the income therefrom, including the interest of a vendor or lessor under a
conditional sale agreement, capital lease or other title retention agreement, or
any agreement to provide any of the foregoing, and the filing of any financing
statement or similar instrument under the UCC or comparable law of any
jurisdiction.

 

“Litigation” means, with respect to any Person, any action, claim, lawsuit,
demand, investigation or proceeding pending or threatened in writing against
such Person before any court, board, commission, agency or instrumentality of
any Governmental Authority or before any arbitrator or panel of arbitrators.

 

“LLC Agreement” means that certain Limited Liability Company Agreement dated as
of August 12, 2009 by and between TCFIF Joint Venture I, LLC, a Minnesota
limited liability company, and Red Iron Holding Corporation, a Delaware
corporation.

 

“Material Adverse Effect” means a material adverse effect on (a) the ability of
any Seller to perform any of its obligations under this Agreement in accordance
with the terms hereof, or (b) the Transferred Receivables (including the
collectability of the Transferred Receivables and any Collateral Security).

 

“Officer’s Certificate” means, with respect to any Person, a certificate signed
by an Authorized Officer of such Person.

 

“Outstanding Balance” means, with respect to any Receivable, the amount of such
Receivable at the time of determination reduced by any credit issued by a Seller
as contemplated by Section 4.2(c).

 

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“Permitted Encumbrances” means the following: (a) Liens for taxes or assessments
or other governmental charges not yet due and payable; (b) inchoate and
unperfected workers’, mechanics’, suppliers’ or similar Liens arising in the
ordinary course of business; (c) presently existing or hereinafter created Liens
in favor of, or created by, Buyer; (d) any Lien created or permitted by any
agreement between Buyer and a Seller; (e) any security interests in assets that
are subordinate to the security interests securing the related Receivables; and
(f) Liens in favor of a Seller that are assigned to Buyer in accordance with the
terms of this Agreement.

 

“Person” means and includes an individual, a partnership, a corporation
(including a business trust), a limited liability company, a joint stock
company, an unincorporated association, a joint venture, a trust, a Governmental
Authority or other entity.

 

“Principal Collections” means Collections other than Collections of interest and
all other non-principal charges (including insurance service fees and handling
fees) on the Receivables.

 

“Products” means the commercial, consumer goods, parts and accessories
manufactured or distributed by Toro or one of its Affiliates.

 

“Purchase Price” is defined in Section 2.3.

 

“Receivable” means all amounts payable (including interest, finance charges and
other charges), and the obligation to pay such amounts, by the related Account
Debtor from time to time in connection with extensions of credit made by a
Seller to Account Debtors in order to finance Products and services purchased by
Account Debtors from such Seller, together with the group of writings evidencing
such amounts and any related Collateral Security and all of the rights,
remedies, powers and privileges thereunder (including under any related
Financing Agreement).

 

“Records” means, with respect to any Receivable, all Financing Agreements and
other documents, books, records and other information (including tapes, disks
and related property and rights) relating to such Receivable and the related
Account Debtor.

 

“Related Documents” means any documents or instruments evidencing Collateral
Security.

 

“Repurchase Agreement” is defined in Section 4.2(f).

 

“Requirements of Law” means, as to any Person, (a) the articles or certificate
of incorporation or organization, bylaws, operating agreement, limited liability
company agreement, partnership agreement or other organizational or governing
documents of such Person, (b) any law, treaty, rule or regulation applicable to
such Person, (c) any license, permit, approval or other authorization granted by
any Governmental Authority to or for the benefit of such Person and (d) any
judgment, decision or determination of any Governmental Authority or arbitrator,
in each case applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.

 

“Seller” and “Sellers” are defined in the preamble.

 

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“TCFIF” means TCF Inventory Finance, Inc., a Minnesota corporation.

 

“Toro” is defined in the preamble.

 

“Toro Credit” is defined in the preamble.

 

“Toro International” is defined in the preamble.

 

“Transferred Assets” is defined in Section 2.1(a).

 

“Transferred Receivables” means the Receivables described on Schedules 1 and 2
attached hereto.  However, Receivables that are repurchased by a Seller pursuant
to this Agreement shall cease to be considered “Transferred Receivables” from
the date of such repurchase.

 

“UCC” means, with respect to any jurisdiction, the Uniform Commercial Code as
the same may, from time to time, be enacted and in effect in such jurisdiction.

 

“United States” means the United States of America, together with its
territories and possessions.

 

1.2           OTHER INTERPRETIVE MATTERS.  ALL TERMS DEFINED DIRECTLY OR BY
INCORPORATION IN THIS AGREEMENT SHALL HAVE THE DEFINED MEANINGS WHEN USED IN ANY
CERTIFICATE OR OTHER DOCUMENT DELIVERED PURSUANT THERETO UNLESS OTHERWISE
DEFINED THEREIN. FOR PURPOSES OF THIS AGREEMENT AND ALL RELATED CERTIFICATES AND
OTHER DOCUMENTS, UNLESS THE CONTEXT OTHERWISE REQUIRES: (A) ACCOUNTING TERMS NOT
OTHERWISE DEFINED IN THIS AGREEMENT, AND ACCOUNTING TERMS PARTLY DEFINED IN THIS
AGREEMENT TO THE EXTENT NOT DEFINED, SHALL HAVE THE RESPECTIVE MEANINGS GIVEN TO
THEM UNDER GAAP; (B) UNLESS OTHERWISE PROVIDED, REFERENCES TO ANY MONTH, QUARTER
OR YEAR REFER TO A CALENDAR MONTH, QUARTER OR YEAR; (C) TERMS DEFINED IN
ARTICLE 9 OF THE UCC AS IN EFFECT IN THE APPLICABLE JURISDICTION AND NOT
OTHERWISE DEFINED IN THIS AGREEMENT ARE USED AS DEFINED IN THAT ARTICLE;
(D) REFERENCES TO ANY AMOUNT AS ON DEPOSIT OR OUTSTANDING ON ANY PARTICULAR DATE
MEANS SUCH AMOUNT AT THE CLOSE OF BUSINESS ON SUCH DAY; (E) THE WORDS “HEREOF,”
“HEREIN” AND “HEREUNDER” AND WORDS OF SIMILAR IMPORT REFER TO THIS AGREEMENT (OR
THE CERTIFICATE OR OTHER DOCUMENT IN WHICH THEY ARE USED) AS A WHOLE AND NOT TO
ANY PARTICULAR PROVISION OF THIS AGREEMENT (OR SUCH CERTIFICATE OR DOCUMENT);
(F) REFERENCES TO ANY SECTION, SCHEDULE OR EXHIBIT ARE REFERENCES TO SECTIONS,
SCHEDULES AND EXHIBITS IN OR TO THIS AGREEMENT (OR THE CERTIFICATE OR OTHER
DOCUMENT IN WHICH THE REFERENCE IS MADE), AND REFERENCES TO ANY PARAGRAPH,
SUBSECTION, CLAUSE OR OTHER SUBDIVISION WITHIN ANY SECTION OR DEFINITION REFER
TO SUCH PARAGRAPH, SUBSECTION, CLAUSE OR OTHER SUBDIVISION OF SUCH SECTION OR
DEFINITION; (G) THE WORDS “INCLUDE” OR “INCLUDING” SHALL NOT BE CONSTRUED TO BE
LIMITING OR EXCLUSIVE; (H) REFERENCES TO ANY LAW OR REGULATION REFER TO THAT LAW
OR REGULATION AS AMENDED FROM TIME TO TIME AND INCLUDE ANY SUCCESSOR LAW OR
REGULATION; (I) REFERENCES TO ANY AGREEMENT REFER TO THAT AGREEMENT AS FROM TIME
TO TIME AMENDED, RESTATED OR SUPPLEMENTED OR AS THE TERMS OF SUCH AGREEMENT ARE
WAIVED OR MODIFIED IN ACCORDANCE WITH ITS TERMS; (J) REFERENCES TO ANY PERSON
INCLUDE THAT PERSON’S SUCCESSORS AND PERMITTED ASSIGNS AND (K) THE TERM “OR” HAS
THE MEANING REPRESENTED BY THE PHRASE “AND/OR.”

 

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ARTICLE II

SALE

 

2.1           SALE.

 

(A)           EACH SELLER DOES HEREBY TRANSFER, ASSIGN, SET OVER AND OTHERWISE
CONVEY TO BUYER, WITHOUT RECOURSE EXCEPT AS PROVIDED HEREIN, ALL ITS RIGHT,
TITLE AND INTEREST (AND EACH SELLER HEREBY AGREES TO CAUSE EACH OF ITS
AFFILIATES, IF APPLICABLE, TO TRANSFER, ASSIGN, SET OVER AND OTHERWISE CONVEY TO
BUYER, WITHOUT RECOURSE EXCEPT AS PROVIDED HEREIN, ALL OF THEIR RESPECTIVE
RIGHT, TITLE AND INTEREST) IN, TO AND UNDER, THE FOLLOWING (THE “TRANSFERRED
ASSETS”):

 

(I)            THE TRANSFERRED RECEIVABLES;

 

(II)           THE COLLATERAL SECURITY WITH RESPECT TO ALL TRANSFERRED
RECEIVABLES TRANSFERRED PURSUANT TO CLAUSE (I), TOGETHER WITH ALL MONIES DUE OR
TO BECOME DUE AND ALL AMOUNTS RECEIVED OR RECEIVABLE WITH RESPECT THERETO AND
INSURANCE PROCEEDS RELATING THERETO;

 

(III)          WITHOUT LIMITING THE GENERALITY OF THE FOREGOING OR THE
FOLLOWING, ALL OF SELLER’S RIGHTS TO RECEIVE PAYMENTS FROM ANY ACCOUNT DEBTOR IN
RESPECT OF SUCH TRANSFERRED RECEIVABLES;

 

(IV)          ALL PROCEEDS OF ALL OF THE FOREGOING; AND

 

(V)           ALL REPORTS, DATA, NOTES, ACCOUNT DEBTOR LISTS AND FILES AND OTHER
BOOKS AND RECORDS OF SELLER THAT RELATE EXCLUSIVELY TO, OR ARE USED EXCLUSIVELY
IN CONNECTION WITH, ANY OF THE FOREGOING.

 

The foregoing does not constitute and is not intended to result in the creation
or assumption by Buyer of any obligation of Seller or any other Person in
connection with the Transferred Receivables or under any agreement or instrument
relating thereto, including any obligation under the Financing Agreements or any
other obligation to any Account Debtor. The foregoing conveyance shall be
effective on the Closing Date, as to all Transferred Assets then existing (it
being understood and agreed that, in the case of clause (iv), the Collections
transferred to Buyer shall include all Collections since
[                              , 2009]).

 

(B)           EACH SELLER SHALL IRREVOCABLY INSTRUCT ALL ACCOUNT DEBTORS UNDER
THE TRANSFERRED RECEIVABLES TO MAKE ALL PAYMENTS ON ACCOUNT THEREOF ON AND AFTER
THE CLOSING DATE TO BUYER.

 

(C)           ANY COLLECTIONS RECEIVED BY A SELLER AFTER THE CLOSING DATE WITH
RESPECT TO THE TRANSFERRED RECEIVABLES SHALL BE DEEMED HELD BY SUCH SELLER IN
TRUST AND AS FIDUCIARY FOR BUYER.  SUCH SELLER SHALL PAY THE SAME OVER TO BUYER
FORTHWITH UPON RECEIPT.

 

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(D)           BUYER IS HEREBY AUTHORIZED AND EMPOWERED (WHICH AUTHORIZATION AND
POWER, BEING COUPLED WITH AN INTEREST, IS IRREVOCABLE UNLESS AND UNTIL A
TRANSFERRED RECEIVABLE IS REPURCHASED BY A SELLER PURSUANT TO THE TERMS OF THIS
AGREEMENT):

 

(I)            TO REQUEST CONFIRMATION FROM ANY ACCOUNT DEBTOR OR PARTY
OBLIGATED UNDER OR WITH RESPECT TO ANY TRANSFERRED RECEIVABLE OF THE AMOUNT
SHOWN BY THE TRANSFERRED RECEIVABLE TO BE PAYABLE, OR ANY OTHER MATTER STATED
THEREIN;

 

(II)           TO ENDORSE IN A SELLER’S NAME AND TO COLLECT, ANY CHATTEL PAPER,
CHECKS, NOTES, DRAFTS, INSTRUMENTS OR OTHER ITEMS OF PAYMENT TENDERED TO OR
RECEIVED BY BUYER IN PAYMENT OF ANY TRANSFERRED RECEIVABLE;

 

(III)          TO NOTIFY ANY ACCOUNT DEBTOR OR OTHER PERSON OBLIGATED UNDER OR
IN RESPECT OF ANY TRANSFERRED RECEIVABLE OF THE SALE THEREOF TO BUYER;

 

(IV)          TO DIRECT ANY ACCOUNT DEBTOR OR OTHER PERSON OBLIGATED UNDER OR IN
RESPECT OF ANY TRANSFERRED RECEIVABLE TO MAKE PAYMENT DIRECTLY TO BUYER OF ANY
AMOUNTS DUE OR TO BECOME DUE THEREUNDER OR WITH RESPECT THERETO.

 

2.2           ACCEPTANCE BY BUYER.  BUYER HEREBY ACKNOWLEDGES ITS ACCEPTANCE OF
ALL RIGHT, TITLE AND INTEREST TO THE PROPERTY, NOW EXISTING AND HEREAFTER
CREATED, CONVEYED TO BUYER PURSUANT TO SECTION 2.1.

 

2.3           PURCHASE PRICE.  BUYER SHALL PAY A PURCHASE PRICE TO EACH SELLER
EQUAL TO THE SUM OF (I) FOR THE TRANSFERRED RECEIVABLES FROM SUCH SELLER THAT
ARE ELIGIBLE RECEIVABLES AND THE OTHER TRANSFERRED ASSETS RELATED THERETO, EQUAL
TO THE OUTSTANDING BALANCE OF SUCH TRANSFERRED RECEIVABLES, AND (II) FOR THE
TRANSFERRED RECEIVABLES FROM SUCH SELLER THAT ARE ADDITIONAL RECEIVABLES AND THE
OTHER TRANSFERRED ASSETS RELATED THERETO, THE PURCHASE PRICE FOR SUCH ADDITIONAL
RECEIVABLES SET FORTH IN SCHEDULE 2 (IN EACH CASE, THE “PURCHASE PRICE”).

 

2.4           ADDITIONAL RECEIVABLES.  SET FORTH ON SCHEDULE 2 IS THE REASON
EACH ADDITIONAL RECEIVABLE FAILS TO QUALIFY AS AN ELIGIBLE RECEIVABLE.
WARRANTIES CONTAINED HEREIN GENERALLY APPLICABLE TO RECEIVABLES THAT ARE IN
DIRECT CONFLICT WITH SUCH REASONS SHALL NOT APPLY TO AN ADDITIONAL RECEIVABLE TO
THE EXTENT OF THE REASON EXPRESSLY SET FORTH IN SCHEDULE 2 FOR SUCH ADDITIONAL
RECEIVABLE.

 

ARTICLE III

CONDITIONS PRECEDENT

 

3.1           CONDITIONS TO TRANSFER.  THE SALE BY SELLERS HEREUNDER SHALL BE
SUBJECT TO SATISFACTION OF EACH OF THE FOLLOWING CONDITIONS PRECEDENT (ANY ONE
OR MORE OF WHICH MAY BE WAIVED IN WRITING BY BUYER) AS OF THE CLOSING DATE:

 

(A)           DOCUMENTS. THIS AGREEMENT OR COUNTERPARTS HEREOF SHALL HAVE BEEN
DULY EXECUTED BY, AND DELIVERED TO, EACH SELLER AND BUYER, AND BUYER SHALL HAVE
RECEIVED SUCH DOCUMENTS, INSTRUMENTS AND AGREEMENTS AS BUYER SHALL REASONABLY
REQUEST IN CONNECTION

 

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WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, EACH IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO BUYER.

 

(B)           GOVERNMENTAL APPROVALS. BUYER SHALL HAVE RECEIVED SATISFACTORY
EVIDENCE THAT EACH SELLER HAS OBTAINED ALL CONSENTS AND APPROVALS OF ALL
PERSONS, INCLUDING ALL REQUISITE GOVERNMENTAL AUTHORITIES, IF ANY, REQUIRED FOR
SUCH SELLER TO EXECUTE, DELIVER AND PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT
AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(C)           COMPLIANCE WITH LAWS. EACH SELLER SHALL BE IN COMPLIANCE WITH ALL
APPLICABLE FOREIGN, FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS, EXCEPT TO THE
EXTENT THAT THE FAILURE TO SO COMPLY, INDIVIDUALLY OR IN THE AGGREGATE, COULD
NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

(D)           OTHER AGREEMENTS.  THE JOINT VENTURE AGREEMENT AND THE LLC
AGREEMENT SHALL HAVE BEEN EXECUTED AND DELIVERED AND THE SAME SHALL BE IN FULL
FORCE AND EFFECT.

 

(E)           REPRESENTATIONS AND WARRANTIES.  THE REPRESENTATIONS AND
WARRANTIES OF EACH SELLER CONTAINED HEREIN SHALL BE TRUE AND CORRECT IN ALL
MATERIAL RESPECTS AS OF THE CLOSING DATE, BOTH BEFORE AND AFTER GIVING EFFECT TO
SUCH SALE.

 

(F)            COVENANTS.  EACH SELLER SHALL BE IN COMPLIANCE IN ALL MATERIAL
RESPECTS WITH EACH OF ITS COVENANTS AND OTHER AGREEMENTS SET FORTH HEREIN.

 

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

4.1           REPRESENTATIONS AND WARRANTIES OF SELLERS.

 

(A)           TO INDUCE BUYER TO ACCEPT THE TRANSFERRED ASSETS, EACH SELLER,
JOINTLY AND SEVERALLY, MAKES THE FOLLOWING REPRESENTATIONS AND WARRANTIES TO
BUYER, AS OF THE CLOSING DATE.

 

(I)            VALID EXISTENCE; POWER AND AUTHORITY. EACH SELLER (1) IS DULY
ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF ITS
JURISDICTION OF ORGANIZATION; (2) IS DULY QUALIFIED TO CONDUCT BUSINESS AND IS
IN GOOD STANDING IN EACH OTHER JURISDICTION WHERE ITS OWNERSHIP OR LEASE OF
PROPERTY OR THE CONDUCT OF ITS BUSINESS REQUIRES SUCH QUALIFICATION AND WHERE
THE FAILURE TO BE SO QUALIFIED OR IN GOOD STANDING COULD NOT REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT; (3) HAS ALL REQUISITE POWER AND
AUTHORITY TO EXECUTE, DELIVER AND PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT;
AND (4) IS ABLE TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT.

 

(II)           AUTHORIZATION OF TRANSACTION; NO VIOLATION. THE EXECUTION,
DELIVERY AND PERFORMANCE BY EACH SELLER OF THIS AGREEMENT AND THE RELATED
DOCUMENTS TO WHICH SUCH SELLER IS A PARTY AND, WITHOUT LIMITING THE FOREGOING,
THE CREATION OF ALL OWNERSHIP INTERESTS PROVIDED FOR HEREIN: (1) HAVE BEEN DULY

 

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AUTHORIZED BY ALL NECESSARY ACTION ON THE PART OF SUCH SELLER, AND (2) DO NOT
VIOLATE ANY PROVISION OF ANY LAW OR REGULATION OF ANY GOVERNMENTAL AUTHORITY, OR
CONTRACTUAL OR OTHER RESTRICTIONS BINDING ON SUCH SELLER, EXCEPT WHERE SUCH
VIOLATIONS, INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED
TO HAVE A MATERIAL ADVERSE EFFECT.

 

(III)          ENFORCEABILITY. EACH SELLER IS IN COMPLIANCE WITH ALL MATERIAL
PROVISIONS OF THIS AGREEMENT AND ANY RELATED DOCUMENTS TO WHICH SUCH SELLER IS A
PARTY.  THIS AGREEMENT AND ANY RELATED DOCUMENTS TO WHICH SUCH SELLER IS A PARTY
HAVE BEEN DULY EXECUTED AND DELIVERED BY SUCH SELLER AND CONSTITUTES A LEGAL,
VALID AND BINDING OBLIGATION OF SUCH SELLER ENFORCEABLE AGAINST IT IN ACCORDANCE
WITH ITS TERMS.

 

(IV)          NO PROCEEDINGS. THERE ARE NO PROCEEDINGS OR, TO THE BEST KNOWLEDGE
OF EACH SELLER, INVESTIGATIONS, PENDING OR THREATENED IN WRITING AGAINST SUCH
SELLER, BEFORE ANY GOVERNMENTAL AUTHORITY (I) ASSERTING THE INVALIDITY OF THIS
AGREEMENT, (II) SEEKING TO PREVENT THE CONSUMMATION OF ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, (III) SEEKING ANY DETERMINATION OR RULING THAT,
IN THE REASONABLE JUDGMENT OF SUCH SELLER, COULD REASONABLY BE EXPECTED TO
MATERIALLY AND ADVERSELY AFFECT THE PERFORMANCE BY SUCH SELLER OF ITS
OBLIGATIONS UNDER THIS AGREEMENT OR (IV) SEEKING ANY DETERMINATION OR RULING
THAT COULD REASONABLY BE EXPECTED TO MATERIALLY AND ADVERSELY AFFECT THE
VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT.

 

(V)           ACCURACY OF CERTAIN INFORMATION. ALL WRITTEN FACTUAL INFORMATION
HERETOFORE FURNISHED BY EACH SELLER TO BUYER WITH RESPECT TO THE TRANSFERRED
RECEIVABLES FOR THE PURPOSES OF, OR IN CONNECTION WITH, THIS AGREEMENT WAS TRUE
AND CORRECT IN ALL MATERIAL RESPECTS ON THE DATE AS OF WHICH SUCH INFORMATION
WAS STATED OR CERTIFIED.

 

(VI)          TRANSFERRED RECEIVABLES. WITH RESPECT TO EACH TRANSFERRED
RECEIVABLE, THE SELLER OF SUCH TRANSFERRED RECEIVABLE REPRESENTS AND WARRANTS
THAT AS OF THE CLOSING DATE:

 

(1)             each Transferred Receivable satisfies the criteria for an
Eligible Receivable as of the Closing Date, except, with respect to an
Additional Receivable, to the extent expressly set forth in Schedule 2 for such
Additional Receivable; and

 

(2)             all authorizations, consents, orders or approvals of or 
registrations or declarations with any Governmental Authority required  to be
obtained, effected or given by such Seller in connection with the conveyance by
such Seller of such Transferred Receivable to Buyer have been duly obtained,
effected or given and are in full force and effect.

 

(VII)         PRODUCTS.  ALL PRODUCTS RELATING TO TRANSFERRED RECEIVABLES ARE OF
MERCHANTABLE QUALITY AND ARE IN CONFORMANCE WITH THE TERMS AND CONDITIONS OF ANY

 

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APPLICABLE FINANCING AGREEMENT.  THE ORIGINAL PRICE PAID BY THE ACCOUNT DEBTOR
FOR THE PRODUCTS DOES NOT INCLUDE ANY AMOUNT IN RESPECT OF OTHER GOODS OR
SERVICES PROVIDED BY THE APPLICABLE SELLER TO THE ACCOUNT DEBTOR, OTHER THAN FOR
ANY DELIVERY CHARGES.

 

(VIII)        PERFECTION. EACH SELLER HAS CAUSED THE FILING OF ALL APPROPRIATE
FINANCING STATEMENTS IN THE PROPER FILING OFFICE IN THE APPROPRIATE
JURISDICTIONS UNDER APPLICABLE LAW IN ORDER TO PERFECT ANY SECURITY INTEREST
GRANTED BY ANY ACCOUNT DEBTOR IN PROPERTY SECURING THE RELATED RECEIVABLES.

 

(IX)           PRIORITY. OTHER THAN THE OWNERSHIP INTERESTS TRANSFERRED TO BUYER
PURSUANT TO THIS AGREEMENT, NO SELLER HAS PLEDGED, ASSIGNED, SOLD, GRANTED A
SECURITY INTEREST IN, OR OTHERWISE CONVEYED ANY OF THE TRANSFERRED ASSETS EXCEPT
AS PERMITTED BY THIS AGREEMENT. NO SELLER HAS AUTHORIZED THE FILING OF AND NO
SELLER IS AWARE OF ANY FINANCING STATEMENTS AGAINST SUCH SELLER THAT INCLUDE A
DESCRIPTION OF COLLATERAL COVERING THE TRANSFERRED ASSETS OTHER THAN ANY
FINANCING STATEMENT THAT HAS BEEN TERMINATED. NONE OF THE CHATTEL PAPER THAT
CONSTITUTES OR EVIDENCES THE RECEIVABLES HAS ANY MARKS OR NOTATIONS INDICATING
THAT THEY HAVE BEEN PLEDGED, ASSIGNED OR OTHERWISE CONVEYED TO ANY PERSON OTHER
THAN BUYER. NO SELLER IS AWARE OF ANY JUDGMENT LIEN IN EXCESS OF $100,000 THAT
IS FINAL, BINDING AND NOT SUBJECT TO APPEAL OR ERISA LIEN OR TAX LIEN FILINGS
AGAINST IT.

 

(X)            PERFORMANCE.  EACH SELLER HAS PERFORMED OR, TO THE EXTENT
APPLICABLE, WILL TIMELY PERFORM, ALL OF ITS MATERIAL OBLIGATIONS RELATING TO THE
TRANSFERRED RECEIVABLES AND, IN PARTICULAR AND WITHOUT LIMITATION, IT HAS
DELIVERED ALL PRODUCTS TO THE ACCOUNT DEBTOR AS ARE DUE AND REQUIRED WITH
RESPECT TO THE OUTSTANDING BALANCE OF THE TRANSFERRED RECEIVABLE.

 

(XI)           ACCOUNT DEBTOR PERFORMANCE.  NO AMOUNTS DUE WITH RESPECT TO THE
TRANSFERRED RECEIVABLES HAVE BEEN PAID IN ADVANCE.  NO ACCOUNT DEBTOR IS IN
BREACH OR DEFAULT UNDER ANY FINANCING AGREEMENT.

 

(XII)          FINANCING AGREEMENTS.  THE FINANCING AGREEMENT AND ANY OTHER
DOCUMENTS PROVIDED TO BUYER IN CONNECTION WITH A TRANSFERRED RECEIVABLE
(A) CONSTITUTE THE ENTIRE AGREEMENT BETWEEN THE APPLICABLE SELLER AND THE
ACCOUNT DEBTOR IN RELATION TO THE FINANCING OF PRODUCTS UNDERLYING SUCH
TRANSFERRED RECEIVABLE; (B) REPRESENT THE LEGAL, VALID, BINDING AND ENFORCEABLE
OBLIGATION OF SUCH SELLER AND THE ACCOUNT DEBTOR; (C) COMPLY WITH ALL APPLICABLE
REQUIREMENTS OF LAW AND OTHER REQUIREMENTS FOR THEIR VALIDITY AND
ENFORCEABILITY; AND (D) REPRESENT A FINAL SALE.

 

(B)           UPON DISCOVERY BY ANY SELLER OR BUYER OF A BREACH OF ANY OF THE
REPRESENTATIONS AND WARRANTIES BY A SELLER SET FORTH IN THIS SECTION 4.1, THE
PARTY DISCOVERING SUCH BREACH SHALL GIVE PROMPT WRITTEN NOTICE TO THE OTHERS.
EACH SELLER, JOINTLY AND SEVERALLY, AGREES TO UNDERTAKE FORTHWITH TO CURE ANY
SUCH BREACH AND DILIGENTLY PROSECUTE SUCH CURE TO COMPLETION.

 

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(C)           IF (I) ANY REPRESENTATION OR WARRANTY OF A SELLER CONTAINED IN
SECTION 4.1(A) IS NOT TRUE AND CORRECT IN ANY MATERIAL RESPECT AS OF THE DATE
SPECIFIED THEREIN WITH RESPECT TO ANY TRANSFERRED RECEIVABLE AND AS A RESULT OF
SUCH BREACH BUYER’S INTEREST IN SUCH TRANSFERRED RECEIVABLE IS MATERIALLY AND
ADVERSELY AFFECTED, INCLUDING IF BUYER’S RIGHTS IN, TO OR UNDER SUCH TRANSFERRED
RECEIVABLES OR THE PROCEEDS OF SUCH TRANSFERRED RECEIVABLES ARE IMPAIRED OR SUCH
PROCEEDS ARE NOT AVAILABLE FOR ANY REASON TO BUYER FREE AND CLEAR OF ANY LIEN
OTHER THAN PERMITTED ENCUMBRANCES, UNLESS CURED WITHIN THIRTY (30) DAYS AFTER
THE EARLIER TO OCCUR OF THE DISCOVERY THEREOF BY A SELLER OR RECEIPT BY SUCH
SELLER OF NOTICE THEREOF GIVEN BY BUYER (IN EITHER CASE, THE “CURE PERIOD”) OR
(II) ANY TRANSFERRED RECEIVABLE OTHER THAN AN ADDITIONAL RECEIVABLE WAS NOT AN
ELIGIBLE RECEIVABLE ON THE CLOSING DATE OR ANY TRANSFERRED RECEIVABLE IDENTIFIED
AS AN ADDITIONAL RECEIVABLE DOES NOT MEET ANY REQUIREMENT FOR AN ELIGIBLE
RECEIVABLE OTHER THAN THOSE EXPRESSLY IDENTIFIED ON SCHEDULE 2 WITH RESPECT TO
SUCH ADDITIONAL RECEIVABLE, THEN SUCH TRANSFERRED RECEIVABLE SHALL BE DESIGNATED
AN “INELIGIBLE RECEIVABLE;” PROVIDED, THAT ANY SUCH TRANSFERRED RECEIVABLE THAT
BECOMES AN INELIGIBLE RECEIVABLE UNDER CLAUSE (I) WILL NOT BE DEEMED TO BE AN
INELIGIBLE RECEIVABLE BUT WILL BE DEEMED AN ELIGIBLE RECEIVABLE OR A QUALIFYING
ADDITIONAL RECEIVABLE IF ON ANY DAY PRIOR TO THE END OF THE CURE PERIOD, (I) THE
RELEVANT REPRESENTATION AND WARRANTY SHALL BE TRUE AND CORRECT IN ALL MATERIAL
RESPECTS AS IF MADE ON SUCH DAY AND (II) SUCH SELLER SHALL HAVE DELIVERED AN
OFFICER’S CERTIFICATE DESCRIBING THE NATURE OF SUCH BREACH AND THE MANNER IN
WHICH THE RELEVANT REPRESENTATION AND WARRANTY BECAME TRUE AND CORRECT.

 

(D)           SELLERS SHALL REPURCHASE SUCH INELIGIBLE RECEIVABLE (AS TO WHICH
THE CURE PERIOD HAS EXPIRED, AS APPLICABLE) FROM BUYER AS PROVIDED BELOW, WHICH
REPURCHASE, SUBJECT TO SELLERS’ PERFORMANCE THEREOF, SHALL BE BUYER’S SOLE AND
EXCLUSIVE REMEDY FOR A BREACH OF SECTIONS 4.1(A), 4.2(A), 4.2(B), 4.3(A) OR
4.3(C) AS TO INDIVIDUAL TRANSFERRED RECEIVABLES. IN CONNECTION WITH SUCH
REPURCHASE, SELLERS SHALL PAY TO BUYER IN IMMEDIATELY AVAILABLE FUNDS NOT LATER
THAN FIVE (5) BUSINESS DAYS AFTER SELLERS’ RECEIPT FROM BUYER OF NOTICE OF SUCH
INELIGIBLE RECEIVABLE’S INELIGIBILITY, IN PAYMENT FOR SUCH REPURCHASE, AN AMOUNT
EQUAL TO THE AGGREGATE REPURCHASE AMOUNT. THE PAYMENT OF SUCH DEPOSIT AMOUNT IN
IMMEDIATELY AVAILABLE FUNDS SHALL OTHERWISE BE CONSIDERED PAYMENT IN FULL OF ALL
OF SUCH TRANSFERRED RECEIVABLES.  EACH SELLER’S OBLIGATION TO REPURCHASE AN
INELIGIBLE RECEIVABLE HEREUNDER IS JOINT AND SEVERAL WITH EACH OTHER SELLER.

 

(E)           UPON THE PAYMENT, IF ANY, REQUIRED TO BE MADE TO BUYER AS PROVIDED
IN SECTION 4.1(D), BUYER SHALL AUTOMATICALLY AND WITHOUT FURTHER ACTION BE
DEEMED TO TRANSFER, ASSIGN, SET OVER AND OTHERWISE CONVEY TO THE APPLICABLE
SELLER OR ITS DESIGNEE, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY, EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE, ALL THE RIGHT, TITLE AND INTEREST OF BUYER
IN AND TO THE APPLICABLE INELIGIBLE RECEIVABLES, ALL MONEYS DUE OR TO BECOME DUE
AND ALL COLLATERAL SECURITY WITH RESPECT THERETO AND ALL AMOUNTS RECEIVED WITH
RESPECT THERETO AND ALL PROCEEDS THEREOF. SUCH TRANSFER SHALL BE FREE AND CLEAR
OF ANY LIENS CREATED BY OR THROUGH BUYER.  ANY COLLECTIONS RECEIVED BY BUYER
WITH RESPECT TO ANY INELIGIBLE RECEIVABLES TRANSFERRED TO A SELLER, AS WELL AS
ANY AMOUNTS RECEIVED BY BUYER FROM AN ACCOUNT DEBTOR AT ANY TIME WHICH DO NOT
CONSTITUTE COLLECTIONS, SHALL BE DEEMED HELD BY BUYER IN TRUST AND AS FIDUCIARY
FOR SUCH SELLER AND BUYER SHALL PAY THE SAME OVER TO SUCH SELLER FORTHWITH UPON
RECEIPT.  BUYER WILL IRREVOCABLY INSTRUCT ALL ACCOUNT DEBTORS WITH RESPECT TO
SUCH INELIGIBLE RECEIVABLES

 

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TO MAKE ALL PAYMENTS ON ACCOUNT THEREOF AFTER SUCH ASSIGNMENT TO SUCH SELLER. 
BUYER SHALL EXECUTE SUCH DOCUMENTS AND INSTRUMENTS OF TRANSFER OR ASSIGNMENT AND
TAKE SUCH OTHER ACTIONS AS SHALL REASONABLY BE REQUESTED BY A SELLER TO EFFECT
THE CONVEYANCE OF SUCH INELIGIBLE RECEIVABLES PURSUANT TO THIS SECTION.

 

(F)            NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT OR ANY
RELATED DOCUMENT, THE REPRESENTATIONS CONTAINED IN SECTION 4.1(A) SHALL BE
CONTINUING AND REMAIN IN FULL FORCE AND EFFECT.

 

4.2           COVENANTS OF SELLERS.

 

(A)           PRODUCT WARRANTIES.  ALL PRODUCTS UNDERLYING THE TRANSFERRED
RECEIVABLES SHALL BE SUBJECT TO APPLICABLE PRODUCT WARRANTIES OF TORO AND TORO
AGREES TO PERFORM, OR CAUSE TO BE PERFORMED, ALL REPAIRS, MODIFICATIONS AND/OR
OTHER ACTS REQUIRED BY TORO PURSUANT TO THE PRODUCT WARRANTIES.  ALL EXPENSES OF
PERFORMANCE BY TORO UNDER THIS SECTION 4.2(A) SHALL BE PAID BY TORO.  IF TORO
DOES NOT PERFORM, OR CAUSE TO BE PERFORMED, ANY ACT REQUIRED BY TORO PURSUANT TO
SUCH PRODUCT WARRANTIES ON ANY PRODUCT UNDERLYING A TRANSFERRED RECEIVABLE OR
PAY THE EXPENSES THEREFOR WITHIN A REASONABLE TIME AFTER DEMAND THEREFOR, SUCH
TRANSFERRED RECEIVABLE SHALL BECOME AN “INELIGIBLE RECEIVABLE,” IMMEDIATELY
SUBJECT TO THE REPURCHASE OBLIGATIONS SET FORTH UNDER SECTION 4.1(D), WITHOUT
GIVING EFFECT TO THE CURE PERIOD.

 

(B)           RETURNS.  IF A SELLER ACCEPTS THE RETURN FROM ANY ACCOUNT DEBTOR
OF ANY PRODUCT COVERED BY ANY TRANSFERRED RECEIVABLE, VOLUNTARILY OR OTHERWISE,
WHETHER OR NOT ANY SUBSTITUTION IS MADE FOR SUCH RETURNED PRODUCT, SUCH SELLER
WILL PAY TO BUYER THE OUTSTANDING BALANCE OF SUCH TRANSFERRED RECEIVABLE OR THE
PORTION THEREOF ATTRIBUTABLE TO THE RETURNED PRODUCT WITHIN TEN (10) BUSINESS
DAYS OF THE APPROVAL BY TORO OF THE RETURN OF THE PRODUCT BY AN ACCOUNT DEBTOR. 
IF SUCH SELLER DOES NOT PAY TO BUYER THE OUTSTANDING BALANCE (OR PORTION
THEREOF) OF SUCH TRANSFERRED RECEIVABLE AS REQUIRED BY THIS SECTION 4.2(B), SUCH
TRANSFERRED RECEIVABLE SHALL BECOME AN “INELIGIBLE RECEIVABLE,” IMMEDIATELY
SUBJECT TO THE REPURCHASE OBLIGATIONS SET FORTH UNDER SECTION 4.1(D), WITHOUT
GIVING EFFECT TO THE CURE PERIOD.

 

(C)           CREDITS.  IF A SELLER IN THE ORDINARY COURSE OF BUSINESS ISSUES
ANY CREDIT TO ANY ACCOUNT DEBTOR THAT REDUCES ANY AMOUNT DUE WITH RESPECT TO A
TRANSFERRED RECEIVABLE, SUCH SELLER SHALL PAY TO BUYER AN AMOUNT EQUAL TO SUCH
CREDIT WITHIN TWO (2) BUSINESS DAYS OF THE ISSUANCE THEREOF.

 

(D)           NOTIFICATION AND RESOLUTION OF DISPUTES.  EACH SELLER SHALL
PROMPTLY NOTIFY BUYER OF ALL FACTS OR CIRCUMSTANCES OF WHICH SUCH SELLER HAS
KNOWLEDGE AND ARE MATERIAL TO BUYER’S INTERESTS UNDER THIS AGREEMENT IN RELATION
TO THE TERMS AND CONDITIONS OF ANY FINANCING AGREEMENT, A TRANSFERRED RECEIVABLE
AND/OR THE RELEVANT PRODUCTS INCLUDING ANY DISPUTE OR THREATENED DISPUTE WITH AN
ACCOUNT DEBTOR IN RELATION THERETO OF WHICH SUCH SELLER HAS KNOWLEDGE.  EACH
SELLER WILL, IF REQUESTED TO DO SO BY BUYER, USE COMMERCIALLY REASONABLE EFFORTS
TO ASSIST BUYER, AT NO COST TO SUCH SELLER, IN RESOLVING ANY DISPUTES BETWEEN
BUYER AND ANY ACCOUNT DEBTOR AND IN COLLECTING THE TRANSFERRED RECEIVABLES OF
SUCH SELLER.

 

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(E)           REPOSSESSION OF PRODUCTS.  IF AN ACCOUNT DEBTOR DEFAULTS ON ANY OF
ITS OBLIGATIONS TO BUYER, BUYER MAY APPOINT A SELLER AS ITS AGENT (WITHOUT
COMPENSATION) TO RECOVER POSSESSION OF THE RELEVANT PRODUCTS FROM THE ACCOUNT
DEBTOR AND SUCH SELLER SHALL, IF IT ACCEPTS SUCH APPOINTMENT IN ITS SOLE
DISCRETION, ON SUCH APPOINTMENT, AT ITS OWN RISK, COST AND EXPENSE, REPOSSESS,
TRANSPORT, STORE AND INSURE SUCH PRODUCTS.  SUCH SELLER SHALL KEEP ANY PRODUCTS
REPOSSESSED BY IT IN A SAFE AND SUITABLE ENVIRONMENT.  IN CASE A SELLER DECLINES
TO ACT AS BUYER’S AGENT, SUCH SELLER SHALL COOPERATE WITH BUYER TO APPOINT A
THIRD PARTY, AT SUCH SELLER’S COST AND EXPENSE, IN CONNECTION WITH THE
REPOSSESSION, TRANSPORTATION, STORAGE AND INSURANCE OF SUCH PRODUCTS.

 

(F)            LIMITED REPURCHASE OBLIGATION.  WITH RESPECT TO THE TRANSFERRED
RECEIVABLES, BUYER SHALL BE ENTITLED TO THE BENEFITS TO WHICH RED IRON IS
ENTITLED DESCRIBED IN SECTIONS 3 AND 4(B) OF THE FORM OF REPURCHASE AGREEMENT
ATTACHED AS EXHIBIT A HERETO (THE “REPURCHASE AGREEMENT”), SUBJECT TO THE LIMITS
SET FORTH IN SECTION 4(A) OF THE REPURCHASE AGREEMENT, AND THE SELLERS JOINTLY
AND SEVERALLY AGREE TO PERFORM ANY OBLIGATIONS OF SELLER (AS DEFINED IN THE
REPURCHASE AGREEMENT) SET FORTH IN SECTIONS 3 AND 4(B) OF THE REPURCHASE
AGREEMENT, SUBJECT TO THE LIMITS SET FORTH IN SECTION 4(A) OF THE REPURCHASE
AGREEMENT.

 

4.3           NEGATIVE COVENANTS OF SELLERS.  EACH SELLER COVENANTS AND AGREES
THAT, WITHOUT THE PRIOR WRITTEN CONSENT OF BUYER:

 

(A)           LIENS. SELLERS SHALL NOT CREATE, INCUR, ASSUME OR PERMIT TO EXIST
ANY LIEN, OTHER THAN PERMITTED ENCUMBRANCES, ON OR WITH RESPECT TO THE
TRANSFERRED ASSETS.  IF A TRANSFERRED RECEIVABLE IS SUBJECT TO SUCH A LIEN AND
SUCH LIEN IS NOT RELEASED WITHIN THE CURE PERIOD, SUCH TRANSFERRED RECEIVABLE
SHALL BECOME AN “INELIGIBLE RECEIVABLE,” IMMEDIATELY SUBJECT TO THE REPURCHASE
OBLIGATIONS SET FORTH UNDER SECTION 4.1(D), WITHOUT GIVING EFFECT TO THE CURE
PERIOD.

 

(B)           AMENDMENTS TO FINANCING AGREEMENTS. SELLERS SHALL NOT AMEND THE
FINANCING AGREEMENTS.

 

(C)           NON DISTURBANCE OF BUYER’S RIGHTS. SELLERS SHALL NOT TAKE ANY
ACTION OVER THE TRANSFERRED RECEIVABLES AND, IN PARTICULAR, EXCEPT AS
CONTEMPLATED BY SECTION 4.2(C), WILL NOT GRANT DISCOUNTS OR GRACE PERIODS TO THE
ACCOUNT DEBTORS NOR WILL THEY AGREE TO ANY COMPROMISE WITH RESPECT TO THE
TRANSFERRED RECEIVABLES.  IF A SELLER TAKES ANY OF THE FOREGOING ACTIONS WITH
RESPECT TO A TRANSFERRED RECEIVABLE, SUCH TRANSFERRED RECEIVABLE SHALL BECOME AN
“INELIGIBLE RECEIVABLE,” IMMEDIATELY SUBJECT TO THE REPURCHASE OBLIGATIONS SET
FORTH UNDER SECTION 4.1(D) WITHOUT GIVING EFFECT TO THE CURE PERIOD.

 

(D)           SALE CHARACTERIZATION. FOR ACCOUNTING PURPOSES, NO SELLER SHALL
ACCOUNT FOR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT IN ANY MANNER OTHER
THAN, WITH RESPECT TO THE SALE OF EACH TRANSFERRED RECEIVABLE, AS A TRUE SALE
AND ABSOLUTE ASSIGNMENT OF ITS FULL RIGHT, TITLE AND OWNERSHIP INTEREST IN THE
RELATED TRANSFERRED ASSETS TO BUYER. SELLERS SHALL ALSO MAINTAIN THEIR
RESPECTIVE RECORDS AND BOOKS OF ACCOUNT IN A MANNER WHICH CLEARLY REFLECTS EACH
SUCH SALE OF THE TRANSFERRED RECEIVABLES TO BUYER.

 

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ARTICLE V

MISCELLANEOUS

 

5.1           NOTICES.  NOTICES AND ALL OTHER COMMUNICATION PROVIDED FOR HEREIN
SHALL BE IN WRITING AND SHALL BE DEEMED TO HAVE BEEN GIVEN TO A PARTY AT THE
EARLIER OF (A) WHEN PERSONALLY DELIVERED, (B) 72 HOURS AFTER HAVING BEEN
DEPOSITED INTO THE CUSTODY OF THE U.S. POSTAL SERVICE, SENT BY FIRST CLASS
CERTIFIED MAIL, POSTAGE PREPAID, (C) ONE BUSINESS DAY AFTER DEPOSIT WITH A
NATIONAL OVERNIGHT COURIER SERVICE, (D) UPON RECEIPT OF A CONFIRMATION OF
FACSIMILE TRANSMISSION, OR (E) UPON RECEIPT OF ELECTRONIC MAIL (WITH A NOTICE
CONTEMPORANEOUSLY GIVEN BY ANOTHER METHOD SPECIFIED IN THIS SECTION 5.1); IN
EACH CASE ADDRESSED AS FOLLOWS:

 

If to Buyer:

Red Iron Acceptance, LLC

 

8111 Lyndale Avenue South

 

Bloomington, MN 55420

 

Attention: General Manager

 

Telephone: (952) 888-8801

 

Facsimile: (952) 887-8258

 

Email:

 

 

 

with copies to:

 

 

 

TCF Inventory Finance, Inc.

 

2300 Barrington Road, Suite 600

 

Hoffman Estates, IL 60169

 

Attention: Vincent E. Hillery, General Counsel

 

Telephone: (847) 252-6616

 

Facsimile: (847) 285-6012

 

Email: vhillery@tcfif.com

 

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and:

 

 

 

TCF National Bank

 

200 E. Lake Street

 

Wayzata, MN 55391

 

Attention: General Counsel

 

Telephone: (952) 475-6498

 

Facsimile: (952) 475-7975

 

Email: jgreen@tcfbank.com

 

 

 

and:

 

 

 

Kaplan, Strangis and Kaplan, P.A.

 

5500 Wells Fargo Center

 

90 South Seventh Street

 

Minneapolis, MN 55402

 

Attention: Harvey F. Kaplan, Esq.

 

Telephone: (612) 375-1138

 

Facsimile: (612) 375-1143

 

Email: hfk@kskpa.com

 

 

If to Sellers:

The Toro Company

 

Toro Credit Company

 

Toro International Company

 

8111 Lyndale Avenue South

 

Bloomington, MN 55420

 

Attention: Treasurer

 

Telephone: (952) 887-8449

 

Facsimile: (952) 887-8920

 

Email: Tom.Larson@toro.com

 

 

 

With copies to:

 

 

 

The Toro Company

 

8111 Lyndale Avenue South

 

Bloomington, MN 55420

 

Attention: General Counsel

 

Telephone: (952) 887-8178

 

Facsimile: (952) 887-8920

 

Email: Tim.Dordell@toro.com

 

 

 

and

 

 

 

Oppenheimer Wolff & Donnelly LLP

 

3300 Plaza VII Building

 

45 South Seventh Street

 

Attention: C. Robert Beattie, Esq.

 

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Telephone:  (612) 607-7395

 

Facsimile:  (612) 607-7100

 

Email:  RBeattie@Oppenheimer.com

 

or to such other address as any party hereto may have furnished to the other
party hereto in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.

 

5.2           NO WAIVER; REMEDIES.

 

(A)           THE FAILURE OF ANY PARTY HERETO, AT ANY TIME OR TIMES, TO REQUIRE
STRICT PERFORMANCE BY ANY OTHER PARTY HERETO OF ANY PROVISION OF THIS AGREEMENT
SHALL NOT WAIVE, AFFECT OR DIMINISH ANY RIGHT OF SUCH PARTY THEREAFTER TO DEMAND
STRICT COMPLIANCE AND PERFORMANCE WITH THIS AGREEMENT. ANY SUSPENSION OR WAIVER
OF ANY BREACH OR DEFAULT HEREUNDER SHALL NOT SUSPEND, WAIVE OR AFFECT ANY OTHER
BREACH OR DEFAULT WHETHER THE SAME IS PRIOR OR SUBSEQUENT THERETO AND WHETHER OF
THE SAME OR A DIFFERENT TYPE. NONE OF THE UNDERTAKINGS, AGREEMENTS, WARRANTIES,
COVENANTS AND REPRESENTATIONS OF ANY PARTY CONTAINED IN THIS AGREEMENT, AND NO
BREACH OR DEFAULT BY ANY PARTY UNDER THIS AGREEMENT, SHALL BE DEEMED TO HAVE
BEEN SUSPENDED OR WAIVED OR AMENDED BY ANY OTHER PARTY HERETO UNLESS SUCH WAIVER
OR SUSPENSION OR AMENDMENT IS BY AN INSTRUMENT IN WRITING SIGNED BY AN OFFICER
OF OR OTHER DULY AUTHORIZED SIGNATORY OF SUCH PARTY AND, IN THE CASE OF A
SUSPENSION OR WAIVER, DIRECTED TO THE DEFAULTING PARTY SPECIFYING SUCH
SUSPENSION OR WAIVER.

 

(B)           EACH PARTY’S RIGHTS AND REMEDIES UNDER THIS AGREEMENT SHALL BE
CUMULATIVE AND NONEXCLUSIVE OF ANY OTHER RIGHTS AND REMEDIES THAT SUCH PARTY MAY
HAVE UNDER ANY OTHER AGREEMENT, INCLUDING THE RELATED DOCUMENTS, BY OPERATION OF
LAW OR OTHERWISE.

 

5.3           SUCCESSORS AND ASSIGNS.  THIS AGREEMENT SHALL BE BINDING UPON AND
SHALL INURE TO THE BENEFIT OF SELLERS AND BUYER AND THEIR RESPECTIVE SUCCESSORS
AND PERMITTED ASSIGNS, EXCEPT AS OTHERWISE PROVIDED HEREIN. NO PARTY MAY ASSIGN,
TRANSFER, HYPOTHECATE OR OTHERWISE CONVEY ITS RIGHTS, BENEFITS, OBLIGATIONS OR
DUTIES HEREUNDER WITHOUT HAVING OBTAINED THE PRIOR EXPRESS WRITTEN CONSENT OF
THE OTHER PARTY. ANY SUCH PURPORTED ASSIGNMENT, TRANSFER, HYPOTHECATION OR OTHER
CONVEYANCE BY ANY SELLER WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT OF BUYER
SHALL BE VOID. THE TERMS AND PROVISIONS OF THIS AGREEMENT ARE FOR THE PURPOSE OF
DEFINING THE RELATIVE RIGHTS AND OBLIGATIONS OF SELLERS AND BUYER WITH RESPECT
TO THE TRANSACTIONS CONTEMPLATED HEREBY AND, EXCEPT AS SET FORTH IN SECTION 7.10
OF THE JOINT VENTURE AGREEMENT, NO PERSON SHALL BE A THIRD-PARTY BENEFICIARY OF
ANY OF THE TERMS AND PROVISIONS OF THIS AGREEMENT.

 

5.4           NO BUYER LIABILITY FOR CONTRACTS.  SELLERS HEREBY ACKNOWLEDGE AND
AGREE THAT BUYER SHALL NOT BE IN ANY WAY RESPONSIBLE FOR THE PERFORMANCE OF ANY
CONTRACT FOR THE SALE OF PRODUCTS BY ANY SELLER TO AN ACCOUNT DEBTOR GIVING RISE
TO ANY TRANSFERRED RECEIVABLE AND BUYER SHALL NOT HAVE ANY OBLIGATION TO
INTERVENE IN ANY DISPUTE ARISING OUT OF THE PERFORMANCE OF ANY SUCH CONTRACT.
SELLERS SHALL, JOINTLY AND SEVERALLY, INDEMNIFY BUYER AND HOLD BUYER HARMLESS
FROM AND AGAINST ANY AND ALL LOSSES, DAMAGES, PENALTIES, COSTS, EXPENSES
(INCLUDING REASONABLE ATTORNEYS’ FEES) AND LIABILITIES (INCLUDING  PRODUCT
LIABILITIES) INCURRED BY BUYER IN CONNECTION WITH ANY CLAIM OR DEMAND BY AN
ACCOUNT DEBTOR OR ANY THIRD PARTY ARISING DIRECTLY OR INDIRECTLY

 

18

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FROM THE DESIGN, MANUFACTURE OR SALE OF THE PRODUCTS, ANY WARRANTY WITH RESPECT
TO THE PRODUCTS OR ANY FAILURE OF THE PRODUCTS TO COMPLY WITH THE TERMS AND
CONDITIONS OF THIS AGREEMENT.

 

5.5           SURVIVAL.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN OR IN ANY
RELATED DOCUMENT, ALL UNDERTAKINGS, AGREEMENTS, COVENANTS, WARRANTIES AND
REPRESENTATIONS OF OR BINDING UPON SELLERS AND BUYER, AND ALL RIGHTS OF SELLERS
AND BUYER HEREUNDER SHALL NOT TERMINATE OR EXPIRE UPON THE CLOSING OF THE
TRANSACTIONS CONTEMPLATED HEREBY, BUT RATHER SHALL SURVIVE.

 

5.6           COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT.  THIS AGREEMENT AND
THE RELATED DOCUMENTS CONSTITUTE THE COMPLETE AGREEMENT BETWEEN THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF, SUPERSEDE ALL PRIOR AGREEMENTS AND
UNDERSTANDINGS RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF, AND MAY NOT BE
MODIFIED, ALTERED OR AMENDED EXCEPT BY WRITTEN AGREEMENT OF THE PARTIES HERETO.

 

5.7           DISPUTE RESOLUTION.  IN THE EVENT THE PARTIES HERETO CANNOT
MUTUALLY REACH A DECISION ON AN ISSUE ARISING UNDER THIS AGREEMENT, THEN SUCH
DISPUTE SHALL BE DEEMED TO BE AN “ARBITRABLE DISPUTE” SUBJECT TO THE DISPUTE
RESOLUTION PROCEDURES SET FORTH IN ARTICLE VI OF THE JOINT VENTURE AGREEMENT.

 

5.8           JURY TRIAL.  EACH OF SELLERS AND BUYER, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING TO THIS AGREEMENT OR
ANY RELATED DOCUMENT IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY RELATED DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY. THIS WAIVER IS A MATERIAL INDUCEMENT FOR OUR ENTERING INTO
THIS AGREEMENT.

 

5.9           GOVERNING LAW; SUBMISSION TO JURISDICTION.  THIS AGREEMENT SHALL
BE SUBJECT TO AND GOVERNED BY THE LAWS OF THE STATE OF MINNESOTA, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES. EACH OF SELLERS AND BUYER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL COURTS SITTING IN
MINNEAPOLIS OR ST. PAUL, MINNESOTA OR ANY STATE COURT LOCATED IN HENNEPIN
COUNTY, MINNESOTA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY
HERETO ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS WITH RESPECT TO
ANY LITIGATION CONCERNING THIS AGREEMENT OR THE RELATED DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY OR ANY MATTERS RELATED THERETO NOT
SUBJECT TO THE PROVISIONS OF SECTION 5.7. EACH PARTY HERETO IRREVOCABLY WAIVES
ANY OBJECTION (INCLUDING  ANY OBJECTION TO THE LAYING OF VENUE OR ANY OBJECTION
ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE RELATED
DOCUMENTS TO THE COURTS SET FORTH ABOVE. EACH PARTY HERETO AGREES TO THE
PERSONAL JURISDICTION OF SUCH COURTS AND THAT SERVICE OF PROCESS MAY BE MADE ON
IT AT THE ADDRESS INDICATED IN SECTION 5.1 ABOVE. NOTHING HEREIN SHALL AFFECT
THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

 

5.10         COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
SEPARATE COUNTERPARTS, EACH OF WHICH SHALL COLLECTIVELY AND SEPARATELY
CONSTITUTE ONE AGREEMENT.

 

19

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5.11         SEVERABILITY.  WHEREVER POSSIBLE, EACH PROVISION OF THIS AGREEMENT
SHALL BE INTERPRETED IN SUCH A MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS AGREEMENT SHALL BE PROHIBITED BY OR
INVALID UNDER APPLICABLE LAW, SUCH PROVISION SHALL BE INEFFECTIVE ONLY TO THE
EXTENT OF SUCH PROHIBITION OR INVALIDITY WITHOUT INVALIDATING THE REMAINDER OF
SUCH PROVISION OR THE REMAINING PROVISIONS OF THIS AGREEMENT.

 

5.12         SECTION TITLES.  THE SECTION TITLES AND TABLE OF CONTENTS CONTAINED
IN THIS AGREEMENT ARE PROVIDED FOR EASE OF REFERENCE ONLY AND SHALL BE WITHOUT
SUBSTANTIVE MEANING OR CONTENT OF ANY KIND WHATSOEVER AND ARE NOT A PART OF THE
AGREEMENT BETWEEN THE PARTIES HERETO.

 

5.13         NO SETOFF.  EACH SELLER’S OBLIGATIONS UNDER THIS AGREEMENT SHALL
NOT BE AFFECTED BY ANY RIGHT OF SETOFF, COUNTERCLAIM, RECOUPMENT, DEFENSE OR
OTHER RIGHT SUCH SELLER MIGHT HAVE AGAINST BUYER, ALL OF WHICH RIGHTS ARE HEREBY
EXPRESSLY WAIVED BY SUCH SELLER.

 

5.14         FURTHER ASSURANCES.

 

(A)           EACH SELLER SHALL, AT ITS SOLE COST AND EXPENSE, UPON REQUEST OF
BUYER, PROMPTLY AND DULY AUTHORIZE, EXECUTE AND/OR DELIVER, AS APPLICABLE, ANY
AND ALL FURTHER INSTRUMENTS AND DOCUMENTS AND TAKE SUCH FURTHER ACTIONS THAT
BUYER MAY REASONABLY REQUEST TO CARRY OUT MORE EFFECTIVELY THE PROVISIONS AND
PURPOSES OF THIS AGREEMENT OR TO OBTAIN THE FULL BENEFITS OF THIS AGREEMENT AND
OF THE RIGHTS AND POWERS HEREIN GRANTED, INCLUDING AUTHORIZING AND FILING
AMENDMENTS TO FINANCING STATEMENTS UNDER THE UCC WITH RESPECT TO THE OWNERSHIP
INTEREST OF BUYER CREATED BY THIS AGREEMENT. EACH SELLER HEREBY AUTHORIZES BUYER
TO FILE ANY SUCH FINANCING STATEMENTS WITHOUT THE SIGNATURE OF SUCH SELLER TO
THE EXTENT PERMITTED BY APPLICABLE LAW. A CARBON, PHOTOGRAPHIC OR OTHER
REPRODUCTION OF THIS AGREEMENT OR OF ANY NOTICE OR FINANCING STATEMENT COVERING
THE TRANSFERRED ASSETS OR ANY PART THEREOF SHALL BE SUFFICIENT AS A NOTICE OR
FINANCING STATEMENT WHERE PERMITTED BY LAW. IF ANY AMOUNT PAYABLE UNDER OR IN
CONNECTION WITH ANY OF THE TRANSFERRED ASSETS IS OR SHALL BECOME EVIDENCED BY
ANY INSTRUMENT, SUCH INSTRUMENT, OTHER THAN CHECKS AND NOTES RECEIVED IN THE
ORDINARY COURSE OF BUSINESS, SHALL BE DULY ENDORSED IN A MANNER SATISFACTORY TO
BUYER IMMEDIATELY UPON SUCH SELLER’S RECEIPT THEREOF AND PROMPTLY DELIVERED TO
OR AT THE DIRECTION OF BUYER.

 

(B)           IF A SELLER FAILS TO PERFORM ANY AGREEMENT OR OBLIGATION UNDER
THIS SECTION 5.14, BUYER MAY (BUT SHALL NOT BE REQUIRED TO) ITSELF PERFORM, OR
CAUSE PERFORMANCE OF, SUCH AGREEMENT OR OBLIGATION, AND THE REASONABLE EXPENSES
OF BUYER INCURRED IN CONNECTION THEREWITH SHALL BE PAYABLE BY SUCH SELLER UPON
DEMAND OF BUYER.

 

5.15         NO INDIRECT OR CONSEQUENTIAL DAMAGES.  NO PARTY TO THIS AGREEMENT
SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO THIS AGREEMENT, ANY
SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER
PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR PUNITIVE, EXEMPLARY
OR, EXCEPT IN THE CASE OF FRAUD, BAD FAITH, WILLFUL MISCONDUCT OR GROSS
NEGLIGENCE, INDIRECT OR CONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED AS A RESULT OF
ANY TRANSACTION CONTEMPLATED HEREUNDER.

 

20

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5.16         NO ASSUMPTION IN DRAFTING.  THE PARTIES HERETO ACKNOWLEDGE AND
AGREE THAT (A) EACH PARTY HAS REVIEWED AND NEGOTIATED THE TERMS AND PROVISIONS
OF THIS AGREEMENT AND HAS HAD THE OPPORTUNITY TO CONTRIBUTE TO ITS REVISION, AND
(B) EACH PARTY HAS BEEN REPRESENTED BY COUNSEL IN REVIEWING AND NEGOTIATING SUCH
TERMS AND PROVISIONS.  ACCORDINGLY, THE RULE OF CONSTRUCTION TO THE EFFECT THAT
AMBIGUITIES ARE RESOLVED AGAINST THE DRAFTING PARTY SHALL NOT BE EMPLOYED IN THE
INTERPRETATION OF THIS AGREEMENT.  RATHER, THE TERMS OF THIS AGREEMENT SHALL BE
CONSTRUED FAIRLY AS TO BOTH PARTIES HERETO AND NOT IN FAVOR OR AGAINST EITHER
PARTY.

 

5.17         HEADINGS; SECTION AND ARTICLE REFERENCES.  THE HEADINGS IN THIS
AGREEMENT ARE INSERTED FOR CONVENIENCE ONLY AND ARE NOT TO BE CONSIDERED IN THE
INTERPRETATION OR CONSTRUCTION OF THE PROVISIONS HEREOF.  UNLESS THE CONTEXT OF
THIS AGREEMENT OTHERWISE CLEARLY REQUIRES, THE FOLLOWING RULES OF CONSTRUCTION
SHALL APPLY TO THIS AGREEMENT: (A) THE WORDS “HEREOF,” “HEREIN” AND “HEREUNDER”
AND WORDS OF SIMILAR IMPORT SHALL REFER TO THIS AGREEMENT AS A WHOLE AND NOT TO
ANY PARTICULAR PROVISION OF THIS AGREEMENT; (B) THE WORDS “INCLUDE” AND
“INCLUDING” AND WORDS OF SIMILAR IMPORT SHALL NOT BE CONSTRUED TO BE LIMITING OR
EXCLUSIVE AND (C) THE WORD “OR” SHALL HAVE THE MEANING REPRESENTED BY THE PHRASE
“AND/OR.”  ANY PRONOUN USED HEREIN SHALL BE DEEMED TO COVER ALL GENDERS.

 

[Signature page follows]

 

21

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IN WITNESS WHEREOF, Sellers and Buyer have caused this Agreement to be duly
executed as of the day and year first above written.

 

 

 

[TORO CREDIT COMPANY, as Seller]

 

 

 

 

 

By:

 

 

Name:

 

 

Its:

 

 

 

 

 

 

THE TORO COMPANY, as Seller

 

 

 

 

 

By:

 

 

Name:

 

 

Its:

 

 

 

 

 

 

[TORO INTERNATIONAL COMPANY, as Seller]

 

 

 

 

 

By:

 

 

Name:

 

 

Its:

 

 

 

 

 

 

 

 

[EXMARK MANUFACTURING COMPANY INCORPORATED, as Seller]

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Its:

 

 

 

 

 

 

 

 

RED IRON ACCEPTANCE, LLC, as Buyer

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Its:

 

 

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